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Telecom - Staff Letter addressed to Distribution List

Gatineau, 5 June 2026

References: 8740-V3-202304046, 8740-V3-202601343, 8740-R28-202304054, 8740-R28-202404614, 8740-S9-202304070, 8740-S9-202404622, 8740-E17-202304038, 8740-C6-202304062, 8740-C6-202306100, 8740-C6-202403153, 8740-C6-202404648, 8740-C6-202501981, 1011-NOC2023-0056

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Distribution List

Subject: Follow-up to Telecom Notice of Consultation CRTC 2023-56 – Notice of Hearing – Review of the wholesale high-speed access service framework – Requests for Information

As part of the proceeding initiated by Notice of hearing – Review of the wholesale high-speed access service framework, Telecom Notice of Consultation CRTC 2023-56 (NoC 2023-56), the Commission directed wholesale high-speed access (HSA) service providers to file proposed tariffs and associated cost studies using the Phase II costing methodology, with supporting rationale, to establish rates for aggregated wholesale HSA services.

The Commission received tariff applications, as well as supporting information, from Cogeco Communications Inc. (Cogeco); Quebecor Media Inc., on behalf of Videotron G.P. (Videotron); Rogers Communications Canada Inc. (RCCI); Shaw Cablesystems G.P. (Shaw); and Bragg Communications Incorporated, carrying on business as Eastlink (collectively, the Cable Carriers) consistent with the Commission’s directions in NoC 2023-56.

Commission staff have reviewed the applications and supporting information filed in response to NoC 2023-56. In relation to the proposed tariffs and supporting Phase II cost studies, Commission staff requests that Cable Carriers file additional supporting information and updated cost studies, as set out below.

Commission staff notes that the Cable Carriers submitted their initial Phase II cost studies between June 2023 and April 2024. However, Commission staff is concerned that the costing information currently on record may no longer reflect the prospective incremental costs of providing these services. Consequently, to ensure that final rates are just and reasonable and reflect the current technological and economic environment, the Cable Carriers are directed to file new Phase II cost studies, including all associated tables, using a five-year study period starting 1 January 2026 and incorporating the most recent available data for equipment costs, labour rates, and network demand.

Baseline and Deviation Cost Studies

For the purpose of this letter, each company is directed to file:

Baseline cost study

The baseline cost study is to be the company’s primary updated Phase II cost study and must:

Unless otherwise specified in this letter, the baseline study is to reflect the Commission’s existing determinations, prescribed assumptions, and Manual-based costing parameters.

Deviation cost study

A single deviation cost study is required if a company proposes a departure from any Commission determination, prescribed assumption, Manual requirement, staff-specified modelling approach, or other baseline filing requirement reflected in this letter.

Each company is to submit only one deviation study that incorporates all proposed departures from the baseline study, including those relating to assumptions, methodologies, cost classifications, traffic growth assumptions, working fill factors (WFFs), speed band structure, and any other proposed changes.

The deviation study must:

For greater clarity:

Baseline and Deviation Cost Studies Modelling Requirements

For each item below, the company is to model the prescribed treatment in the baseline study and, where the company proposes a different treatment, include that alternative in the single deviation study.

1. Study period and updated data

Baseline study

The company is to file a baseline study that:

Deviation study

If the company proposes any alternative treatment that depends on a different study assumption or updated-data approach, that alternative treatment is to be incorporated into the company’s single deviation study, with full supporting rationale and evidence.

2. Manual compliance

Baseline study

The company is to use in the baseline study the cost of debt, the cost of equity, WFFs, and asset life estimates, and any other relevant factors specified in Appendix V of the company’s Manual.

Commission staff clarifies that while the Manual itself is approved, the individual tables within Appendix V—which the Cable Carriers update periodically—have not been approved by the Commission in their entirety. The only parameters within these tables that carry formal Commission approval are those established through specific decisions, such as the cost of debt, the cost of equity, and WFFs. Accordingly, for the baseline study, the company must not deviate from any specific values that have been formally approved in the company’s Manual.

Commission staff further clarifies that in the absence of explicitly defined WFF values for certain shared facilities, e.g. Optical Nodes, Converged Cable Access Platform (CCAP), within Appendix V of the carriers' respective Manuals, the Cable Carriers are to align their capacity cost modeling for the baseline study with historical baselines rather than unapproved company-specific parameters. Specifically, in Telecom Regulatory Policy 2011-703, as affirmed in Telecom Decision 2013-76, the Commission extensively reviewed the internal engineering design rules—specifically rejecting the use of lower, company-specific WFF values. Accordingly, if a Cable Carrier's approved Appendix V does not explicitly state the WFF for certain shared facilities, the carrier is directed to file its baseline study using a standardized proxy of 75% to ensure consistency across the Cable Carriers.

