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Telecom Decision CRTC 2012-396

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Route reference: Telecom Notice of Consultation 2011-761

Ottawa, 20 July 2012

Notification requirements for competitive local exchange carriers seeking to offer local services in new exchanges, and filing of related documents

File number: 8663-C12-201115791

In this decision, the Commission modifies and clarifies the notification requirements applicable to existing competitive local exchange carriers (CLECs) seeking to offer local services in additional incumbent telephone exchanges.

Specifically, the Commission

The Commission also establishes a service standard for the completion of the registration process for CLECs seeking to offer local services in additional exchanges.

Introduction

1. In Telecom Notice of Consultation 2011-761, the Commission invited interventions on whether it would be appropriate to maintain all of the current notification requirements for existing competitive local exchange carriers (CLECs) seeking to offer local services in additional exchanges.

2. The Commission received submissions from Bell Aliant Regional Communications, Limited Partnership and Bell Canada (collectively, the Bell companies); Bragg Communications Inc. operating as EastLink (EastLink); Canadian Network Operators Consortium Inc. (CNOC); Distributel Communications Limited (Distributel); MTS Inc. and Allstream Inc. (collectively, MTS Allstream); the Ontario Telecommunications Association (OTA); Rogers Communications Partnership, on behalf of itself and Fido Solutions Inc. (RCP); Saskatchewan Telecommunications (SaskTel); Shaw Telecom G.P. (Shaw); TBayTel; and TELUS Communications Company (TCC).

3. The public record of this proceeding, which closed on 9 February 2012, is available on the Commission’s website at www.crtc.gc.ca under “Public Proceedings” or by using the file number provided above.

Background

4. Currently, a Canadian carrier eligible to operate as a telecommunications common carrier is required to meet a number of requirements before it can begin offering local services in an exchange. These requirements include the following:

5. In Telecom Notice of Consultation 2011-761, the Commission noted that existing CLECs must already meet these requirements in their current serving areas and called for comments on whether it was still appropriate to impose all of the existing notification requirements each time a CLEC seeks to offer local services in an additional exchange.

6. The Commission has identified the following issues to be addressed in this decision:

I. Should the requirement that an existing CLEC file a letter of intention with the Commission to offer local services in an additional exchange be maintained?

II. Should the requirement that an existing CLEC file Schedule Cs for Commission approval prior to offering services in an additional exchange be maintained if the CLEC already has approved Schedule Cs with all the local exchange carriers (LECs) offering services in the additional exchange?

III. Should the requirement that an existing CLEC file a letter notifying the Commission that all relevant obligations have been satisfied prior to offering local services in an additional exchange be maintained? If so, what information should be provided in the letter?

IV. Should an existing CLEC continue to serve documentation it files with the Commission on all Canadian carriers providing services in the exchange in which it proposes to offer local services, and on all other entities that have proposed to provide services in compliance with the established CLEC entry procedures?

V. Should a service standard be established for the completion of the registration process for existing CLECs seeking to offer local services in an additional exchange?

7. The Commission notes that the determinations set out in this decision only apply to exchanges in which local competition is implemented. Consequently, the process established in Telecom Decision 2006-14 with respect to the initial competitive entry in the operating territories of the small incumbent local exchange carriers (ILECs) remains in place.

I. Should the requirement that an existing CLEC file a letter of intention with the Commission to offer local services in an additional exchange be maintained?

8. The Bell companies, EastLink, and MTS Allstream submitted that this requirement should be eliminated. They argued that since the CLEC already needs to contact every LEC operating in the exchange prior to its entry to sign MALIs and to update Schedule Cs, the letter of intention provides no additional information.

9. Distributel submitted that the requirement to file a letter of intention forces a CLEC to publicly disclose its expansion plans to competitors already offering service in the area, which could potentially damage the CLEC’s business plans. Distributel also submitted that if this requirement was maintained, the letter of intention should be filed in confidence with the Commission in accordance with section 39 of the Telecommunications Act (the Act).

