|
Summary |
|
Further to Seeking public
input on access to multi-dwelling units, in-building wiring and riser
space, Public Notice CRTC 2000-124,
25 August 2000, as amended by Public Notices 2000-124-1
and 2000-124-2,
the Commission establishes the conditions and principles for the provision
of telecommunications services to customers located in multi-dwelling
units (MDUs), including guidelines that will assist building owners
and local exchange carriers (LECs) in negotiating just and expedient
conditions of access to MDUs. This decision also addresses a number
of related matters, including the terms and conditions of access to
MDUs via the LECs' facilities. |
|
|
|
|
1. |
In 1993, Parliament enacted
the Telecommunications Act (the Act), replacing the telecommunications-related
provisions of the Railway Act. The Act affirmed many of the
policy objectives that the Commission had been giving effect to under
the Railway Act since the 1970's, including the introduction
of competition in various telecommunications markets. Section 7 of
the Act declares that Canadian telecommunications policy has among
its objectives to facilitate the orderly development of a telecommunications
system that serves to safeguard, enrich and strengthen the social
and economic fabric of Canada and its regions, to render reliable
and affordable telecommunications services of high quality accessible
to Canadians in both urban and rural areas in all regions of Canada,
to enhance the efficiency and competitiveness of Canadian telecommunications
at the national and international levels, to foster increased reliance
on market forces for the provision of telecommunications services,
to encourage innovation in the provision of telecommunications services,
and to respond to the economic and social requirements of users of
telecommunications services. The Act provides the Commission with
new powers to impose conditions of service on Canadian carriers under
section 24, and to forbear from regulating services or classes of
services under section 34(1), when such forbearance is found to be
consistent with the Canadian telecommunications policy objectives.
The Act also requires the Commission, under section 34(2), to forbear
from regulating services or classes of services where these are found
to be subject to competition sufficient to protect the interests of
users. Section 47 of the Act requires that the Commission exercise
its powers and perform its duties with a view to implementing the
Canadian telecommunications policy objectives set out in section 7. |
2. |
In Review of regulatory
framework, Telecom Decision CRTC 94-19,
16 September 1994 (Decision 94-19),
the Commission established a comprehensive regulatory framework for
the telecommunications industry, in light of the policy objectives
of the Act and the evolution of the telecommunications environment.
The Commission stated that market forces would generally be preferable
for governing the behaviour of telecommunications service providers
in markets that were sufficiently competitive. The Commission also
stated that greater reliance on market forces would allow for greater
choice and supplier responsiveness and would ensure that user applications,
not regulators, drove supply considerations. The Commission determined
that, with the ever-increasing range of telecommunications services
made available through new technology, users should have the opportunity
to choose whatever package of services and whichever suppliers best
fit their particular needs. The Commission further determined that
the public interest would be best served if all telecommunications
services were provided competitively and made accessible to all sectors
of the public. The regulatory framework was therefore established
with a view to assisting in the development of a telecommunications
infrastructure that would allow all Canadians, not just a select few,
ubiquitous and affordable access to an increasing range of competitively
provided basic and advanced information and communications products
and services to serve increasingly diverse user requirements. |
3. |
The Decision 94-19
framework encompassed a wide range of regulatory issues, as well as
a framework for the introduction of competition into the local telephone
market. In particular, the Commission found that, while the local
telephone market was already open to competitive entry by cellular
and other wireless suppliers, the potential existed for meaningful
competition in the local wireline market. The Commission considered
that encouraging this potential would lead to benefits, such as productivity
improvements and service innovation, and found that in order to achieve
these objectives, there was a need to remove barriers to entry and
adopt conditions to safeguard competition. The Commission concluded
that principles of open access, unbundling, co-location and interoperability
among networks had to be promoted to ensure that the right economic
and technical conditions were in place to facilitate entry into the
local wireline market. The Commission subsequently initiated a number
of proceedings to establish the necessary frameworks to give effect
to its conclusions. |
4. |
In Local competition,
Telecom Decision CRTC 97-8, 1 May
1997 (Decision 97-8), the Commission
established a framework for the implementation of local competition,
in accordance with the principles enunciated in Decision 94-19.
The Commission found that efficient and effective competition would
be best achieved through facilities-based competitive service providers.
The Commission considered that, without facilities-based competition,
competition would only develop at the retail level, with the incumbent
local exchange carriers (ILECs) retaining monopoly control of wholesale
level distribution. The Commission adopted the principle that competitive
local exchange carriers (CLECs) were not simply customers of ILECs
but were carriers of equal stature to the ILECs in the local exchange
market. |
5. |
In Decision 97-8,
the Commission found that there were several barriers to entry into
the local exchange market arising from technical restrictions, tariff
restrictions designed for regulation in a monopoly environment, and
subsidized pricing policies implemented in respect of residential
service rates. The Commission adopted a number of measures to facilitate
the entry of CLECs into the local exchange market, while ensuring
that they had sufficient incentives to invest in their own facilities.
