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Ottawa, September 28, 2012

Our reference: 8662-C182-201202324


Mr. William Sandiford
Chair of the Board and President
107-85 Curlew Drive
Toronto, Ontario M3A 2P8

Re: Canadian Network Operators Consortium Inc. Part 1 Application to Review and Vary Telecom Regulatory Policy 2011-703 and Telecom Regulatory Policy CRTC 2011-704 – Ruling on request for expedited resolution of mark-up issue and for admission of additional submission on the record

On 9 August 2012 the Canadian Network Operators Consortium Inc. (CNOC) submitted additional argument and evidence in support of its request made in the above-noted review and vary application for a reduced markup for business wholesale high-speed access services. CNOC also requested that the Commission rule on the mark-up issue in an expedited manner and proposed additional process to allow other parties to provide comments on its submission. CNOC re-iterated its concern that, in light of the high markups embedded in the wholesale business high-speed access services, the recent retail business service offering by Bell Aliant Regional Communications, Limited Partnership and Bell Canada (collectively, the Bell companies) will have the net effect of unduly lessening competition in the retail business high-speed Internet market. By letter dated 10 August 2012, Vaxination Informatique (Vaxination) supported CNOC’s request.

On 13 August 2012, Commission staff responded to CNOC’s request, noting that CNOC’s submission was made out-of-process as the record of the proceeding with respect to CNOC’s request for a reduced markup for business wholesale high-speed access services was closed. Commission staff further considered that CNOC and other parties had ample opportunity to make submissions on this matter within the established process and that the new information submitted about a specific retail pricing initiative as additional evidence in support of CNOC’s original request did not warrant reopening the process in the context of a decision involving broad wholesale pricing policy. Commission staff indicated that CNOC’s and Vaxination’s submissions would therefore not form part of the record of the proceeding. Commission staff also indicated that the Commission’s decision on the matter would be issued in due course.

By letter dated 17 August 2012, CNOC requested that the Commission rule on CNOC’s
9 August 2012 requests. CNOC added that contrary to Commission staff’s reasoning, the information with respect to the Bell companies’ new retail business service offering submitted by CNOC on 9 August 2012 was not available when CNOC filed its review and vary application or during the reply comment stage of the proceeding. By letters dated 23 August 2012, the British Columbia Broadband Association, MTS Inc., Allstream Inc. and Vaxination supported CNOC’s request.

On 23 August 2012, the Bell companies and TELUS Communications Company (TELUS) opposed CNOC’s request. The Bell companies submitted that it would not be appropriate to parse out various elements of CNOC’s Review and Vary application for an expedited analysis as CNOC requested. TELUS submitted that the Bell companies’ new retail Internet rates do not constitute a fundamental change in circumstances or facts since Telecom Regulatory Policy 2011-703 and Telecom Regulatory Policy CRTC 2011-704 were issued. TELUS further submitted that new retail Internet rates and term offers are facts-of-life in a hyper-competitive market where all retail Internet rates are forborne.

The Commission has reviewed all submissions regarding CNOC’s requests. The Commission notes that it is currently considering a number of Review and Vary applications along with a CNOC Part I application, all of which deal with the subject of wholesale access rates, including the complex review of the broad wholesale pricing policy, and that many of the issues in these applications are interrelated. Further, the Commission notes that disposing of one issue prior to all others in CNOC’s Review and Vary application and prior to the other related applications, could introduce potential process complexities and create uncertainty for all parties. In light of the above, the Commission considers that it would be inappropriate to dispose of the wholesale business markup issue raised by CNOC in isolation of the other related issues currently before the Commission. Accordingly, the Commission denies CNOC’s request for expedited treatment on the business markup issue raised in CNOC’s Review and Vary application.

With respect to CNOC’s request to include its additional submission regarding the business wholesale service markup on the record of its Review and Vary proceeding, the Commission considers that for the reasons set out above and as stated by Commission staff in its letter dated 13 August 2012, CNOC’s request is denied.

Finally, the Commission notes that it expects to issue its decision on these matters as expeditiously as possible.


Original signed by

John Traversy
Secretary General

c.c.: Interested Parties to Telecom Notice of Consultation 2011-77
Chris Seidl, CRTC,
Lynne Fancy, CRTC,
Tom Vilmansen, CRTC,

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