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Telecom Order CRTC 2024-261

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References: 2023-56, 2023-56-1, 2023-56-2, 2023-56-3 and 2023-56-4

Ottawa, 25 October 2024

Public records: 1011-NOC2023-0056; Bell Aliant Regional Communications, Limited Partnership Tariff Notices 569, 569A, 569B and 569C ; Bell Canada Tariff Notices 7664, 7664A, 7664B and 7664C; Bell MTS Inc. Tariff Notices 852, 852A, 852B and 852C; Saskatchewan Telecommunications Tariff Notices 378, 378A and 378B; TELUS Communications Inc. Tariff Notices 583, 583A, 657, 657A, 657B and 657C

Interim rates for aggregated wholesale high-speed access services over fibre-to-the-premises facilities

Summary

The Commission is taking steps to promote greater competition between Internet service providers. Greater competition will empower Canadians with new choices and will make providers work harder to win Canadians’ business.

To do this, the Commission is providing competitors with workable access to the fibre networks of Canada’s large telephone companies by 13 February 2025. With this access, competitors will be able to use the latest available technology to offer Canadians a variety of communications services over fibre-to-the-premises (FTTP), including Internet, television, home phone, and smart home services. This order sets the interim rates that competitors will pay for that access.

In March 2023, the Commission launched two concurrent processes to determine competitor access to fibre. In November 2023, following an expedited process, the Commission provided competitors with temporary access to fibre networks in Ontario and Quebec. At that time, the Commission set interim rates for that access, and competitors have been successfully using those rates since May 2024 to offer new services to Canadians.

Then, in August 2024, following a comprehensive review and a week-long public hearing, the Commission provided competitors with broader access to fibre networks deployed by the large telephone companies across Canada by 13 February 2025.

The Commission has acted quickly to set rates on an interim basis to provide certainty to the market before new fibre access begins. This order sets the interim rates outside of Ontario and Quebec, and updates certain elements of the November 2023 interim rates for Ontario and Quebec.

The rates set in this order are determined in accordance with the Commission’s long-standing approach to setting cost-based rates. These rates are being established for modern, fibre-based services and reflect the costs that large telephone companies have incurred to build out fibre networks. In setting these rates, the Commission has completed a thorough and highly technical analysis to assess detailed costing information filed by Canada’s large telephone companies.

The Commission has already completed much of the underlying analysis necessary to set rates on a final basis; however, over the coming months, Canada’s large telephone companies will need to provide additional information for the Commission to finalize the rates. The Commission will continue to move quickly to set the terms and conditions and final rates for aggregated wholesale FTTP services.

Introduction

  1. In Telecom Regulatory Policy 2024-180, the Commission required Canada’s largest telephone companies to provide competitors with workable wholesale access to their fibre-to-the-premises (FTTP) networks by 13 February 2025. In that policy, the Commission also took steps to ensure continued investments so that more Canadians can access high-quality, higher-speed Internet.
  2. This order establishes cost-based, just and reasonable interim rates to enable wholesale FTTP access. It also sets interim rates for other services associated with both FTTP and non-FTTP wholesale high-speed access (HSA) services.