The Commission mandated interconnection arrangements between local
exchange carriers (LECs) and directed that associated technical modifications
be made to the ILECs' networks. The Commission also ordered the unbundling
of essential facilities that CLECs would require, but would not generally
be able to provide themselves. It also established a transitional
regime for the unbundling of other ILEC facilities (near-essential
facilities) for a period of five years, pending the development of
facilities-based competition. |
6. |
In order to facilitate end-user
choice, the Commission determined in Decision 97-8
that it was in the public interest that end-users have the right and
the means to access the LEC of their choice in all situations. The
Commission noted that the nature of the local exchange network allowed
LECs to use another LEC's existing facilities to access end-users
served by that LEC. In order to ensure that these principles were
observed, the Commission required, as a condition of providing service,
that all LECs ensure that the end-users that they served were able
to have direct access, under reasonable terms and conditions, to services
provided by any other LEC operating in the same area. The Commission
also considered that, in order to promote competitive entry and foster
consumer choice, it was reasonable to mandate that customers be permitted
to connect the wire located in their premises to the network of any
LEC in whose serving area they were situated. |
7. |
The Commission recognized in
Decision 97-8 that additional technical
and operational modifications would be needed to allow CLECs to interconnect
their network facilities to the ubiquitous networks of the ILECs in
a manner that would allow them to offer local exchange services to
end-users, and that such modifications would require further investigation
and negotiation on the part of those affected. The Commission therefore
requested the CRTC Interconnection Steering Committee (CISC), established
pursuant to Implementation of Regulatory Framework - Development
of Carrier Interfaces and Other Procedures, Telecom Public Notice
CRTC 96-28, 1 August
1996, to identify issues and propose solutions for consideration by
the Commission. |
8. |
Following Decision 97-8,
the Commission conducted a number of proceedings to implement local
competition, including proceedings relating to co-location1,
unbundling2 as well as access
to support structures3 and
rights-of-way.4 The Commission
also established a Building Access and Inside Wire Sub-Working
Group of the CISC (the SWG) to deal with issues relating to the provision
of competitive telecommunications services in multi-tenant buildings,
commonly referred to as multi-dwelling units (MDUs). |
|
|
9. |
While the SWG resolved a number
of issues that had been referred to it by the Commission, it requested
that the Commission address several matters in dispute. In Location
of Demarcation Point for Inside Wire in Multi-tenant Buildings and
Associated Issues, Telecom Public Notice CRTC 98-35,
2 December 1998, the Commission initiated a proceeding to address
matters related to whether or not responsibility and control of in-building
wire extending from the main terminal room (MTR) in an MDU to the
customer's suite, together with other related telecommunications facilities
located in the MDU (collectively, the in-building wire) should be
transferred from LECs to building owners. |
10. |
In Location of Demarcation
Point for Inside Wire in Multi-Dwelling Units and Associated Issues,
Telecom Decision CRTC 99-10, 6 August
1999 (Decision 99-10), the Commission
determined that the ability of CLECs to have access to the in-building
wiring in an MDU was central to the implementation of its policy
of end-user choice, and therefore found it appropriate that LECs use
in-building wire under the building owner's responsibility and control
where the building owner made such facilities available on reasonable,
non-discriminatory terms and conditions. |
11. |
The Commission determined further
in Decision 99-10 that building
owners would be required to have responsibility and control of in-building
wire in all newly constructed MDUs, and in existing MDUs where the
building owner accepted such responsibility and control in writing.
Building owners that had responsibility and control of in-building
wire would be responsible for managing those facilities. |
12. |
The Commission also determined
that the service provider demarcation point, designating the point
at which a LEC's responsibility and control over wires and other telecommunications
facilities would end, should be located at the MTR, in cases where
the building owner had responsibility and control of in-building wire.
The Commission considered that having a common point of connection
to in-building wire would permit building owners to better respond
to requests for access. |
13. |
Where the building owner was
not willing to accept responsibility and control of the in-building
wire, but was willing to permit a LEC to install facilities in the
MDU, the Commission determined that each LEC would have responsibility
and control for the in-building wire it installed. The Commission
also noted that a LEC that did not wish to install its own in-building
wire could use another LEC's unbundled loop to serve end-users in an
MDU. |
14. |
The Commission noted in Decision
99-10 that many parties had raised
issues regarding the role building owners could play as "gatekeepers"
in relation to the LECs' ability to access end-users in MDUs, including
issues relating to the terms and conditions for such access, and particularly
fees. The Commission stated that it would initiate a proceeding to
consider such matters. |
15. |
Following the issuance of Decision
99-10, the Commission initiated
a number of proceedings in response to complaints and disputes relating
to the LECs' ability to access end-users in MDUs. |
16. |
In a letter-decision Re:
Eastlink/Norigen Part VII Applications – Access to In-building Wire,
5 June 2000 (the 5 June 2000 ruling), the Commission addressed
access issues raised by CLECs that were using their own facilities
to access MDUs where the in-building wire was under the responsibility
and control of an ILEC. The Commission found that these CLECs were
being prevented from serving their customers in MDUs where Bell Canada
or Maritime Tel & Tel Limited (MTT) retained control of the in-building
wire, and the building owner, while allowing access to the MTR, would
not allow the CLECs to install their own in-building wire. |
17. |
In the circumstances of the
5 June 2000 ruling, the Commission determined that it was appropriate
to require Bell Canada and MTT to permit CLECs to connect to
the in-building wire. The Commission set an interim rate for the connection
of the CLECs' facilities to ILEC-controlled in-building wire at $1
per month. The Commission confirmed that the price of unbundled loops
would continue to include the in-building wire, as these costs had
already been included in the price of unbundled loops. The Commission
directed other LECs to show cause why the same regime should not apply
to them. |
18. |
In Seeking public input
on access to multi-dwelling units, in-building wiring and riser space,
Public Notice CRTC 2000-124,
25 August 2000 (Public Notice 2000-124),
the Commission initiated a proceeding (the Public Notice 2000-124
proceeding) calling for comments on the regulatory approach that should
be used to facilitate non-discriminatory access and consumer choice
in MDUs. In particular, the Commission sought comments on the terms
and conditions, including fees, under which LECs could access the
MTR or other areas of the building, access building riser space to
install their own wiring, and connect to in-building wire controlled
by building owners or other LECs. The Commission also sought comments
on whether it should impose specific terms and conditions pursuant
to section 24 of the Act or other means, or whether as an alternative
to Commission-specified terms and conditions, it should issue guidelines
that could be used by LECs and building owners in negotiating access
agreements. In addition, the Commission invited parties to comment
on the scope and nature of the Commission's jurisdiction to set the
terms and conditions of access to MDUs. |
19. |
In Public Notice CRTC 2000-124-1,
21 September 2000, the Commission announced a revised schedule for
filing comments in the Public Notice 2000-124
proceeding, following requests from a number of parties to the proceeding. |
20. |
In Re: The Commission extends
the determination on the EastLink/Norigen application (access to in-building
wire) to all local exchange carriers, Decision CRTC 2001-362,
19 June 2001 (Decision 2001-362),
the Commission applied the determination made in the 5 June 2000
ruling to all LECs, such that all LECs controlling in-building wire
were required to accommodate the connection of facilities of other
LECs to the in-building wire under their control. The Commission also
applied, on an interim basis, the rate of $1 per month for such connections. |
21. |
In Re: Clarifications concerning
access to in-building wire: Call-Net Part VII applications of 30 June
and 4 August 2000, Decision CRTC 2001-364,
19 June 2001 (Decision 2001-364),
the Commission acknowledged that it might not have fully considered
the operational and cost implications of ending local loops at the
MTR, in cases where the building owner had accepted responsibility
and control of the in-building wire pursuant to Decision 99-10.