Furthermore, pursuant to the directives in Telecom Decision 2025-195, all carriers were required to remove references to "Quality of Experience" (QoE) from their Manuals. This requirement extends to all attachments and supporting sheets within Appendix V. Companies are directed to ensure that any remaining QoE-related parameters, factors, or adjustments are excluded from the baseline study. Should a company wish to propose the inclusion of such factors, they must be reflected only in the single deviation study with a comprehensive supporting rationale.

Deviation study

If the company proposes capital or economic parameters that differ from the requirements established in Section 2.0 (Manual Compliance) of this letter, those alternative parameters are to be incorporated into the company’s single deviation study.

3. Traffic growth assumptions

Baseline study

Historically, the Commission’s approach to traffic growth forecasting involved utilizing company-specific projections for the first two years of the study period, while applying a standardized annual growth rate of 32% for both downstream and upstream traffic during years three through five, as established in Telecom Decision 2016-117. However, following a comprehensive review of recent cost models and submissions from both cable carriers and ILECs in the context of NoC 2023-56, Commission staff has identified a significant shift in observed downstream and upstream usage trends. Consequently, Commission staff believes it is necessary to explore the forecasting methodology to better reflect current market realities.

Commission staff notes that to ensure consistency and accuracy across the five-year study period, traffic growth projections should align with established regulatory benchmarks. Based on the metrics measured and calculated in the CRTC Communications Market Report (covering data from 2020 Q1 through 2025 Q3)Footnote 1, Commission staff proposes that the companies utilize an annual downstream usage growth forecast of 9% and an annual upstream usage growth forecast of 14%. Companies are to apply these numbers to their five-year study period in their baseline study.

Deviation study

If the company is of the view that alternative traffic growth assumptions should be used, those alternatives are to be incorporated into the company’s single deviation study.

4. Access/CBB classification

The major wholesale tariff elements of the Cable Carriers’ aggregated Third Party Internet Access (TPIA) service include a monthly access rate by speed band (Access) and a monthly Capacity Based Billing (CBB) rate per 100 Mbps.

In the current version of the Hybrid Fibre Coaxial (HFC) network Excel models submitted by the Cable Carriers, the costs of various elements such as Optical Nodes, Segmentation Fibre, and CCAP have been assigned to the Access and CBB categories in a manner that is inconsistent across the companies.

Commission staff is of the view that the classification of these cost elements should be consistent across the Cable Carriers for the purpose of developing rates and maintaining a uniform wholesale rate structure for the industry.

Baseline study

Commission staff proposes a standardized approach to Access/CBB cost classification. This methodology is based on a comprehensive review of historical submissions and recent Cable Carrier filings in response to NoC 2023-56. It reflects the consensus observed across the majority of cable carrier cost models and establishes a clear framework for determining the functional split between Access and CBB.

In the baseline study, the company is to classify costs as follows:

Deviation study

If the company proposes a cost classification that differs from the baseline approach above, including a split of Optical Node costs and/or Segmentation Fibre costs between Access and CBB, that alternative classification is to be incorporated into the company’s single deviation study.

5. Usage-sensitive equipment cost trends

Baseline study

For each of the following usage-sensitive equipment categories, the company is to apply in the baseline study an annual capital unit cost change assumption of minus 26.4% for the duration of the study period. The minus 26.4% factor is to be applied to both the material component, such as Installed First Cost, and the labour component, such as Engineering and Installation Labour Factors, of the unit costs for:

Deviation study

If the company is of the view that the minus 26.4% annual unit cost change assumption is not appropriate for one or more usage-sensitive equipment categories, the alternative assumption or assumptions are to be incorporated into the company’s single deviation study.

6. Speed band structure

Commission staff is exploring measures to streamline the tariff structure and improve administrative efficiency by potentially consolidating and reducing the number of aggregated wholesale HSA service speed bands into a fixed number of speed bands for all Cable Carriers.