Background

  1. In March 2023, through Telecom Notice of Consultation 2023-56, the Commission directed large Internet providers to file proposed tariffs and associated cost studies for aggregated wholesale HSA services, including FTTP services, using the Phase II costing methodology.
  2. In November 2023, through Telecom Decision 2023-358, the Commission required Bell Canada and TELUS Communications Inc. (TELUS) to provide aggregated wholesale FTTP services in the provinces of Ontario and Quebec on a temporary and expedited basis by no later than 7 May 2024. In that same decision, the Commission set interim rates for these temporary services. Since that time, competitors have been making use of the temporary aggregated FTTP services to bring new choices to Canadians.
  3. In August 2024, through Telecom Regulatory Policy 2024-180, the Commission required Bell Aliant, a division of Bell Canada (Bell Aliant); Bell Canada; Bell MTS Inc. (Bell MTS); Saskatchewan Telecommunications(SaskTel); and TELUS (collectively, the incumbent local exchange carriers [ILECs]) to provide aggregated wholesale FTTP services by 13 February 2025. In that policy, the Commission stated its intention to set interim rates by the end of 2024, with final rates to follow.
  4. The Commission has worked diligently to analyze and test the rates proposed by the ILECs through a series of requests for information.
  5. In addition to adjustments that are similar to – and made for the same reasons as – those made in Telecom Decision 2023-358,Footnote 1 the Commission has made numerous adjustments to the proposed rates of the ILECs,Footnote 2 including:
    • adjusting access rates to remove any element that could potentially result in double counting for costs already covered in the service charge;
    • adjusting the service charges to differentiate between services that require a site visit versus those that do not;
    • changing life estimates for software, where they constitute a significant cost causal to service, to spread the impact of those costs over a 10-year period;
    • applying a 50% utilization factor for the distribution and feeder fibre penetration rate across TELUS’s territory in Alberta and British Columbia, reflecting the assumption that, in an ideal competitive market, two facilities-based competitors have a 50% chance of gaining retail or wholesale subscribers;Footnote 3
    • using historical financials instead of forecasted modeled costs where the record allowed, reflecting that: (i) ILECs are not required to provide access to newly deployed FTTP during the five-year head start period set out in Telecom Regulatory Policy 2024-180, and (ii) these future builds tend to include a more expensive network deployment mix than the current FTTP base subject to the final mandate; and
    • shifting costs captured by SaskTel’s enablement feesFootnote 4 to a separate access fee spread over a 10-year period.
  6. The interim rates for Bell Aliant (Atlantic Canada) and Bell MTS (Manitoba) are set using Bell Canada’s Ontario and Quebec FTTP rates, where appropriate.Footnote 5 Bell Canada requested this treatment given the late filing of their cost studies and proposed rates for the territories covered by Bell Aliant and Bell MTS. In these circumstances, the Commission had to choose between (i) accepting the late-filed rates with minimal scrutiny or adjustment, (ii) delaying the availability of wholesale access in Bell Aliant’s and Bell MTS’s serving territories, or (iii) applying the Bell Canada rate as a proxy in Manitoba and Atlantic Canada until rates are finalized. The Commission opted to use proxy rates for the interim because it strikes a balance between achieving a timely decision and allowing for the analysis of company-specific information in the future.
  7. The interim rates will allow competitors to better serve Canadians using the latest available technology. The rates will provide competitors with the opportunity to innovate and to attract customers by selling a range of communications services over FTTP, including Internet, television, home phone, and smart home solutions. The rates will also ensure that those who build Internet networks will continue to invest in high-quality Internet access across Canada.

Next Steps

  1. Arriving at just and reasonable rates involves a complex and highly technical application of costing principles over multiple companies and services. This is a significant and resource-intensive exercise.
  2. The Commission has acted quickly to set rates on an interim basis to provide certainty to the market before new fibre access begins.
  3. The Commission has already completed much of the underlying analysis necessary to set rates on a final basis; however, over the coming months, Canada’s large telephone companies will need to provide additional information for the Commission to finalize the rates. The Commission will continue to move quickly to set the terms and conditions and final rates for aggregated wholesale FTTP services.

Conclusion

  1. The Commission approves, on an interim basis, the access rates, capacity-based billing (CBB) rates, and service charges set out in Appendix 1 to this order for Bell Canada’s aggregated HSA services in Ontario and Quebec, and for TELUS’s aggregated HSA services in Quebec, effective 25 October 2024.
  2. The Commission approves, on an interim basis, the access rates, CBB rates, and service charges set out in Appendix 2 to this order for the aggregated HSA services of Bell Aliant, Bell MTS, SaskTel, and TELUS in Alberta and British Columbia, effective 13 February 2025.
  3. The Commission directs Bell Aliant, Bell Canada, Bell MTS, SaskTel, TELUS (Quebec), and TELUS (Alberta and British Columbia) to issue new tariff pages reflecting the interim approved rates within five business days of the date of this order.

Secretary General

Related documents

Appendix 1 to Telecom Order CRTC 2024-261

Interim approved rates for aggregated wholesale fibre-to-the-premises (FTTP) high-speed access (HSA) services effective 25 October 2024

Bell Canada aggregated FTTP access rates (Ontario and Quebec)

Bell Canada aggregated fibre-to-the-node (FTTN) and FTTP capacity-based billing (CBB) rate (Ontario and Quebec)

Bell Canada service charges (Ontario and Quebec)

TELUS aggregated FTTP access rate (Quebec)

TELUS aggregated FTTP CBB rate (Quebec)

TELUS service charges (Quebec)

Appendix 2 to Telecom Order CRTC 2024-261

Interim approved rates for aggregated wholesale fibre-to-the-premises (FTTP) high-speed access (HSA) services effective 13 February 2025

Bell Aliant aggregated FTTP access rates

Bell Aliant aggregated FTTP capacity-based billing (CBB) ratesFootnote 7

Bell Aliant service charges

Bell MTS aggregated FTTP access rates

Bell MTS aggregated FTTN and FTTP CBB rate

Bell MTS Service Charges

SaskTel aggregated FTTP access rate

SaskTel Monthly FTTP HSA Service Enablement Charge per Access

SaskTel aggregated FTTP CBB ratesFootnote 8

SaskTel service charges

TELUS aggregated FTTP access rate (Alberta and British Columbia)

TELUS aggregated FTTP CBB rate (Alberta and British Columbia)Footnote 9

TELUS service charges (Alberta and British Columbia)

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