Telecom - Secretary General Letter addressed to Peggy Tabet (Québecor Media Inc.) and Philippe Gauvin (Bell Canada)

Ottawa, 13 July 2023

Our reference: 8622-V3-202300416

VIA EMAIL

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

Philippe Gauvin
Assistant General Counsel
Bell Canada
Floor 19, 160 Elgin Street
Ottawa ON K2P 2C4
bell.regulatory@bell.ca

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

Dear Peggy Tabet and Philippe Gauvin,

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

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 22 June 2023, the Commission received a request for FOA from Québecor, on behalf of Videotron and Freedom, for the purpose of establishing just and reasonable rates for the provision of facilities based MVNO access service by Bell to Québecor pursuant to subsection 27(1) of the Telecommunications Act.

The Commission notes that this is the second time that Québecor has requested an FOA for establishing MVNO access rates with Bell. The Commission rejected, by way of a letter on 17 February 2023, Québecor’s initial FOA request of 22 June 2023. The Commission directed the parties to undertake good-faith negotiations for a minimum period of 30 days, while suggesting that a new FOA request could be filed in the event of a continuing impasse.

In the present FOA request, while Québecor has indicated its willingness to participate in a staff-assisted mediation prior to initiating a formal FOA process, Québecor nonetheless asserted that this case now 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 involves one issue which is purely monetary: the rates payable by Québecor for Bell’s MVNO access service;
• 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.

Further on 27 June 2023, in response to a letter from staff inquiring as to whether the seamless handoff component should be severed from the rest of the FOA, Québecor indicated that the said capability is an integral part of the MVNO access service as per Telecom Decision 2022-288 and, therefore, should be considered in conjunction with all other components of MVNO access.

On 27 June 2023, Bell replied that it is also willing to participate in a staff-assisted mediation. Moreover, should the parties eventually proceed to an FOA process, Bell commented that the seamless hand-off capability, and its incremental costs, should be severed and considered separately from the MVNO access rates.

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 (i.e., Québecor and Bell), 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).

While the Commission notes the parties’ willingness to participate in a staff-assisted mediation as an intermediary step, the Commission considers it appropriate to initiate the FOA process forthwith. The Commission intends to use staff-assisted mediation where it is likely to ensure progress in the dispute. However, in this case, given that the parties are still far apart on some key issues following several months of negotiations, the Commission believes that mediation is unlikely to result in a resolution of the dispute. As such, to ensure a timely and efficient resolution, the Commission will forego mediation for this particular dispute. The Commission reminds the parties that they are encouraged to continue negotiations in parallel with the FOA process. If parties come to an agreement on certain issues the Commission will exclude them from determination, and if parties come to an agreement, they can withdraw from the FOA process. In both cases, both parties will have to confirm that an agreement has been reached.

Further, the Commission notes that the parties proposed different final offer rate structures to be considered in the FOA process, which is largely due to their different positions on whether to sever seamless hand-off from the process. In Telecom Decision 2022-288 and Telecom Order 2023-133, the Commission mandated the inclusion of seamless hand-off in the MVNO access service, and determined that parties are to establish the associated rates via commercial negotiations. However, the Commission acknowledged the potential increase of operational costs to be incurred by the incumbents in association with the implementation of seamless hand-off for MVNO access services. Therefore, in order to provide the parties with maximum flexibility to structure their best final offers, the Commission determines that # #.

The Commission therefore accepts Québecor’s application for FOA to determine MVNO access rates with seamless handoff based on the following terms:

• this FOA will determine the rates for # #; and
• 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. The Commission’s decision will be binding on the parties. On an exceptional basis, where neither party’s final offer is, in the opinion of the Commission, in the public interest, both final offers will be rejected by the Commission and the parties involved will be so advised. In such case, the Commission may suggest or initiate a different dispute resolution mechanism.

The Commission further notes that the inclusion of line items other than # # in the final offer rate structure set out above does not by itself mean that the Commission considers their inclusion to be just and reasonable. The parties should justify the inclusion of these line items in addition to the rates proposed. This also means that proposed rates of $0 for these line items may be included in the final offers. If a party chooses to do so, it should explain why it is appropriate and if / how the costs related to these line items are incorporated in other components of the offer, # #.

Documents to be provided

The Commission requires that the parties each file their final offers for MVNO access with seamless hand-off with the Commission by 28 July 2023.

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

Alongside their final offers, parties have the opportunity, in their submissions, to indicate which policy objectives would be furthered by their respective proposal, as well as which factors set out in paragraph 14 of 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. As indicated in the 2019-184 Bulletin, the Commission may, upon request, permit a party to include an appendix to its final offer submission.

To complete the record on the FOA request, Québecor is to provide by 28 July 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 Québecor to roam on another Canadian network, along with a ranking, with pertinent rationale, of relevance for this FOA;
• actual number of subscribers and usage on Québecor’s own network for the past 12 months, broken down by brand, as well as monthly volume projections for the use of Bell’s MVNO network, including new subscribers due to access to the MVNO network, and total number of subscribers using the MVNO network. This should include usage (actual and projected) for calls, SMS and data, along with any pertinent assumptions used to establish the projections;
• in an Excel spreadsheet, detailed costs, and cost breakdown of providing the network access to Québecor’s own customers. 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;
• 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, inclusions and exclusions, 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;
• for every component of the rate structure other than # #, in an Excel spreadsheet, detailed breakdown justifying the proposed rates as well as projected usage and projected overall costs for each of the next 12 months. 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 rates; and
• any other data relevant to justify Québecor’s final offer.

To complete the record on the FOA request, Bell is to provide by 28 July 2023:

• copies of all MVNO access agreements entered into;
• copies of all off tariff roaming access agreements entered into since September 2022, along with any related agreements that contain information pertinent to a current agreement, providing access to Bell’s network. The Commission will maintain the claims of confidentiality requested at that time for this proceeding. In order to reduce the burden of filing additional agreements, all agreements that were filed by the Bell in response to the Commission letter dated 19 August 2022, will form part of the record of this FOA process;
• 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 Bell’s own subscribers, on a per subscriber basis. The Excel spreadsheet must include all formulas used to derive the cost elements, inclusions and exclusions, 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;
• in an Excel spreadsheet, detailed costs, and cost breakdown of providing the MVNO access service, including the costs of providing seamless hand-off capability. 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;
• for every component of the rate structure other than # #, in an Excel spreadsheet, detailed breakdown justifying the proposed rates as well as projected usage and projected overall costs for each of the next 12 months. 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 Bell’s 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 five 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.

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-V3-202300416.

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 conclusion 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 Canadian Radio-television and Telecommunications Commission 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

Procedural Appendix

Procedures

The Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules), 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.^Footnote1 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 of 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:

2023-07-13