Telecom Procedural Letter Addressed to Distribution List

Ottawa, 16 December 2016

Our references: 8740-B2-201606873, 8740-C6-201606831, 8740-M59-201606980, 8740-R28-201606808, 8740-S22-201606823, 8740-S9-201606790, 8740-T66-201606815, 8740-V3-201606849, 8740-E17-20161026

BY EMAIL

Re: Information Associated with the Implementation of Telecom Order CRTC 2016-396

To Distribution List:

In Telecom Decision 2016-117Footnote1, the Commission directed all wholesale high-speed access (HSA) service providers to file new tariff applications for bandedFootnote2 non-legacy aggregated wholesale HSA service speeds, reflecting the Commission’s determinations set out in that decision. The Commission also directed wholesale HSA service providers that use the capacity based billing (CBB) modelFootnote3 to file their updated monthly capacity rate per 100 megabits per second (Mbps).

The Commission received tariff applicationsFootnote4, dated 30 June 2016, from Bell Canada, Cogeco Communications Inc. (Cogeco); MTS Inc. (MTS); Quebecor Media Inc., on behalf of Videotron G.P. (Videotron); Rogers Communications Canada Inc. (RCCI); Saskatchewan Telecommunications (SaskTel); Shaw Cablesystems G.P. (Shaw); and TELUS Communications Company (TCC).Footnote5 Bragg Communications Incorporated, carrying on business as Eastlink (Eastlink), was granted an extension and filed its application on 9 September 2016.

In Telecom Order 2016-396Footnote6 and Telecom Order 2016-448Footnote7, the Commission revised the proposed rates filed by the wholesale HSA service providers. The Commission expressed concern that certain wholesale HSA service providers did not provide sufficient costing details in their studies, did not conduct their cost studies in accordance with Phase II costing principles, as detailed in their Regulatory Economic Studies Manuals (the Manual), and/or did not justify any departures from the principles and methodologies set out in the Manual and past Commission determinations. Revised rates were approved on an interim basis.

In order for the Commission to approve the wholesale HSA service tariff applications on a final basis, it is necessary for the companies to re-file cost studies in the context of their related tariff applications. Such cost studies must:

  1. Abide by the principles and methodologies outlined in the ManualsFootnote8.
  2. Abide by previous applicable Commission determinations as they relate to the wholesale HSA services.
  3. Include all the information in the prescribed format as identified in the Commission staff letter dated March 31, 2016 titled “Re: Information Associated with the Implementation of Telecom Decision CRTC 2016-117”.
  4. In addition, the filing of information in the context of the tariff applications, including in the cost studies, should be consistent with the confidentiality guidelines set out in Telecom Regulatory Policy CRTC 2012-592Footnote9

A company request for deviation from a past Commission determination that would be captured in items 1 through 4 above is to reflect the cost impact of such a deviation in a separate cost study that highlights the proposed revision(s), including a detailed rationale and supporting evidence.

In the absence of supporting rationale and evidence for proposed cost study inputs, Commission staff will be guided by the Commission’s adjustments identified in Telecom Order CRTC 2016-396.

Wholesale HSA service providers are reminded to provide an electronic copy (i.e., Excel spreadsheets which include all formulas and linkages) of the cost model. This cost model should not include hard coded numbers that are not supported by either an internal/external reference, explanation or other supporting rationale. The populated model should include all the associated linked spreadsheet files that contain supporting data used to develop the costs. Additionally, a brief description of the input data variables, the vintage of the input data, modelling assumptions with supporting rationale, and any other pertinent costing details should be provided.

Along with the requirement to file revised cost studies, the attachment to this letter contains requests for information that address specific issues. Such information will allow the Commission to generate a fulsome record.

The timelines associated with the review of the tariff applications are as follows:

It is Commission staff’s intention to provide further process information either in the 7 April 2017 determination or shortly thereafter by separate letter.

