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Telecom Decision CRTC 2017-233

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Ottawa, 5 July 2017

File number: 8663-S4-201703215

Sogetel inc. – Implementation of local competition for CoopTel, on behalf of Câble Axion Digitel inc., in the exchanges of Lac-Etchemin and St-Just-de-Bretenières, Quebec

The Commission approves Sogetel inc.’s implementation plan for local competition, including local number portability, for CoopTel, on behalf of Câble Axion Digitel inc., in the exchanges of Lac-Etchemin and St-Just-de-Bretenières, Quebec. The Commission’s decision enables customers in these exchanges to benefit from local competition by allowing them to choose among the services, options, and prices offered by different service providers.

Background

  1. In Telecom Decision 2006-14, the Commission, among other things, set out the framework for local competition implementation in the serving territories of the small incumbent local exchange carriers (ILECs). That decision includes directives that the small ILECs must follow when submitting their implementation plans.
  2. In Telecom Regulatory Policy 2011-291, the Commission, among other things, modified the existing framework. In that decision, the Commission allowed for the recovery of ongoing costs related to local competition implementation, finding that
    • the imputed $30 rate component used in calculating the subsidy requirement would be lowered by an amount equal to the lesser of the approved ongoing local competition costs on a per-network-access-service (NAS), per-month basis, or $2 per NAS per month; and
    • after the three-year period following the implementation of local competition, small ILECs that operate in competitive regulated exchanges would continue to receive monthly subsidies, but only for the number of residential NAS that they serve in those exchanges.

Application

  1. The Commission received an implementation plan for local competition, including local number portability (LNP) [the implementation plan], dated 14 April 2017, from Sogetel inc. (Sogetel). In accordance with the framework set out in Telecom Decision 2006-14 and modified in Telecom Regulatory Policy 2011-291, the implementation plan was submitted in response to a formal signed expression of interest from CoopTel, on behalf of Câble Axion Digitel inc., to implement LNP in the exchanges of Lac-Etchemin and St-Just-de-Bretenières, Quebec, located in the local interconnection region (LIR) of Lac-Etchemin, Quebec (referred to hereafter as the affected exchanges).
  2. In its implementation plan, Sogetel identified the services and network components that it planned to make available to CoopTel, as well as the costs related to its implementation plan.  
  3. Sogetel added that in Telecom Decision 2016-182, the Commission had approved the terms of implementation of local competition and LNP for CoopTel in various exchanges within the Lac-Etchemin LIR, including the installation of shared-cost circuits towards CoopTel’s point of presence and LNP. In the past, Sogetel has filed two similar applications for the Lac-Etchemin LIR. The first was for TELUS Communications Company on behalf of Cogeco Cable Inc., and the second was for Quebecor Media Inc. on behalf of Videotron G.P. The terms of these plans were approved with changes in Telecom Decisions 2012-42 and 2013-176, respectively.
  4. The Commission received an intervention from CoopTel. The public record of this proceeding, which closed on 29 May 2017, is available on the Commission’s website at www.crtc.gc.ca or by using the file number provided above.

Issues

  1. The Commission has examined the following issues in considering Sogetel’s proposed implementation plan:
    • Which interconnection methods and options for implementing local competition in the affected exchanges would be appropriate?
    • Are new wholesale tariffs required to allow for the implementation of local competition in the affected exchanges?
    • What would be the additional costs related to the implementation of local competition for CoopTel in the affected exchanges, and what mechanisms are available to Sogetel to recover these costs?
    • What would be a reasonable time frame to implement local competition in the affected exchanges?

Which interconnection methods and options for implementing local competition in the affected exchanges would be appropriate?

  1. Sogetel proposed to respond to CoopTel’s request by using the default point of interconnection in the Lac-Etchemin LIR. Sogetel submitted that this interconnection is already in place as a result of Telecom Decision 2016-182. CoopTel supported Sogetel’s proposal.

Commission’s analysis and determinations

  1. Sogetel’s proposal reflects the most effective interconnection configuration and reduces the related costs as much as possible. The Commission therefore approves the use of the existing interconnection in the Lac-Etchemin LIR to serve the affected exchanges.

