ARCHIVED - Letter

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Ottawa, 11 March 2011

Our Reference: 8661-C12-201102350

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Dear Madam or Sir:

Re: Review of billing practices for wholesale residential high-speed access services, Telecom Notice of Consultation CRTC 2011-77, 8 February 2011 (Notice 2011-77) – Requests to modify the scope and terms of the proceeding

Shortly after the issuance of Notice 2011-77, the Commission received requests to modify the scope and terms of this proceeding. The Public Interest Advocacy Centre (PIAC), on its own behalf and as counsel to the Consumers’ Association of Canada (CAC) (collectively, PIAC/CAC), submitted such a request on 10 February 2011 and the Canadian Network Operators Consortium (CNOC) submitted one on 11 February 2011.

In a letter dated 15 February 2011, Commission staff sought comments from various parties on these requests to modify the scope and terms of the proceeding.

Following the issuance of that letter, the Commission received comments from the following parties: Bell Aliant Regional Communications, Limited Partnership and Bell Canada; BC Broadband Association; the Canadian Association of Internet Providers (CAIP); Cogeco Cable Inc., EastLink Cable Inc., Quebecor Media Inc. on behalf of its affiliate Videotron G.P., Rogers Communications Partnership, and Shaw Communications Inc. (collectively, the cable carriers); Mark Rubenstein; MTS Allstream Inc. (MTS Allstream); Netflix Inc.; the Samuelson‐Glushko Canadian Internet Policy and Public Interest Clinic; Saskatchewan Telecommunications; TELUS Communications Company; l’Union des consommateurs; and Vaxination informatique.

This letter sets out the Commission’s determinations regarding these requests.

Principles

In Notice 2011-77, the Commission set out an approach to review billing practices regarding mandated wholesale residential high-speed access services based on the following two principles:

as a general rule, ordinary consumers served by small Internet service providers (Small ISPs) should not have to fund the bandwidth used by the heaviest retail Internet service consumers; and

it is in the best interest of consumers that Small ISPs, which offer competitive alternatives to the incumbent carriers, should continue to do so

PIAC/CAC requested that principle (a) noted above should be removed from Notice 2011-77. CAIP requested that the Commission remove both principles noted above from Notice 2011-77. Both parties indicated that these principles prejudge a rate structure for billing practices regarding mandated wholesale residential high-speed access services and that they should be replaced with broader questions in order to determine the proper principles applicable to mandated wholesale services.

The Commission considers that the two principles stated above and in Notice 2011-77 are intended to create a fair wholesale regime that (1) protects the interests of consumers and Small ISPs, and (2) does not create an unintended advantage for any particular service provider or user. In addition, the principles stated above do not prejudge in any way the outcome of this proceeding. In reviewing the billing practices for mandated wholesale residential high-speed access services in this proceeding, the Commission is inviting comments on proposals for billing practices that implement these two principles, and is not limited to examining only usage-based billing (UBB).

For example, the scope of the proceeding does not preclude proposals for billing practices that incorporate usage-based charges aggregated on a per-ISP basis or that are driven by peak period traffic, as indicated by some parties in their comments. The scope of the proceeding also does not preclude comments on the effectiveness of any billing practice as an Internet traffic management practice.

In light of the above, the Commission denies PIAC/CAC’s and CAIP’s requests.

Expansion of proceeding

PIAC/CAC also requested that the Commission expand the scope of the proceeding to allow parties to comment on the use of UBB in the retail Internet market.

The Commission notes that it has forborne from the regulation of retail Internet services on the basis that there is sufficient competition in the retail market. The Commission also notes that no parties provided evidence to justify a re-examination of this forbearance directive. Accordingly, the Commission denies PIAC/CAC’s request for expansion of the scope of the proceeding to allow comments regarding the use of UBB in the retail Internet market.

CNOC submitted that the current regulatory framework for wholesale high-speed access services is outdated and needs to be replaced. CNOC argued that the current framework is based on the assumption that these services are only used by competitors to deliver Internet services to their end-users and that competitors are mere resellers of incumbent retail Internet access services. CNOC requested that the Commission expand the scope of the proceeding to include a review of the regulatory framework for wholesale high-speed access services.

The Commission notes that the current proceeding deals with the narrow issue of billing practices for mandated wholesale residential high-speed access services. The Commission also notes that many of the issues raised by CNOC regarding wholesale high-speed access services were addressed in a recent Commission decision. The Commission considers that it would not be appropriate to include in the current proceeding a broad review of the regulatory framework for wholesale high-speed access services, as suggested by CNOC. Accordingly, the Commission denies CNOC’s request to modify the scope of the Notice 2011-77 proceeding.

MTS Allstream requested that the Notice 2011-77 proceeding be revised to include additional questions regarding such issues as network congestion and capacity.

The Commission considers that the above noted issues raised by MTS Allstream can be addressed in the context of this proceeding.

Procedural matters

Several parties requested that the procedure set out in Notice 2011-77 be modified to include an interrogatory process. Several parties also requested clarification on whether this proceeding would include an oral hearing and an online consultation.

The Commission will issue an amendment to Notice 2011-77 shortly to revise the procedure to include an interrogatory process, an oral hearing, and an online consultation. The oral public hearing will begin on 11 July 2011. Details will be provided in the amendment to Notice 2011-77.

Sincerely,

Original signed by:

Robert A. Morin

Secretary General

Wholesale high-speed access services proceeding, Telecom Regulatory Policy CRTC 2010-632, 30 August 2010