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Order CRTC 2000-983
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Ottawa, 27 October 2000 |
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Digital subscriber line service providers' access approved for
unbundled loops and co-location
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Reference: Bell Canada TNs 6475/6475A
and 8622-C85-01/00
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This order provides the rationale behind the recent CRTC decision to
give digital subscriber line (DSL) service providers the same
interconnection benefits as competitive local exchange carriers (CLECs).
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Applications from a potential DSL service provider, Covad Canada
Communications Inc., and Bell Canada resulted in the CRTC letter
decision on 21 September 2000. It directed that telephone companies
must give DSL service providers access to unbundled, unloaded loops and
co-location at the same rates, terms and conditions already approved for
CLECs.
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Saskatchewan Telecommunications (SaskTel) identified possible network
architecture variations from other telephone companies and is invited to
respond.
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Terms used in this order
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Digital subscriber line (DSL) service provides high-speed access
to digital networks via the same copper telephone lines that are used for
common voice telephone services.
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DSL service providers in this order are non-facilities-based
resellers. |
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Unloaded copper loops are used exclusively for digital data
communications and have none of the noise-filtering equipment required
for analog voice-grade lines. Noise filters tend to limit the digital
frequencies, absorb the pulses, and kill the signal. |
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Digital subscriber line access multiplexer (DSLAM): In a telephone
company's central office, DSL customers' telephone lines are connected to
a DSLAM instead of a traditional telephone switch. Companies that compete
with the telephone companies are allowed to co-locate their own DSLAM at
the central office to ensure customers have a choice of service
providers.
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Bell Canada files DSL tariff
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1. |
On 27 April 2000, Bell Canada filed Tariff Notice (TN) 6475,
amended by TN 6475A dated 5 May 2000. It proposed a tariffed
service to provide DSL service providers with the capability to lease
unbundled and unloaded copper loops and associated connecting links for
interconnection with the DSL service providers' equipment.
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Covad Canada's Part VII application
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2. |
Covad Canada filed an application on 5 May 2000 asking the Commission
to direct the incumbent local exchange carriers (ILECs) to modify their
General Tariffs to offer DSL service providers the same rates,
terms and conditions applicable to both unbundled local network
components and co-location arrangements as those currently available to
CLECs and Canadian carriers.
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Access to unbundled loops and co-location
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3. |
Only CLECs and certain other Canadian carriers (e.g. interexchange
carriers) are given mandated access to unbundled loops and General Tariff
co-location. Therefore, DSL service providers cannot access unbundled
loops and co-location through the General Tariff. Rather, they must
provide DSL: |
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a) on a line-shared basis, through a customer's primary exchange
service;
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b) through use of ILEC tariffed local copper channels designed for
low-speed data; or
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c) through use of unbundled copper loops obtained by CLEC
arrangements.
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4. |
Covad Canada maintains these limits are a significant competitive
disadvantage for DSL service providers relative to CLECs, ILECs and other
Canadian carriers.
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5. |
In Covad Canada's view, there are currently no tariffs in effect which
allow a DSL service provider to obtain co-location from any ILEC on a
General Tariff basis and on the same terms and conditions as those
available to CLECs. Although virtual co-location can be obtained on a
Special Facilities Tariff (SFT) basis, the ILECs have placed additional
conditions in the SFT arrangements, such as the requirement for the DSL
service provider to purchase General Tariff transport to the DSL access
multiplexer from the incumbents.
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6. |
Most reseller companies offering similar DSL services supported Bell
Canada's application, while CLECs tended to oppose it.
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7. |
Comments on Covad Canada's application were received from resellers,
CLECs, potential CLECs, Internet service providers (ISPs) and ILECs.
Several ISPs including BCNET Networking Society, British Columbia
Internet Association, Western Internet Portal Services Inc. and Primus
Telecommunications Canada Inc. supported Covad Canada's application.
However, TELUS Corporation argued, among other things, that Covad
Canada's application was a request to review and vary Telecom Decisions
CRTC 97-8, Local
competition, dated 1 May 1997 and 97-15,
Co-location, dated 16 June 1997, and that Covad Canada had
failed to meet the Commission's review and vary criteria. Moreover, TELUS
believes the Commission should not consider approving any part of the
application without first canvassing wider industry and public opinion in
a broader proceeding.
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8. |
In the Commission's view, Covad Canada's application does not
constitute a request to review and vary Decisions 97-8 and 97-15 because
it doesn't take issue with the original correctness of those decisions.
