Order Varying Telecom Decision CRTC 2006-15

Order Varying Telecom Decision CRTC 2006-15 Whereas, on April 6, 2006, the Canadian Radio-television and Telecommunications Commission (the Commission) rendered Telecom Decision CRTC 2006-15, Forbearance from the regulation of retail local exchange services (the Decision); Whereas the Commission determined that it was prepared to forbear from regulating retail local exchange services provided by Incumbent Local Exchange Carriers (ILECs) when the ILEC could demonstrate that, in the relevant market, rivalrous behaviour exists and that it has experienced a 25% market share loss, complied with specified competitor quality of service standards throughout the six-month period preceding its application for forbearance, implemented approved Competitor Services tariffs and provided competitors with access to its Operational Support Systems; Whereas the Commission determined that local forbearance regions (LFRs) were the appropriate geographic component of a relevant market; Whereas the Commission considered providing ILECs with greater regulatory flexibility prior to forbearance and the circumstances under which it might lessen or remove existing competitive safeguards for promotions, as defined in Telecom Decision CRTC 2005-25, Promotions of local wireline services, lessen or remove the local winback rule set out in Telecom Decision CRTC 2005-28, Regulatory framework for voice communication services using Internet Protocol, as amended by Telecom Decision CRTC 2005-28-1 and confirmed by Telecom Decision CRTC 2006-53, permit the ex parte filing of tariff applications for promotions, and permit the waiving of service charges for local residential winbacks; Whereas subsection 12(1) of the Telecommunications Act (the Act) provides that, within one year after a decision by the Commission, the Governor in Council may vary the decision on petition in writing presented to the Governor in Council within 90 days after the decision; Whereas petitions by the Government of Saskatchewan and the Coalition for Competitive Telecommunications and a joint petition by Aliant Telecom Inc., Bell Canada, Saskatchewan Telecommunications and Telus Communications Company were presented in writing to the Governor in Council within 90 days after the Decision; Whereas, in accordance with subsection 12(4) of the Act, notices of receipt of those petitions were published in the Canada Gazette by the Minister of Industry on June 3, 2006 and July 22, 2006, indicating that the petitions and any petition or submission made in response to them could be inspected and copied at the website strategis.gc.ca; Whereas, in accordance with section 13 of the Act, the Minister of Industry has notified a minister designated by the government of each province of the Minister’s intention to make a recommendation to the Governor in Council for the purposes of an order under section 12 of the Act and has provided an opportunity for each of them to consult with the Minister; Whereas a copy of the proposed Order Varying Telecom Decision CRTC 2006–15 was published in the Canada Gazette, Part I, on December 16, 2006 and a reasonable opportunity was thereby afforded to interested persons to make representations with respect to the proposed Order; Whereas subsection 34(1) of the Act provides that the Commission may make a determination to refrain, in whole or in part and conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 of the Act in relation to a telecommunications service or class of services provided by a Canadian carrier, if the Commission finds as a question of fact that to refrain would be consistent with the Canadian telecommunications policy objectives set out in section 7 of the Act; Whereas the Canadian telecommunications policy objectives include rendering reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada, enhancing the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications, fostering increased reliance on market forces for the provision of telecommunications services and ensuring that regulation, when required, is efficient and effective; Whereas subsection 34(2) of the Act provides that the Commission shall make a determination to refrain, to the extent that it considers appropriate, conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 of the Act in relation to a telecommunications service or class of services provided by a Canadian carrier, where the Commission finds as a question of fact that the service or class of service is or will be subject to competition sufficient to protect the interests of users; Whereas the evolution of competitive telecommunications markets in Canada has accelerated with the deployment of Internet Protocol technology; Whereas, in light of the evolving competition, the Governor in Council made, on December 14, 2006, the Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunication Policy Objectives; Whereas that Order directs that the Commission should rely on market forces to the maximum extent feasible as the means of achieving the Canadian telecommunications policy objectives and that, when relying on regulation to achieve those objectives, the Commission should use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary; Whereas the Governor in Council considers that facilities-based competition is a durable