ARCHIVED - Transcript, Hearing 27 October 2011

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Volume 4, 27 October 2011



Proceeding to review network interconnection matters


Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

27 October 2011


In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.

Canadian Radio-television and Telecommunications Commission


Proceeding to review network interconnection matters


Konrad von FinckensteinChairperson

Len KatzCommissioner

Timothy DentonCommissioner

Suzanne LamarreCommissioner

Candice MolnarCommissioner


Cindy VenturaSecretary

Alastair StewartLegal Counsel

Anthony McIntyreLegal Counsel

Robert MartinHearing Manager and Manager, Telecommunications Policy


Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

27 October 2011

- iv -







13. Shaw Communications Inc.639 / 3787

14. Public Mobile Inc.675 / 4020

16. Mobilicity698 / 4156

Gatineau, Quebec

--- Upon resuming on Thursday, October 27, 2011 at 0904

3782   LE PRÉSIDENT : Bonjour.

3783   Madame la Secrétaire, commençons.

3784   LA SECRÉTAIRE : Merci, Monsieur le Président et bonjour.

3785   We will start today with the presentation by Shaw Communications Inc.

3786   Please introduce yourselves for the record, after which you will have 20 minutes for your presentation. Thank you.


3787   MR. BRAZEAU: Thank you.

3788   Thank you, Mr. Chairman and members of the panel. I am Jean Brazeau, Senior Vice-President of Regulatory Affairs at Shaw Communications.

3789   I am joined today by my colleagues:

3790   - Dave Dykstra, Director, Telecommunications Systems, on my right;

3791   - Paul Cowling, Senior Director, Regulatory Affairs, on my left;

3792   - behind me is Brian Monroe, Senior Manager, Voice Networks, and Esther Snow, Manager, Regulatory Affairs.

3793   As the Commission is aware, Shaw is a large CLEC with over 1.2 million local exchange customers. We have been providing local exchange service for over six years in five provinces. Shaw is an industry leader in the use of IP voice networks. One hundred percent of our voice traffic within our network is IP and we have successfully established IP-based interconnections with several carriers in North America.

3794   In this consultation, the Commission has asked the industry to consider and propose changes to the interconnection regime in order to enhance competition and thus benefit consumers.

3795   Over the past several years, we have faced a number of challenges under the current interconnection regime. Often, ILEC interconnections that could be completed in months took years as a result of unnecessary delays. That experience certainly informed our perspective on this consultation, but we are here to ask the Commission to consider the present and future, not the past.

3796   In its review, the Commission must focus on the fact that one of the Government's core policy objectives is to make Canada a global leader in the digital economy by driving the adoption of new technology.

3797   In this context, the Commission must bring more flexibility to the current rules and their bias towards TDM interconnection, which is yesterday's technology.

3798   More specifically, the key changes that Shaw proposes are the following:

3799   - The Commission should mandate a shared-cost IP interconnection regime that provides Canadian carriers with the right to interconnect their voice IP networks to those of any other Canadian carrier.

3800   - Voice IP traffic should be exchanged over shared cost facilities on a bill-and-keep basis.

3801   - Carriers should be responsible for converting the traffic that terminates on their respective networks, when necessary.

3802   - All LECs should be in a position to accept requests for IP interconnection within six months of the Commission's decision in this consultation, and we believe interconnections could be completed within one year from receipt of a request.

3803   - Interconnection areas should be consolidated. There could be as few as two points of interconnection per ILEC per province. Even without mandated IP interconnection, the existing LIR boundaries must be expanded.

3804   We turn now to the specific questions the Commission raised in its letter of October 12.

3805   - Does the natural evolution from circuit-switched to IP interconnection facilities require regulatory intervention?

3806   Despite the fact that all parties to this proceeding have recognized that IP is the future for our industry, IP interconnection with ILECs is rare in Canada. Unfortunately, market forces are not driving migration to IP interconnection at a rate consistent with IP's prominence. This is because of the entrenched role of TDM interconnection as well as the ILECs' inertia and incentive to preserve this regime. This stalemate hinders competition and prejudices the rollout of IP technology.

3807   IP interconnection embraces and encourages IP's potential for innovation and thereby promotes Canada's digital economy in accordance with the government's goals. As noted in the government's Digital Economy Consultation Paper, next-generation networks provide "dramatic improvements in speed, functionality and integration of services."

3808   Dave.

3809   MR. DYKSTRA: Furthermore, IP interconnection will result in a cascade of efficiencies for all carriers, including lower trunking, routing, maintenance and repair costs. It also translates into more efficient competitive entry in all markets, including rural areas. This benefits consumers in the form of more competition and choice in all markets and more efficient telecommunications networks.

3810   In their submissions, the ILECs do not dispute the fact that eventually IP interconnection will displace TDM. Instead, their opposition is focused on timing. The ILECs assert that the industry's transition to IP interconnection should proceed on a timetable dictated by them. In the meantime, the ILECs do not have sufficient incentive to ensure that competitors can take full advantage of the IP platform.

3811   Given the critical importance of accelerating the transition to IP interconnection, progress must not depend on the willingness or incentive of ILECs to negotiate. Shaw submits that a transition on this basis has been and will continue to be much too slow. The lack of progress to date provides solid support for Shaw's position.

3812   Even though the CISC IP Interconnection Guidelines were approved by the Commission in 2009, there is no evidence that ILECs are willing to move to an IP-based interconnection regime. If these delays persist, there will be considerable costs to the industry and the economy in the form of inefficiencies and lost innovation.

3813   - Should the Commission mandate IP-based network interconnection and establish basic rules or should it be commercially driven?

3814   The Commission must mandate IP interconnection. This would move us beyond the stalemate that we have just described and accelerate the industry's natural transition to IP, which is the foundation of our digital economy.

3815   The current TDM regime is not technologically or competitively neutral because it clearly favours the ILECs' legacy networks over those of competitors whose voice networks are predominantly IP-based.

3816   In contrast, our IP interconnection proposal is neutral because virtually all carriers are using IP in their voice networks and agree that IP interconnection will be the default in the future.

3817   In addition, we are not advocating a mandated phase-out of TDM interconnection. We believe TDM and IP interconnections can coexist.

3818   One of the ILECs' criticisms of mandated IP interconnection is that it would impose onerous costs on the ILECs. However, IP interconnections are far more cost-efficient for ILECs and CLECs alike. At the same time, IP-based carriers should not be forced to invest in outdated TDM technologies.

3819   Under the current regime, carriers are required to interconnect at each LIR. However, these LIRs are not appropriate for IP-based networks because they are unnecessarily small and require numerous interconnection points that are costly to both interconnecting carriers.

3820   An IP interconnection regime would allow for significant consolidation of interconnection areas, which would reduce costs for all carriers. We believe as few as two points of interconnection per ILEC per province would be sufficient.

3821   Even if the Commission chooses to refrain from mandating IP interconnection at this time, existing LIRs should be reviewed for consolidation into larger TDM interconnection areas.

3822   MR. COWLING:

3823   - To what extent, if any, should the Commission forbear from the regulation of network interconnection for voice services? If so, under what conditions and within which timeframe would it be appropriate for the Commission to forbear under the Telecommunications Act and consistent with the Policy Direction?

3824   As several other parties to this proceeding have noted, the Act requires that the Commission only exercise its forbearance power in circumstances where there is sufficient competition to protect the interests of users. That is not the case today for voice network interconnection services.

3825   Currently, ILECs provide the only efficient means of access to the PSTN because of the ubiquity of their networks and their interconnection arrangements with all LECs. The record of this proceeding shows that the industry is struggling to move forward with IP in the face of resistance from ILECs. However, even after a mandated IP interconnection regime has matured, the Commission would need to find evidence of a proven and efficient substitute to any given interconnection service before it forbears.

3826   Some ILECs have asserted that the Commission should immediately forbear from TDM interconnection if mandated IP interconnection is implemented. This proposal disregards the fact that certain services, namely 9-1-1 and IXC, would still need to interconnect on a TDM basis and that certain carriers may still need to establish TDM interconnections. We believe the most neutral approach is for TDM and IP to exist in parallel as the industry transitions to IP interconnection.

3827   - Should wireless carriers be treated as equal carriers with the ILECs and therefore be entitled to shared-cost interconnection with bill and keep, and if so, under what terms and conditions?

3828   Wireless carriers should be treated as equal carriers with LECs under our proposed IP interconnection regime and they should be entitled to shared-cost interconnection with bill and keep.

3829   In Shaw's view, the current wireless interconnection regime is out of step with the reality that a substantial amount of voice traffic is terminated on wireless networks. Shaw does not believe that wireless carriers should be required to offer equal access to interexchange carriers in order to be treated as peers for interconnection purposes.

3830   - What measures need to be taken to ensure that wireless carriers have the same benefits and obligations regardless of whether they are independent or part of a vertically integrated telecommunications entity?

3831   There is no need to apply distinct obligations or exemptions based on whether a wireless carrier is part of a corporate group that provides other telecommunications services.

3832   - Would it be appropriate for the Commission to forbear from regulating wireless access service, and if so, what criteria should be applied?

3833   As we noted previously, the statutory test for forbearance requires the Commission to find, based on established facts, that competition will protect the interests of users. Shaw does not believe that this is the case for wireless access service.

3834   Finally, with respect to the Commission's proposed modifications to the existing wireless interconnection rules in small ILEC territories, we do not believe they are necessary or appropriate.

3835   MR. BRAZEAU: In conclusion, the Commission should promote and facilitate the adoption of IP technologies for the future of Canada's digital economy. We believe IP interconnection is critical to fully realize the potential of IP voice networks. Yet, we are unable to overcome the ILECs' insufficient willingness and incentive to move forward with IP interconnections.