Moreover, as noted by Covad Canada, both decisions dealt specifically
with the switched local voice market, while Covad Canada's application is
with respect to the local data access market. |
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Bell Canada Tariff Notices 6475/6475A
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9. |
The basis for Bell Canada's rationale for its tariff filings is as
follows:
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· DSL service providers need "unloaded" copper transmission
facilities access to provide their services;
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· Bell Canada's proposed tariff would stop DSL service providers from
having to use other tariffed services such as local low-speed data
channels for unloaded copper that were not designed for DSL.
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10. |
CLECs Call-Net Enterprises Inc. and Optel Communications Corporation
(now AXXENT Corp.) argued, among other things, that Bell Canada's
tariff filings raise a number of significant policy concerns which should
be addressed before the Commission disposes of the application.
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11. |
Call-Net submitted that approval of TNs 6475/6475A would lead to
a significant increase in demand for co-location space that in many cases
is not available. Call-Net said that currently, co-location is being used
almost exclusively for the provision of local voice services. Any
limitation on its availability would curtail the expansion of competitive
local voice services.
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12. |
AXXENT submitted that permitting DSL service provider access to
unbundled loops at mandated rates without the requirement to be a
Canadian carrier or a CLEC would create an uneven playing field. If DSL
service providers were not subject to Canadian CLEC ownership and control
rules, they would potentially have greater access to more foreign capital
than CLECs, and would be free to compete in the most attractive and
fastest growing segment of the local access market.
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13. |
AXXENT submitted that DSL technologies are employed to provide both
voice and data services. Call-Net indicated that nothing could restrict
DSL service providers from providing local voice traffic.
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14. |
ISPs and resellers generally submitted that the development of DSL
competition is not meeting consumer demand and that delaying approval of
Bell Canada's tariff filings would further hinder meaningful competition.
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15. |
Riptide Networks Inc. supported Bell Canada's tariff filings and added
that local network interconnection and component unbundling should be
restricted to interconnecting carriers. However, long distance reseller
Primus Canada disagreed, arguing that if TNs 6475/6475A were restricted
to interconnecting carriers, the proposed tariff would be futile.
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Covad Canada's Part VII application
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16. |
Covad Canada sought two forms of relief:
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· access by DSL service providers to unbundled loops at mandated
rates and rights of co-location identical to those of Canadian carriers;
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· a special regime for DSL service providers to be established that
doesn't impose ownership restrictions or require these entities to become
CLECs. |
17. |
Covad Canada also argued that Canada is required to give DSL service
providers mandated access to unbundled loops due to commitments from the
Fourth Protocol to the General Agreement on Trade in Services (GATS),
otherwise Canada would be vulnerable to a World Trade Organization
challenge. Covad Canada also submitted the extension of such rights to
DSL service providers would stimulate competition in this sector,
resulting in lower prices and increased customer choice. Covad Canada
also believes that approval of its application would facilitate the
federal government's Connectedness Agenda.
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18. |
Covad Canada submitted that DSL service providers cannot get unbundled
loops at all, let alone at the same rates as CLECs, and thus are unable
to offer an economically competitive service. Also, CLECs compete against
DSL service providers in the same market, so there is no incentive for
CLECs to resell the unbundled loops that they obtain from ILECs.
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19. |
Covad Canada submitted that the DSL market in Canada has been
artificially constrained. This, in turn, has contributed to a slower
roll-out of DSL services and lower rates of adoption.
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20. |
TELUS and Bell Canada argued that Covad Canada's portrayal of the
Canadian high-speed Internet access service marketplace as competitively
deficient and underserved is incorrect and misleading. |
21. |
Covad Canada countered by noting that while it is true there is a
competitive alternative to DSL services via coaxial cable Internet access
service, DSL supply is confined to the retail and wholesale DSL services
of the ILECs.
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22. |
In a joint submission AXXENT, AT&T Canada Corp., Call-Net and GT
Group Telecom Services Corp., (all of which are CLECs) requested a
further, broader public proceeding to deal with both applications and to
examine broader issues. Otherwise, these parties believe Covad Canada's
application and Bell Canada's TNs 6475/6475A should be denied.
Reseller NorthPoint Canada made similar submissions.
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Commission approves mandated access and co-location for DSL service
providers
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Current conditions cause interference with other customers
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23. |
Under current conditions, DSL service providers have little choice but
to use tariffed ILEC services to provide their own services. These
tariffed services are low-speed unloaded copper non-switched local
channel offerings originally designed for low-speed data applications.
The Commission notes Covad Canada's and Bell Canada's common concern
that, when these low-speed services are underlying high-speed DSL
offerings and are in cable bundles that also contain facilities for other
data customers, they cause interference with these other customers' data
transmissions.
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24. |
Bell Canada noted that DSL service providers' use of unbundled loops
in lieu of their current use of low speed data facilities will eliminate
the interference problem. As well, the Commission notes that Bell
Canada's application is the result of Commission-encouraged negotiations
between Bell Canada and the Canadian Association of Internet Providers.