The Commission was of the view that, while Decision 99-10
was intended to support the development of facilities-based competition,
the termination of loops in the MTR could reduce end-user choice or
affect the viability of services offered by CLECs that used unbundled
loops. In light of these concerns, the Commission directed all ILECs
to show cause why they should not be directed, on an interim basis,
to prevent further transfer of responsibility and control of ILEC-owned
in-building wire to building owners, pending a final determination
on this matter in the Public Notice 2000-124
proceeding. |
22. |
In Subject: Direction,
on an interim basis, that local exchange carriers must retain responsibility
and control of their in-building wire pending the final determination
in the PN 2000-124
proceeding, Decision CRTC 2001-572,
10 September 2001 (Decision 2001-572),
the Commission directed, on an interim basis, as a condition to the
offering and provision of local service, that all LECs retain responsibility
and control of their in-building wire, pending a final determination
in the Public Notice 2000-124
proceeding. |
23. |
In Public Notice CRTC 2000-124-2,
15 October 2001 (Public Notice 2000-124-2),
the Commission reopened the Public Notice 2000-124
proceeding to seek comments on additional issues relating to access
to MDUs, including certain aspects of Decision 99-10. |
|
|
24. |
The Commission received submissions
in response to Public Notice 2000-124
from the following ILECs: Bell Canada on behalf of itself,
Island Telecom Inc., MTT, MTS Communications Inc., NBTel Inc.,
NewTel Communications Inc. and Saskatchewan Telecommunications
(SaskTel) (collectively, Bell Canada et al.); and TELUS Communications
(B.C.) Inc. on behalf of itself, TCI Communications Inc. and Québec-Téléphone
(collectively, TCI). SaskTel also filed comments independently. |
25. |
The CLECs that filed submissions
were: MaxLink Communications Inc. on behalf of itself, AT&T Canada
Telecom Services Company (AT&T Canada), AXXENT Corp., C1.com
Inc., Call-Net Enterprises Inc. (Call-Net), Combined Telecom Inc.,
and Wispra Networks Inc. (collectively, MaxLink et al.); Futureway
Communications Inc. (Futureway); GT Group Telecom Services Corp. (Group
Telecom); Norigen Communications Inc. (Norigen); and Novus Telecom
Group Inc. (Novus). |
26. |
Submissions were filed by the
following building owners and associations representing building owners:
Boardwalk Equities Inc. on behalf of itself and Suite Systems Inc.
(Boardwalk); the Canadian Institute of Public and Private Real Estate
Companies and the Building Owners and Managers Association - Canada
(CIPPREC/BOMA); and the Canadian Federation of Apartment Associations
(CFAA). |
27. |
Submissions were filed by the
following broadcasting distribution undertakings (BDUs) and associations
representing BDUs: Bell ExpressVu Limited Partnership (Bell ExpressVu);
Look Communications Inc. (Look); Regional Cablesystems Inc. (Regional);
Whistler Cable Television Ltd. (Whistler Cable); and the Canadian
Cable Television Association (CCTA). |
28. |
Submissions were also received
from the University of Manitoba, the Federation of Canadian Municipalities
(FCM), and Stream Intelligent Networks Corp. (Stream). |
29. |
On 14 November 2000, the Commission
and other parties sent interrogatories to parties. Responses were
filed on 12 December 2000. |
30. |
On 5 February 2001, comments
were filed by the following parties: Action Réseau Consommateur on
behalf of itself, the Consumers' Association of Canada, the Fédération
des associations coopératives d'économie familiale du Québec, and
the National Anti-Poverty Organization (collectively, ARC et al.);
Boardwalk; CCTA; CIPPREC/BOMA; Bell Canada et al.;
MaxLink et al.; Futureway; Group Telecom; Norigen; Sheila Kimmel;
Stream; and TCI. |
31. |
On 14 February 2001, ARC et
al., Boardwalk, CIPPREC/BOMA, Bell Canada et al., MaxLink et
al., Futureway, Group Telecom, Norigen, and TCI filed reply comments. |
32. |
MaxLink Communications Inc.
advised the Commission that, as of June 2001, it no longer represented
the parties identified above as MaxLink et al. A number of these parties
subsequently participated individually. |
33. |
On 14 November 2001, ARC et
al., AT&T Canada, Call-Net, CIPPREC/BOMA, Bell Canada
et al., Group Telecom, Futureway, TCI, Stream, and The Western Canadian
Universities Computing Directors representing universities in Manitoba,
Saskatchewan, Alberta and British Columbia filed comments in response
to Public Notice 2000-124-2. |
34. |
On 29 November 2001, AT&T Canada,
CIPPREC/BOMA, Bell Canada et al., Futureway, and TCI filed reply
comments. |
|
|
|
|
35. |
The parties to this proceeding
representing ILECs and CLECs, with the exception of Futureway, argued
that regulatory intervention was necessary to ensure that end-users
in MDUs had a reasonable opportunity to obtain service from the LEC
of their choice. These parties submitted that the Commission had to
adopt measures to remove barriers to entry and ensure that LECs
had access to end-users in MDUs on reasonable terms and conditions.
The parties representing CLECs, with the exception of Futureway, also
argued that barriers to entry placed them at a competitive disadvantage
relative to ILECs, and that regulatory intervention was necessary
to ensure that access to MDUs was available on an equitable basis. |
36. |
Bell Canada et al., Group
Telecom, MaxLink et al., Norigen, Novus, and TCI submitted that building
owners were, by virtue of their bargaining power, compromising end-user
choice by imposing unreasonable terms and conditions of access that
effectively prevented LECs from serving customers in MDUs. These parties
argued that regulatory intervention was required to preclude building
owners from extracting excessive concessions as a result of their
role as gatekeepers. |
37. |
Bell Canada et al. argued
that it was necessary for the Commission to intervene in order to
ensure that end-users in MDUs had the means to obtain services from
the LEC of their choice, and that LECs were able to serve those end-users
by means of their own facilities, on reasonable and non-discriminatory
terms and conditions. Bell Canada et al. submitted that local
competition had created economic incentives for building owners to
impose terms and conditions of access and argued that in the absence
of Commission action, building owners would have a virtually unfettered
ability to impose the charges, terms and conditions they chose. Bell Canada
et al. submitted that access agreements should not be permitted to
create obstacles to end-user choice through exclusive arrangements,
the creation of monopoly fees, terms and conditions, or the establishment
of anti-competitive terms and conditions. SaskTel also submitted that
building owners should not be permitted to create obstacles to end-user
choice by imposing unreasonable and anti-competitive terms and conditions,
including excessive fees. |
38. |
MaxLink et al. submitted that
the establishment of a regulatory framework that enshrined not only
the principles of fair and non-discriminatory access to MDUs but also
established an open entry model for access was crucial to the successful
attainment of the Commission's policies of end-user choice and the
establishment of facilities-based local competition. |
39. |
MaxLink et al. stated that
CLECs were facing obstacles created by building owners that prevented
them from obtaining access to MDUs on reasonable terms and conditions.