3836   Limiting mandated interconnection to TDM will force us to continue allocating scarce resources to TDM at the expense of rolling out next-generation services, which favours the ILECs over carriers whose networks are predominantly IP. This is inconsistent with the Commission's mandate regarding interconnection under the Policy Direction to balance the interests of all carriers and enable competition from new technologies.

3837   In contrast, if the Commission adopts Shaw's interconnection proposal, this would accelerate the industry's transition to IP, thereby freeing up investment resources, encouraging innovation, reducing costs and increasing efficiencies for all carriers, all of which will provide considerable benefits to consumers.

3838   This concludes our remarks. We are certainly open to your questions.

3839   THE CHAIRPERSON: Thank you very much. A very succinct and concise presentation.

3840   Your suggestion on interconnection for IP, is it just -- there are no conditions? We heard from both Rogers and Cogeco who sort of put a little rider on it, Cogeco more than Rogers, that basically where you are capable of interconnecting. I think Cogeco said where you already are providing interconnection for IXC carriers or for your own wireless or whatever.

3841   If I understood you correctly, you basically say mandate it and it will happen. There's no precondition?

3842   MR. BRAZEAU: Well, I think that's correct.

3843   What we are recommending is for mandated negotiations and I think we can negotiate these -- most of these issues. And I think the roadmap -- the Commission may be able to provide some parts of the roadmap, but I think we can, through negotiations, complete that roadmap.

3844   And we believe that most of the carriers are already there, already have IP, and because we're looking at a very few interconnections per province, I think we could get there fairly easily and cost-effectively for both carriers.

3845   THE CHAIRPERSON: But your opening assumption is they are all there, they can provide IP-to-IP interconnection, they're just not doing it in order to protect their investment in TDM?

3846   MR. BRAZEAU: I am not sure what the logic is, and Dave may want to add to this, but certainly, we believe that they're all IP-based and they could do IP interconnections today.

3847   MR. DYKSTRA: Today in the business world we're selling IP business phone service, we're using it internally in our networks. The investment is already being made. They are delivering IP. We simply want to take advantage of the economies of scale and be able to interconnect at them so that our customers can take advantage of IP advances.

3848   THE CHAIRPERSON: On the data side, they use IP interconnection already?

3849   MR. DYKSTRA: Yes.

3850   THE CHAIRPERSON: Now, the other point you made was consolidation of the LIRs.

3851   Are you suggesting that we basically set rules for minimal points of interconnection or are you suggesting it should be an industry process or sort of be this process or how do we get -- I mean I think this week everybody agrees with you there are too many LIRs, but how do we get there, what's the process that you suggest we adopt here?

3852   MR. COWLING: Well, under an IP interconnection regime, we think it's almost self-evident that it would be -- it could be one or two POIs per province per ILEC.

3853   If we're talking about the current --

3854   THE CHAIRPERSON: Let's assume it's IP, let's assume we take your suggestion and mandate IP, you say it's self-evident, it may not be self-evident to the ILECs, so therefore how do we get there?

3855   MR. COWLING: Well, I think it could be -- it certainly could be confirmed through an industry process.

3856   But I just wanted to also make the point that if we're consolidating the POIs under the existing TDM regime, then I think it's a question of reviewing the network architecture and updating the LIRs to reflect those updates.

3857   THE CHAIRPERSON: But I'm a regulator, I feel somewhat ill at ease telling Bell, you know, your network isn't as efficient, you don't need 20 LIRs, you can live with five or whatever. So how do we get there?

3858   MR. COWLING: Right. I guess that would be part of the review that I would be suggesting, is that you would be reviewing the ILECs' network architecture to update it since the last review, which took place, I think, prior to 2004.

3859   THE CHAIRPERSON: But a review means we start a process and at the end of the day we impose?

3860   MR. COWLING: That's correct.

3861   THE CHAIRPERSON: That's what you're suggesting. Okay, thank you.

3862   Suzanne, you have some questions?

3863   COMMISSIONER LAMARRE: I have a few questions. Thank you very much.

3864   Starting off with a point of clarification, throughout your presentation and also your submission you use the words "consumers" and "users." Are they interchangeable?

3865   MR. BRAZEAU: Yes.

3866   COMMISSIONER LAMARRE: Yes, they are. Okay. I'm just making sure that "users" did not mean other carriers in your submission.

3867   Now, you're asking us to mandate and you're actually going as far as suggesting some timelines. So let's look at that.

3868   On page 2 of your presentation you say that if we were to mandate IP interconnection that an ILEC should be in a position to accept requests for IP interconnection within six months of the Commission's decision. So that's the first timeline. And you believe that interconnection could be completed within one year from receipt of a request.

3869   Now, how did you arrive at those timelines and how do they factor in the volume? Like if it's just Shaw coming out within six months with a request to TELUS or Bell, maybe we could expect that, but if it's not just Shaw, if it's everybody and their brother that comes in with requests, how are we going to manage that?

3870   MR. BRAZEAU: Well, as we mentioned earlier in our opening remarks, we've had quite a bit of experience negotiating interconnection arrangements. In B.C. and Alberta, I think we negotiated something like 35 of these arrangements. So we have some experience and we understand what the timelines are under that regime.

3871   We think that the IP regime for interconnection is well known. We've done it. We're not reinventing the wheel here. So, you know, given that experience, I think the timelines that we are proposing are reasonable, but, you know, these timelines can certainly be revisited.

3872   And the reason why we're suggesting that the Commission needs to get involved here is that, again, in our experience in negotiating TDM interconnections, we found ourselves in a situation where all the timelines are dictated by the ILEC and we really don't have a lot of say in those timelines, and we just want to make sure that we have a more equal role in establishing the timelines and ensuring that there's efficient use of resources and we can do this as quickly as possible.

3873   COMMISSIONER LAMARRE: So if you say that you would want an increased role in setting the timelines, would you be willing to consider that the timeline actually be negotiated and justified, like explained? Because, you know, in some cases eight months may make sense, in other cases two years would still be a stretch.

3874   MR. BRAZEAU: We understand that. We understand there's always resource constraints, et cetera. So I think your suggestion would certainly be a reasonable suggestion.

3875   COMMISSIONER LAMARRE: At the same time you make the point that TDM interconnection is yesterday's technology. At one point in time IP is also going to be -- in the future IP is going to be the future's yesterday's technology. I'm sure you get what I'm saying here.

3876   So it's yesterday's technology but it's still working today and massive investments have been made so that the voice interconnection is done properly for the benefit of all citizens in Canada, and we have to balance it out, as you so rightly pointed out at the end of your presentation, we have to balance out the interests of all carriers.

3877   How can we be so sure that the expense that is going to be put out by the fact that we may be retiring working equipment sooner than the end of its natural life is going to be balanced out by savings or by improved efficiencies?

3878   MR. BRAZEAU: Certainly the equipment we are talking about is equipment that was introduced in 1992 as a result of the Commission's decision on IXC competition. So we are assuming that most of these costs have been recovered by now.

3879   But if they are a stranded investment, that is part of our business. All of us experience stranded investment. We are experiencing stranded investment in the TDM technology -- or equipment that we need to buy.

3880   So I think it is just part of doing business in the business we are in.

3881   I think that Cogeco, yesterday, was mentioning about the efficiencies and the cost savings, for both sides, with fewer interconnections and with IP interconnection. So, if you did a cost-benefit analysis of those efficiencies and those cost savings, I think they would probably overwhelm any stranded investment or anything like that that the incumbents would have to face as a result of this.

3882   COMMISSIONER LAMARRE: So there is partly a leap of faith still in this.

3883   MR. BRAZEAU: No, I think we understand what the costs are for connecting at the IP, and if you consolidated the interconnections to two per province versus the 30-odd that we have today --

3884   In order to have the last 5 percent of our customer base interconnected, we still need to do something like 14 interconnections. So all of that is very, very costly for both sides.

3885   I think the efficiencies are there. I don't think it's a leap of faith at all.

3886   MR. DYKSTRA: I would like to add, as well, that if we go to the smaller points of interconnect, say, two per province, it really allows us to build gateways between each other, and it doesn't force the ILECs themselves to have to go out and replace all of the equipment that lies within their architecture.

3887   COMMISSIONER LAMARRE: When we are talking about taking full advantage of the IP platform -- and it was through your submissions, your presentation this morning -- keeping in mind that what we are mandating at this point in time, and what we are looking at -- looking forward, we are still talking just about voice. But when we talk about the full advantage of the IP platform, and the industry's natural transition to IP, which is the foundation of our digital economy -- and I don't disagree at all -- aren't we, at a certain degree, falling into -- on confound les genres un peu?

3888   Isn't there confusion here?

3889   Because, basically, we are mixing the issues. It is obvious that going toward IP interconnection -- all of the benefit is not just going to be for voice, it's going to be for much more than that, and it is going to be at a cost for the system.

3890   So, should we really be looking at that at this point in time, or should we just be forbearing from all of it and let the industry take care of it?

3891   MR. BRAZEAU: That's a tough question.

3892   COMMISSIONER LAMARRE: The answer is tougher.

3893   MR. BRAZEAU: We don't even have one IP interconnection in Canada with the ILECs, so I think that forbearance is a little premature right now. Let's put that aside for now.

3894   And Dave can add to this.

3895   I think there are a slew of services out there that will be IP-based that are voice driven -- HD voice, high-quality conference calling, et cetera -- that are there for -- once we roll out an IP platform.

3896   So I think the innovations will certainly be there, and I think the benefits to consumers will be significant.

3897   Also, if you can reduce the interconnection cost -- whatever costs we have to bear are passed on to consumers. When there are savings, consumers benefit also.

3898   So I think it is time for us to move forward. I think all we need here is a little nudge, because everybody's network is moving to an IP platform.

3899   I think all that is really required from the Commission is a little nudge to say: Guys, you have to sit down, you have to negotiate, and you can't take five years to do that, you have to do it within a reasonable timeframe.

