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Telecom - Commission letter addressed to the Distribution list

Ottawa, 25 March 2021

Our reference: 1011-NOC2020-0367

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Re: Call for comments – Review of the Commission’s regulatory framework for Northwestel Inc. and the state of telecommunications services in Canada’s North, Telecom Notice of Consultation CRTC 2020-367 – Disclosure of information designated as confidential


Dear recipients:

This letter addresses requests for disclosure of certain information designated as confidential by Northwestel Inc. (Northwestel) in its response to a request for information (RFI) issued by Commission staff as part of the proceeding initiated by Telecom Notice of Consultation 2020-367 (TNC 2020-367).

The RFI subject to the requests was issued on 27 November 2020. Northwestel responded to the RFI on 28 January 2021.Footnote1

On 8 February 2021, the Commission received requests for disclosure of information designated as confidential from the Council of Yukon First Nations (CYFN), Iristel Inc. (Iristel), and the Public Interest Advocacy Centre (PIAC).

On 18 February 2021, Northwestel filed a reply to each of the submitted requests with the Commission.

General principles

Requests for disclosure of information designated as confidential are addressed in light of sections 38 and 39 of the Telecommunications Act (the Act) as well as sections 30 to 34 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure.

In evaluating a request for disclosure, an assessment is first made as to whether the information falls into a category of information that can be designated as confidential pursuant to section 39 of the Act. An assessment is then made as to whether disclosure of particular information is in the public interest; regard is generally had to whether the disclosure would result in specific direct harm and whether that harm outweighs the public interest in disclosure. Harm may be more likely to outweigh the public interest where the information is more disaggregated or where the degree of competition is greater. Conversely, the public interest may be more likely to outweigh any harm where the information is more important to the ability of the Commission to obtain a full and complete record on which to make its decision. Further information regarding the general procedures and the factors considered may be found in Procedures for filing confidential information and requesting its disclosure in Commission proceedings, Broadcasting and Telecom Information Bulletin CRTC 2010-961, 23 December 2010, as amended by Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, 26 October 2012.

Commission staff has arrived at determinations with respect to each of the requests made, which are considered in turn below.

Commission staff determinations

Northwestel(CRTC)27Nov20-1.2ii)

Iristel requested disclosure of all information filed in confidence by Northwestel with respect to the capacity of its primary and backup transport facilities, disaggregated by transport type and by community. Commission staff considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

With respect to specific direct harm, Northwestel indicated that disclosure of this information could provide competitors with insight into their network management decisions, and could directly and negatively impact their negotiations with wholesale customers, who might use such information to make strategic decisions regarding the type, capacity, and location of wholesale services to purchase.

With respect to the public interest in disclosure, Iristel noted that this information is extremely probative to issues raised in the present proceeding, including how Northwestel could enhance its current wholesale offerings, or what further wholesale services Northwestel is capable of offering in each community. Northwestel noted that the subject information is not necessary for the public to meaningfully comment on what further wholesale services should be offered.

Commission staff is of the view that disclosure of this information could result in the specific direct harm cited by Northwestel. Further, Commission staff considers that this particular information is not required in order for parties to meaningfully participate in the proceeding. For instance, Iristel was able to make fairly specific, technical recommendations in its intervention related to the maximum bandwidth that should be available to competitors through Wholesale Connect; and that Northwestel should be required to provide at least one more Network Breakout Point in addition to the one in High Level, Alberta, on a redundant path.

In this case, Commission staff considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

Northwestel(CRTC)27Nov20-1.2iii)

PIAC, Iristel, and CYFN requested disclosure of information filed by Northwestel in confidence with respect to annual average wireline voice outage time, annual average Internet outage time,
and average time to restore service for each, for the last five years, disaggregated by community. CYFN’s request was limited to communities in the Yukon.

Regarding whether this information is eligible to be considered as confidential under section 39(1) of the Act, Iristel argued that it is not eligible since members of the community are clearly aware when Northwestel’s service goes out and how long it takes Northwestel to restore the service. Commission staff considers that the general public awareness described by Iristel is substantially different from data collected by community, across Northwestel’s entire operating territory, for five years. Commission staff therefore considers that this information is eligible for confidentiality.