They described situations where the terms, conditions and fees sought
by building owners were so onerous that they had refused to serve
the MDU in question. They also described situations where, in order
to be able to serve their customers, they had signed access agreements
under circumstances that, in their view, amounted to duress. CLECs,
with the exception of Futureway, estimated that they had faced obstacles
to entry in 60% to over 95% of the MDUs that they had attempted to
serve. |
40. |
The CLECs submitted that there
were numerous barriers to entry to MDUs affecting their ability to
serve customers using their own facilities. They further submitted
that they often faced difficulties serving customers in MDUs with
leased unbundled loops, as they had been unable to negotiate reasonable
terms and conditions of access with building owners to allow them
to connect unbundled loops to in-building wire under the responsibility
and control of building owners. AT&T Canada submitted
that it often depended on unbundled loops as a means of accessing
customers in MDUs pending the building of its own facilities. AT&T Canada
and Call-Net also submitted that unbundled loops often represented
the only option available to reach customers in cases where it
was either uneconomical or impossible to access an MDU through their
own facilities. |
41. |
Group Telecom submitted that
it had incurred significant delays in attempting to negotiate acceptable
access agreements with building owners in almost all MDUs that it
had attempted to serve. Group Telecom submitted that these delays
effectively amounted to a denial of access for CLECs. In this regard,
Group Telecom noted that a CLEC might be able to interest customers
in its services, but if access could not be negotiated within a reasonable
period of time, the potential customers would generally cancel their
orders. |
42. |
Group Telecom, MaxLink et al.,
Norigen and Novus argued that it was unjustly discriminatory for CLECs
to be required to enter into access agreements, incur delays in negotiating
agreements and be subject to unreasonable terms and conditions of
access while most ILECs were able to continue to serve customers in
MDUs without written access agreements. They further submitted that
it was unjustly discriminatory for them to be charged excessive fees
to serve an MDU when ILECs could serve the same MDU without paying
any fees. The CLECs submitted that ILECs also gained an advantage
in MDUs where there were no competitive service providers in that
they were able to earn all of the telecommunications revenues while
paying no fees. Group Telecom added that CLECs were at a disadvantage
since the building owner would not expel an ILEC that refused to accept
the terms of an access agreement. |
43. |
TCI submitted that, in many
cases, LECs were capitulating to building owners' demands in order
to serve customers. TCI noted that there were access difficulties
in almost all cases where it attempted to negotiate access to MDUs
as a CLEC operating outside its ILEC serving territory. TCI noted
that the terms, conditions and fees were often so onerous that it
either did not provide service to the MDUs in question, or it signed
agreements on condition that these could be changed to comply with
any future Commission rulings. TCI noted that it was also experiencing
difficulties in gaining access to MDUs in areas where it operated
as an ILEC. In this regard, TCI noted that there were a number of
buildings in its serving territory where it had been limited to supplying
basic services to existing customers as it had been denied access
to install and replace equipment to serve new customers and to provide
additional services to existing customers. TCI also submitted that
ILECs were, in some cases, faced with expulsion from MDUs if
they did not match the excessive fees demanded from CLECs. |
44. |
Bell Canada et al. noted
that they were experiencing increasing difficulties in gaining access
to MDUs. They noted instances where the ILECs had found themselves
unable to gain access or had simply been advised that a building owner
had entered into arrangements with a LEC whereby the building owner
and the LEC were not willing to permit other LECs to gain access to
serve customers in the MDU. |
45. |
In support of their position
for regulatory intervention, LECs, with the exception of Futureway,
provided illustrations of the difficulties they faced as a result
of the bargaining power of building owners. Bell Canada et al.,
Group Telecom, MaxLink et al., Norigen, Novus and TCI also filed copies
of executed access agreements that included terms and conditions that,
in their opinion, were onerous or unreasonable. These terms and conditions included: |
|
· provisions allowing a building
owner to assume ownership of in-building wire without compensation
to the LEC, upon 30 days notice; |
|
· provisions allowing the building
owner to determine, at its discretion, the size, type, configuration
and location of telecommunications equipment in the MDU; |
|
· provisions prohibiting the
sharing of a LEC's telecommunications equipment with other LECs; |
|
· provisions prohibiting the
cross-connection of telecommunications equipment between LECs, without
the permission of the building owner; |
|
· requirements that the LEC
use a common in-building wiring infrastructure and pay connection
and usage fees determined by the building owner; |
|
· requirements that the LEC
indemnify the building owner from liability in all situations,
including situations where the building owner might be found negligent; |
|
· provisions prohibiting changes
to any telecommunications service provided to customers in the MDU,
without the written approval of the building owner; and |
|
· provisions to the effect
that the access agreement would override any rulings made by the Commission. |
46. |
The LECs, with the exception
of Futureway, further argued that regulatory intervention was necessary
in light of the ability of certain building owners to extract excessive
profits from the provision of access to MDUs. The LECs submitted that,
with the fees demanded by certain building owners, they could not
make viable business cases for serving some MDUs. In support of their
position, the LECs provided examples of fee provisions that they considered
excessive. These included: |
|
· fees based on a percentage
of the LEC's revenue ranging from 5% to 15%; |
|
· annual fees amounting to
several hundred thousand dollars based on all of the buildings in
the building owner's portfolio rather than the specific building to
which access was required; |
|
· fees based on the total square
footage of the building rather than the actual space used by the LEC; |
|
· no reduction in fees for
the use of equipment space if equipment space was shared with another
LEC; |
|
· entry fees that had no relationship
to any services offered or required by the LEC; |
|
· excessive fees for the maintenance,
installation and repair of in-building wiring, including fees for
wiring management services that did not abide by quality of service
standards; and |
|
· fees for the building owner's
costs of negotiating access. |
47. |
The LECs submitted that access
to MDUs on reasonable terms and conditions was crucial to achieving
sustainable competition. MaxLink et al. argued that access to MDUs
located in urban centres was particularly critical. Bell Canada
et al. observed that many MDUs were prime commercial properties where
LECs needed access. TCI added that, in many cases, a customer's location
in an MDU represented only one part of a customer's network and that
access to MDUs was often critical to meet the customer's total communications
needs. |
48. |
In response to interrogatories
on the estimated size of the MDU market, CIPPREC/BOMA estimated that
the Canadian residential MDU market included approximately 42% of
all residential telephone lines. TCI was of the view that it was probably
closer to 22% while Novus submitted an estimate of 32%. CIPPREC/BOMA
estimated that there were 550 million square feet of commercial
office space in Canada. Bell Canada et al. estimated that, in
commercial MDUs, it provided an average of one line per 10 square
metres of floor space. |
49. |
The parties representing building
owners, the FCM, and Futureway argued that regulatory intervention
was not required and that market forces would, over time, serve to
ensure end-user choice. |
50. |
CIPPREC/BOMA argued that LECs
had been successful in negotiating access, and that there were no
access problems in any MDUs. In support of their position, CIPPREC/BOMA
noted that the results of a survey entitled "Critical Connections"
indicated that 98% of tenants in the United States and Canada
were served by the telecommunications providers of their choice. In
response, MaxLink at al. and TCI submitted that the survey did not
apply to the Canadian market since no Canadian tenants had participated
in the survey. They further submitted that the survey was of limited
value since the wording of the particular question upon which CIPPREC/BOMA
had based their conclusion did not allow for the interpretation it
had presented. |
51. |
Boardwalk, CIPPREC/BOMA and
Futureway objected to any mandated access to MDUs. CIPPREC/BOMA submitted
that, while they supported competition and the objective of end-user
choice, they did not support or accept the end-users' right to have
access to the facilities-based carrier of their choice in all situations.