3900   I think, at the end of the day, that is all we are asking for.

3901   MR. DYKSTRA: With respect to the services, it is more than just voice, it is the next generation of voice, which converges different services with it.

3902   So, as we move to that IP world, like Jean said, high-quality video calling -- there is video calling on Apple iPods and iPhones today. We would like to see where we would extend that: I can do that from my home, and it's not Skype quality, it's toll quality voice and toll quality video.

3903   So, when we talk about the services, that's what we see moving forward.

3904   COMMISSIONER LAMARRE: As to the question regarding wireless, forbearing from regulating wireless access services, at paragraph 22 you mention that the test for forbearance requires that the Commission finds, based on established facts, that competition will protect the interests of users, and you do not believe this is the case right now.

3905   So, in your opinion, what specific facts should we be looking for in order to come to the conclusion that the users are currently protected or not?

3906   MR. COWLING: The service that we are talking about is a network interconnection service.


3908   MR. COWLING: And I think the proposal, or the argument that was made for forbearance by the ILECs on this one was, if you have a CLEC present in the market, then that would be sufficient evidence, I suppose, of market forces protecting the user, so that you could forbear.

3909   In our view, that would not be sufficient evidence, because, as we have pointed out elsewhere in the presentation, the ILECs still provide a single point of access, which is really the only efficient and economical way of accessing the PSTN, and it would be unreasonable, and it would not protect the users, to require a new CLEC entering the market to go around interconnection arrangements with all of the other CLECs, when it would have this efficient means of accessing the PSTN through the ILEC.

3910   COMMISSIONER LAMARRE: What would be sufficient?

3911   MR. COWLING: What would be sufficient is an economically viable alternative to that efficient access to the PSTN.

3912   MR. BRAZEAU: What we are envisioning here is that there might be some CLECs, once IP interconnection is well established, that could provide that kind of universal access to the PSTN for other parties.

3913   So I think that as we roll out IP interconnection, some CLECs might think that's a business they want to be in.

3914   So I think that is when the Commission could be pretty confident that consumers would be well protected, if there is a second party providing similar types of services, or access to the PSTN down the road.

3915   I think that will evolve. I think that will evolve with the IP interconnection.

3916   COMMISSIONER LAMARRE: So, at this point in time, you cannot tell me with certainty what you would like to see as a test, as opposed to what the ILEC is proposing as a test.

3917   MR. BRAZEAU: I think you already have a test. All we are suggesting is, let's use that test.

3918   COMMISSIONER LAMARRE: Okay. My mistake.

3919   Those are all my questions. Thank you.

3920   THE CHAIRPERSON: Len...

3921   COMMISSIONER KATZ: Thank you, Mr. Chairman.

3922   Good morning. I think you have already answered the first part of this question. In paragraph 2 you indicate that you have successfully established IP-based interconnections with several carriers in North America.

3923   I was going to ask you whether any are in Canada. I think I heard you say a minute ago that there are none?

3924   MR. DYKSTRA: One is in Canada.

3925   COMMISSIONER KATZ: One is in Canada.

3926   MR. BRAZEAU: The none was ILECs.

3927   COMMISSIONER KATZ: And that one in Canada is working well?

3928   MR. DYKSTRA: Yes.

3929   COMMISSIONER KATZ: How long has it been in operation?

3930   MR. DYKSTRA: Six months.

3931   COMMISSIONER KATZ: Are you on compatible technologies?

3932   We heard yesterday -- I think it was Cogeco saying that they interconnect, as well, on an IP basis, and one of the parties has a softswitch from Nortel and one has a Cisco.

3933   Are you on a similar platform or different platforms?

3934   MR. DYKSTRA: Internally, in our network, we have two different softswitches. As, I believe, Cogeco or Vidéotron mentioned yesterday, they use the session border controllers, sort of that IP gateway that does any conversions necessary between different platforms.

3935   COMMISSIONER KATZ: Do you use the same session border controllers?

3936   MR. DYKSTRA: Yes, we do.

3937   COMMISSIONER KATZ: And you have had no problems?

3938   MR. DYKSTRA: No.

3939   COMMISSIONER KATZ: Do the optional services, the value-added services, all work equally well?

3940   MR. DYKSTRA: To date, from the value add, we haven't done a lot. We have been up and operational for over a year using the session border controllers with other carriers.

3941   COMMISSIONER KATZ: In your presentation this morning you moved toward the digital economy and the government's agenda with regard to the digital economy and suggested that the evolution toward IP will actually help to enhance that initiative.

3942   Are you aware of any correlation that exists in the U.S. or elsewhere between the evolution toward an IP regime and the success in the digital economy and the strengthening of innovation and creativity by virtue of that?

3943   MR. BRAZEAU: If I could point to a study? No.

3944   But I think it is self-evident that -- and we talked about a few of the services that could be rolled out in an IP environment, where, for a business user, there would be significant gains in efficiency.

3945   I think it is pretty self-evident that it would certainly reinforce the move to the digital economy.

3946   COMMISSIONER KATZ: I note your notion about efficiencies, as well, and I was commenting to somewhere earlier that in the old days, whenever we would make an awful lot of these statements in previous Commission proceedings, there would be a slew of analyses done, with cost benefits, improving economics and everything. Now we tend to take things at face value.

3947   The statements you are making, for example, in paragraph 13, about the cost efficiencies for ILECs and CLECs, alike, that would be borne by a rapid transition to IP, is that just your gut feeling, or have you seen studies, or have you done some analysis to substantiate these statements?

3948   MR. DYKSTRA: If we go to the previous statements about the number of LIRs that we have had to interconnect to, there is lots of network that has to go in, there is lots of time and effort that both the ILECs and we put in to get those turned up and running.

3949   If we moved to a more simplified model that was IP, we could use existing fibre facilities, and then it would just be a matter of configuring new equipment to turn up different accesses in different LIRs.

3950   So that, in itself, to us, shows the cost savings, from an equipment perspective and from a manpower perspective.

3951   COMMISSIONER KATZ: Remind me, how did we get to the multiple LIR infrastructure?

3952   Was that something that the ILECs did on their own? Was that a construct of the CRTC, in concert with parties?

3953   How did we get to all of these multiple ones that you now want to consolidate?

3954   MR. BRAZEAU: I think it was the latter, and it was based on the network configurations of the ILEC.

3955   I think it was pointed out earlier, too, that new entrants wanted multiple POIs in order to reduce transport costs, things of that nature, because leasing circuits and trunks was expensive.

3956   So I think it was a combination of those elements that created the regime that we are currently in.

3957   COMMISSIONER KATZ: So a number of years ago, in order to facilitate competition, we created multiple POIs, and now that we have a lot of competition and we can become more efficient, we are looking at consolidating those.

3958   Is that right?

3959   MR. BRAZEAU: That is part of it, but, also, there have been significant changes in consumer demand, and also in technology. This IP technology is having a huge impact on all of us.

3960   COMMISSIONER KATZ: My last question. In paragraph 4 you make the statement that the Commission must bring more flexibility to the current rules and their bias toward TDM interconnection.

3961   I always thought that the Commission was technologically neutral.

3962   What gives you the impression that we have a bias toward TDM?

3963   MR. BRAZEAU: Maybe that was a poor choice of words.

3964   What we meant is that, today, TDM is the standard, and that's how we interconnect today. We would just like to broaden that to say TDM and IP.

3965   COMMISSIONER KATZ: Thank you, those are my questions.

3966   THE CHAIRPERSON: Tim...

3967   COMMISSIONER DENTON: Good morning.

3968   Hi, Jean.

--- Laughter

3969   COMMISSIONER DENTON: There has been some talk of stranded investment, but I sort of had a brain flash that really what you are asking for is that the translation job of IP to TDM be done by the party receiving the IP traffic, and behind that translator they can have all of the obsolescent TDM they want. Right?

3970   So you are not asking for a replacement. What is implied by what you are asking for is not a replacement of TDM on some accelerated schedule, it is that the costs of translation be borne by those who persist in using TDM.

3971   MR. BRAZEAU: Yes, and nor do we need fibre to the home, so you are right.

3972   COMMISSIONER DENTON: Okay. That's it. Thank you.

3973   THE CHAIRPERSON: Candice...

3974   COMMISSIONER MOLNAR: I just want to make sure that I understand. You had proposed here mandating IP interconnection, accept interconnections within six months, enable them within a year. Then I heard you say: Well, we just want you to give them a nudge.

3975   Those don't seem to align, in my view, as to whether or not this is a nudge or this is a real heavy push.

3976   We have had other parties here -- virtually everybody agrees that IP interconnection is the way of the future, and that we need to get there.

3977   So it is a question for me as to what is the most reasonable means of getting there.

3978   And, from a regulator's perspective, what is our role in getting the industry there.

3979   We have some parties who suggest that enabling voluntary negotiations for IP-to-IP interconnection is a good first step.

3980   If we made it clear that IP interconnections were both enabled and encouraged, and as a first step we would like to see what the industry could negotiate, what do you think of that as an alternative to mandating in the timeframes that you have suggested?

3981   MR. BRAZEAU: I certainly think it is a good start. The only caveat that I would provide is that, again, our experience in negotiating our interconnections has been, at times, frustrating, again because we have very little control over the timelines.

3982   If, somehow, there could be some assurances that this was not going to drag out forever, then I think we are certainly prepared to have those discussions and negotiations.

3983   That would be the only caveat that I would put out there.

3984   COMMISSIONER MOLNAR: So if that was combined with a follow-up that said that within -- and we have heard timeframes of two years to two and a half years, that that would be a good time to re-look this and look at the progress that has been made by the industry.

3985   What do you think about something like that, that we enable this timeframe within which industry participants can seek to negotiate arrangements?

3986   Potentially, with that, as well, you could seek to negotiate what are the most reasonable POIs amongst yourselves, instead of us mandating new points of interconnection, and see where that could go over a timeframe.

