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Ottawa, December 16, 2013

Our reference: 8638-C12-200817505 and 8678-C12-200905557

BY EMAIL

Mr. Mirko Bibic
Executive Vice President
and Chief Legal & Regulatory Officer
Bell Canada and BCE Inc.
160 Elgin Street, Floor 19
Ottawa, Ontario K2P 2C4
bell.regulatory@bell.ca

RE: Bell Canada’s and Bell Aliant’s Deferral Account-Funded Broadband Expansion

Dear Sir:

In Follow-up to Telecom Decision 2008-1 – Proposal by Bell Aliant Regional Communications, Limited Partnership and Bell Canada to dispose of the funds remaining in their deferral account, Telecom Decision 2010-637, 31 August 2010 (Telecom Decision 2010-637), the Commission approved the use of $306.3 million in deferral account funds by Bell Aliant Regional Communications, Limited Partnership, and Bell Canada (the Bell companies) to expand broadband services to 112 communities (the approved communities) in Ontario and Quebec. The Commission noted that service expansion should take place over no more than four years and should be completed by the end of August 2014.

In response to the Bell companies’ deferral account report filed in July 2012, the Commission issued a letter, dated 26 October 2012, in which it expressed concern that the Bell companies’ rollout plans would not be completed by the end of the rollout period. As a result, the Commission modified the Bell companies’ reporting requirements by requiring more detailed quarterly, rather than annual, reports. The Commission indicated that if it continued to be concerned by the pace of the rollout activities, it would consider initiating a proceeding to determine whether stricter timelines needed to be imposed, and what consequences, if any (such as reapplying interest charges), should apply if the rollout was not completed by the established timelines.

After receiving the Bell companies’ quarterly report on 15 April 2013, which showed no advancement in broadband service rollout since the July 2012 report, the Commission directed the Bell companies, by letter dated 5 June 2013, to identify a) the major risks associated with their rollout plan, and b) their mitigation strategies to address each risk, such as accelerating the rollout to specific communities.

The Commission received the Bell companies’ reply to its 5 June 2013 letter on 17 June 2013. The Commission has since received the Bell companies’ July 2013 and October 2013 reports.

The October 2013 report shows that broadband service is currently available in only 12 of the 112 approved communities. However, in this report, the Bell companies indicated that they now plan to turn up broadband services in 10 additional approved communities by the end of 2013.

The Commission notes that there are still many activities to be completed within the next nine months and that, more specifically, construction of wireline transport backbone to 17 approved communities must be both started and finished within the first eight months of 2014 in order to meet the August deadline.

The Commission also notes that the Bell companies indicated in their July 2012 report that they needed to provide most consumers with an external antenna to deliver quality service. However, no update on this situation was provided in subsequent reports.

Consequently, the Commission directs the Bell companies, in their 15 January 2014 report, to

a) update their risk assessment and mitigation strategy for the last eight months of the rollout, and
b) provide a summary of any evaluations of the service quality delivered to consumers using the external antenna in deferral-account-funded communities.

Further, the Commission directs the Bell companies, beginning in their January 2014 report and continuing in subsequent quarterly reports, to refine their forecast for the period of January to August 2014 by

1. specifying, for each of the remaining communities, in which month
a. the remaining towers are to be completed (column H),
b. construction of wireline transport is expected to start (column J),
c. construction of wireline transport is expected to be completed (column K), and
d. service will begin (column L), versus specifying a single date of August 2014 for all communities; and

2. providing a summary of the number of new towers forecasted to be completed in 2014, by month.

Additionally, in their subsequent quarterly reports, the Bell companies are to identify where any changes have been made to the forecasted month for each of the items in 1. above.

Sincerely,

Original signed by

John Traversy
Secretary General

c.c.: Michel Murray, Director, Regulatory Implementation, CRTC, 819-997-9300
michel.murray@crtc.gc.ca

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