Regarding specific direct harm, Northwestel noted that this information could allow parties to target aspects of their network to maximize outage time, take advantage of perceived vulnerabilities, and develop methods to frustrate their efforts to restore service during an outage.

Regarding the public interest in disclosure, PIAC notes that quantifying the problem of outages is required to have a meaningful debate regarding whether Northwestel should be providing better services, or has sufficient incentive to improve service. Iristel also noted that service outages is a critical issue raised in TNC 2020-367.

Commission staff notes that it recently declined to require Northwestel to disclose similar information with similar potential for specific direct harmFootnote2, namely, that the information could enable people to target aspects of the network to maximize outage time, identify perceived vulnerabilities in the network, circumvent efforts to restore service outages and disrupt service for the greatest number of customers. Commission staff is of the view that similar considerations apply in this instance.

Commission staff also notes that there are other sources of information available to the public that could inform comments on the issue of outages. Pursuant to Telecom Decision CRTC 2008-105 and Telecom Decision CRTC 2009-304, the Commission requires Northwestel to report Quality of Service indicators for retail services quarterly (see public record 8660-C12-201000116).

In this case, Commission staff considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

PIAC also commented on Northwestel having not provided key reasons for outages disaggregated by community. While these comments were out of scope of the present specific process related to disclosure of information designated as confidential, further process is established below, which provides for all parties an opportunity to comment on the information contained in Northwestel’s RFI responses.

Iristel also noted that Northwestel had not provided any outage information with respect to mobile services, and requested that the Commission require Northwestel, or Bell Mobility directly, to provide the outage information with respect to mobile service outages. Commission staff intends to request any necessary information from Bell Mobility regarding mobile service outages.

Northwestel(CRTC)v27Nov20-1.2i)

Iristel and CYFN requested disclosure of all information filed in confidence by Northwestel describing its planned network improvements supported by the Broadband Fund, which was disaggregated by community. CYFN’s request was limited to communities in the Yukon.

Regarding whether this information is eligible to be considered as confidential under section 39(1) of the Act, Iristel argued that any information disclosed regarding these projects in Commission decisionsFootnote3 is already public and therefore cannot be claimed as confidential. Commission staff notes that the disaggregated information that Northwestel claimed as confidential, and did not disclose voluntarily in its reply to these disclosure requests, goes beyond what has been disclosed in prior Commission decisions. Commission staff therefore considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

Regarding specific direct harm, Northwestel argued that the confidential information could prejudice their competitive position, resulting in material financial loss, and allow competitors to develop more effective business strategies.

Regarding the public interest in disclosure, Iristel argued that the confidential information is necessary to meaningfully comment on Northwestel’s network improvement plans.

Commission staff notes that Northwestel originally provided related general information to the public in its RFI response regarding planned network improvements in Northwestel(CRTC)27Nov20-1.2, and in Northwestel(CRTC)27Nov20-3.2. Further, in its reply to these disclosure requests, Northwestel voluntarily provided additional relevant information on a more aggregated basis than the information for which confidentiality is claimed. This additional information, as well as the information in the Commission’s decisions regarding Northwestel’s Broadband Fund projects, provides the public with sufficient relevant information upon which to effectively participate in this proceeding. Commission staff considers that any further detailed disclosure of planned network improvements would likely cause specific direct harm to Northwestel, as it would allow competitors to develop more effective business strategies with competitively sensitive information.

Commission staff therefore considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

CYFN also requested information regarding Northwestel’s network improvement plans pursuant to an undertaking it entered into pursuant to Section 72.006 of the Acton 25 March 2019 (public record number 8661-N1-201800863). Although this request was not within the scope of this specific process for disclosure of information designated as confidential, Commission staff notes that Northwestel voluntarily provided further information in its reply which appears to adequately respond to this request.