10. CNOC, OTA, RCP, Shaw, TBayTel, and TCC submitted that this requirement should be maintained. They argued that the letter of intention filed with the Commission provides an efficient notification mechanism and is necessary to ensure that MALIs and other arrangements are executed with every LEC operating in the exchange. TCC argued that since Type III and IV CLECs do not have central office codes, the absence of a requirement for these CLECs to file a letter of intention would make it impossible for a LEC to be certain that MALIs have been executed with all other CLECs operating in a given exchange.

11. Shaw submitted that the entry information is not competitively sensitive at the time the letter of intention is filed with the Commission because the information is already publicly available through other sources. Shaw stated that details regarding number block assignments are available on the Canadian Numbering Administrator (CNA) website at least 66 days prior to market entry.

12. TCC further submitted that the letter of intention should be filed with the Commission at least 30 days in advance of the anticipated in-service date, since this would give other LECs sufficient advance notice to allow for MALI completion without creating the possibility of a meaningful competitive market response. TCC further submitted that other LECs should not make the letter of intention a precondition to negotiating and implementing any necessary interconnection or transiting arrangements.

13. SaskTel submitted that the requirement to file the letter of intention with the Commission to operate as a CLEC in a given exchange should be eliminated in cases where the CLEC already offers local services in other exchanges forming part of the same local interconnection region (LIR), but should be maintained in other circumstances. In support of its position, SaskTel argued that since LECs interconnect at the LIR level, it is inefficient and of little benefit to other LECs for the CLEC to file further notifications when it proposes to offer local services in another exchange located within an LIR where it is already operating.

14. The Commission notes that, pursuant to Telecom Decision 97-8, a LEC is required to have MALIs in place with every other LEC operating in each exchange where it offers local services.1 In this regard, the Commission considers that filing a letter of intention, identifying the exchanges in which a CLEC is planning to offer local services at a given time, serves an important regulatory function of providing all LECs operating in the identified exchanges with notice that MALIs and associated Schedule Cs may need to be established or modified. The Commission further considers that the need for such notification would not necessarily be absent in situations where a CLEC is proposing to expand its local service offering to other exchanges forming part of an LIR within which it already offers local services, given that it may not have MALIs in place with every other LEC operating in these additional exchanges or that its existing Schedule Cs may not take into account these additional exchanges and thus require modifications.

15. The Commission acknowledges that a CLEC may be reluctant to publicly disclose its expansion plans. However, the Commission considers that, given that each LEC is required to have MALIs and associated Schedule Cs in place with all LECs operating in the same exchange, it is important to provide such LECs with a means to ascertain the existence of prospective new entrants in order for them to ensure compliance with their own regulatory requirements. The Commission considers that requiring the filing of a letter of intention with the Commission at least 30 days prior to market entry would strike an adequate balance between the need for providing LECs with an efficient means for ensuring continued compliance with their regulatory obligations, while mitigating any potential competitive harm which could result from the public disclosure of a CLEC’s expansion plans. This would serve to facilitate the orderly development of the Canadian telecommunications system, aid in rendering reliable telecommunications services accessible to Canadians and enhance the efficiency of Canadian telecommunications.

16. Consequently, the Commission maintains the requirement for an existing CLEC to publicly file a letter of intention with the Commission to offer local services in an additional exchange. The Commission determines that the letter must be filed with the Commission at least 30 days prior to the CLEC’s anticipated in-service date. Moreover, as the letter of intention is to be filed for notification purposes only, other LECs are not to make it a precondition to negotiating or implementing the necessary interconnection or transiting arrangements.

II. Should the requirement that an existing CLEC file Schedule Cs for Commission approval prior to offering services in an additional exchange be maintained if the CLEC already has approved Schedule Cs with all of the LECs offering services in the additional exchange?

17. Most of the parties sought clarification from the Commission regarding the continued requirement to file Schedule Cs with all other LECs offering local service in an exchange for Commission approval, in light of the forbearance determinations set out in Telecom Regulatory Policy 2012-24 with respect to Internet Protocol (IP) and time-division multiplexing (TDM) voice network interconnection services provided pursuant to negotiated arrangements.

