ARCHIVED - Letter

Ottawa, 20 May 2014

Our reference: 8663-C12-201313601

BY E-MAIL

John Pecman
Commissioner of Competition
Competition Bureau
50 Victoria Street
Gatineau, Quebec
K1A 0C9

Re: Telecom Notice of Consultation CRTC 2013-551 – Competition Bureau’s request for disclosure of information designated as confidential

This letter constitutes the Commission’s ruling with respect to the Competition Bureau’s (the Bureau) request[1] for disclosure of certain information filed in confidence in the proceeding initiated by Telecom Notice of Consultation CRTC 2013-551 (the Proceeding).[2]

Specifically, the Bureau requested that the Commission rule on its request and order the disclosure to the Bureau or, alternatively, to the public of the following:

• Information filed in confidence by parties to the Proceeding in response to Commission requests for information (RFI) 103, 104, 105 and 106, issued on 15 October 2013;
• Information designated as confidential by Bell Canada and found in paragraphs 145, 174 and 184 of the company’s 31 January 2014 intervention.

Bureau’s position

The Bureau submitted that it was in the public interest for it to have access to the requested information. The Bureau submitted that it was a unique intervener with special status under section 125 of the Competition Act, that it had specialized knowledge and expertise in competition matters, and that its submissions would greatly assist the Commission in reviewing the regulatory framework for wholesale services and associated policies. The Bureau argued that it required access to the confidential information in order to fully apply its expertise in commenting on the competitiveness of the markets for the wholesale services at issue.

The Bureau disagreed with the objections raised by parties to the effect that the Telecommunications Act (the Act) does not provide the Commission with the legal authority to order the disclosure of the information to the Bureau only and that any such selective disclosure would be contrary to principles of procedural fairness.

With respect to the issue of statutory authority, the Bureau argued that subsection 39(4) of the Act provided the Commission with the necessary authority to order disclosure to the Bureau.

With respect to procedural fairness concerns, the Bureau argued that given the nature of the proceeding, which is non-adversarial and will require that the Commission balance a number of competing interests and economic concepts, procedural fairness requires only that parties be made aware of the substance or broad grounds of the Bureau’s submissions. The Bureau further submitted that no procedural unfairness would result from the Bureau having access to more information than that held by any other individual party as the duty of procedural fairness owed in the Proceeding does not require that each party be treated the same.

Other parties’ positions

A number of parties whose confidential information was at issue opposed the Bureau’s request. In general, these parties argued that the Bureau did not benefit from any special status conferring upon it additional procedural rights when participating in Commission proceedings; that the Act did not provide the Commission with authority to disclose confidential information to the Bureau on a selective basis and that any decision to do so would breach the duty of fairness owed by the Commission.

Bell Canada and Bell Aliant Regional Communications, L.P. (collectively, the Bell companies), as well as SaskTel, supported the Bureau’s request for selective disclosure. The Bell companies’ support was, however, conditional on the Commission establishing conditions designed to protect the confidentiality and use of the information in question.

All parties that commented objected to the request for disclosure on the public record on the basis that the specific direct harm resulting from such disclosure would outweigh the public interest in its disclosure.

Analysis

The disposition of the Bureau’s request for disclosure of information designated as confidential is governed by section 39 of the Act. In Broadcasting and Telecom Information Bulletin CRTC 2010-961 (Info Bulletin 2010-961),[3] the Commission explained that in exercising its discretion under subsection 39(4) to disclose or order the disclosure of information properly designated as confidential, an assessment is made as to whether disclosure of the information would be likely to result in specific direct harm and whether that harm outweighs the public interest in disclosure.

The Commission notes that the information requested by the Bureau relates to the following:

• Wholesale service revenues and associated subscriber counts;[4]
• Identification of wholesale service groups that have experienced a compound annual growth rate of at least +/- 10% over a five year period;[5]
• Bell Canada’s installed base of unbundled local loops (ULLs) and importance of ULLs, relative to aggregated high-speed access (HSA) services, for the provisioning of retail broadband services;[1] and,
• Anticipated population coverage of Bell Mobility’s LTE network[1]

Confidential information filed in response to RFIs

The Commission notes that all information filed in confidence and submitted in response to RFI 104 has now been disclosed on the public record. With respect to the other information filed in confidence and for which the Bureau seeks disclosure on the public record, the Commission considers that the public interest in such disclosure is outweighed by the specific direct harm to the party claiming confidentiality. The Commission notes that the designated information submitted in response to RFI 103 and 105 identifies company-specific revenues for itemized wholesale services and associated customer counts. The Commission considers that public disclosure of this information would provide competitors with commercially sensitive information about a responding party’s wholesale operations and would allow them to position their business strategies accordingly. In the Commission’s view, public disclosure of the information designated as confidential in response to RFI 106 would be similarly prejudicial to the party claiming confidentiality.

