Telecom - Staff Letter addressed to Peggy Tabet (Quebecor Media Inc.) and Ted Woodhead (Rogers Communications Inc.)

Ottawa, 27 April 2023

Our reference: 8622-V3-202302040

BY EMAIL

Peggy Tabet
Vice President, Regulatory and Environmental Affairs
Quebecor Media Inc.
612 Saint-Jacques Street
Montréal QC  H3C 4M8
tabet.peggy@quebecor.com

Ted Woodhead
Chief Regulatory Officer and Government Affairs
Rogers Communications Inc.
333 Bloor Street East
10th Floor
Toronto ON  M4W 1G9
regulatory@rci.rogers.com

Subject: Request for final offer arbitration regarding mobile virtual network operator (MVNO) access rates

Dear Peggy Tabet and Ted Woodhead,

This letter is to advise the parties that the Commission accepts the request by Quebecor Media Inc. (Quebecor Media), on behalf of Videotron Ltd. (Videotron) and Freedom Mobile, and Rogers Communications Inc. (Rogers), for final offer arbitration (FOA).

This letter sets out the matter upon which the Commission will make a determination and procedures associated with the conduct of this process.

The Commission strives to release FOA decisions as expeditiously as possible. However, any procedural issues that arise may result in delays to the applicable timelines (see details in the attached Procedural Appendix).

The application

On 6 April 2023, the Commission received a request for FOA from Quebecor Media, on behalf of Videotron and Freedom Mobile, and Rogers for the purpose of establishing rates associated with the provision of wholesale mobile virtual network operator (MVNO) access service by Rogers to Quebecor Media.  The parties agreed that the arbitration should be based on the terms and conditions of the agreement entered into by the parties rather than the tariffed terms and conditions (once finalized).

The parties further asserted that this case meets all of the criteria for FOA set out in paragraph 4 of Practices and procedures for dispute resolution, Broadcasting and Telecom Information Bulletin CRTC 2019-184, 29 May 2019 (the 2019-184 Bulletin):

• the dispute is bilateral;
• the parties have been unable to resolve the dispute by other methods;
• the dispute is relevant to the regulation and supervision of either the Canadian broadcasting or telecommunications system, primarily to matters of interpretation or application of an existing Commission decision, policy, or regulation; and
• the resolution of the dispute does not require a new policy or change to an existing policy.

Quebecor Media and Rogers requested an expedited process without mediation. By way of letter dated 13 April 2023, Quebecor Media and Rogers were asked to propose the rate structure under which the Commission is to conduct the FOA process.  The Commission notes that Rogers responded by proposing a rate structure to which Quebecor agreed.

Commission Decisions

Upon review of the current record, the Commission considers that FOA is an appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves two parties (Quebecor Media and Rogers), and otherwise generally meets the criteria for dispute resolution set out in the 2019-184 Bulletin (and listed above). Accepting this application is also consistent with the principles set out in Practice and procedure for final offer arbitration to determine mobile virtual network operator access rates, Telecom Information Bulletin CRTC 2022-337, 9 December 2022 (the 2022-337 Bulletin).

The Commission therefore accepts the parties’ application for FOA based on the following terms:

• the terms and conditions are those negotiated by the parties;
• the proposed rate(s) are to account for seamless hand-off capability # #;
• this FOA will determine the rates for # #;
• the rates to be determined are for # #.

In accordance with paragraph 22 of the 2019-184 Bulletin, the matter upon which the Commission will make a determination is as follows:

• which party’s offer better represents just and reasonable rates for MVNO access with seamless hand off capability based on the following rate structure format?

Each party must separately provide one offer, which must be consistent with the Commission’s characterization of the matter in dispute, as noted above. Commission staff may ask the parties to respond to clarifying questions following the submission of final offers, as needed, to ensure a complete record for the Commission to make a determination.

The Commission will examine the final offers submitted by the parties and will select one offer in its entirety.^Footnote1 The Commission’s decision will be binding on the parties.