18. The Bell companies, Shaw, and TCC were of the view that pursuant to Telecom Regulatory Policy 2012-24, Schedule Cs no longer had to be filed for Commission approval, although LECs remained obligated to execute Schedule Cs prior to offering local services in an exchange. EastLink was of the view that the obligation to file Schedule Cs with the Commission should remain in place in all cases where a new point of interconnection (POI) is established; however, EastLink submitted that Schedule Cs should not be subject to Commission approval.

19. CNOC, Distributel, MTS Allstream, OTA, SaskTel, and TBayTel were of the view that CLECs should continue to be required to file Schedule Cs for Commission approval in accordance with the regime set out in Telecom Decision 2007-129. Distributel and SaskTel also submitted that maintaining the requirement addresses potential concerns of undue preference and unjust discrimination, since it allows the Commission to intervene if the interconnection does not conform to the interconnection rules.

20. RCP submitted that where it has approved MALIs with other LECs in one or more LIRs and is expanding into an additional LIR where these same LECs operate, it should be permitted to negotiate and implement its expansion without the pre-approval of the revised Schedule C by the Commission. RCP indicated that the requirement for approval prior to being able to expand has resulted in unnecessary delays, as it has sometimes waited months for an ILEC to update a Schedule C. RCP proposed that LECs be required to file a revised Schedule C for Commission approval only when establishing a new interconnection and that such requirement only come to term following implementation of the interconnection, for example within 3 months of the effective date of such implementation.

21. The Commission considers that the filing and approval requirements pertaining to Schedule Cs of MALIs were not contemplated by the Commission when it forbore from the exercise of certain of its powers and the performance of certain of its duties under the Act with respect to the regulation of negotiated agreements for IP and TDM voice network interconnection services. In this regard, the Commission notes that its forbearance determinations with respect to the regulation of such agreements were rendered against a regulatory backdrop whereby carriers could always avail themselves of TDM voice network interconnection services provided pursuant to Commission-approved tariffs. The Commission notes that Schedule Cs of MALIs address matters that are not covered in approved tariffs and, as such, clarifies that the forbearance determinations reached in Telecom Regulatory Policy 2012-24 do not apply to MALIs and their associated Schedule Cs.

22. In Telecom Decision 2007-129, the Commission determined that Schedule Cs would be deemed to be approved upon filing with the Commission within seven business days of their execution, with the Commission reserving the power to amend, suspend, or disallow such agreements back to the date of filing. The Commission did not remove the obligation to file Schedule Cs, noting that there was no Commission-approved model for Schedule Cs and that regulatory oversight was necessary to address concerns regarding unjust discrimination and undue preference. While the Commission has rarely found it necessary to require amendments to such agreements, it considers that the approval process currently in place is not onerous or disproportionate to its purpose.

23. The Commission notes that local competition plays an important role in implementing a number of telecommunication policy objectives, including those set out at paragraphs 7(a), (b), (c), (f), (g) and (h) of the Act. Given this, and the importance of Schedule Cs in providing for efficient and effective interchange of traffic between competing local service providers, the Commission considers that the approval process for Schedule Cs set out in Telecom Decision 2007-129 interferes with the operation of competitive market forces to the minimum extent necessary to meet those objectives.

24. In light of the above, for existing CLECs seeking to offer services in an additional exchange, the Commission maintains the requirement to file and obtain Commission approval for Schedule Cs with all other LECs offering service in that additional exchange.

25. The Commission notes RCP’s concerns that delays in providing local services have resulted from an ILEC taking several months to update a Schedule C. The Commission notes that Telecom Decision 2004-46 resulted in the consolidation of certain exchanges into larger LIRs, in which interconnection between any two interconnected LECs is made at a single POI. The Commission considers that delays for entering an additional exchange within an LIR in which the CLEC is already interconnected would be significantly reduced, if not altogether eliminated, if the interconnection arrangement set out in the previously approved Schedule C covered all the exchanges within that LIR.