Northwestel(CRTC)27Nov20-2.3

Northwestel claimed confidentiality with respect to disaggregated information concerning revenues from its Wholesale Connect service, by community and by competitor. PIAC requested disclosure of the names of wholesale customers of Northwestel and “at least” the “aggregated percentage of these wholesale customers serving in the North”. Commission staff considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

Regarding specific direct harm, Northwestel argued that this information could enable competitors to develop more effective business strategies, could result in specific direct harm to the competitors purchasing Wholesale Connect services, and disclosure of this information would contravene Article 11 of Northwestel’s Regulated Terms of ServiceFootnote4.

Regarding public interest in disclosure, PIAC argued that this information provides evidence upon which the public can comment on the availability of competitors and consumer choice, the extent of Northwestel’s market dominance, and the “state of competition” being reviewed by the Commission in this proceeding.

Commission staff considers that disclosure of this highly disaggregated information would likely result in specific direct harm to Northwestel. Commission staff also notes that Northwestel is bound by Article 11 of its Terms of Service, and that Northwestel’s wholesale customers have an interest in whether their information is disclosed. Further, disaggregated Wholesale Connect revenue information by competitor would not necessarily provide the public with reliable evidence upon which it could draw conclusions regarding Northwestel’s market dominance or the state of competition. This would equally be the case with respect to the alternative request made by PIAC for aggregated disclosure. Northwestel also pointed to several other related sources of information available to the public for comment, including the information Northwestel gathered from public sources to respond to Northwestel(CRTC)27Nov20-2.1, as well as the websites of competitors, or the interventions they filed in the proceeding initiated by TNC 2020-367.

Commission staff therefore considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

Northwestel(CRTC)27Nov20-3.3

PIAC requested disclosure of Northwestel’s number of subscribers, disaggregated by community and by service, for wireline telephone service (residential NAS), standalone wireline telephone service, and residential Internet access service by speed. In the alternative, PIAC requested that Northwestel at least be required to disclose the aggregated total number of local voice subscribers who would be affected by the local service subsidy. Commission staff considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

With respect to specific direct harm, Northwestel argued that the information would allow competitors to formulate more effective business strategies to Northwestel’s detriment. PIAC acknowledged that the information is competitively sensitive, but suggested that this is mitigated by Northwestel’s market dominance.

With respect to public interest in disclosure, PIAC argued that this information is critical to determining the impact of the phase-out of the local voice subsidy, and to what extent Canadians in the North have access to Internet speeds that meet the universal service objective. Regarding residential NAS subscribers, Northwestel argued that PIAC did not explain how the requested information allows for a better understanding of the impact of phasing out the local service subsidy. Regarding Internet subscriber data, Northwestel argued that the requested information is not necessary to allow PIAC to comment on the availability of certain speeds of service.

Commission staff considers that these subscriber numbers disaggregated by community and by service are competitively sensitive, disclosure of which would likely cause specific direct harm to Northwestel. Further, Commission staff notes that the availability of Internet services meeting the universal service objective is different from the number of subscribers to services of a particular speed. However, subscriber numbers for residential NAS and standalone wireline telephone are relevant to the issue of the phase-out of the local service subsidy, and if they are disclosed in aggregate across Northwestel’s operating territory then the likelihood of any competitive harm to Northwestel’s detriment should be minimal.

Commission staff therefore considers that the likelihood of specific direct harm is outweighed by the public interest in disclosure with respect to aggregate subscriber numbers for residential NAS, and standalone wireline telephone, across Northwestel’s operating territory. Northwestel is to file this information with the Commission by 8 April 2021.

Northwestel(CRTC)27Nov20-3.4

PIAC requested disclosure of Northwestel’s revenues for residential high cost service area (HCSA), residential non-HCSA, and residential Internet service baskets, for the years 2014-2019. Commission staff considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

With respect to specific direct harm, Northwestel argued that this information is competitively sensitive, and would provide competitors with service-specific revenue information which would allow them to develop more effective marketing strategies.

With respect to public interest in disclosure, PIAC argued that this information is important to understanding the impact of phasing out the local service subsidy, any potential shortfall for Northwestel, and its impact on whether rates are just and reasonable. Similarly, such information is relevant to considering the appropriateness of an Internet subsidy, price caps, basket structure, phase outs and rate design. Northwestel argued that this information is irrelevant to the issues PIAC raises; assessment of the potential need for subsidy is not based on the revenues per se, but on the gap between the cost and revenues for the services at issue.

