ARCHIVED - Telecom Commission Letter Addressed to David Watt (Rogers Communications Inc.) and Bram Abramson (TekSavvy Solutions Inc.)

Ottawa, 15 December 2015

Our reference:  8663-T117-201513325

BY-EMAIL

Mr. David Watt
Senior Vice President – Regulatory
Rogers Communications Partnership
333 Bloor Street East, 9th Floor
Toronto, Ontario M4W 1G9
david.watt@rci.rogers.com

Mr. Bram Abramson
Chief Legal and Regulatory Officer
TekSavvy Solutions Inc.
800 Richmond Street
Chatham ON N2M 5J5
babramson@teksavvy.ca

RE:  Part 1 application by TekSavvy Solutions Inc. with respect to wholesale access to Rogers’ facilities – Disposition of request for interim relief

Dear Sirs:

This letter disposes of a request for interim relief filed by TekSavvy Solutions Inc. (TekSavvy) on 4 December 2015 as part of an application that included a request for final relief (the Application).

By way of background, TekSavvy stated that Rogers Communications Partnership (Rogers) is currently engaged in the removal of coaxial cable from a Toronto neighbourhood, in favour of a fibre optic connection. TekSavvy further stated that Rogers intended to complete the transition by 16 December 2015 at which time the existing coaxial cable will have been taken out of service.

In its Application TekSavvy requested that the Commission grant interim relief on an expedited basis by:

1. halting the removal of existing coaxial infrastructure available to wholesale customers, until the issues raised in this Application have been disposed of; or
2. ensuring that wholesale access to the access facilities required to provision downstream retail services is always provided for, through Rogers committing to the maintenance of existing aggregated tariffs in a technology-neutral matter, regardless of infrastructure, in respect of new endpoints-as Rogers has already committed to do in respect of TPIA delivered to existing endpoints, which will be grandfathered.

By way of final relief, TekSavvy requested that the Commission: (1) ascertain the extent of Rogers’ plans to replace coaxial cabling by fibre, (2) determine to what extent such plans would prevent competitors from gaining access to customers, and (3) determine how to address installation changes, both in terms of the notification required and the need to ensure that wholesale arrangements are not interrupted by changes in installation facilities.

In response to the Commission’s expedited process letter, Rogers provided its answer to TekSavvy’s request for interim relief on 9 December 2015, and Teksavvy provided its reply comments on 11 December 2015.

The criteria applied by the Commission to assess applications for interim relief are those set out by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311. These criteria (the RJR-MacDonald criteria) are that: a) there is a serious issue to be determined; b) the party seeking the interim relief will incur irreparable harm if the relief is not granted; and c) the balance of convenience, taking into account the public interest, favours granting the interim relief. To be granted interim relief, an applicant must demonstrate that its application meets all three criteria.

Is there a serious issue to be determined?

TekSavvy submitted that Rogers’ removal of coaxial access cabling in favour of fibre to the premises (FTTP), and its refusal to allow wholesale access to such fibre for addresses other than those currently served, raise a serious issue. Rogers’ actions are in violation of the 6-month notification requirement set out by the Commission in Telecom Letter Decision CRTC 94-11 (Letter 94-11). Further, TekSavvy submitted that Rogers was acting in a manner inconsistent with Telecom Regulatory Policy 2015-326 (TRP 2015-326) where the Commission contemplated  that until tariffs for the mandated provision of disaggregated wholesale high speed access (HSA) services had been approved, competitors should have access to aggregated wholesale HSA services.

In its answer, and by way of background, Rogers stated that the situation giving rise to TekSavvy’s application was limited to a condominium townhouse complex and that the company took advantage of a joint trench offer by Toronto Hydro to upgrade its ageing coaxial cabling facilities. Further it was at the request of the complex’s property manager that the coaxial cable was being removed from the property. Rogers admitted that TekSavvy should have been given notice earlier and that it had put in place systems to address this situation for the future. Rogers argued that TekSavvy’s reliance on Letter 94-11 was misplaced because it was not relevant to the facts and that, at most, current rules contemplate that 72 hours need given to competitors.