Sincerely,

Original signed by

Lyne Renaud
Director, Competitor Services and Costing Implementation
Telecommunications Sector

Attach. (2):  Distribution List
Detailed Cost Information Requirements

DISTRIBUTION LIST

Doug Thurston, CRTC, doug.thurston@crtc.gc.ca;
Ramin Adim, CRTC, ramin.adim@crtc.gc.ca;
Bell Canada:  bell.regulatory@bell.ca;
MTS Inc.: regulatory@mts.ca;
Zayo Canada Inc.: regulatory@allstream.com;
Saskatchewan Telecommunications: document.control@sasktel.com;
TELUS Communications: regulatory.affairs@telus.com;
Cogeco Cable Inc.: telecom.regulatory@cogeco.com;
Quebecor Media Inc. (Videotron): regaffairs@quebecor.com;
Rogers Communications Partnership: barry.choi@rci.rogers.com; david.watt@rci.rogers.com; rwi_gr@rci.rogers.com;
Shaw Cablesystems G.P.: Regulatory@sjrb.ca;
CNOC Regulatory: regulatory@cnoc.ca ;
TekSavvy Solutions Inc.: regulatory@teksavvy.com;
Vaxination Informatique: jfmezei@vaxination.ca;
VMedia Inc.: george.burger@vmedia.ca;
Steve Sorochan: steve.sorochan@gov.yk.ca;
Darren Parberry: metisbus@yahoo.ca;
Marcus Schultze: marcus.p.schultze@gmail.com;
Kathleen Turnsek: regulatory@vianet.ca;
Eastlink: Regulatory.Matters@corp.eastlink.ca;
Tacit Law: ctacit@tacitlaw.com;
Distributel Communications Limited: regulatory@distributel.ca;

Detailed Cost Information Requirements

Request for information to Bell Canada

  1. Refer to Bell Canada’s letter, dated 30 June 2016, titled, “Associated with Bell Canada Tariff Notice 7504 – Revisions to GAS-FTTN Service Pursuant to Decision 2016-117”. In Section C, Bell Canada submits that due to the low demand in the Atlantic serving area for residential 15 Mbps asymmetric digital subscriber line (ADSL) access – fibre-to-the-node (FTTN) service and business 13 Mbps ADSL access – FTTN service, and with consideration to the cost, time, and resources required to develop updated costs, a revised cost study is not required in this instance. Accordingly, Bell Canada proposed no change to the existing rates. Bell Canada indicated that the Commission, in TRP 2015-326Footnote10, addressed the question of whether in some circumstances it would be reasonable to waive the requirement to file a cost study.

    Commission staff notes Bell Canada’s request to make no change to the rates for the two ADSL-FTTN services in Atlantic Canada, and has reviewed the issues raised by Bell Canada with respect to demand for the services, TRP 2015-326, and the effort associated with the preparation of regulatory material.

    As an alternative to filing an updated cost study for the two ADSL-FTTN services in Atlantic Canada:

    1. Comment on the possibility to apply the same percentage change adjustments reflected in the rates (access and usage) for its similar-speed Bell Ontario and Quebec GAS - FTTN service to the two ADSL access - FTTN services in Atlantic Canada, including all necessary supporting rationale.
    2. If the cost adjustment proposal provided in 1a) above is not acceptable to the company, propose an alternate method that would reflect the cost changes experienced since the current rates were approved with supporting rationale.

    In the absence of alternatives provided in 1a) and 1b), the company is to provide an updated cost study and propose rates for the residential 15 Mbps ADSL access – FTTN service and business 13 Mbps ADSL access – FTTN service.

Request for information to Telus Quebec

  1. Explain with supporting rationale why the company has not filed a tariff application for non-legacy aggregated HSA service speeds pursuant to the speed-matching requirement set out in Telecom Regulatory Policy CRTC 2010-632Footnote11.
  2. Explain with supporting rationale why the company has not filed a tariff application for non-legacy aggregated HSA service speeds in accordance with Telecom Decision CRTC 2016-117.
  3. Refer to your website, which indicates that the following retail internet speeds are offered: Optik Internet 25, 50, 100, and 250 Mbps. Describe these services – including a description of the facilities used to provision the services to the end-users. Further, explain with supporting rationale why existing regulatory requirements do not trigger the filing of company tariff applications associated with the wholesale provisioning of these services.