Commission staff considers that releasing this disaggregated revenue information that would not otherwise be available to the public would likely cause specific direct harm to Northwestel. Commission staff notes that the public is able to comment on the appropriate costing methodology, and what an appropriate markup for each service would be, without Northwestel’s disaggregated revenue information. Commission staff also notes that Northwestel has publicly disclosed some information regarding general trends with respect to its revenue in Northwestel(CRTC)27Nov20-3.5, which is available for comment.

Commission staff therefore considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

Northwestel(CRTC)27Nov20-3.5

PIAC requested disclosure of Northwestel’s full income statements from 2014 to 2019, and disclosure of the amount of subsidies from Innovation, Science, and Economic Development Canada (ISED) lost in 2021 as compared to 2019. Commission staff considers this information to be eligible for confidentiality, as it falls within the categories under section 39(1) of the Act.

With respect to specific direct harm, Northwestel argues that release of this information would provide competitors, suppliers and funding partners with valuable insight into their costs and revenues at a disaggregate level that would not otherwise be available to them, allowing them to formulate more effective business plans.

With respect to public interest in disclosure, PIAC argued that its comments with respect to Northwestel(CRTC)27Nov20-3.4 apply similarly here. Further, PIAC argued that the public cannot evaluate whether Northwestel’s rates should be increased in the future on the basis of loss of subsidies without the requested information. Northwestel argued that decisions with respect to what public disclosure is appropriate to assess future calls for rate increases can be made at that time, and for now the public information it provided regarding general trends with respect to its revenue (also in response to Northwestel(CRTC)27Nov20-3.5) is sufficient to comment on a “hypothetical future call” for higher rates.

Commission staff considers that releasing these financial statements and related ISED subsidy information on the public record would likely cause specific direct harm to Northwestel. For the same reasons noted in Northwestel(CRTC)27Nov20-3.4, Commission staff considers that the public interest in disclosure is outweighed by the likelihood of specific direct harm. No further disclosure of information is required.

CYFN also requested “for each of the years 2014 to 2019, the amounts paid by Northwestel to Bell Canada.” Commission staff considers this to fall outside of the scope of this specific process for disclosure of information designated as confidential. That said, Commission staff notes that CYFN’s request could inform future RFIs in regard to the relationship between Northwestel and its affiliated companies.

Northwestel Community Engagement Report (CYFN)

CYFN requested an “unredacted copy of the Northwestel Community Engagement Report: Broadband Projects, dated December 1, 2020, (the Report) and filed with the Commission as a requirement under the Broadband Fund decisions.”

This request falls outside of the scope of questions raised in the RFI, and is with respect to information filed in the context of the Broadband Fund decisions proceeding.Footnote5 As part of that proceeding, Northwestel provided CYFN with a version of the Report with the CYFN's redacted information.

Further, although the Report did not form part of the record of the proceeding, it may raise issues that are relevant to this proceeding. As such, Commission staff considers it appropriate to place the Report on the record of this proceeding, with the abridged version available for the public.

Further process for comments

Parties will have an opportunity to file additional comments strictly limited to the information provided by Northwestel in its responses to the RFI and the Report. Such further process will be as follows:

A copy of this letter will be placed on the public record of this proceeding.

Yours sincerely,

Original signed by

Lisanne Legros
Director, Telecommunications Networks Policy
Telecommunications Sector


c.c.:     Marianne Blais, CRTC, (819) 997-4836, marianne.blais@crtc.gc.ca
Simon Wozny, CRTC, (873) 455-4630, simon.wozny@crtc.gc.ca
Julie Boisvert, CRTC, (819) 953-2421, julie.boisvert@crtc.gc.ca
Nicolas Gatto, CRTC, (873) 353-9280, nicolas.gatto@crtc.gc.ca
Andrew MacKenzie, CRTC, (819) 230-6251, andrew.mackenzie@crtc.gc.ca

Distribution List: All parties to 2020-367

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