Baseline study

In the baseline study, the company is to use the following six-band speed structure for aggregated wholesale HSA service:

Speed Band Downstream Speed Range
Band 1 Up to and including 150 Mbps
Band 2 151 Mbps – 300 Mbps
Band 3 301 Mbps – 500 Mbps
Band 4 501 Mbps – 1 Gbps
Band 5 1.001 Gbps – 2 Gbps
Band 6 Above 2 Gbps

Deviation study

If the company is of the view that the staff-proposed six-band structure and/or the 150 Mbps threshold is not appropriate, the company may propose an alternative speed band structure. Any such alternative structure is to be incorporated into the company’s single deviation study.

7. Working Fill Factors

Baseline study

In the baseline study, the company is to use the WFFs compliant with the requirements established in Section 2.0 (Manual Compliance) of this letter for the respective equipment unit cost.

Deviation study

If the company considers that alternative WFFs or another methodology would be more appropriate than the WFFs used in the baseline study, that alternative treatment is to be incorporated into the company’s single deviation study.

Filing Requirements

Since the commencement of NoC 2023-56, if your company has filed additional cost models for different speed bands’ access rates and/or capacity-based billing (CBB) rates per 100 Mbps that are not yet approved by the Commission on a final basis, the company is to file a single unified updated cost model for aggregated wholesale HSA services over HFC networks, a term used in this letter to refer to the Cable Carriers’ wholesale HSA networks. This unified model is to include the rates for all access speed bands and the CBB rate per 100 Mbps.

Refer to the Commission staff letter dated 31 March 2016, Re: Information Associated with the Implementation of Telecom Decision CRTC 2016-117. Include Tables 11-14. Further refer to the Commission staff letter dated 13 September 2013, Re: Information to be provided in support of wholesale service tariff applications. Include Tables 6a-6d, and Tables 8c-8d. In your company’s cost model, include the most recent actual information for the historical years and forecasts for the future years over the study period, wherever applicable. Additionally, the company is to follow and submit all the information and tables consistent with the requirements in Appendix D of the company's Manual.

The Cable Carriers are reminded to provide an electronic copy of the cost model in Excel format with all formulas and linkages intact. Link the Installed First Cost (IFC) or unit costs calculated in Table 6b as inputs to the cash flow calculations. Show all calculations in Microsoft Excel by linking formulas step by step. Explain, with supporting rationale, the source and reasonableness of any hardcoded value, and demonstrate how it is derived. In addition, a brief description of the input data variables, the vintage of the input data, modelling assumptions with supporting rationale, and any other pertinent costing details must be provided.

Along with the requirement to file revised cost studies, the attachment to this letter contains requests for information that address specific issues. Together, these revised cost studies and responses to requests for information will allow the Commission to generate a fulsome record.
The filing deadline associated with this request is as follows:

Commission staff continues to examine the wholesale HSA tariff applications. Parties will be advised as to the next steps in the evaluation process by way of a separate procedural letter, which will set out further process for the proceeding, including requests for disclosure of information filed in response to the attached requests for information.

All documents filed and served must be received, not merely sent, by the date provided. Parties are to send an electronic copy of all documents to Commission staff copied on this letter.

The Commission requires the response or other documents to be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and completing the “Telecom Cover Page” located on the Commission’s website.

An abridged copy of this letter and all related correspondence will be added to the public record of the proceeding.

As set out in section 39 of the Telecommunications Act and in Broadcasting and Telecom Information Bulletin 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, persons may designate certain information as confidential. A person designating information as confidential must provide a detailed explanation of why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm likely to result from disclosure would outweigh the public interest in disclosure. Furthermore, a person designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Sincerely,

Original signed by

Noah Moser
Director General, Costing and Regulatory Implementation
Telecommunications Sector

c.c.: Chris Noonan, CRTC, chris.noonan@crtc.gc.ca
Josée Line Gendron, CRTC, joseeline.gendron@crtc.gc.ca
Bill Lloyd, CRTC, william.lloyd@crtc.gc.ca

Attach. (2)

  1. Distribution List
  2. Request for Information (RFI) Questions

Distribution List

Company; Tariff Notice Number(s); Our Reference Number; Company Contact; Company Email

Requests for Information (RFI)

Questions for the Cable Carriers

1. Study period and updated data

If the company proposes a different study period assumption or updated-data approach for the baseline study described above, provide the company’s view with supporting rationales and assumptions.

2. Manual compliance

Commission staff notes that the Manual serves as the foundational framework for conducting Phase II cost studies, ensuring that rates are based on prospective incremental costs. Specifically, Appendix V of the company-specific Manual contains the updated economic and capital parameters intended to be used in all Phase II regulatory filings.