26. In instances where LECs are not directly interconnecting their facilities, the transiting arrangements set out in Schedule Cs often encompass all areas where these LECs offer local services. The Commission expects LECs to continue this practice as it minimizes the number of Schedule C updates required, thereby reducing possible delays for offering local services in an additional exchange.

27. In order to avoid delays in the provision of competitive local services to customers, the Commission expects LECs to either sign MALIs or update Schedule Cs, where necessary, with the CLEC entering the additional exchange within 30 days of the date the letter of intention is filed with the Commission.

III. Should the requirement that an existing CLEC file a letter notifying the Commission that all relevant obligations have been satisfied prior to offering local services in an additional exchange be maintained? If so, what information should be provided in the letter?

28. Most parties were of the view that the requirement to file the notification letter should be maintained. However, EastLink, OTA, and SaskTel submitted that it should only be maintained in cases where a CLEC is entering an ILEC’s operating territory for the first time.

29. Parties that were in favour of maintaining the requirement to file the notification letter provided details as to the information that, in their opinion, should be addressed in the letter. Most parties agreed that, at a minimum, the information provided should include the name of the exchange along with the in-service date for commercial traffic. Some parties indicated that a notification that all obligations have been completed, along with a reference to the filing of agreements and tariffs, and the type of CLEC (i.e. I, II, III, and IV) that the CLEC is proposing to qualify as should be included.

30. TCC submitted that when entering into an ILEC’s territory for the first time, an existing CLEC should report on every obligation, since it cannot be presumed that the new ILEC actively partook in the scrutiny of a CLEC’s claims regarding its obligations when that CLEC was proposing to enter another ILEC’s territory. TCC proposed that the letter be sent prior to the completion of testing of network interconnection for the exchange in order to better permit completion of the Commission’s review prior to the CLEC’s planned entry date, thereby minimizing the risk of delays.

31. The Commission notes that while Telecom Decision 97-8 permitted CLECs to define their own serving areas for the purpose of setting rates for retail services, it imposed a number of conditions on CLECs that applied at the level of the ILEC’s exchange boundaries. Given that these obligations are imposed as a condition of offering local services, an entity that has satisfied all applicable obligations in order to operate as a CLEC in a given exchange (i.e. an existing CLEC) remains a proposed CLEC for any exchange in which it intends to provide local service but has yet to fulfill all applicable obligations.

32. While an existing CLEC may not need to take active steps in order to fulfill all obligations each time it seeks to provide local services in an additional exchange, it remains that all obligations must be met with respect to each ILEC exchange in which it proposes to offer local services.

33. In order to allow for proper administration of the obligations imposed upon a CLEC entering into an additional ILEC exchange, the Commission has required that the CLEC provide the Commission with, and publicly disclose, certain information. In this regard, the requirement furthers a number of telecommunication policy objectives, namely those set out at paragraphs 7(a), (b), (c), (h) and (i) of the Act. As such, the Commission maintains the requirement for a CLEC to file a notification letter attesting that it is in full compliance with all of its obligations prior to offering local services in an additional exchange.

34. The Commission considers that the information provided by a CLEC in such notification letters will differ depending on whether a CLEC is (i) entering an ILEC’s incumbent serving territory for the first time, or (ii) already providing local services in certain exchanges of a given ILEC’s incumbent serving territory. In the latter situation, the information will differ depending on whether the CLEC is (i) entering an exchange contained within an LIR in which it previously did not offer local services, or (ii) entering an additional exchange contained within an LIR in which it already offers local services. The Commission considers that the impact that these various entry scenarios will have on the information that a CLEC needs to provide to allow for proper administration of its obligations will depend on the wording of approved tariffs and required agreements, as well as whether such pre-existing agreements capture all carriers operating in the exchange in which the CLEC intends to offer local services. In the Appendix to this decision sets out the information which a CLEC must provide in its notification letter.2

IV. Should an existing CLEC continue to serve documentation it files with the Commission on all Canadian carriers providing services in the exchange in which it proposes to offer local service, and on all other entities that have proposed to provide services in compliance with the required CLEC entry procedures?