Disclosure of Rate Structure

The Commission is of the view that it is in the public interest that the rate structure (though not any financials contained therein) proposed by the parties should be disclosed publicly on the record of this proceeding and in any consequent decision. Such information would facilitate the intelligibility of this process to the public, ensuring that the Commission’s ultimate reasoning is well understood. The disclosure would be limited to the types of services under consideration, the units of measurement by which the rates would be determined, and the timeframes considered. In the Commission’s view, disclosure of such information could not reasonably be expected to result in specific and direct harm to the parties involved and, in any event, any potential harm would be outweighed by the public interest in its disclosure.

The Commission considers that the rate structure should be placed on the public record. If either party objects, then representations must be received by 1 May 2023.
Documents to be provided

The Commission requires that the parties each file their final offers with the Commission by 12 May 2023.

Alongside their final offers, parties have the opportunity, in their submission, to indicate which policy objectives would be furthered by their respective proposals, as well as which factors set out in paragraph 14 of Practice and procedure for final offer arbitration to determine mobile virtual network operator access rates, Telecom Information Bulletin CRTC 2022-337, 9 December 2022 (the 2022-337 Bulletin) should apply, how such factors should be interpreted, and how much weight should be accorded to a given factor in assessing proposals. In their submissions, parties can also propose and provide justification for other factors they believe the Commission should consider, as long as the other party can comment, in its reply, as to the pertinence of the proposed factors in determining the appropriate MVNO access rates. These submissions are not to exceed 30 pages in length.^Footnote2

The Commission approves Rogers’ request to allow both parties to file an appendix to their final offers as provided in paragraph 25 of Bulletin 2019-184. Rogers demonstrated that the appendix serves solely to support the FOA record and does not include any new arguments in support of its offer. However, the appendix should be of no more than 20 pages.

Please refer to the attached Procedural Appendix for the procedure to be followed in the filing of documents.

To complete the record on the FOA request, Quebecor Media is to provide by 12 May 2023:

• copies of all MVNO access agreements entered into;
• copies of all current off tariff roaming access agreements, along with any related agreements that contain information pertinent to a current agreement, allowing the party to roam on another Canadian network, along with a ranking, with pertinent rationale, of relevance for this FOA;
• monthly volume projections for the use of Rogers’ MVNO network, including new subscribers due to access to the MVNO network, total number of subscribers using the MVNO network, as well as calls, SMS, data use for # # and data use for # # on the MVNO network, along with any pertinent assumptions used to establish the projections;
• in an Excel spreadsheet, details and breakdowns of all costs incurred, other than the rates being decided through this FOA, to provide wireless access service to customers through this MVNO network, on a per subscriber basis. The Excel spreadsheet must include all formulas used to derive the cost elements and shall not include hard coded numbers that are not supported by either an internal / external reference, explanation, or other supporting rationale. The Excel spreadsheet must further include descriptions of all relevant variables, the vintage of the data used, as well as explanations of any assumptions used with supporting rationale;
• any documentation relevant to establishing the cost of providing seamless hand-off capability and an explanation of how, or if, it was incorporated into the proposed rate; and
• any other data relevant to justify Quebecor Media’s final offer.

To complete the record on the FOA request, Rogers is to provide by 12 May 2023:

• copies of all MVNO access agreements entered into;
• copies of all off tariff roaming access agreements entered into since September 2022^Footnote3, along with any related agreements that contain information pertinent to a current agreement, providing access to Rogers’ network;^Footnote4
• in an Excel spreadsheet, detailed costs, and cost breakdown of providing the MVNO access service, including the costs of providing seamless hand-off capability. The costs should, as much as possible be separated between voice, SMS, data use for # # and data use for # #. Where possible, please provide the costs on a per subscriber basis. The Excel spreadsheet must include all formulas used to derive the cost elements and shall not include hard coded numbers that are not supported by either an internal / external reference, explanation, or other supporting rationale.  The Excel spreadsheet must further include descriptions of all relevant variables, the vintage of the data used, as well as explanations of any assumptions used with supporting rationale; and
• any other data relevant to justify Rogers’ final offer.

After receiving the offers, the Commission will review them to confirm that they are within the identified scope and that all information requested by the Commission has been appropriately submitted. Should clarification questions be required, Commission staff will notify the parties and specify the timeline for a response. Upon confirmation, Commission staff will forward to each party a copy of the other party’s offers. The Commission aims to submit each party with a copy of the other party’s offer within 5 days of receiving the offers.