3987   I am interested in your thoughts on that timeframe, as well as -- is that enough of a spur to see what could happen?

3988   MR. BRAZEAU: What if, in two and a half years, there is still no interconnection?

3989   I mean, that would be a very big concern of ours.

3990   I think we have provided some reasonable timelines. Can we revisit those and have some flexibility there? Sure, but just to leave it to best efforts and hope for the best -- again, we have experienced this in the past, and it is very challenging -- very, very challenging.

3991   Again, I am not trying to say that there is some conspiracy to keep us out of the market. I think it is more corporate inertia than anything else.

3992   We just need to move beyond that.

3993   COMMISSIONER MOLNAR: Just tell me, then -- you said that you have proposed reasonable timeframes. So you think that six months is the timeframe within which we should let the markets try to negotiate?

3994   Is that what you are saying?

3995   What is that reasonable timeframe, and what is the step that you would have us, as a regulator, do? Is there something that you want us to do -- have reports -- report these interconnection arrangements to us, report the status of negotiations?

3996   What is it that we can do without jumping in and mandating and directing this ourselves?

3997   MR. BRAZEAU: I think that there is a process for TDM interconnection, there are tariffs, there are whole procedures. I think that the system is there, now we need to incorporate the possibility of IP interconnection into that system.

3998   I don't think there needs to be a whole slew of changes here, except to say that this will apply not only for TDM interconnection, but it will also apply for IP interconnection.

3999   THE CHAIRPERSON: Let me follow that up and come at it from a different point of view.

4000   There is a natural disincentive for ILECs to do this, because they have stranded investment, et cetera -- and to do it at their pace, et cetera.

4001   You want to do it now and, as you pointed out, it makes sense in terms of getting Canada, as a nation, to the digital age, et cetera.

4002   How could one incentivize the ILECs to do this faster?

4003   Because you are saying: Mandate them and let them eat the cost of the stranded investment.

4004   That's what it boils down to.

4005   And, obviously, they are going to drag it out and do it as slowly as possible. They will do it at the rate that makes sense for them, from their perspective, not from Shaw's.

4006   Have you given any thought to how one could build an incentive into it, besides mandating, so that Bell could say, "Hey, there is actually something in it for us, so let's do it faster," or TELUS, or whoever the ILEC is?

4007   MR. BRAZEAU: I haven't given a lot of thought to how you could use a carrot versus a stick.

4008   I think that there are certainly internal incentives for them to move to IP as quickly as possible, as we start rolling out products and services that are IP-based and that customers really want.

4009   So I think that there is a market incentive for them to roll out more IP technology.

4010   As for interconnection, again, our experience has been fairly frustrating to try to negotiate these agreements, and we don't see that changing, unfortunately.

4011   THE CHAIRPERSON: I would ask you and everybody over the weekend to think about that, because I think we have very nicely isolated what the issue is and what are the possible solutions, but, as always, we try to find something that is fair for everybody, not just one side.

4012   Thank you very much.

4013   Before we move on to the next intervenor, let's take a five-minute break.

--- Upon recessing at 0948

--- Upon resuming at 0959

4014   THE CHAIRPERSON: Okay. Before we start I have been asked to make the following clarification which I find strange, but anyway. We asked for information requirements from all parties.

4015   So Madam Secretary, to CLECs I said "No, LECs", L-E-Cs. LECs includes SILECs in my view. Apparently some people have had doubts. So the information requirements that we asked applies to all LECs. I hope this clarifies the matter now.

4016   So commençons, Madam Secretary.

4017   THE SECRETARY: Thank you, Mr. Chairman.

4018   We will now proceed with the presentation by Public Mobile Inc.

4019   Please introduce yourselves for the record, after which you will have 20 minutes for your presentation. Thank you.


4020   MR. BORON: Thank you, Madam Secretary.

4021   Good morning Mr. Chairman, Commissioners, and Commission staff.

4022   Public Mobile is pleased to participate in this consultation before the Commission related to important matters concerning the interconnection of telecommunications networks. My name is Bob Boron, and I am Vice President of Legal & Regulatory Affairs at Public Mobile.

4023   With me today is Brian O'Shaughnessy, to my right, our Chief Technical Officer and Vice President of Network.

4024   Supporting us are Tony McCarthy, Manager of Inter-Carrier Operations, Jamie Greenberg, Manager of Legal and Regulatory Affairs, and Sharon Ledwell, our Consultant on this matter.

4025   By way of introduction, Public Mobile is a wireless telecommunications carrier offering voice, text and data services in Canada's two largest markets. We operate as an independent wireless service provider, or WSP. We adhere to the terms and conditions of the WSP interconnection regime mandated by the Commission.

4026   In 2008, Public Mobile acquired 10 MHz of PCS spectrum covering about 19 million Canadians in Ontario and Quebec. We currently provide wireless coverage in the Greater Toronto and Greater Montreal Areas. We have plans to eventually build out much more extensively within our licensed territory.

4027   We provide services on a simple unlimited, pay-in-advance basis with no term contracts. We offer mobile phone service to Canadians who never before had reasonable access, without risking their pay cheque.

4028   Companies like Public Mobile have, in a very short period of time, stimulated market growth and driven significant price reductions. Our presence has without doubt supported the Commission's objective to ensure reliable and affordable wireless services for Canadians.

4029   In this presentation, we will submit that:

4030   - The Commission maintain its "light touch" to the regulation of the wireless market;

4031   - The Commission mandate the development of IP tariffs to ensure a timely evolution to IP-based interconnection;

4032   - The Commission continue its regulatory oversight of wireless interconnection services, whether in the context of wireless access service or IP tariffs, and;

4033   - The Commission modify the WSP regime to address issues of fairness and competitive equity by leveling the playing field vis-à-vis the benefits currently enjoyed by the vertically-integrated carriers.

4034   Public Mobile will address the issues set out in the Notice of Consultation and the Commission's October 12th letter in light of the inadequacies of the current regime and the government's policy direction to the Commission.

4035   We submit that the Commission's light touch to the regulation of the wireless should continue because to do otherwise, particularly for new wireless entrants who do not have market power, would be contradictory to current policy. Equal access and other CLEC Obligations need not be mandated for WSPs. Doing so would only serve to impose additional regulatory costs on wireless entrants and would offer no new benefits to consumers.

4036   We propose that the Commission mandate IP interconnection to ensure a timely evolution to IP, which is where the rest of the developed world has gone or is going quickly. We will also comment on the detrimental effect that forbearance of WSP interconnection would have at this juncture.

4037   The current WSP regime no longer reflects current market conditions. It perpetuates inequities as between independent and affiliated WSPs which are not justified or supported by public policy. Rather than consolidating the LEC and WSP regimes, we propose modifying the WSP regime so that interconnection costs are shared equally. That would serve two purposes.

4038   First, it would remove a loophole and create a level playing field for independent WSPs relative to affiliated WSPs.

4039   Second, it would remove the implicit subsidy that WSPs provide to LECs.

4040   This pernicious situation is an unintended artefact of an antiquated regime which should not be maintained. Making this change would allow wireless entrants to direct more investment towards expanding network reach, enhancing service and price innovation, and enabling greater competition at the low end of the market.

4041   As one of only two independent WSPs participating in this consultation, Public Mobile's perspective on the current regulatory regime is different than at least some WSPs operating within vertically-integrated companies.

4042   In our view, the current regime where WSPs pay 100 percent of the interconnection costs, including 100 percent of costs required to terminate LEC and affiliated WSP-originated traffic, is not equitable. It has resulted in an implicit subsidization of LECs by WSPs. It has also created a loophole where independent WSPs are singled out as the sole class of local carriers unable to share interconnection costs equally.

4043   Given that there is no public policy rationale to support this situation, we submit it is an unintended consequence of an antiquated regime that must be changed. All WSPs should be able to access a shared-cost facilities and bill and keep.

4044   In 1984, the Commission determined that wireless was a specialized, discretionary service. At that time, in a nascent market, wireless carriers connected to ILECs using line-side trunks, shared central office codes administered by the ILECs, and originated far more traffic than they terminated.

4045   Today, WSPs connect using services equivalent to those used by the LECs. They originate and terminate roughly equal amounts of traffic. They obtain their own CO codes, administer their own telephone numbers, and participate in number portability. Independent WSPs therefore connect as peers in all ways -- except economically.

4046   To be frank, under the current regime, independent WSPs are getting hosed.

4047   As noted in paragraph 26 of our intervention, currently WSPs can pay up to 20 times more than LECs for an equivalent interconnection service. This situation is unfair and creates a barrier to competition particularly for WSPs seeking to serve the low end of the market.

4048   Affiliated WSPs, such as Bell, Rogers and TELUS avail themselves of an effective loophole in the current regime by virtue of their integrated operations. The wireless business units of such integrated carriers, which operate under the WSP regime, benefit by taking advantage of a more favourable LEC interconnection regime and cost allocation without adhering to CLEC Obligations.

4049   Any interconnection fees paid by these WSPs to their affiliated LEC business units are effectively intercompany transfers and are neutral on a real cost basis for the integrated enterprise.

4050   Fido is an interesting case study. Microcell received wireless CLEC status for Fido's operations more than 10 years ago. Rogers, since it acquired Fido in 2004, as we understand it, has continued to operate Fido as a CLEC. This has allowed Rogers to leverage the wireless CLEC operations to interconnect its WSP traffic outside its cableco serving territory which gives Rogers an extensive geographic area where its WSP operations has access to the benefits of the LEC interconnection regime.

4051   It is only fair that the WSP regime be modified so that equal sharing of interconnection costs be available to independent WSPs.

4052   With respect to forbearance, it is important to note that Decision 2008-17 made wireless to wireline interconnection mandatory and subject to a Phase II "plus" costing. In Public Mobile's submission there is currently no justification to vary from this determination, whether for wireless access service tariffs or for future IP interconnection tariffs.