CIPPREC/BOMA submitted that the right to choice in all situations
might only be accomplished through leased unbundled loops. In CIPPREC/BOMA's
view, there was no reason why the leasing of unbundled loops should not
satisfy end-user choice if access to the MDU was not otherwise available. |
52. |
AT&T Canada stated
that, although the availability of unbundled loops was an important
component of the local competition regime, it would not, in and of
itself, satisfy the Commission's policies of end-user choice and facilities-based
competition. Bell Canada et al. added that, while the use of
unbundled loops represented an acceptable means of providing service
to customers, the objective of end-user choice had to be pursued in
conjunction with the development of facilities-based competition.
AT&T Canada and Futureway raised a number of issues with
respect to the technical suitability of unbundled loops for the provision
of services beyond conventional voice services, such as broadband
and high-speed Internet services. Group Telecom noted that it required
fibre-optic cable extending directly to its customers because it was
not technically feasible with unbundled loops to provide the full
suite of services it had to offer. |
53. |
ARC et al. argued that some
form of regulation, whether direct or indirect, was necessary in order
to ensure reasonable access by CLECs to serve end-users in MDUs. ARC
et al. submitted that it was clear from the evidence to date that
residential building owners could not be relied upon to facilitate
competitive access. ARC et al. argued that tenants could not exert
sufficient influence on building owners since the length and the terms
of leases, as well as the cost and inconvenience of relocating, made
it impractical for tenants to relocate as a means of getting telecommunications
services from the service providers of their choice. ARC et al. also
submitted that it expected that building owners would favour service
providers with which they were affiliated, to the detriment of end-user
choice. In ARC et al.'s view, this further highlighted the need for
Commission intervention. |
54. |
Norigen submitted that market
forces alone would not be sufficient to ensure that access arrangements
promoted what it regarded as the over-riding objective of end-user
choice. In Norigen's view, some regulatory oversight of access arrangements
was necessary to guide it in its negotiations with building owners.
Norigen submitted that an appropriate regulatory framework would be
one that ensured open access to serve end-users in MDUs with a minimal
amount of regulatory burden. |
|
|
55. |
Parties to this proceeding
provided their views on the appropriateness of various means by which
the Commission could ensure access to MDUs on equitable and reasonable
terms and conditions, including Commission-specified terms and conditions,
model access agreements, and guidelines to assist LECs and building
owners in their negotiations. |
56. |
CLECs, with the exception of
Futureway, argued that all LECs had to be subject to non-discriminatory
access agreements in order to promote equity in the industry. In this
regard, Group Telecom submitted that an ILEC should not be exempted
from paying fees even if it were the only telecommunications provider
in an MDU. |
57. |
ILECs submitted that agreements
should only be required in MDUs where more than one service provider
was present. TCI submitted that a LEC should be able to adopt another
LEC's access terms when these were more favourable. |
58. |
CIPPREC/BOMA argued that building
owners should be able to require that access agreements be entered
into by all LECs, and that all LECs should pay a fee for occupying
space and utilizing resources. |
59. |
Boardwalk and CIPPREC/BOMA
submitted that ILECs and CLECs should have similar access agreements.
CIPPREC/BOMA submitted that ILECs should pay fees, even when they
were the sole telecommunications provider in an MDU. CIPPREC/BOMA
argued that the ILECs' dominant market position allowed them to refuse
to sign access agreements with building owners and that building owners
had little leverage and no recourse against ILECs since they could
not be forced out of the building given their obligation to provide
telephone service and the tenants' need for service. They suggested
that there should be a transition period for ILECs to enter into access
agreements. |
60. |
CIPPREC/BOMA indicated that
it could work with telecommunications service providers to develop
a model access agreement as long as the agreement allowed for payment
of fees and limitations of liability. Futureway submitted that model
access agreements were not required and that the terms of access agreements
should be negotiated with building owners on a case-by-case basis. |
61. |
CIPPREC/BOMA submitted that
guidelines could assist both LECs and trade associations in developing
and communicating best practices to building owners. CIPPREC/BOMA
submitted that the guidelines could include: |
|
· a general prohibition on
exclusive agreements; |
|
· guidance on good housekeeping
and required LEC conduct while on the MDU property; |
|
· guidelines on process considerations
to ensure that LECs were aware of the necessary steps to enable access; |
|
· guidelines on joint real
estate industry/LEC communications that could be developed and disseminated;
and |
|
· a voluntary process to facilitate
discussion and negotiation of model agreements. |
62. |
Bell Canada et al., Group
Telecom and Norigen submitted that voluntary guidelines were not an
appropriate alternative to Commission-specified terms and conditions
of access, since compliance with voluntary guidelines could vary between
parties. In particular, they submitted that the Voluntary Code of
Conduct developed by the SWG to facilitate access to MDUs and resolve
access disputes, had not succeeded in preventing building owners from
demanding unreasonable terms and conditions of access. Norigen submitted
that the Voluntary Code of Conduct had not been effective in that
the obligations were vague, there was no enforcement mechanism, and
the dispute resolution process was too cumbersome for a competitive
market. Bell Canada et al. added that their experience to date
had shown that even though CIPPREC/BOMA had agreed in principle to
provide access to MDUs in accordance with the Voluntary Code of Conduct,
in practice, many building owners had totally disregarded these guidelines. |
63. |
Bell Canada et al. submitted
that the issuance of guidelines might be a viable approach in a marketplace
where information was available to all parties and the bargaining
situation between LECs and gatekeepers was more nearly equal. In Bell Canada
et al.'s view, the marketplace for building access was not conducive
to voluntary guidelines as a result of the imbalance in negotiating
power between LECs and building owners, and the fact that competing
LECs could not reasonably be expected to voluntarily share information
on the terms and conditions under which they provided service. |
64. |
Bell Canada et al. argued
that the Commission had to provide LECs clear direction in order to
meet the objective of end-user choice, and submitted that the Commission
should mandate consistent terms and conditions of access, including
fees, in the form of standard access agreements. Bell Canada
et al. further submitted that the Commission could require that any
agreement that differed in any material manner from the standard agreements
be filed for Commission approval. Bell Canada et al. also submitted
that the Commission could make such agreements publicly available
for comment by interested parties prior to approval. |
65. |
TCI submitted that it did not
have any objections to executed access agreements being made public,
excluding those portions that contained end-user-specific information.