The parties will then have five days following receipt of the other party’s offers, to file comments with the Commission on the other party’s final offer, and to serve a copy of those comments on the other party. However, neither party will be authorized to amend its offer.

The Commission may require parties to participate in a mediation session after the close of record of the FOA process if it believes that it could yield positive results.

Any documents filed with the Commission should be filed via the secure service “My CRTC Account” (GCKey or Partner Log In) using the Telecom Cover Page and using the application number 8622-V3-202302040.

The parties may contact Philippe Nadeau at 819-664-7849 or  Philippe.Nadeau@crtc.gc.ca if they require additional information regarding the organization and conduct of the FOA proceeding.

Where a document is to be filed or served by a specific date, the document must be received, not merely sent, by that date. In addition to filing with the Commission via “My CRTC Account”, the parties must also send copies of all the documents in question to Philippe Nadeau at Philippe.Nadeau@crtc.gc.ca and Michel Murray at michel.murray@crtc.gc.ca.

Parties may file certain information in confidence as detailed in the appendix to this letter.

The Commission is of the view that it is of particular importance for the attainment of the objectives set out in Telecom Regulatory Policy 2021-130, as well as in the public interest, that all carriers that provide or access wholesale MVNO services be provided with sufficient information to understand the Commission’s rationale and decisions. As such, the Commission will aim to release as much information and rationale as possible to the public in its decisions on FOA proceedings on MVNO access rates. Releasing as much information as possible would also assist other carriers involved in the achievement of a MVNO access agreement.

In keeping with this objective, the parties should prepare their various submissions as part of this process with the view to disclose information on the public record to the maximum extent possible, which will also assist the Commission to release FOA decisions as expeditiously as possible.

As an exception to the CRTC Rules of Practice and Procedure, these offers and submissions are not to be served on the other party at the time of filing. As stated in paragraph 26 of the 2019-184 Bulletin and discussed above, within five days of the date on which the final offer submissions of the parties have been received by the Commission, and upon confirmation that both offers are within the identified scope of the proceeding as established by the Commission, the Commission will forward to each of the parties a copy of the other party’s offer.

An abridged copy of this letter will be added to the public record.

Yours sincerely

Original signed by

Claude Doucet,
Secretary General

Appendix

Procedures

The CRTC Rules of Practice and Procedure, which are referred to in Information Bulletin 2019-184, and Information Bulletin 2022-337, set out the practices and procedures to be followed in FOA regarding MVNO access rates, as well as matters relating to the filing of documents and confidentiality.^Footnote5 Parties should be aware that any deviation from the FOA process may result in delays to the applicable timelines.

Filing of documents

Parties must follow the naming convention noted below when filing documents via GC key.

Application number – FOA – Filing party – Document name – Document version – Filing date (yyyy-mm-dd)

Confidentiality

In accordance with paragraph 59 of Information Bulletin CRTC 2019-184 and paragraph 19 of Information Bulletin 2022-337, existing Commission confidentiality rules and practices will apply throughout the FOA proceedings.

The applicable statutory regime and associated practices are set out at sections 38 and 39 of the Telecommunications Act and in sections 30 to 34 or the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules).  The procedures for filing confidential information or requesting its disclosure are further described in  Broadcasting and Telecom Information Bulletin 2010-961.

A party designating information as confidential must make such designation at the time that they file the document that contains the relevant information. The party that designates information as confidential must provide reasons, as well as any supporting documents, why the disclosure of the information would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in its disclosure.

In FOA proceedings there are generally three versions of each document filed with the Commission: (i) a full, complete version that contains all confidential information and is for use solely by the Commission; (ii) a version that is provided to the other party to the FOA and that includes the complete details of the party’s offer but generally omits certain details that are of a commercially sensitive nature; and (iii) a version that is placed on the public record and generally omits commercially sensitive information as well as details pertaining to the final offer, among other things. When filing their submissions, parties must clearly designate each version of the submitted document by marking the top of every page of each version of the document with one of the following three designations: “Public version”, “Confidential version for party X”, or “Confidential CRTC version”.

In the confidential CRTC version, parties are to highlight any text that is designated confidential: in green to denote confidential to the other party and the public, and in yellow to denote confidential to the public but disclosed to the other party.

Date modified:

2023-04-27