Are new wholesale tariffs required to allow for the implementation of local competition in the affected exchanges?

  1. Sogetel indicated that in Telecom Order 2012-297, the Commission approved tariffs for the purpose of implementing local competition in Sogetel’s serving territory. The company did not expect that it would need to file additional tariffs associated with CoopTel’s request.

Commission’s analysis and determinations

  1. Sogetel already has an Access Services Tariff that the Commission approved during the implementation of local competition in Sogetel’s serving territory. In the current proceeding, CoopTel did not identify which services it may need.
  2. Accordingly, the Commission determines that Sogetel’s existing Access Services Tariff is acceptable and that new wholesale tariffs are not required at this time. The Commission encourages the parties to come to an agreement on which services should be provided. If there is a change required to the rates or services that Sogetel offers, it must file a new tariff notice to that effect with the Commission.

What would be the additional costs related to the implementation of local competition for CoopTel in the affected exchanges, and what mechanisms are available to Sogetel to recover these costs?

  1. Sogetel proposed start-up and ongoing costs related to the implementation of local competition in the affected exchanges. The start-up costs relate to consultation fees, while the ongoing costs relate to portability and LNP research.
  2. The company indicated that in Telecom Decisions 2012-42, 2013-176, and 2016-182, the Commission authorized exogenous adjustmentsFootnote 1 of $71,000, $31,000, and $28,481 respectively for the recovery of start-up costs, with corresponding reductions of $0.64, $0.11, and $0.39 in Sogetel’s primary exchange service (PES) rate component used to calculate its subsidy amount for the recovery of its ongoing costs.
  3. The corresponding amounts for Sogetel’s current application represent an additional exogenous adjustment of $2,500 for the recovery of its start-up costs, as well as an additional reduction of $0.03 in the PES rate component used to calculate its subsidy amount for the recovery of its ongoing costs.Footnote 2

Commission’s analysis and determinations

  1. The Commission has reviewed the cost study and the breakdown of costs, taking into account the regulatory framework and costs approved in the past, and considers the proposed costs to be reasonable. Accordingly, the Commission approves Sogetel’s proposed costs.

What would be a reasonable time frame to implement local competition in the affected exchanges?

  1. Sogetel proposed to carry out its implementation plan within 45 days of the Commission approving the plan. It noted that the implementation time is based strictly on the competitor services specific to CoopTel’s request.
  2. CoopTel supported Sogetel’s proposal.

Commission’s analysis and determinations

  1. The framework governing local competition applicable to the small ILECs did not set out a specific time frame to establish each element of an implementation plan. Since several elements are already in place in the Lac-Etchemin LIR, where the affected exchanges are located, and since Sogetel now has the experience to successfully complete the implementation of local competition, the Commission finds that the proposed 45-day time frame is appropriate.
  2. The Commission therefore approves a schedule of a maximum of 45 days for the implementation of local competition in the affected exchanges.

Conclusion

  1. In light of all the above,
    • the Commission approves Sogetel’s implementation plan;
    • the Commission directs Sogetel to provide information and assistance to CoopTel in the negotiation process, as required, to implement local competition and LNP as quickly as possible so that CoopTel may begin operating in the affected exchanges by no later than 21 August 2017; and
    • when implementing all aspects of local competition and LNP in the affected exchanges, including technical and network interconnection, Sogetel must abide by the industry consensus items outlined in the various CRTC Interconnection Steering Committee documents related to interconnection, as well as the existing rules as outlined in the various decisions, orders, and letters issued by the Commission pertaining to local competition and LNP.

Policy Direction

  1. The Commission considers that its approval of Sogetel’s local competition implementation plan allows customers in the exchanges of Lac-Etchemin and St-Just-de-Bretenières, Quebec, to benefit from competition in the local services market by enabling them to choose among the services, options, and prices offered by different service providers. As a result, the Commission considers that its determinations in this decision will advance the policy objectives set out in paragraphs 7(b), (f), and (h) of the Telecommunications Act.Footnote 3
  2. In light of the above, the Commission considers that its determinations are consistent with the Policy DirectionFootnote 4 requirements that the Commission should (i) rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives; and (ii) when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.

Secretary General

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