4053   Today, vertically-integrated carriers hold about 95 percent of the wireless market. New wireless entrants compete against dominant incumbent wireless carriers whose affiliated ILECs provide about 95 percent of interconnection services to wireless entrants.

4054   Given the market concentration and the dynamic that exist today, and which will continue for some time, it is reasonable to conclude that forbearing would increase costs and complexity of interconnection for wireless entrants to the detriment of consumers.

4055   New entrants have no market power and cannot effectively negotiate reasonable interconnection terms with affiliates of their major and dominant competitors.

4056   The record of this consultation shows that many of the largest CLECs who have integrated wireless business units do not currently offer interconnection services to independent WSPs.

4057   Taking all these circumstances into account, forbearing from regulating interconnection services could have significant negative effects. These would include higher interconnection costs, increased administrative complexities, and perhaps forestalling competitive entry into certain regions altogether.

4058   We submit that the broad regulatory policy and structural issues of the current WSP regime should be resolved before forbearance of interconnection tariffs is considered. Furthermore, regulatory oversight is necessary to manage the potential for integrated carriers to abuse their market power by imposing barriers on wireless entrants.

4059   We submit that the current level of regulation applied to the WSP market is appropriate. Order-in-Council 2006-1534 directs the Commission to rely on market forces to the maximum extent possible, and it would be contrary to the policy direction to impose additional regulation on WSPs.

4060   In this respect many of the CLEC Obligations stem from sections of the Telecommunications Act relating to the filing tariffs and agreements. These need not apply to the wireless market.

4061   There is no public policy justification to require WSPs to support equal access, to file tariffs, or to submit agreements for approval as pre-conditions to accessing a regime with equal sharing of interconnection costs. Public Mobile and other WSPs already adhere to many CLEC obligations, including those respecting issues of customer protection and safety, and we are not suggesting that that should be changed.

4062   Further, no logical or legitimate underpinning exists for a "regulatory bargain" related to the increased regulatory burden of CLEC Obligations in order to access shared-cost facilities and bill and keep. It does not exist.

4063   In Decision 97-8, the Commission decided to provide shared-cost facilities on the basis that it removes barriers to entry by reducing the potential and incentives to inflate costs. Similarly, the Commission deemed that bill and keep removes barriers to entry by reducing administrative costs and complexity related to the billing of interconnection services.

4064   Interestingly, Fido's status as a wireless CLEC is illustrative of why the Commission need not mandate equal access in a revamped WSP regime.

4065   Fido, as a CLEC, has supported equal access since 2001, presumably with significant costs to implement and to support. However, the record of this proceeding indicates that Fido's equal access penetration is only 0.7 percent of its long distance traffic.

4066   Clearly, in an environment of commoditized and bundled long distance, and with the increasing availability of over-the-top domestic and international long distance options, equal access should not be a concern for the Commission in a revamped WSP regime.

4067   By way of example, today any customer of Public Mobile who purchases one of our voice plans (which can purchased for as little as $15 a month) receives free unlimited in province calling, can purchase unlimited domestic calling anywhere else in Canada for $5 per month, and unlimited U.S. long distance anywhere in the U.S. for $10 per month. And we generally offer the lowest international rates of any carrier.

4068   With competition market discipline will protect consumers. A WSP's decision to offer equal access should be a business decision.

4069   Mandating equal access on WSPs would increase the regulatory burden and add costs which would be passed through to customers. Further, independent WSPs have no market power and could never get away with uncompetitive long distance rates.

4070   Public Mobile submits that at the very least any obligation for equal access should be waived for independent WSPs. This matter could be re-evaluated by the Commission in the future if deemed necessary.

4071   At this point, Commissioners, I would now like to hand it over to Brian O'Shaughnessy.

4072   MR. O'SHAUGHNESSY: I would like to address the lack of neutrality in the current interconnection regime which is implicitly biased towards TDM technology.

4073   Public Mobile agrees with the preponderance of intervenor submissions in this proceeding that support the evolution to IP interconnection. The percentage of voice services that utilize IP is large and growing steadily. Most wireless and cableco voice networks are already predominantly IP. The ILECs offer IP-PBX services to business customers and are deploying fibre-to-the-home access technology where voice services are offered via VoIP. Further, IP networks have been deployed to support the large volume of internet traffics to the vast majority of homes and businesses via DOCSIS, various DSL, and fixed wireless or other technologies.

4074   We conservatively estimate that at least 23.5 million, or 53 percent of wireline and wireless subscribers in Canada, are currently IP-enabled.

4075   I would like to bring your attention to Exhibits 1 and 2 that we distributed to the hearing secretary earlier today on those two matters.

4076   With the majority of traffic already being IP-enabled, it is more costly and less efficient for the industry as a whole, to convert such traffic back to TDM at the point of interconnection.

4077   Traffic should be handled through IP interconnection. To do otherwise would mean that carriers and ultimately consumers unnecessarily incur the costs of operating and maintaining dual architectures, being TDM and IP, merely to facilitate PSTN interconnection.

4078   It is worth noting that virtually all of Public Mobile's long distance traffic is connected via IP using a variety of service providers with different vendor equipment. The only traffic on TDM today is local PSTN traffic exchanged with LECs.

4079   The ILECs argue that the trigger for IP interconnection should be their wireline and wireless access technologies upgrades such as fibre-to-the-home and voice over LTE which are required to enable their retail IP services. We submit that waiting for incumbent retail readiness stifles innovation in the market.

4080   In Public Mobile's view we are at the tipping point and the current regime needs to be modified. This will ensure that the industry and consumers benefit from the efficiencies to be gained from IP technology, and avoids Canada falling behind other global carriers given that ILECs in the U.S., Asia and Europe have deployed IP networks with voice over IP as a major part of their service offering.

4081   Currently, no interconnection tariffs exist and bilateral -- no IP interconnection tariffs exist and bilateral agreements exist only for toll services and select wireless interconnections.

4082   To ensure regulatory symmetry, these services should be widely available to all carriers under clear terms and conditions. This is best achieved through the implementation of IP interconnection tariffs which must co-exist with TDM tariffs for a period of time.

4083   To do otherwise would leave Public Mobile and others who have limited negotiating power at the whim of the ILECs as to the terms and timing for the availability for these services.

4084   In conclusion, we respectfully submit:

4085   - That there is no need to increase regulation of WSPs by mandating equal access or other CLEC obligations. Doing so would be unnecessary and contrary to stated policy;

4086   - That it is necessary to mandate the development of IP tariffs to ensure a timely evolution to IP-based interconnection. We propose that the Commission direct the CRTC Interconnection Steering Committee to address any unresolved technical matters and establish clear timelines for the development of the IP tariffs;

4087   - That the Commission continue its regulatory oversight of wireless interconnection services for both wireless access service and IP tariffs, and finally;

4088   - That the Commission modify the WSP regime to address issues of competitive equity by extending shared-cost facilities and bill and keep to independent WSPs, thereby levelling the playing field currently biased toward integrated companies and removing an implicit LEC subsidy.

4089   Before concluding, I would like to point out to the Commission that we have filed with the hearing secretary an exhibit that provides Public Mobile's responses to the questions posed by the Chairman in his opening remarks.

4090   Thank you very much, Mr. Chairman and Commissioners, for the opportunity to present to you today on these important matters. We would be pleased to take any questions you might have.

4091   THE CHAIRPERSON: Thank you. You mentioned that the wireless service providers are treated in a very old-fashioned way as customers, et cetera and you want them to be treated like CLECs.

4092   We have heard here that most wireless service providers have made deals with CLECs to basically get all the benefit of a CLEC without alternate arrangements they usually call it, et cetera.

4093   Have you made such alternate arrangements?

4094   MR. O'SHAUGHNESSY: Public Mobile's interconnection arrangements are that we have deals with LECs today, bilateral deals for interconnection.

4095   We also have arrangements with ILECs for interconnection under tariff purposes.

4096   Then we also have direct arrangements with third party long distance carriers where we connect on an IP basis.

4097   THE CHAIRPERSON: Yeah, but I mean all I was talking about was the WAS. You're not using WAS to interconnect. You couldn't connect with a CLEC, I presume.

4098   MR. O'SHAUGHNESSY: I see. Yes, we have both. We have -- most is through a LEC on a bilateral arrangement.

4099   THE CHAIRPERSON: Right.

4100   MR. O'SHAUGHNESSY: But we also have interconnection with the ILEC.

4101   THE CHAIRPERSON: Okay. In terms of IP interconnection deals you have some right now, I understand, but none with an ILEC. They are all with IXCs. Is that --

4102   MR. O'SHAUGHNESSY: Correct. They are all with long distance carriers whether for domestic, North American or international long distance traffic.

4103   THE CHAIRPERSON: Are there any you have with other wireless carriers?

4104   MR. O'SHAUGHNESSY: No, not at this time.

4105   THE CHAIRPERSON: Okay. You mentioned one thing and we heard that from everybody, that equal access is really yesterday's remedy and doesn't apply to today and shouldn't be imposed upon you. And there are all sorts of other alternate means available.

4106   Just it piqued my curiousity. I always see these ads on TV you know for long distance dial 10-10 and some number. Does that work on a Public Mobile phone too?

4107   MR. BORON: Sorry, are you asking how a Public Mobile customer would --

4108   THE CHAIRPERSON: You know would that work? I mean if I am a Public Mobile customer can I actually avail myself on one of those services?

4109   MR. O'SHAUGHNESSY: Today if you dial a standard telephone number -- you can dial around but in terms of dialing a short code it would not.

4110   THE CHAIRPERSON: But you know what I'm talking about? You see on --

--- Pause

4111   MR. O'SHAUGHNESSY: Right. So what we do support is dialing around if you dial a traditional telephone number. That's what we support -- or calling card type number or anything.