With respect to the issue of whether there was a serious issue to be tried,  Rogers argued that the issues raised by TekSavvy had been considered by the Commission in TRP 2015-326 and that it was only when tariffs for disaggregated HSA have been approved, that incumbents will be  required to provide competitors with access to FTTP facilities. Rogers argued that TekSavvy was effectively and improperly using its Application to seek a review and vary of TRP 2015-326.

Commission analysis

The threshold to demonstrate that there is a serious question to be determined is low. The issue is whether or not the application for final relief is frivolous or vexatious. Based on the record, the Commission is satisfied that TekSavvy has demonstrated that there is a serious issue to be determined.

Will the party seeking the interim relief incur irreparable harm if the relief is not granted?

TekSavvy submitted that if interim relief is not granted, the coaxial cable will be removed by Rogers and TPIA-reliant competitors will not be eligible to compete for new customers on the  FTTP platform,  Further, TekSavvy submitted that such harm could not be compensated for in the event that the final relief were granted. 

Rogers submitted that it was difficult to see how losing access for approximately a year to compete for the non-TekSavvy served homes in the affected condominium complex that to date have not chosen to take service from TekSavvy will cause TekSavvy irreparable harm.

Commission analysis

In assessing whether irreparable harm has been demonstrated, the issue is not the magnitude of the harm but rather its nature. By contrast with the first criterion, the threshold for irreparable harm is high.

With respect to the nature of the harm, an applicant has to show, among other things, that the harm is not speculative. In the Commission’s view, TekSavvy has failed to demonstrate that the harm is not speculative. More specifically, TekSavvy has failed to demonstrate that it was actively targeting customers in the complex and that Rogers’ actions have caused it to lose customers that it would otherwise have had a reasonable chance of winning over.

Further, TekSavvy has failed to demonstrate that it did not have access to alternative wholesale HSA facilities from a different carrier in order to provide service to end users in the complex, or that such access would cause significant dislocation to TekSavvy.

In light of the above, the Commission is not persuaded that TekSavvy would incur irreparable harm in the event the final relief it is seeking were granted.

Balance of convenience

TekSavvy argued that the balance of convenience favours granting the interim relief because it would preserve the status quo and would ensure that until the Commission rules as part of the final relief sought, whether competitors should be able to continue to provide service to their customers existing customers, and compete for new customers, notwithstanding an incumbent’s decision to replace its facilities.  Further, TekSavvy argued that the impact on Rogers if interim relief is allowed is outweighed by the need to ensure that competition is preserved.

Rogers submitted that were the interim relief to be granted, the company would be required to leave ageing cable plant in place, despite the property manager’s request that it be removed or, it would be obliged to provide access to fibre facilities in circumstances in which it is not mandated to do so pursuant to TRP 2015-326.

Commission analysis

In the Commission’s view, the balance of convenience, taking into account the public interest, militates against the granting of interim relief. Unlike in the case of the irreparable harm criterion, in determining the balance of convenience, the magnitude of the harm is a relevant factor. In this case, the issue is confined to a condominium townhouse complex, Rogers has stated that it has no plans to replace coaxial cable by fibre in other areas and Rogers has stated that TekSavvy’s existing customers will be grandfathered. Further, if interim relief were granted but the final relief denied, new customers of TekSavvy in the complex would be compelled to change service providers, thereby causing potentially significant dislocation to these customers.

Given the above, the Commission determines that the balance of convenience, including the public interest, favours denial of the interim relief request.

Disposition

In light of the above, the Commission denies, by majority decision, TekSavvy’s application for interim relief.

Sincerely,

Original signed by

Danielle May-Cuconato
Secretary General

Date modified:

2015-12-15