35. The Bell companies, CNOC, MTS Allstream, and TBayTel submitted that it is not necessary to serve other carriers with documentation filed with the Commission, as long as the information is made available on the Commission’s website in a timely manner.

36. EastLink submitted that only a notification letter indicating that a CLEC is entering an ILEC’s territory for the first time should be filed with the Commission and further submitted that this letter need only be served on the ILEC.

37. Distributel submitted that only the notification letter should be served on all Canadian carriers that currently, or propose to, provide service in the exchange, and that the practice of serving the CNA, the Canadian Local Number Portability Consortium and the Canadian Portable Contribution Consortium Inc. should be maintained. Shaw submitted that the letter of intention and the notification letter should be served on LECs operating or proposing to operate in the relevant exchange, as the communication of this information ensures that they are aware of which parties they need to make arrangements with for exchanging traffic, and signals the commencement of traffic exchange and porting requests involving a new entrant. RCP submitted that the process currently in place for LECs serves its purpose well.

38. TCC submitted that as the ILEC must be aware of all CLEC operations, the letter of intention, the notification letter, as well as correspondence from the Commission should be copied to the ILEC, and that other CLECs need not be copied on either letter. Instead, TCC suggested that the Commission establish a separate distribution list for approvals pertaining to each ILEC territory, similar to the interested party lists for public proceedings, to which parties could subscribe to receive notification. TCC indicated that doing so would allow interested parties of any type to be notified of CLEC expansions without burdening the uninterested parties with a multitude of e-mails.

39. The Commission notes that some parties indicated that they do not wish to be served with the documentation filed by CLECs, while others have indicated that they wish to continue to receive, at a minimum, the notification letters. The Commission considers that it is important that LECs and other interested parties be made aware of a CLEC’s entry into an exchange in order to ensure that all arrangements for the interchange of traffic are in place, and to ascertain the start date for exchanging traffic and processing porting requests. However, the Commission considers that there are more efficient ways for CLECs to communicate this information than by serving documentation on all Canadian carriers offering services in a given exchange, as well as on all other entities that have proposed to provide local services in this same exchange. Instead, the Commission will implement changes on its website to allow interested entities to easily obtain the information relating to CLECs’ entry in exchanges. The Commission expects that these changes will be completed by 1 January 2013.

40. Accordingly, the Commission eliminates the requirement for existing CLECs to serve documentation they file with the Commission on all Canadian carriers providing services in the exchange in which they are proposing to provide local services, and on all other entities that have proposed to provide services in compliance with the CLEC entry procedures. However, until the changes to the Commission’s website are implemented, CLECs are to serve the letters of intention and the notification letters they file with the Commission on all LECs providing, or proposing to provide, services in the exchanges in which they are planning to offer local services. The Commission will also continue to publish CLECs’ market entry information on its website.

V. Should a service standard be established for the completion of the registration process for existing CLECs seeking to offer local services in an additional exchange?

41. Parties suggested timeframes that ranged from 5 to 45 business days following reception of a notification letter from an existing CLEC seeking to offer local services in an additional exchange. TCC proposed that a response normally be issued within 5 business days if (i) each obligation that is to be addressed in the notification letter is correctly addressed, (ii) the necessary tariffs have been approved and the approval order is provided in reference, (iii) MALIs are executed and identified, and (iv) no intervention is received. The Bell companies proposed a process similar to that established for Group B tariff filings in Telecom Decision 2008-74.

42. As noted above, CLECs must fulfill a number of obligations as a condition of providing service in a given exchange. The Commission notes that in order to meet the obligations related to tariffs and certain inter-carrier agreements, Commission approval is required. While a CLEC must notify the Commission that it has fulfilled its obligations by filing of a letter of notification, CLECs are not required to obtain approval of requests to offer local services in a given exchange. However, in Telecom Decision 97-8, the Commission established a CLEC registration regime to provide interested persons with an effective means of raising potential issues with respect to a CLEC’s compliance with market entry obligations following the publication of its letter of notification. This regime ensures that, absent indication of the existence of any such issues and corresponding Commission intervention, all carriers operating in an exchange in which the CLEC intends to offer local services are made aware that they are to interact with that entity on the basis of it qualifying as a CLEC, thereby facilitating the orderly development of competition in the Canadian telecommunications system. The practice has been for the Commission to communicate registration of a CLEC’s entry into an additional exchange by means of a letter, posted on the Commission’s website, indicating that a CLEC has provided notification of compliance with all applicable CLEC obligations (registration letters) with subsequent updates to the General Tariff Exchanges list found on the Commission’s website at www.crtc.gc.ca, under “Registration Lists” in the Telecommunications Sector part of the website.