In TCI's view, publication of executed access agreements would serve
as a compliance mechanism, to ensure that Commission-prescribed terms
and conditions were adhered to. |
66. |
CIPPREC/BOMA submitted that
confidentiality agreements in tenant leases were rare and that brokers
often required the financial details of tenant leases in order to
publish market data. CIPPREC/BOMA further submitted that some building
owners would be quite concerned, for safety and security reasons,
if building plans, wiring maps or other building "system"
information were disclosed. Boardwalk submitted that it would not
be appropriate to require public disclosure of executed access agreements,
given the competitive nature of access to MDUs and the risk of
material financial harm from disclosure of competitively sensitive information. |
67. |
TCI submitted that the Commission
should issue a comprehensive decision providing clear direction to
all of the stakeholders. TCI argued that leaving significant access
issues to be negotiated between LECs and building owners would not
advance the Commission's public policy objectives. TCI submitted that
there was a material risk that the market power of building owners
would result in the terms and conditions of access becoming entrenched,
beyond the reach of the Commission. In TCI's view, such an approach
would cause unnecessary expenses for consumers, a reduction in choice
of service providers, and a reduced ability to meet the quality of
service standards for telecommunications services. |
68. |
MaxLink et al. submitted that
the Commission should develop a set of mandatory principles that would
serve as the basis for all access agreements negotiated between building
owners and LECs. MaxLink et al. submitted that these principles should
be binding on building owners as well as on any agent or third party
that had control over access to the MDU. |
69. |
MaxLink et al. submitted that
all access agreements should be subject to the following set of principles: |
|
· a building owner shall not
interfere with the installation, maintenance, and operation of telecommunications
apparatus and facilities located on its property or premises except
where it is reasonably necessary to protect the safety, security,
appearance and condition of the property and the safety and convenience
of other persons; |
|
· a building owner may require
a Canadian carrier to indemnify the proper for damage caused in installing,
operating, or removing telecommunications apparatus and facilities; |
|
· a building owner may require
that the Canadian carrier or the tenant, or a combination thereof,
bear the entire cost of the installation, operation or removal of
telecommunications apparatus and facilities; and |
|
· a Canadian carrier and a
building owner are prohibited from entering into any exclusive or
preferred access arrangement of any kind and a building owner shall
not discriminate in favour of, or against, a Canadian carrier regarding
access in any manner. |
70. |
MaxLink et al. submitted that
these principles would serve to achieve an appropriate balance between
the attainment of the Commission's policies and the building owner's
right to manage its property. In particular, they submitted that building
owners would, under these principles, be allowed to set reasonable
terms required for the proper functioning and operation of their property,
without unreasonably interfering with the business operations of Canadian
carriers. |
|
|
71. |
Parties provided their views
on specific terms and conditions of access agreements, including those
related to exclusive and preferred access arrangements, preferred
marketing arrangements, fees for access and for the use of space,
in-building wire and other facilities within an MDU, access to install
in-building wire and other telecommunications facilities, and access
during construction of MDUs. |
|
i) Exclusive and preferred access arrangements and preferred marketing
arrangements
|
72. |
All LECs, with the exception
of Futureway, submitted that exclusive and preferred access agreements
limiting access to an MDU to one or a few selected LECs should be
prohibited. |
73. |
Bell Canada et al. submitted
that exclusive and preferred access agreements caused end-user choice
to be replaced by building owner choice. Bell Canada et al. submitted
that mandated access agreements would not serve to ensure that all
LECs gained access to MDUs under consistent terms and conditions,
unless all exclusive and preferred access arrangements were prohibited.
ARC et al. added that preferred access agreements were common for
LECs affiliated with building owners. |
74. |
CIPPREC/BOMA and Futureway
submitted that building owners had the right to determine which LECs
occupied space in their building as well as the terms and conditions
of such access. CIPPREC/BOMA submitted that, while they supported
a restriction on exclusive agreements, they would not provide access
to CLECs if fees were inadequate. CIPPREC/BOMA suggested that, where
a building owner was having difficulty attracting a CLEC to provide
a competitive alternative in its MDU, the building owner should be
able to offer the CLEC, for a finite period of time, an assurance
that no other CLEC would have access to the MDU. CIPPREC/BOMA further
submitted that preferred marketing arrangements providing for the
coordinated promotion of a LEC's services by the LEC and the building
owner should be permitted. |
75. |
Group Telecom, MaxLink et al.,
Norigen and Novus were of the view that any arrangement, including
preferred marketing arrangements, that directly or indirectly discriminated
against competing providers should be prohibited. Group Telecom submitted
that preferred marketing arrangements limited to the advertising and
promotion of a LEC's services in a building might, however, be
permissible. In Bell Canada et al.'s view, preferred marketing
arrangements should be permitted so long as they did not compromise
end-user choice by limiting access by other LECs to serve customers
in the MDU. |
|
ii) Fees
|
76. |
Bell Canada et al. argued
that the Commission should prohibit LECs from making any payments
or giving any kind of financial advantage to building owners in consideration
for the use of space, facilities or other services needed by the LEC
for the provision of telecommunications services in MDUs, since tenants
already paid for telecommunications facilities and any costs associated
with the provision of telecommunications services as part of their
rent. Bell Canada et al. submitted, however, that it would be
appropriate for LECs to compensate building owners for the wire management
services provided by a riser management company (RMC), if the RMC
provided a service that a LEC would otherwise have to provide itself
and if the fees were not simply a substitute for charging for the
right of access to the building or the in-building facilities. |
77. |
TCI submitted that LECs should
only be required to pay fees that were based on incremental costs.