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25. |
In light of the above, the Commission considers that if the
applications are approved, the issue of interference with other users
noted above would be eliminated.
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Voice over DSL
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26. |
CLECs such as Call-Net and AXXENT said that once DSL service providers
had access to the loop tariff, nothing would restrict them from providing
local voice access on their DSL services. The Commission notes, however,
that local exchange competition rules apply to the switched local voice
market. To provide such services, a DSL service provider would have to be
given connections to the switched local telephone network that is
controlled by the LEC providing the loops. The current rules require LECs
to be Canadian carriers. The Commission is satisfied, therefore, that
prohibiting LECs from providing DSL service providers with local switched
telephone network connections will ensure that DSL service providers will
be unable to provide switched local voice.
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CLEC obligations still apply
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27. |
The CLECs argued, among other things, that approving DSL service
providers' access to the loop tariff and co-location would be unfair to
CLECs who would continue to have to meet Decision 97-8 obligations as a
condition of using local loops, but DSL service providers would not.
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28. |
The Commission disagrees. As Covad Canada suggests, data access
transmission – either high or low speed – was not an issue in the
Decision 97-8 and Decision 97-15
proceedings. The Commission also notes Covad Canada's reference to
Telecom Decision CRTC 98-12
in which the Commission prohibited resellers, which would include DSL
service providers, from entering the switched local voice market for
reasons that remain valid. The Commission notes that approval of the two
current applications would maintain the prohibition against resellers
being CLECs.
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29. |
This is based on the fact that resellers providing DSL services are
not offering switched local voice. Rather, they would provide broadband
data and other digital access services via the unbundled loops and
connecting links, as well as co-location, to give users access to
networks such as the Internet and local area networks. There would be no
issue of enforcing consumer safeguards for basic telephone service. The
Commission's rule would continue to apply that only LECs may provide
switched local voice services and therefore, related consumer safeguards
would continue to be directly enforced on these carriers by the
Commission.
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Competition in Internet access
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30. |
The Commission notes that facilities to provide broadband Internet and
other data access are not particularly widespread. ILEC tariffs are in
place to allow DSL service providers to provide asymmetric digital
subscriber line (ADSL), but this is only a small subset of other DSL
services that customers want. Under the current rules, CLECs have the
option to resell loops and connecting links they have leased from ILECs
to DSL service providers. This has not occurred to any great degree and
it is unlikely to happen in the near term as CLECs have not seen
this as being in their interest so far.
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31. |
Broadband Internet access services are available for cable companies
for resale, but the take rate has been limited. As yet, resellers cannot
interconnect to cable company networks to obtain underlying broadband
facilities for provision of broadband data access. In short, supply of
facilities needed for provision of broadband data access continues to be
limited. |
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Price and access inequity quashed
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32. |
As noted earlier, Bell Canada has proposed to offer unbundled loops
and connecting links to DSL service providers but not necessarily at the
same rates, terms and conditions that it applies to CLECs. The loops and
connecting links that they would use are exactly the same as those that
CLECs use. DSL service providers would use them to provide broadband data
access services and CLECs can use them to provide local switched voice as
well as broadband data access services. In these circumstances, the
Commission is of the view that DSL service providers should be subject to
the same rates, terms and conditions as CLECs as they would receive the
same services from Bell Canada.
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33. |
In the Commission's view, conditions have changed significantly since
Decision 97-15 was issued. The decision was directed at promoting
competition in voice telecommunications markets. It permitted competing
carriers to interconnect with ILEC facilities by using their own
facilities up to the ILEC's central office, where they would co-locate
their terminating equipment for interconnection.
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34. |
If DSL service providers are not able to co-locate, they would not be
able to seek the best price from competing carriers for the facilities
they need to connect their points of presence to the central office. They
would be captives of the ILECs for these facilities, as Bell Canada has
effectively proposed in its application. The Commission believes this
would reduce potential for efficient competitive entry with obvious
disadvantages to consumers. In addition, it would disadvantage competing
carriers supplying such facilities. In the Commission's view, therefore,
mandating the expansion of co-location for reseller DSL service providers
is warranted under these conditions.
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Access to foreign capital
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35. |
AXXENT objects that reseller DSL service providers could access
foreign capital which is unavailable to CLECs because they must be
Canadian owned and controlled. While this may be correct, the Commission
notes that any reseller has, and always has had, access to foreign
capital. The Commission has never found this to be a good regulatory
reason to block reseller access to markets or facilities.
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36. |
As noted above, demand for broadband data access services is growing
and supply is concentrated in relatively few hands. The Commission's view
is that encouraging competitive entry may help diversify supply.