  1. Verify that the baseline study exclusively utilizes parameters and values compliant with the requirements established in Section 2.0 (Manual Compliance) of this letter.

  2. If the company uses factors or estimates in the single deviation study that differ from the requirements established in Section 2.0 (Manual Compliance) of this letter, provide a detailed table identifying each deviation. For each item, include:

    • the value used in the study versus the value in the baseline study; and
    • a comprehensive supporting rationale for the deviation.

  3. If deviations are used, provide separate versions of Table 6b – Capital Equipment and Table 6c – Capital and Expense Parameters that reflect the values used in

    • the baseline study; and
    • the single deviation study.

3. Traffic growth assumptions

If the company proposes alternative traffic growth assumptions in its single deviation study, provide all supporting rationales, assumptions, historical usage data, demand forecasts, descriptions of forecasting methodologies, and any third-party studies relied upon.

Companies should further demonstrate how their proposed assumptions better reflect expected traffic growth in the Canadian wholesale HSA context.

4. Access/CBB classification

If the company proposes in its single deviation study an alternative to the proposed baseline study, provide detailed supporting rationale and all underlying assumptions in support of that proposal.

  1. If the company is proposing to distribute costs between access and CBB for the Optical Nodes and/or Segmentation Fibre in its deviation study, provide the company’s proposed percentage, for each of Optical Nodes (as well as Segmentation Fibre, if applicable) that should be assigned to each of the Access and CBB categories. Provide the company’s rationale and calculations used to derive these percentages.

5. Usage-sensitive equipment cost trends

If the company proposes in its single deviation study an alternative to the minus 26.4% annual capital unit cost change assumption, provide detailed supporting rationale and all underlying company-specific assumptions and historical data in support of that proposal. The rationale and the accompanying data provided must be specific to the company's own operations and history — rather than relying on third-party studies or proxies—and must be based on a sufficiently long time series to ensure the trend is representative of long-term cost movements.

6. Speed band structure

Provide the company’s views, including the detailed supporting rationale and all underlying assumptions, including but not limited to, on the following:

  1. the appropriateness of consolidating the number of speed bands for aggregated wholesale HSA service to the six-band structure used in the baseline study;
  2. the impact of this change on the company’s ability to recover Phase II costs;
  3. any potential impacts on the speed band rates due to the accuracy of cost-weighting within the proposed consolidated speed bands;
  4. any changes required to demand forecasting methodologies;
  5. the expected administrative and technical benefits or drawbacks for the company and the TPIA customers;
  6. the appropriateness of setting a single, consolidated rate for all service speed tiers within Band 1, i.e. up to and including 150 Mbps; and
  7. the appropriateness of freezing existing speed tier rates for 150 Mbps and below to encourage consumer migration toward higher-speed tiers and Fibre-to-the-Premises services (FTTP).

If the company proposes an alternative speed band structure in its single deviation study, provide the detailed rationale and underlying assumptions addressing the seven criteria listed above.

7. Retail and Wholesale demand data and forecasting

Provide detailed and separate retail and wholesale demand data and forecasts for the company’s aggregated wholesale HSA services. The requested data must be segmented to reflect the following:

  1. Service speed inventory: a comprehensive list of all service speeds currently offered, including any grandfathered service speeds.
  2. Historical and current subscriber volumes: for each service speed identified in 7 i. above, provide the total number of retail and wholesale end-users, separately, subscribed as of:
    • 31 December 2023
    • 31 December 2024
    • 31 December 2025
    • 30 June 2026.

8. Implementation and retroactivity

Provide the company’s views on implementing any new speed bands, including how the company would manage retroactivity in the event that new banding calculations result in rate adjustments. Also provide the company’s view on how retroactivity, if applicable, could be addressed for the intervening period from 8 March 2023 to 31 December 2025.

9. Access cost allocation and speed band differentiation

Provide a comprehensive explanation of the formulas and calculations used to derive the access component costs for the staff-proposed speed bands and, where applicable, the company-proposed speed bands. Your response must include:

  1. Allocation methodology and drivers: a detailed description of the methodology used to allocate shared access network costs across different speed bands. Specify the cost-causative drivers and network utilization metrics employed, such as capacity-based versus subscriber-based drivers, and provide the technical and economic rationale for the weightings assigned to each.
  2. Cost differentiation logic: an explanation of the technical and economic factors that result in higher speed bands having different access costs than lower speed bands. Specifically, address how the model accounts for the increased network capacity or equipment requirements necessitated by higher-speed service offerings.
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