TCI further submitted that no fees should be levied for buildings
forming part of a building owner's portfolio where no service was
provided, and that no fees should be paid where only one LEC served
the building. |
78. |
ARC et al. submitted that it
was not appropriate to apply new charges for services that were already
being provided to other LECs and that access fees should only apply
where building owners incurred additional costs in providing access. |
79. |
MaxLink et al. submitted that
fees for the use of wiring and facilities provided by building owners
should generally recover incremental costs while fees for the use
of building space, including any utility services, should be based
on the charges that would apply for similar facilities used by tenants
and other service providers in the MDU. MaxLink et al. further submitted
that the Commission should ensure that no competitive advantages would
arise in circumstances where a LEC was not required to pay fees under
a cost-based approach. |
80. |
AT&T Canada and Bell Canada
et al. submitted that LECs serving an MDU should be able to make use
of any copper in-building wire available in an MDU at no charge. TCI
submitted that any fees established for the use of in-building wire
should be no higher than the rates that ILECs receive for the use
of their wiring. MaxLink et al. argued that such fees should only
recover direct incremental costs associated with the provision of
in-building wire. |
81. |
To assist in the valuation
of copper in-building wire, a number of parties provided evidence
on the cost of installing new copper in-building wire in MDUs. AT&T Canada
estimated that a 50 pair cable could be installed in an MDU for $43.65
per pair. Bell Canada et al., Futureway and TCI provided evidence
in confidence that ranged above and below this estimate. |
82. |
Bell Canada et al. and
TCI provided evidence, based on the records available, on the estimated
useful life and age of copper in-building wire under their control.
They estimated the useful life of in-building wire to be approximately
18 years. TCI submitted, however, that barring obsolescence, there
should be no end to the useful life of copper in-building wire when
it was properly installed. Bell Canada et al. and TCI also noted
that, based on the average age of the copper in-building wire under
their control, most of the initial investment for the installation
of such wiring had been recovered. They also noted that in-building
wire required infrequent maintenance and, that once connected, it
rarely failed. |
83. |
CIPPREC/BOMA argued that for-profit
telecommunications service providers should negotiate access on a
commercial basis. In CIPPREC/BOMA's view, negotiated, market-based
fees were required to maximize building value and any limitation restricting
fees to a cost-based level would constitute expropriation. In CIPPREC/BOMA's
view, the rates for leasing unbundled loops provided an appropriate
mechanism to limit negotiated fees since CLECs could always lease
loops as an alternative to using their own facilities to serve their
customers. |
84. |
CIPPREC/BOMA submitted that
fees based on proxy rates for similar services, such as storage space,
were not appropriate since such rates would fail to take into account
the fact that telecommunications equipment might require additional
services, such as ventilation, and other improvements. Boardwalk,
CIPPREC/BOMA and Futureway also submitted that it was appropriate
for building owners to designate an RMC to manage and supervise in-building
wire and that LECs should pay for such services at negotiated rates. |
85. |
Futureway submitted that fees
for access and building services should be market-based, subject to
Commission guidelines on causal costs and mark-ups. |
|
iii) Access to install in-building wire in MDUs
|
86. |
AT&T Canada, Bell Canada
et al. and Group Telecom submitted that they needed access to install
fibre-optic cable and other types of wiring, in addition to copper
wiring, to meet their customers' needs. They submitted that such access
was necessary to allow them to control costs, the timeliness of installation,
the choice of technology and the quality of services they provided.
Bell Canada et al., Group Telecom, MaxLink et al. and Norigen
submitted that there was sufficient space in risers to install in-building
wiring in the majority of MDUs. |
87. |
LECs submitted that it was
reasonable for them to make their own arrangements for the installation
of their own in-building wiring, subject to acceptance of a wiring
plan by the building owner. They also noted that, generally, they
assumed the costs related to the installation of in-building wiring
for their own use, including any costs for approvals, materials and
supervision. |
88. |
Norigen and TCI submitted that
LECs should have the option of installing their own in-building wire
where a fibre-based system was made available by an RMC, rather than
being required to adapt to the technology and pay the fees established
by an RMC. Boardwalk, in contrast, submitted that an RMC serving an
MDU should be responsible for the installation and supervision of
all in-building wiring. |
89. |
ARC et al. submitted that building
owners should only be required to provide access to install new in-building
wiring where there was insufficient capacity. |
90. |
Boardwalk and Futureway submitted
that building owners had the right to choose which carriers were permitted
to install in-building wiring in MDUs, as well as the terms and conditions
of such access, and that these rights should be respected. CIPPREC/BOMA
submitted that access to install in-building wiring should be authorized
by the building owner and that access agreements between LECs and
building owners were needed for the installation of any wiring or
equipment in an MDU. CIPPREC/BOMA noted that there were cases where
in-building wiring in MDUs was not properly managed, leading to inefficient
use of space, damage to buildings and unsightly wiring installation. |
91. |
CIPPREC/BOMA noted that they
had experienced very few, if any, circumstances where risers had to
be modified to accommodate additional in-building wire, since existing
copper in-building wire was generally sufficient. CIPPREC/BOMA noted
that there were cases where the in-building wire in some older, congested
MDUs was utilized to maximum capacity. CIPPREC/BOMA further submitted
that the amount of space in the building core areas available to accommodate
additional riser space was often limited. LECs submitted that copper
in-building wire was generally available in MDUs. |
|
iv) Access during construction of MDUs
|
92. |
Bell Canada et al., Group
Telecom, MaxLink et al., Norigen and TCI submitted that they required
access to MDUs under construction in order to install entrance facilities
to reach new MDUs. Bell Canada et al., Norigen and Novus noted
that the most economical time to install such facilities, with the
minimum of disruption to building owners, was during the construction
stage. Bell Canada et al. added that it was important to have
access to MDUs during construction in order to have service available
upon occupancy. Group Telecom submitted that all LECs should be given
notice of MDU construction plans in order to allow them to plan for
the installation of telecommunications facilities. |
93. |
Bell Canada et al. submitted
that only a small number of LECs were likely to require access to
new MDUs, given the limited number of LECs serving in any given location,
and the limited demand for telecommunications services in any given
MDU. Bell Canada et al. further submitted that LECs were unlikely
to incur the costs of installing facilities to reach an MDU in
which they did not anticipate any market share. |
94. |