Therefore, the fact that DSL service providers may be able to obtain
foreign capital should not be a reason to disallow their access to the
unbundled loop and co-location tariffs.
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37. |
Competitive long distance carriers and resellers are permitted to use
unbundled loops for the purposes of providing direct access lines. A
number of ISPs have co-location now through SFTs at rates that match
those in the General Tariff. Thus, there is a precedent for allowing
resellers to use co-location services.
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38. |
The Commission has received and continues to receive disputes from
competitive entrants seeking access to co-location space and copper
loops. By establishing a tariffed access to these facilities for
non-Canadian carriers such as DSL service providers, the procedural
objections from ILECs to such access will be eliminated, but the physical
facilities limitations and disputes will remain. In some central offices,
the ILECs are arguing that physical space and facilities are not
available for co-location. The issues related to co-location are being
addressed in other proceedings as well as through the Co-location
(dispute resolution) Group.
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39. |
Based on the record, the Commission considers that approval of Bell
Canada's TN with amendments and Covad Canada's application will serve the
public interest, is consistent with the objectives of the Telecommunications
Act and will help consumers to obtain affordable, innovative and high
quality telecommunications services. Further, in the Commission's view,
these approvals will help in reducing the problem of number exhaust.
Exclusive reservations of central office codes by DSL service providers
who do not need them (but must reserve them to qualify as CLECs in order
to access the loops and co-location tariffs) will no longer be necessary. |
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CRTC's determinations
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40. |
As noted previously, the Commission has already issued its disposition
of Covad Canada's application, and Bell Canada's tariff filings.
Specifically, the Commission:
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a) approved Bell Canada's application TNs 6475/6475A with the
modification that Bell Canada provide the services proposed in those
notices to DSL service providers at the same rates, terms and conditions
as the CLECs;
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b) granted Covad Canada's application for relief, with respect to the
modification of the ILECs' General Tariffs. Specifically, DSL service
providers may lease unbundled loops and connecting links on the same
basis as CLECs in the ILECs territories. Further, DSL service providers
may lease from the ILECs, all services related to co-location under the
same General Tariff rates, terms and conditions and central office
licensing agreements currently available to CLECs and other Canadian
carriers;
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c) directed Bell Canada to issue within 30 days tariff pages and an
amended central office licensing agreement reflecting the determinations
made in a) and b) above;
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d) directed the other ILECs to issue within 30 days tariff pages
and amended central office licensing agreements reflecting the
determination made in b) above; and
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e) gave SaskTel and parties an opportunity to provide comments on the
appropriateness of applying the directions in d) above to SaskTel. It and
other parties could file submissions, serving copies on other parties, on
or before 6 October 2000.
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41. |
The Commission also noted that DSL service providers that are not
CLECs having access to tariffs for unbundled loops and connecting links
and for co-location may not use these services to provide switched local
voice services. The Commission directed all ILECs, and any CLECs
providing such services to DSL service providers, to ensure that DSL
service providers do not use them for the provision of switched local
voice services. |
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Registration requirements
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42. |
DSL service providers are required to register with the Commission and
provide the name of the carrier supplying unbundled loops and
co-location.
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Further process possible for SaskTel
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43. |
In a letter dated 6 October 2000, SaskTel provided its views
concerning the appropriateness of applying the directions in d) above to
SaskTel. On a preliminary basis, SaskTel is of the view that it would
appear to be as appropriate to offer unbundled loops, connecting links
and co-location to DSL service providers in its territory as it is within
the territories of the other ILECs. However, SaskTel requested the right
to supplement its preliminary comments following release of the
Commission's reasons. SaskTel indicated its concern about certain
implementation issues that may arise due to its network architecture. For
example, SaskTel does not guarantee that a copper loop will terminate in
a central office. Due to a utilization of a large proportion of digital
concentrators and integrated digital loop carriers (IDLCs), copper loops
that appear at concentrators or IDLCs are not available at a central
office where a DSL service provider may co-locate.
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44. |
Covad Canada submitted that it would be appropriate to apply the 21
September 2000 determinations to SaskTel:
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a) as a benefit to ensuring uniformity;
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b) in view of SaskTel's commitment to align with federal
telecommunications policies with those applied to other ILECs; and
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c) in the public interest of meeting demand for high-speed Internet
access services across Canada.
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Directive for SaskTel tariff filing
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45. |
SaskTel may supplement its preliminary comments and comments on any
implementation problems it anticipates, within 10 days from the date of
this order, serving copies on parties who commented on Bell Canada's and
Covad Canada's applications. |
46. |
Parties may file submissions on SaskTel's comments with the
Commission, serving copies on all other parties, within five days. |
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Secretary General |
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This document is available in alternative format upon request and may
also be examined at the following Internet site: http://www.crtc.gc.ca
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