4112   THE CHAIRPERSON: Yeah, right.

4113   Now, a last thing, why do you feel you need -- at your closing you said we should mandate a tariff. I understand that -- you make a very eloquent argument why we should mandate IP-to-IP interconnection, but why should we set a tariff as well?

4114   MR. O'SHAUGHNESSY: Our belief is a company such as ours without any market power we will not be able to negotiate a tariff in a simple way with the incumbents. It will one, take time; and two, we would not be able to negotiate a fair arrangement.


4116   MR. BORON: And just to add to that, Mr. Chairman, I guess the situation which we found in negotiating agreements with the incumbent vertically-integrated carriers, an example that is sort of near and dear to my heart is negotiating roaming arrangements with the incumbents.

4117   Although that's not a matter for the Commission's concern, but it's just that when you are dealing with a party that is a dominant provider in the market that we provide retail services is also effectively a monopoly or dominant provider for the service that we're talking to them about it makes -- when you're a small player like us, it makes for a very difficult and protracted series of negotiations.

4118   THE CHAIRPERSON: Tim, you have some questions?

4119   COMMISSIONER DENTON: No, I do not have questions.


4121   Len...? Suzanne...?

4122   COMMISSIONER LAMARRE: Merci, Monsieur le Président.

4123   Page 3 of your presentation, and I went and had a look at your site here, when you're talking about the current coverage you're covering Greater Toronto, Greater Montreal Areas and you have plans to eventually build out much more extensively within your licensed territory.

4124   What's your licensed territory?

4125   MR. BORON: Our licensed territory is the vast majority or at least where the vast majority of people live in Ontario and Quebec. That covers slightly over 19 million people.


4127   MR. BORON: It's essentially the Quebec City to Windsor corridor.


4129   MR. BORON: It's more than that but that's where the majority of the population is.

4130   COMMISSIONER LAMARRE: And largely Quebec City to Windsor corridor.

4131   MR. BORON: That's right.

4132   COMMISSIONER LAMARRE: So if you plan to expand, at one point in time you're going to be expanding within small ILEC territory. How do you foresee your arrangements once you expand to those territories?

4133   MR. O'SHAUGHNESSY: I am sorry, just a clarification. You're saying how we interconnect -- expand our interconnection arrangements as we move to other territories? Yes.

4134   We would continue to work with the companies we are already interconnecting with and look to interconnect with others, whether it be -- in some markets the only place you can go is the ILEC. In other markets there are obviously independent carriers that we would enter into business negotiations with, including the SILECs. That's what I mean by independent carriers.

4135   COMMISSIONER LAMARRE: So do you have any concerns about the issues that were raised by the SILECs?

4136   That is more the rebuts file, but you may want to keep that in mind, because if you plan to expand up to Quebec City and in large territories you are going over all the SILEC territories in Quebec. And if you go down south Windsor, you are also going to be covering over at least some of those territories.

4137   So, you know, just keep it in mind for the rebuttal phase. So I know it is looking forward, but that is exactly the exercise we are having today.

4138   MR. BORON: And very quickly, I won't get into any detail, but we have certainly focused in the way that we've thought about this proceeding on not the SILECs, on the ILECs, just because that is our immediate focus. But I guess --

4139   COMMISSIONER LAMARRE: If you cold give it some thought or --

4140   MR. BORON: We will give it some thought in rebuttal and I think we will come to the Commission with some ideas as to how there shouldn't be additional inefficiencies introduced, but thank you.

4141   COMMISSIONER LAMARRE: Thank you, those are all my questions.

4142   THE CHAIRPERSON: Okay. Before I let you go, you peaked my curiosity when you mentioned roaming agreement. I understood that you are a special frequency. Are your handsets such that when you roam you in effect switch frequency and you are riding then on Rogers' frequency let's say or something?

4143   MR. O'SHAUGHNESSY: The way our handsets work is obviously we do have a unique frequency in our territory that we build on and it is part of the PCS band and is being used or planned to be used by Sprint in the United States as well.

4144   All our handsets, however, work in both the cellular band and all the other PCS bands. So when we do roam on other carriers it switches and uses their frequency.

4145   THE CHAIRPERSON: Then automatically as a user I don't have to do anything. It is a soft --

4146   MR. O'SHAUGHNESSY: Exactly. You would not know the difference. As a matter of fact, the frequency is irrelevant to the end-user, they would not see that there was nay difference.

4147   THE CHAIRPERSON: Okay, thank you very much. Those are our questions.

4148   And then let's move on, Madame le Secrétaire. I think WIND Mobile is next?

4149   UNIDENTIFIED SPEAKER: No, they were up.

4150   THE CHAIRPERSON: Oh, they were up?

4151   THE SECRETARY: I would invite Mobilicity to come forward. Thank you.

4152   THE CHAIRPERSON: Oh, WIND was Yak. Yak and WIND were combined, yes.

--- Pause

4153   THE SECRETARY: We will now proceed with the presentation by Mobilicity.

4154   Please introduce yourselves for the record, after which you will have 20 minutes for your presentation.

4155   Thank you.


4156   MR. THOMPSON: Madam Secretary, Mr. Chairman, Commissioners, my name is Stewart Thompson, I am in Carrier Relations at Data & Audio-Visual Enterprises Wireless Inc. doing business as Mobilicity.

4157   With me today is Gary Wong, Legal Counsel for Mobilicity.

4158   Mobilicity is a new entrant standalone public mobile service provider. We launched our services in May, 2010, approximately 18 months ago. We hold spectrum licences for high-frequency AWS spectrum covering a population of over 18 million Canadians.

4159   Through our unlimited talk, text and data services we continue bring more competitive choice in mobile wireless services to Canadian consumers.

4160   Thank you for providing us with this opportunity to share with you our view on network interconnections issues.

4161   Based on what we have heard and seen to date on the record, our position on the issues in this proceeding may be summarized as follows. At the option of wireless carriers, wireless carriers should be permitted to interconnect with LECs on a shared-cost and bill-and-keep basis.

4162   All LECs should be mandated to provide in their tariffs for shared-cost interconnection and bill-and-keep treatment of local voice traffic exchanged between the LEC and the wireless carrier.

4163   No new or additional obligations should be imposed on wireless carriers beyond those already observed by wireless carriers.

4164   Notwithstanding the extremely high rates in the ILEC WAS tariffs, these should continue to be mandated and wireless interconnection services should continue to be part of the model CLEC tariff. It would not be appropriate to forbear from regulating these baseline interconnection services.

4165   IP to IP interconnection should be mandated for any carrier that has at least one such arrangement in place with any third party, including any affiliated entity.

4166   A model IP interconnection agreement with model tariffs reflecting the framework principles that will be established by the Commission in this proceeding should be developed.

4167   A party that is mandated to provide IP to IP interconnection must negotiate a mutually agreeable point of interconnection and other network configuration and interface issues in accordance with established framework principles. These principles could be based on so-called default rules proposed by Rogers with a few modifications, as discussed below. Wireless carriers should not be required to establish direct connections wit SILECs.

4168   We will now respond to each of the seven questions set out in the CRTC's organization and conduct letter dated October 12th, 2011 beginning with the Commission's four questions on wireless interconnection issues.

4169   Should wireless carriers be treated as equal carriers with the ILECs and therefore be entitled to shared-cost interconnection with bill-and-keep and, if so, under what terms and conditions?

4170   Yes, it is time for wireless carriers to be recognized as co-carriers along with the LECs. The regime for wireless carrier interconnection with an incumbent local exchange carrier was established almost 30 years ago when mobile wireless services occupied a much different place in people's lives.

4171   Today, however, the number of wireless connections exceeds wireline by more than $7 million. Mobile wireless telecommunication services are ubiquitous and a substitute for traditional wireline and IP-based voice telephony services.

4172   Among other things, wireless carriers have access to central office codes, provide 911 services and offer local number portability. Local wireline services are, in large part, deregulated, in many causes due in part to the presence of a wireless carrier. In these circumstances, it is hard to understand how wireless carriers cannot be considered co-carriers.

4173   Parties suggest that standalone new entrant wireless carriers can become CLECs. It is no answer to state that wireless carriers have the option to be come wireless carrier CLECs. The regime has been a failure. Fido, formerly owned and operated by Microcell, is currently the only registered WSP-CLEC.

4174   It is also selected that standalone wireless carriers should attempt to replicate the model of vertically integrated wireline/wireless carriers adopted by the ILECs and certain other market participants by creating affiliated CLECs.

4175   It is interesting to note that in 2000 when Microcell filed its wireless carrier CLEC tariffs it incorporated a non-CLEC affiliate to whom it planned to resell mobile wireless services.

4176   The established players at the time vehemently objected that Microcell was attempting to circumvent the CLEC obligations and, in particular, the obligation to provide equal access. Microcell was prevented from using an affiliate to avoid the equal access obligations.

4177   And yet, as we make clear in responses to Mobilicity interrogatories, the fact is that today equal access is not provided on the wireless networks of the ILECs or Rogers and there is no material demand for directory listing services on wireless.

4178   Equal access on wireless networks is offered today only by Fido. And as Mr. Watts stated on Tuesday, it accounts for only about 1 per cent of the total toll traffic on the Fido Network. There does not appear to be any material consumer demand or benefit to consumers associated with equal access. There are so many alternative long-distance options available, such as prepaid cards, local access numbers and over-the-top applications.

4179   Not only is there little apparent consumer benefit, equal access and directory listing services on wireless networks would represent significant added costs. We identified many of the cost items that would be associated with implementing equal access in a response to CRTC-2.

4180   Quebecor Media expressed serious doubts about the ability to recover investments in equal access if forced to make them. Rogers noted on Tuesday that imposing equal access on wireless would lead to higher prices for consumers. This effect would be even more pronounced for new entrant wireless carriers.