form of competition that delivers the greatest benefits to consumers, imposes competitive market discipline on incumbents and strengthens investment in telecommunications infrastructure; Whereas the Governor in Council considers that local business markets and local residential markets should be considered separately; Whereas the Governor in Council considers that it is important to adopt simple and streamlined criteria for de-regulating the services of incumbent telephone companies in order to avoid imposing an unnecessary regulatory burden that could deny or delay the benefits of competitive rivalry to consumers; Whereas the Governor in Council considers that LFRs are not the appropriate geographic component of a relevant market, as they are too vast to retain administrative practicality and do not reflect a social and economic community of interest; Whereas the Governor in Council considers that local exchanges are the appropriate geographic component of a relevant market, as they often reflect a social and economic community of interest and are less likely than LFRs to contain pockets of uncontested customers; Whereas the Governor in Council considers that the provision of competitor services by an ILEC, in accordance with the competitor quality of service standards, supports sustainable competition, and that it is appropriate that an ILEC demonstrate that it has, on average, met those standards prior to any granting of forbearance under section 34 of the Act; Whereas the Governor in Council considers that the use of mobile wireless technology by consumers is increasing and will likely continue to increase, and that for many consumers the exclusive use of mobile wireless services is an increasingly attractive alternative to wireline local exchange services; Whereas the Governor in Council considers that the removal of marketing restrictions imposed by the Commission on ILECs will foster an increased reliance on market forces and enhance competitive market rivalry; Whereas the Governor in Council considers that it would be consistent with Canadian telecommunications policy objectives for the Commission, in accordance with section 34 of the Act, to grant forbearance from regulating the provision of retail local exchange services when the criteria set out in this Order are satisfied; And whereas the Governor in Council considers that retail local exchange services, for which forbearance is granted under section 34 of the Act based on the criteria set out in this Order, will be subject to competition that is sufficient to protect the interests of users and will not unduly impair the establishment or continuance of a competitive market; Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsection 12(1) of the Telecommunications Acta, varies Telecom Decision CRTC 2006-15 as follows: S.C. 1993, c. 38 Paragraphs 141 to 168 of the Decision are replaced by the following: The Commission considers that, for the purposes of a local forbearance application by an ILEC, a local exchange is the appropriate geographic component of the relevant market. Paragraphs 242 to 281 of the Decision are replaced by the following: The Commission considers that, if an ILEC can satisfy the following criteria, then the requirements of section 34 of the Act for a forbearance determination will have been met and the Commission may therefore grant local forbearance in accordance with that section: the ILEC demonstrates that one of the following circumstances exists in the relevant market: that the ILEC does not have market power, based on the criteria set out in paragraph 213, that, if the ILEC offers residential local exchange services, there are, in addition to the ILEC, at least 2 independent facilities-based telecommunications service providers, including providers of mobile wireless services, each of which offers local exchange services in the market and is capable of serving at least 75% of the number of residential local exchange service lines that the ILEC is capable of serving, and at least one of which, in addition to the ILEC, is a facilities-based, fixed-line telecommunications service provider, or that, if the ILEC offers business local exchange services, there is, in addition to the ILEC, at least one other independent facilities-based, fixed-line telecommunications service provider that offers local exchange services in the market and is capable of serving at least 75% of the number of business local exchange service lines that the ILEC is capable of serving; the ILEC demonstrates that, during a six-month period, beginning no earlier than eight months before its application for local forbearance and ending at any time before the Commission’s decision respecting the application, it met, on average, the quality of service standard for each indicator set out in Appendix B, as defined in Telecom Decision CRTC 2005-20, Finalization of quality of service rate rebate plan for competitors, with respect to the services provided to competitors in its territory, and it did not consistently provide any of those competitors with services that were below those quality of service standards. For the purposes of subparagraphs 242a)(ii) and (iii) and paragraph 523, the Commission considers that a telecommunications service provider is independent if it does not have the same owner as, and is not