43. In order to interfere with the operation of competitive market forces to the least possible extent while continuing to ensure that the orderly development of competition continues as efficiently as possible, the Commission announces its intention (i) to eliminate its practice of issuing registration letters with respect to CLECs proposing to expand their local service offering into additional exchanges, and (ii) to communicate registration in such instances by means of the above-mentioned General Tariff Exchanges list within 15 calendar days3 following reception of such notification letter. The notification letter should be filed at least 15 calendar days prior to the anticipated in-service date and should include the appropriate information listed in the Appendix to this decision. This will provide both industry participants and the Commission with necessary time to review a CLEC’s compliance with applicable obligations and raise potential issues, should any be identified.

Other matters

44. In its intervention, TCC proposed that the Commission modify the requirement by which a CLEC is required to enter into a MALI with every other LEC offering local services in an exchange. Moreover, CNOC addressed the continued appropriateness of each requirement imposed on CLECs, as established in Telecom Decision 97-8 and subsequent decisions, and proposed changes to the approval process related to certain inter-carrier agreements.

45. The Commission notes that the scope of Telecom Notice of Consultation 2011-761 was limited to the notification requirements applicable to existing CLECs seeking to offer local services in additional exchanges, and did not include a review of all substantive regulatory requirements imposed on CLECs, as established in Telecom Decision 97-8 and subsequent decisions. The Commission therefore considers that CNOC’s and TCC’s proposals in this regard are outside the scope of this proceeding.

Secretary General

Related documents


Appendix

The following information must be provided in the notification letter filed by an existing CLEC.

1. Attest to the Commission that the CLEC understands and will conform to the obligations set out in Telecom Decision 97-8, as modified from time to time.

2. Indicate the type (i.e. I, II, III, and IV) the CLEC is proposing to qualify as within the exchange(s). For types III and IV, identify the name of the underlying LEC.

3. Identify the exchange(s) to be served along with the in-service date(s).

4. Identify the agreement number(s) of the approved Schedule C(s), along with the relevant appendix, entered into with the other LECs offering local services in the exchange(s).

5. Identify the tariff notice number in which revisions to the CLEC’s Access Services Tariff were proposed and the decision or order approving the tariff application, in cases where such revisions are required as a result of entering the additional exchange(s).

6. Indicate the name of the parties and the date of execution of LEC/IXC agreement(s) 4 that have been executed as a result of entering the additional exchange(s), consistent with the determinations set out at paragraph 27 of Telecom Decision 2007-129.

7. Indicate that directory listings will be supplied to other LECs serving the exchange(s) in accordance with the CLEC’s approved tariff and the Basic Listing Interchange File agreement.

8. Indicate that 9-1-1 service will be provided. Identify the file number of the approved 9-1-1 agreement, in cases where a new 9-1-1 agreement was executed as a result of entering the additional exchange(s).

9. Indicate that Message Relay Service (MRS) service will be provided. Identify the file number of the approved MRS agreement, in cases where a new MRS agreement was executed as a result of entering the additional exchange(s).


Footnotes:

[1] A LEC must have a MALI and associated Schedule C in place with every other LEC operating in each exchange where it offers local services, regardless of whether the concerned LECs are directly interconnected.

[2] The Commission notes that, as set out in paragraph 43 of the present decision, notification letters should be filed at least 15 calendar days prior to the anticipated in-service date.

[3] In accordance with the rules on computation of time set out in section 12 of the Canadian Radio-Television and Telecommunications Commission Rules of Practice and Procedure.

[4] Interexchange carrier

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