Request for information to all cable companies

  1. Confirm whether your company has currently deployed, or is planning to deploy within the proposed study period, Data Over Cable Service Interface Specification (DOCSIS) 3.1. If not, explain why not with supporting rationale. If so, provide the company’s rollout plan from DOCSIS 3.0 to DOCSIS 3.1. Further, explain how the transition from DOCSIS 3.0 to DOCSIS 3.1 has been reflected in the cost study.
  2. Similar to question 15 submitted by the companiesFootnote12 on 2009-07-17 and addressed to the large cable companies in the context of the proceeding initiated by Notice of Consultation 2009-261Footnote13, http://www.crtc.gc.ca/PartVII/eng/2009/8663/c12_200907321.htm#a2c Document: 1244792.zip, provide, with respect to your most common configuration of downstream and upstream capacity, within the proposed study period:
    1. the bandwidth (in megahertz [MHz]) of channels used for voice;
    2. the bandwidth (in Mbps) for these voice channels;
    3. the bandwidth (in MHz) of channels used for Internet;
    4. the bandwidth (in Mbps) for these Internet channels;
    5. the bandwidth (in MHz) of channels used for data, other than Internet;
    6. the bandwidth (in Mbps) for these data, other than Internet, RF channels;
    7. the bandwidth (in MHz) of channels used for video; and
    8. the bandwidth (in Mbps) for these video channels.

    In responding to this request for information, the companies are to provide the relevant information separately for downstream and upstream capacity.

  3. Confirm whether the company has a Converged Cable Access Platform (CCAP) device in-service today. If not, explain why not with supporting rationale. If so, provide an updated cost study to remove all cable modem termination system, and edge quadrature amplitude modulation equipment costs and replace those costs with CCAP equipment costs.
  4. Refer to the Cisco document titled “Cable Access Technologies” found at the following website,   http://docwiki.cisco.com/wiki/Cable_Access_Technologies#Table:_Nominal_DOCSIS_Downstream_Data_Rates_in_6-MHz_Channel. The table titled “Nominal DOCSIS Downstream Data Rates in 6-MHz Channel” identifies a total data rate of 42.9 Mbps (42.88 Mbps) and an effective data rate of 38 Mbps. If the company is not using one of these Mbps values, explain why not with supporting rationale.
  5. In Order CRTC 2000-789Footnote14, the Commission found it appropriate to use a rate of $0.152 as a proxy for the incremental cost of the capacity of a cable carrier channel. Public Notice CRTC 1997-35Footnote15 had established the $0.152Footnote16 per-subscriber monthly rate for access by exempt programming undertakings to cable undertakings’ channel capacity, based on a 56-channel facility.

    In the cost studies filed on 30 June 2016 and 9 September 2016, the companies proposed to assign a cost of $0.152 per subscriber per channel per month.

    Prior to Telecom Decision CRTC 2016-117, the cost of $0.152 per subscriber per channel per month was not a major cost factor as the number of channels dedicated to the high-speed access service was significantly lower than the number proposed in the current tariff applications. As the number of channels dedicated to the high-speed access service increase, concerns arise as to whether the use of this cost, established in 1997, remains appropriate for the purposes of populating the cost studies under consideration.

    Commission staff considers that the methodology proposed by the cable companies, in their tariff notices, may not lead to just and reasonable rates considering the vintage of the data used to develop the proxy cost and the increase in the number of channels dedicated to the high-speed access service since 1996.

    1. Identify, with respect to your most common configuration, the number of  downstream and upstream channels per node (identified separately) your company uses today:
      1. for voice;
      2. for Internet;
      3. for data, other than Internet; and
      4. for video
    2. If the response to a) above is higher than 56 channels in total:
      1. Explain with supporting rationale why the approach of using $0.152 as a proxy for the incremental cost of a cable carrier channel continues to be appropriate.
      2. Provide the company’s view of modifying the proxy cost of $0.152 by using the revised cost formula (shown below) to calculate the revised incremental cost per channel. 

        Revised cost per channel = $0.152 multiplied by the ratio of 56 channels over the total number of channels provided in response to a) above

      3. If the adjustment provided in ii) is not acceptable to the company, then the company may:
        1. propose an alternate proxy method, with supporting rationale;
        2. estimate the incremental cost of a cable carrier channel per high-speed access subscriber based on the principles and methodologies set out in the Manual along with a full description and justification of the manner in which the costs were estimated.
      4. Include in your cost study the company’s response to either 9 b) ii or 9 b) iii, as appropriate.
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