4181   In short, over time the equal access obligation, like the directory listing service obligation, has become a rule without a reason. These obligations are outmoded, particularly when it comes to wireless networks. And no party in this proceeding has rushed to defend them as being required to maintain or enhance consumer benefit. On the contrary, the imposition of equal access will likely lead to reduced consumer benefit in the form of higher prices.

4182   As a result of their inability to obtain co-carrier status, the inequities of the CLEC regimes and the high cost of ILECs' WAS tariffs wireless carriers, such as Mobilicity, have had no choice but to enter into interconnection arrangements with CLECs.

4183   Under such arrangements, Mobilicity still pays for all incoming traffic terminated on our own network while our CLEC gets compensated through bill-and-keep by the ILEC, and we have to pay them for this service as well.

4184   More to the point, it is a false choice to offer up WSP-CLEC status, affiliation with a CLEC or commercial interconnection arrangements with CLECs as an option for wireless carriers when more fundamentally there is no good reason to deny wireless carriers co-carrier status.

4185   What measures need to be taken to ensure that wireless carriers have the same benefits and obligations regardless of whether they are independent or part of a vertically integrated telecommunications entity?

4186   We propose that wireless service providers be recognized as co-carriers and, as such, be permitted to interconnect on a shared-cost facility and bill-and-keep basis with LECs under Commission-approved tariffs and agreements.

4187   Wireless carriers are already mandated to provide e911 and LNP. There is no need for any additional obligations. The evidence shows that there is no material consumer benefit in imposing additional obligations on wireless carriers.

4188   In particular, Mobilicity submits that the following so-called CLEC obligations, in particular, would represent additional obligations that should not be imposed on wireless carriers: the provision of equal access; provision of directory listing services; and, the provision of details of all service options with applicable prices.

4189   With respect to the third listed element above, in the current wireless context, providing details of all service options would simply be too onerous and would likely be a wasted effort, given how quickly and often service options are modified. At most, if this type of obligation is imposed on wireless carriers, it should be limited to the provision of then current web-published service options.

4190   Regarding the establishment of shared-cost interconnection facilities, we support Rogers' request in this proceeding, that the Commission clarify that the shared-cost principle extends to the use of leased facilities. We understand that there should be an end to the practice of some ILECs charging 100 per cent of the facilities' tariff rates to the interconnecting carrier.

4191   Regarding the appropriate point of interconnection, Mobilicity would not object to a minimum interconnection area of the LIR consistent the wireline LEC-to-LEC regime with express permission to establish a more highly aggregated point of interconnection for LEC to wireless carrier interconnection.

4192   Where a wireless carrier and a LEC cannot agree on more highly aggregated point of interconnection, Mobilicity notes that section 40 of the Telecommunications Act grants jurisdiction to mandate the connection of telecommunications facilities within such time and subject to such conditions as the Commission determines to be just and expedient.

4193   Would it be appropriate for the Commission to forbear from regulating wireless access service and, if so, what criteria should be applied?

4194   No, ILES WAS tariffs should continue to be mandated and wireless interconnection services continue to be part of the model CLEC tariff.

4195   As noted by Rogers and Videotron, there are circumstances in which WAS serves a role as the most technically efficient and expedient means of interconnection.

4196   For example, particularly with new entrant wireless carriers, it will not be economically feasible or practical to established shared-cost interconnection facilities in all cases. In such situations, there must continue to be a way for wireless carriers to terminate traffic with every LEC.

4197   Wireless carries, including established carriers such as Rogers, have provided evidence that continue to require WAS in areas where the establishment of a shared-cost facility is not justified. This would be important to new entrant wireless carriers to build scale and scope.

4198   Furthermore, Mobilicity notes from experience that the situation for wireless carriers it that there are very few suitable CLECs qualified and willing to handle mobile wireless voice traffic.

4199   For example, a small CLEC focused on offering VoIP termination or origination services may not be in a position to offer the quality of service and reliability or demonstrate the financial stability required by a wireless carrier. Suitable CLEC alternatives in many cases are likely to be integrated carriers with whom we compete.

4200   Given the foregoing factors, one cannot presume that forbearance would not lead to higher interconnection costs. There is no evidence supporting the view that ILECs will continue to offer competitive WAS services at competitive rates if forborne, other than to themselves. We believe that forbearance could result in higher costs and reduced consumer choice.

4201   As unacceptably high as the tariffed WAS rates are, they do provide a baseline and a guaranteed means of interconnecting should a suitable CLEC not be available or prepared to provide interconnection services to new entrant wireless carriers.

4202   Should existing rules be modified to require wireless carriers in small ILEC territories to establish direct network interconnection arrangements with the small ILECs, unless the two parties agree to alternative arrangements?

4203   No. Mobilicity would be concerned about any regulatory rules that would make it more costly for it to enter new markets, such as the typically underserved markets served by SILECs. In Mobilicity's view, the SILEC proposal would inevitably lead to higher costs and, therefore, higher prices or a disincentive to entering.

4204   IP to IP interconnection matters. Mobilicity operates a TDM-based access network with IP-based transmission technology in the core of its network. We are, in relative terms, a small new entrant carrier. However, we can say that we are currently actively engaged in exploring IP-based toll interconnection arrangements.

4205   We anticipate that we will have multiple IP interconnection arrangements in place in late-2012 and some as well in the first quarter of 2012.

4206   It is clear from the record that a number of parties have entered into IP to IP interconnection arrangements with affiliated and unaffiliated third parties. This means that they have the capability within their networks to exchange traffic on an IP to IP basis.

4207   Thus, given our own experience and the evidence of the emergence of IP to IP interconnection arrangements in Canada, we believe that technical issues, if any, do not stand in the way of achieving widespread IP to IP interconnection arrangements in the short to medium-term.

4208   We know from our own experience that large carriers lack incentives to enter into commercial arrangements with smaller carriers. We have some experience with mandated right, but negotiated term regimes, and it has not been positive.

4209   Thus, in our view, leaving the development of IP interconnection to negotiations will delay implementation of IP interconnection and the Canadian telecommunications IP infrastructure will have less chance to develop seamlessly and in an orderly fashion.

4210   What is revealing is the evidence on the record of this proceeding, that the two larges cable companies in Canada have sought and been refused IP-based interconnection presumably by one or more ILECs.

4211   We believe that IP to IP interconnection should be mandated and required to be provided under tariff by any carrier that had entered into an IP interconnection arrangement with at least one affiliated or unaffiliated third party.

4212   Similar to interconnection under the current TDM-based regime, the basic principles could be enshrined in a model tariff and model IP to IP interconnection agreement.

4213   The basic principles that should be enshrined in a tariff and model IP to IP interconnection agreement include:

4214   A mandate to provide IP-based interconnection imposed on any LEC or wireless carrier that has already entered into an IP to IP arrangement with at least one third party;

4215   Only one or two, for redundancy, points of interconnection per province between the parties;

4216   The cost of IP to TDM conversion should be borne by the terminating carrier;

4217   IP to IP interconnection standards guidelines should reflect ongoing compliance with current internationally accepted industry standards, including minimum message set guidelines;

4218   Any new interconnection facility should be established on a shared-cost basis;

4219   Traffic should be exchanged on a bill-and-keep basis, like for current TDM-based LEC to LEC interconnection regime. However, traffic imbalance payment rates, one would expect, would be lower than current traffic imbalance rates on TDM;

4220   Term, termination and other provisions found in MALI and other mandated wholesale agreements.

4221   Mobilicity does not totally exclude the need for negotiations. For example, Mobilicity anticipates that the location of a mutually agreeable point of interconnection or other network configuration and interface issues may be more efficiently and flexibly be dealt with through direct negotiations between the parties.

4222   As for off-tariff arrangements Mobilicity notes that in our interrogatory responses filed in this proceeding we stated that we were opposed, in principle, to off-tariff arrangements being reached in relation to interconnection matters.

4223   Having heard the submissions of the parties, we are reconsidering our position in this regard and we will come back next week with a more considered view.

4224   This concludes our prepared statement. We would be pleased to address any questions that you may have.

4225   THE CHAIRPERSON: Thank you very much for your presentation.

4226   Now, I found it interesting to say that you operate a TDM-based access network with IP-based transmission technology in the core of its network.

4227   MR. THOMPSON: Yes.

4228   THE CHAIRPERSON: So you have right now no IP interconnections --

4229   MR. THOMPSON: Today we have no IP interconnections --

4230   THE CHAIRPERSON: -- you connect everybody TDM-based?

4231   MR. THOMPSON: That is correct.

4232   THE CHAIRPERSON: Even with IXC carriers and so on?

4233   MR. THOMPSON: And that is what we are working on. We really spent the first year, year and a half, focused on providing service domestically to our customers. We have been somewhat satisfied with our long-distance carriers today who are TDM-based.

4234   But what we have found is that when we are looking to enter into new IXC arrangements, basically everybody says you have to deliver traffic to us IP. Nobody is interested in TDM interconnection anymore, in particular, for international long-distance traffic.

4235   So we are undertaking a project, as we speak, to implement the ability to terminate IP-based traffic and we will start with international toll.

4236   THE CHAIRPERSON: I am just surprised that, as a new entrant, you chose to do all your access through TDM rather than -- it seems to me the other new entrants all go totally IP and then, for access purposes, sort of downgrade to TDM"

4237   MR. THOMPSON: Well, our switch is IP-enabled, so it can support both TDM, and we used TDM obviously for local access interconnection. And there is the opportunity to do it for toll traffic, as an example.

4238   But we are just acquiring a session border controller. You have heard about session border controllers? So we can get SIP compliant with that --

4239   THE CHAIRPERSON: Explain that to me so that I can understand what it means. I hear the word, I have no idea what you are talking about.

4240   MR. THOMPSON: Well, what session border controllers in effect do is they can take varying standards of IP and they basically convert them into standard.

4241   There is different SIP standards, there is SIP-I, there is SIP-T. Some wireless carriers have SIP-T, some have SIP-I. The common standard is SIP-I. But if we are SIP-T, a session border controller could convert that such that we can hand off the traffic to a SIP-I-enabled carrier.

