Telecom Commission Letter Addressed to Howard Slawner and Samer Bishay (Rogers Communications Canada Inc. and Iristel Inc.)

Ottawa, 22 December 2016

Our reference: 8622-R28-201611781

BY EMAIL

Mr. Howard Slawner
Vice President - Regulatory Telecom
Rogers Communications Canada Inc.
350 Bloor Street East, 6th Floor
Toronto, ON  M4W 0A1
rwi_gr@rci.rogers.com

Mr. Samer Bishay
President & CEO, Iristel Inc.
675 Cochrane Drive, 6th Floor, East Tower
Markham, Ontario  L3R 0B8
regulatory@iristel.ca

Re: Application by Rogers Communications Canada Inc. alleging that Iris Technologies Inc. and Iristel are engaging in traffic stimulation

Dear Sirs,

On 16 November 2016, Rogers Communications Canada Inc. (RCCI) filed an application with the Commission alleging that Iris Technologies Inc. and Iristel (collectively, Iristel) were engaged in traffic stimulation. 

Among other things, RCCI requested that the Commission issue an order to make the rates charged by Iristel for (1) interexchange carrier (IXC) traffic termination in the Northwest Territories pursuant to the Outbound Termination Services (OTS) Agreement (the OTS agreement) between the two parties, and (2) local exchange traffic termination pursuant to its tariff Footnote1 interim pending the outcome of the proceeding.  For the purpose of this letter, these rates are collectively referred to as Iristel’s traffic termination rates.

On 25 November 2016, Commission staff issued a letter to RCCI and Iristel establishing a summary process to determine whether Iristel’s traffic termination rates should be made interim pending the outcome of the proceeding.

On 2 December 2016 Iristel filed (a) a comprehensive answer to RCCI’s application that Iristel stated addressed all of RCCI’s application, and (b) a letter requesting that the Commission grant Iristel the right to submit a reply in this proceeding at the same time that RCCI submitted its reply.

In addition, on 2 December 2016, Freedom Mobile Inc.; Québecor Media Inc., on behalf of Vidéotron G.P., and Shaw Telecom G.P. filed interventions with regard to RCCI’s request that Iristel’s IXC traffic termination rates be made interim.

On 6 December 2016, RCCI filed two separate replies to Iristel’s 2 December 2016 filings.

Further process

As noted above, Iristel requested that the Commission grant it the right to submit a reply in this proceeding at the same time that RCCI submitted its reply.

Commission staff notes that the Canadian Radio-television and Telecommunications Rules of Practice and Procedures (the Rules) do not contemplate a party named as respondent in an application being granted a final reply in a proceeding, although the Rules may be varied to ensure an appropriate process in the circumstances.

In that regard, Commission staff considers that it would be reasonable for Iristel to be able to supplement its answer to RCCI’s application and also to comment on any information filed in interventions.

Commission staff also considers that additional information is required with regard to RCCI’s request that the Commission make Iristel’s traffic termination rates interim. 

In light of the foregoing, set out below are the revised deadlines for this proceeding:

As set out in Procedures for filing confidential information and requesting its disclosure in Commission proceedings, Broadcasting and Telecom Information Bulletin 2010-961, 23 December 2010, parties may designate certain information as confidential.  Parties must provide an abridged version of the document involved, accompanied by rationale explaining how the information removed is confidential.

All submissions are to be made in accordance with the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure, SOR/2010-277.

Interrogatory responses, interventions, answers, and any replies are to be served on all parties to this application, including interveners, by the specified dates.  Where a document is to be filed or served by a specific date the document must be received, not merely sent.  Copies of documents should be sent to kevin.pickell@crtc.gc.ca

Sincerely,

Original signed by

Michel Murray
Director, Dispute Resolution & Regulatory Implementation
Telecommunications Sector

c.c.:  Kevin Pickell, CRTC, 819-997-4580, kevin.pickell@crtc.gc.ca
Freedom Mobile Inc., eantecol@FreedomMobile.ca
Québecor Media on behalf of Vidéotron, dennis.beland@quebecor.com
Shaw Telecom G.P., Regulatory@sjrb.ca

Attach. (1)

Requests for information to be answered by Rogers Communications Canada Inc. (RCCI) and Iris Technologies Inc. and Iristel (Iristel)

  1. Both RCCI and Iristel make reference to an Outbound Termination Services (OTS) Agreement (the OTS agreement) between the two parties.  Provide a copy of that agreement.
  2. In paragraph 10 of RCCI’s 6 December 2016 reply to Iristel’s 2 December 2016 answer, RCCI states that:

    In its answer on the issue of interim rates, Iristel claims that an increase in the volume of minutes cannot render Iristel’s rates no longer just and reasonable.  Iristel is incorrect.  Traffic volume is the denominator for the calculation of the per minute cost of terminating incoming toll traffic on a LEC network.  A dramatic increase in the number of minutes terminating on a network will reduce the cost per minute of terminating that traffic.

    1. Provide details of what cost elements are used to calculate a rate for terminating toll traffic on a local network.
    2. How do these cost elements compare with the cost elements that your company actually used to develop such rates, for example in a commercially negotiated agreement?
    3. Provide details of how an increase in the volume of minutes would affect the rate for terminating toll traffic on a local network. 
    4. Provide details of any decrease or increase in costs as a result of an increased volume of minutes.
  3. In paragraph 19 of RCCI’s 6 December 2016 reply to Iristel’s 2 December 2016 answer, RCCI states that:

    Rogers would reiterate that it is really the termination rate charged by Iristel (the CLEC), i.e. $0.038 per minute (which is regulated), that is incorporated into the rate charged by Iristel (the IXC) that is the problem - not the interexchange traffic carriage charge by Iristel.  That termination rate element was believed to be valid at the time - but is no longer so.  The facts alleged by Rogers, and substantiated at least in part by Iristel, lead to the conclusion that the current CLEC traffic termination rate charged to IXCs is no longer just and reasonable and consequently neither is the overall interexchange traffic carriage rate.  The two rates are linked because one incorporates the other

    1. How is the local termination rate charged by Iristel (the CLEC) incorporated into the IXC traffic termination rate charged by Iristel (the IXC)?
    2. Is the local termination rate charged by Iristel included in the OTS agreement?  If so, how?
    3. Is there a direct link between the two rates? 
    4. If the Commission renders a determination that changes the local termination rate charged by Iristel (the CLEC) pursuant to its tariff, what effect, if any, would that change have on the IXC termination rate charged by Iristel (the IXC).
    5. If the Commission renders a determination that changes the local termination rate charged by Iristel (the CLEC) pursuant to its tariff, what effect, if any, would that change have on the OTS agreement?
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