While the Commission acknowledges that disclosure of this information would assist the Bureau in making its submissions, the Commission does not consider that access to this information is necessary in order to permit the Bureau to meaningfully participate in the Proceeding. In this regard, the Commission considers that the public record, inclusive of the interventions filed on 31 January 2014, discloses the substance of each party’s positions and arguments. The Commission further notes that, in addition to the full disclosure of information provided in response to RFI 104, the Commission has also made available to parties certain aggregated data on the basis of the information received in response to the relevant RFIs sufficient to estimate the size of the existing wholesale market for service groups and associated historical trends.

In light of the above, the Commission considers that the public interest in disclosing the information designated as confidential in responses to these RFIs and which has not been subsequently disclosed would not outweigh the harm likely to result from its public disclosure.

Information designated as confidential by Bell Canada in its 31 January 2014 intervention

Paragraph 145

The Commission considers that Bell Mobility’s forecast penetration rate for its LTE wireless network should be disclosed on the public record as this information has been disclosed by BCE in its most recent annual report. The Commission considers that the timeline within which the company anticipates to meet this forecast penetration rate need not be disclosed publically as knowledge of this information is of little, if any, benefit to parties for the purposes of commenting on issues relevant to the Proceeding.

Paragraph 174

With respect to ULL demand, the Commission considers that this information should be disclosed on the public record. The Commission is of the view that the level of aggregation of the information is sufficient that its disclosure would not permit competitors to use the information in a way that could harm Bell Canada’s competitive position. Furthermore, and considering that Bell Canada is relying on this information in support of its case for forbearance, the Commission considers that parties need access to this information in order to meaningfully comment on Bell Canada’s request. In light of this, the Commission considers the public benefit of disclosing the information on the public record relating to ULL demand outweighs the harm that could result in its public disclosure.

Paragraph 184

With respect to the ratio of end-users served via aggregated HSA services versus ULLs, the Commission considers that this information should not be disclosed on the public record. Given the public disclosure of Bell Canada’s ULL demand, as discussed above, disclosure of this ratio would allow competitors to ascertain the number of end users served via Bell Canada’s HSA services. In the circumstances, public disclosure of the information would be prejudicial to Bell Canada’s competitive position as competitors could use the information to better position their business strategies. Furthermore, the Commission is of the view that this information adds little to Bell Canada’s argument that ULLs do not play a significant role in the provision of broadband services. Accordingly, the Commission determines that the specific direct harm outweighs the public interest in disclosure.

In light of the above, the Commission directs Bell Canada to disclose on the public record, by no later than 27 May 2014, the LTE wireless network forecast penetration rate set out at paragraph 145 of the company’s 31 January 2014 intervention as well as the ULL demand information provided in 174 of that same intervention.

Selective disclosure to the Bureau

With respect to the Bureau’s request that the confidential information in question be disclosed to it only, the Commission considers that the criteria typically addressed in the exercise of its discretion under subsection 39(4), as articulated in Info Bulletin 2010-961 and discussed above, do not lend themselves to the specific circumstances at issue. This is because the Bureau is a government body that does not have a commercial interest that could benefit financially from access to the requested information.

In the present case, the Commission considers that an appropriate factor to take into account in the exercise of its discretion is the impact, if any, that selective disclosure to the Bureau is likely to have on the perceived integrity and fairness of Commission proceedings. The Commission notes that the Bureau plays a special role in Commission proceedings, as an advocate for competition with specialized expertise in the area. At the same time, the Bureau has, to date, been treated from the procedural standpoint, like any other party. In this regard, the Commission notes that unlike other legislation, such as Canadian International Trade Tribunal Act and the Shipping Conferences Exemption Act, 1987, the Act does not confer upon the Bureau a special status in Commission proceedings.

As previously discussed, the Commission considers that the information contained on the record of this proceeding, including the information disclosed in response to requests for disclosure and information compiled on an aggregated basis from confidential information submitted by parties, provides the Bureau with the opportunity to participate meaningfully in the proceeding.

The Commission considers that a direction requiring the selective disclosure of the requested confidential information to the Bureau would have a negative impact on the perceived integrity and fairness of the Proceeding as such a direction would effectively result in conferring a special status on the Bureau. This, in turn, could result in a perception that the Commission might give the Bureau’s submissions greater weight than those of other parties, in part because the Bureau can rely on data that is unavailable to any other party. In this regard, the Commission notes that while the Bureau is not a party that is adverse in interest in the traditional sense, its position in the proceeding will likely be at variance with the positions advocated by at least some of the parties.

In light of the above, and in the exercise of its discretion under s.39(4) of the Act, the Commission considers that it would not be in the public interest to disclose or require the disclosure of the requested information selectively to the Bureau.

Original signed by

John Traversy
Secretary General

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