affiliated with, any other service provider referred to in the respective subparagraph. Further, for the purpose of those provisions, the Commission considers that a facilities-based telecommunications service provider is one that provides services in the relevant market either by using its own facilities and services or by using a combination of its own facilities and services together with those leased from other service providers. Paragraphs 483 to 488 of the Decision are replaced by the following: The Commission removes the existing competitive safeguards for promotions, as defined in Telecom Decision CRTC 2005-25, Promotions of local wireline services, removes the local winback rule as set out in Telecom Decision CRTC 2005-28, Regulatory framework for voice communication services using Internet Protocol, as amended by Telecom Decision CRTC 2005-28-1 and confirmed by Telecom Decision CRTC 2006-53, permits the ex parte filing of tariff applications for promotions and permits the waiving of service charges for residential local winbacks. Paragraphs 512 to 535 of the Decision are replaced by the following: Application for local forbearance The Commission will establish a process for dealing with applications for local forbearance filed pursuant to the framework set out in this Decision. In an application for local forbearance, the ILEC should provide evidence that it has satisfied all the criteria referred to in paragraph 242 or indicate that it will make the demonstration referred to in paragraph 242b) after filing the application. Each application should only be with reference to one relevant market and should list the tariff items and associated tariff numbers of the services for which the ILEC is requesting local forbearance. An application for local forbearance should be accompanied by a draft communications plan for the Commission’s approval. The plan should describe how the ILEC intends to explain local forbearance to customers in the relevant market, provide information concerning the ongoing availability of stand-alone PES in the market and provide contact information for customers who have questions or concerns. If an applicant ILEC is making applications for a number of contiguous local exchanges, the ILEC may request that the Commission determine those applications together. The applicant ILEC will, prior to filing, serve a copy of its application on all registered CLECs and any other known TSP providing local exchange service in the relevant market. Other parties that may be interested in commenting on such applications for local forbearance will be responsible for monitoring the Commission’s website in order to be aware of when such applications have been filed. The Commission will post the application to its website once it is received. The Commission notes that applications that are deficient in providing all of the required information, or that are not accompanied by all of the required documents, will be returned to the applicant ILEC. The Commission notes that it may request that the applicant ILEC or others provide further information or documents that it considers necessary to determine whether local forbearance is warranted. In establishing a process for dealing with applications for local forbearance, the Commission considers it important to provide a process that allows for timely decisions to be rendered for those applications. Consequently, if the ILEC provides all the required information and documents in the required form, the Commission undertakes, subject to paragraphs 520 to 522, to complete its analysis of, and render its decision respecting applications which rely on paragraph 242a)(ii) or (iii) within 120 days after the day on which the application is received. Applications for local forbearance that propose a division of business local exchange services into multiple relevant markets will not be subject to the undertaking. If the applicant ILEC indicates in its application that it will make the demonstration referred to in paragraph 242b) after filing the application, the Commission will commence its analysis of the application, but the application will not be subject to the undertaking. Applications for local forbearance that relate to local exchanges that are located wholly or partially within the census metropolitan area of Calgary, Edmonton, Halifax, Hamilton, London, Montreal, Ottawa-Gatineau, Quebec City, Toronto, Vancouver or Winnipeg, will be given priority by the Commission. Special circumstance If, prior to granting local forbearance, the Commission is informed that the ILEC’s application is based on competition in the relevant market from an independent fixed-line telecommunications service provider that, including all of its affiliates, has less than 20,000 local exchange services customers in Canada, the forbearance will not be effective until at least 18 months after the day on which the service provider began providing local exchange services in that market. Appendix A of the Decision is repealed. Appendix B of the Decision is replaced by the following: Appendix D and Appendix E of the Decision are repealed. The Decision shall otherwise continue to apply, but any provisions in the Decision that are inconsistent with this Order shall be interpreted in accordance with this Order to the extent of the inconsistency.