4242   THE CHAIRPERSON: But let's say if Bell tomorrow said, yes, we offer IP interconnection, et cetera, you would avail yourselves of that, would you?

4243   MR. THOMPSON: Yes. Oh, are you talking about for local?

4244   THE CHAIRPERSON: I am just wondering if -- your core you are telling me is IP, so I would assume that the sooner you can convert --

4245   MR. THOMPSON: We couldn't do it today, but --

4246   THE CHAIRPERSON: You couldn't?

4247   MR. THOMPSON: Well, we are in the process of establishing that capability, so --

4248   THE CHAIRPERSON: But that is where you want to go?

4249   MR. THOMPSON: That is absolutely where we want to go.

4250   THE CHAIRPERSON: And then your position on the POIs. You seem to sort of equivocate from having them prescribed by us as two per province to negotiate it under a mutually agreed basis. So where exactly are you landing on this one?

4251   MR. THOMPSON: Well, the current standard today is at a local interconnection region.


4253   MR. THOMPSON: And if we fell into that regime, we're okay with that. But like many parties here, we think there can be further consolidation of points of interconnection, both for TDM and for IP.

4254   We think it's more efficient. The fewer connections you have, the more cost effective it is, so what we're basically stating is if it prescribed that we need to do it on a local interconnection region basis, we're okay with that, but what we'd really support is larger regions for interconnection.

4255   THE CHAIRPERSON: So -- okay. So paragraph 32, sub (b):

"Only one or two (for redundancy) points of interconnection per province between the parties."

4256   I'm trying to figure out, is that what you would like us to mandate, that's where you want to arrive with the parties through negotiations, or is this basically an objective without any enforcement?

4257   MR. THOMPSON: All right. What we're suggesting is we don't mandate where the location is. The parties can mutually agree to where it is appropriate to establish those points of interconnection.

4258   But what we do believe is that there -- we should minimize the number of points of interconnection require.

4259   THE CHAIRPERSON: So you would like us to set it as --

4260   MR. THOMPSON: For IP in particular, we think that would make sense, yes.

4261   THE CHAIRPERSON: So go away from the LIR regime and --

4262   MR. THOMPSON: Yes.

4263   THE CHAIRPERSON: -- to performance.

4264   And the other point I -- I mean, your list is very clear. At the end, I'm just -- you're coming down where Cogeco come down, basically. If there is an ILAC that doesn't have IP to IP interconnection, they don't have to offer it. But if they already have demonstrated the ability by offering it to either an affiliate or to an IXE, et cetera, then there is no reason why they shouldn't offer it to you.

4265   MR. THOMPSON: That's correct.


4267   MR. THOMPSON: Going back to the example of today where we're IP between our switches but we're not capable at this very moment of interconnecting on an IP basis. We're working towards it.

4268   THE CHAIRPERSON: Yeah. No, no. Okay.

4269   I think the rest of your presentation is eminently clear and straightforward, so you're beating to death the horse of equal access --

4270   MR. THOMPSON: Right.

4271   THE CHAIRPERSON: -- as everybody else has done.

4272   MR. THOMPSON: Can't leave anything to chance.

--- Laughter

4273   THE CHAIRPERSON: Okay. So thank you.

4274   Do my colleagues have any questions? Suzanne?

4275   COMMISSIONER LAMARRE: Merci, monsieur le président.

4276   Correct me if I'm wrong. You have licence spectrum in Ontario, but you do not have licence spectrum in Quebec.

4277   MR. THOMPSON: That is correct.

4278   COMMISSIONER LAMARRE: That's correct. Okay, thank you.

4279   Now, going back at the last page of your presentation, paragraph 33, speaking of IP to IP interconnection, you do make the point that Mobilicity does not totally exclude the need for negotiations.

4280   So I'll take it that, in a general sense, Mobilicity is for negotiation, whatever the subject. I'll take that as a premise.

4281   MR. THOMPSON: Okay.

4282   COMMISSIONER LAMARRE: Okay. First, okay?

4283   Going back to the interconnection with SILECs, when you're saying on paragraph 26 considering that you do make the point that you want as little interconnection points as possible, I mean, your answer there is consequential. That's one of the reasons why you don't want us to modify the rules so that wireless carriers in small ILEC territories need to establish interconnection in each of the territories.

4284   Now, you answer the question -- there are two parts to the question. The first part --

4285   MR. THOMPSON: Okay.

4286   COMMISSIONER LAMARRE: -- relates to interconnection. The second part is unless the two parties agree to alternative arrangements.

4287   What would you think if, while not mandating interconnection in each of the territories, the Commission mandated the negotiations between wireless providers and the small ILEC?

4288   You can think about it and come back next week.

4289   MR. THOMPSON: I think I'd prefer to do that. Thank you.

4290   COMMISSIONER LAMARRE: Thank you. That's all my questions.


4292   COMMISSIONER DENTON: Excellent presentation. Thank you.

4293   I have at paragraph 28 an opportunity for you to expand and explain the following sentence:

"Thus, given our own experience and the evidence of the emergence of IP-to-IP interconnection arrangements in Canada, we believe that technical issues, if any, do not stand in the way of achieving widespread IP-to-IP interconnection arrangements in the short to medium term."

4294   Two questions. What are those standards, and what do you mean by short -- "we believe that technical issues". What are those technical issues? And secondly, what do you mean by "short to medium term"?

4295   If you could expand on that, I think that would be --

4296   MR. THOMPSON: Sure.

4297   COMMISSIONER DENTON: -- of benefit.

4298   MR. THOMPSON: Well, the standards are based on SIP, and basically what happens is the ITU -- through the ITU, they're called RFCs. They're Requests for Comments that become approved, and they become standards for various minimum message set standards, so it would be easy to specify a list of RFCs which any carriers need to be compliant with that are generally accepted around the world.

4299   So that's what we'd be looking for, something --

4300   COMMISSIONER DENTON: Okay. That --

4301   MR. THOMPSON: -- that indicates basically that these are the standards, the minimum standards that IP providers must meet.

4302   COMMISSIONER DENTON: Okay. So perhaps --

4303   MR. THOMPSON: Session border controllers certainly facilitate that because session border controllers basically state what the RFCs are that they support.

4304   COMMISSIONER DENTON: Well, in your reply comments why don't you just give us a sample of those RFCs? It would be of assistance --

4305   MR. THOMPSON: Okay.

4306   COMMISSIONER DENTON: -- so we don't have any excuse not to understand.

4307   And I believe it's the IETF that makes those RFC --

4308   MR. THOMPSON: Excuse me, IETF. Thank you.

4309   COMMISSIONER DENTON: Now, the next one is, what do you mean by "short to medium term" because that may have different connotations for different minds?

4310   MR. THOMPSON: M'hmm. Well, you know, what we'd like to see is a regime put in place as soon as possible with respect to tariffs in the model agreement, and then once that's in place, then we're certainly supportive of IP to IP arrangements being made.

4311   COMMISSIONER DENTON: So in other words, by your answer, I can take out "short to medium term" and substitute "as soon as possible"?

4312   MR. THOMPSON: I think that would work.


4314   Thank you. Those are my questions.

4315   THE CHAIRPERSON: Okay. Before I let you go, would you clarify to me what paragraph 19 -- what you're talking about?

4316   I mean, why -- you want us to endorse Rogers' request in this proceeding to clarify that the shared cost principle extends to the use of leased facilities. What are they -- what are ILECs doing presently?

4317   MR. THOMPSON: Well, again, we don't have experience with this because we don't have access to shared cost facilities today. But what we heard from Rogers was that, typically, there may be interconnection on a fibre basis and each party goes to a meet me point and basically the cost is shared of that fibre interconnection.

4318   But in some cases, such as ourselves, it may make more sense in the interim to use a leased facility rather than do a fibre build.

4319   That leased facility effectively should only pay half -- for half of that. The ILEC should be paying for the other half as their obligation to deliver the interconnection to us.

4320   So if it's $1,000 connection, we pay half and -- because we shouldn't be paying for the full facility.

4321   THE CHAIRPERSON: And do ILECs have a different position?

4322   MR. THOMPSON: Well, again, what we heard from Rogers was that there may be ILECs that are not interpreting or applying that understanding.

4323   THE CHAIRPERSON: I'm sure Rogers will review that on Monday, okay.

4324   I think those are all our questions for you. Thank you very much.

4325   Madam Secretary, we will resume on Monday with the rebuttal phase. All right?

4326   THE SECRETARY: Yes, I just have --

4327   THE CHAIRPERSON: Before you make your announcement, let me just finish.

4328   I would like parties very much to reflect on what was said during this week and I think what we all collectively learned. Some people have changed their position, and also come back to sort of the issue that we all are struggling with, the key issue, the IP interconnection, how do we do this in a way that's fair and equitable to both the ILECs and the new entrants, or the people who already have FP interconnection.

4329   I mean, it's -- I think this is the key issue not only for this hearing, but the consequence of that for the nation in terms of our progress towards a digital economy. And so I would like you -- I'm looking for help and inspiration from you to find the right solution for it. And we look forward to hearing from you on that point on Monday.

4330   Madam le secrétaire.

4331   THE SECRETARY: Merci, monsieur le président.

4332   As the Chairman noted, rebuttal phase will begin October 31st at 9:00 a.m. Parties should be present, as they may be called upon or want to contribute to the debate.

4333   Finally, given the two changes to the schedule this week, we have revised the order of appearance, and copies are available at the back table.

4334   Thank you, Mr. Chairman.

4335   THE CHAIRPERSON: That terminates today's session. Thank you.

--- Whereupon the hearing adjourned at 1058, to resume on Monday, October 31, 2011 at 0900


Johanne Morin

Karen Paré

Jennifer Cheslock

Monique Mahoney

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