CIPPREC/BOMA and Futureway
opposed any mandated access during construction. Futureway noted that
potential tenants in new commercial buildings in which it was providing
service had been able to demand that the building owner provide access
to the LEC of their choice prior to occupying the building. CIPPREC/BOMA
submitted that building owners plan MTR and riser space to meet the
future needs of tenants, and that building owners should be responsible
for the installation of wiring and related facilities in new
buildings. |
|
|
95. |
LECs and the parties representing
building owners that commented on the Commission's jurisdiction were
in general agreement that the Commission had the jurisdiction, through
conditions imposed under section 24 of the Act, to directly regulate
Canadian carriers in respect of access to, and interconnection with,
telecommunications facilities and services in MDUs. The parties, however,
disagreed over whether such conditions could be enforced by the Commission
against building owners. |
96. |
Bell Canada et al., Group
Telecom, MaxLink et al. and TCI took the position that the Commission
could use its powers under section 24 of the Act to require LECs to
enter into access agreements with required terms and conditions. They
submitted that section 24 could also be used to regulate the terms
and conditions of access to in-building wire. TCI argued that such
regulation could apply to in-building wire controlled by building
owners. TCI submitted that if the Commission's order did not require
a property owner to enter into an agreement, there could be no "taking"
or "expropriation" of the owner's property rights. |
97. |
Bell Canada et al. referred
to Resale To Provide Primary Exchange Voice Services, Telecom
Decision CRTC 87-1, 12 February 1987
(Decision 87-1), and subsequent related
decisions, regarding shared tenant services as examples of the Commission
exercising its powers to ensure end-user choice. According to Bell Canada
et al., in those decisions, the Commission imposed conditions on the
resale of a carrier's service to ensure that the carrier retained
direct access to tenants to provide services. |
98. |
The parties representing building
owners argued that conditions imposed pursuant to section 24 of the
Act could not be enforced against them as building owners did not
fall within the Commission's jurisdiction under the Act. CIPPREC/BOMA
argued that the Act did not give the Commission the jurisdiction to
permit a carrier to occupy private property without the owner's authorization,
absent expropriation. |
99. |
Parties also discussed the
ability of the Commission to use its powers under sections 40 and
42 of the Act to enforce access to MDUs. |
100. |
TCI, Group Telecom and MaxLink
et al. argued that if a building owner refused to provide a LEC with
access to an MDU, the Commission could use its powers under section
40 of the Act to require the LEC to interconnect to the in-building
wire owned or controlled by the building owner or another LEC, and
to impose terms and conditions on such interconnection. |
101. |
CIPPREC/BOMA questioned whether
a court would interpret the language in section 40 of the Act as permitting
the Commission to make orders requiring connection to telecommunications
facilities regardless of whether the facilities were owned by another
currently regulated entity or not, and regardless of who owned the
property on which the facilities were located. CIPPREC/BOMA submitted
that the Commission only had authority to order connection to existing
wire, and that it did not have the authority to permit access to any
other part of a building, or even access after the "connection"
was made. |
102. |
Bell Canada et al., Group
Telecom, MaxLink et al. and TCI submitted that the Commission could
use section 42 of the Act to mandate access to and use of the MTR,
conduits and in-building wire. These parties took the position that
the Commission could, under section 42, require a building owner to
provide, construct, install, alter, move, operate, use, repair or
maintain any telecommunications facilities, subject to such conditions
as to compensation, or otherwise, as determined by the Commission.
These parties submitted that, in light of these powers, the Commission
could therefore require that a building owner permit a carrier to
install and interconnect to another carrier's existing in-building
wire, equipment, facilities and apparatus. MaxLink et al. and TCI
argued that the definition of "telecommunications facilities"
included not only the in-building wire, but also the MTR, conduits,
risers, and equipment space necessary for a carrier to provide telecommunications
services. |
103. |
CIPPREC/BOMA and Boardwalk
submitted that section 42 of the Act did not explicitly provide jurisdiction
over private property owners and that, in light of the provincial
authority over property and civil rights, it could not be interpreted
to give the Commission direct regulatory control over building owners.
Boardwalk argued that had Parliament intended to confer upon the Commission
the jurisdiction to regulate directly or indirectly the provision
of access by carriers to MDUs, it would have done so expressly and
within defined limits, as in the case of municipalities and support
structures. CIPPREC/BOMA further argued that section 42 dealt only
with "telecommunications facilities" and was not broad enough
to deal with the myriad of issues relating to access to buildings,
such as engineering, management and security. |
104. |
Boardwalk argued that, while
section 42 of the Act permitted the Commission to issue an order that
"any property be acquired", such an order would have to
relate specifically to the telecommunications facilities of carriers.
In Boardwalk's view, building risers, MTRs, rooftops, and related
areas in MDUs did not meet this precondition. |
105. |
Boardwalk, CIPPREC/BOMA, the
FCM and Futureway further submitted that issues of access to MDUs
and the terms and conditions of such access fell within exclusive
provincial legislative authority under the Constitution Act, 1867
and hence, outside of the Commission's jurisdiction. In Futureway's
view, objects such as in-building wire, and areas such as MTRs, formed
part of the private property owned by the building owner, over which
the Commission did not have jurisdiction. They further submitted that
private property owners could exclude others, including LECs, from
entering their private property or installing facilities and had the
exclusive right to manage occupancy within their private property. |
106. |
MaxLink et al. argued that
acceptance of the arguments made by Boardwalk, CIPPREC/ BOMA, the
FCM and Futureway would mean that the Commission's jurisdiction over
the telecommunications network would terminate at the building entrance.
In MaxLink et al.'s view, this argument failed to recognize the end-to-end
nature of a telecommunications network. MaxLink et al. argued that
the Commission's jurisdiction over telecommunications encompasses
all components of the network, from the provider of a telecommunications
service to the ultimate end-users. |
107. |
MaxLink et al. argued that
the telecommunications facilities and apparatus located on both sides
of the MDU entrance together made up the telecommunications network.
MaxLink et al. submitted that interconnection to these facilities
was an essential matter of Commission jurisdiction and a vital part
of a Canadian carrier's operations. |
108. |
In the view of Bell Canada
et al., any Commission orders that constrained the rights of gatekeepers,
such as building owners, to establish rents, terms and conditions
on carriers would only incidentally affect property or civil rights. |
109. |
MaxLink et al. and TCI argued
that a regulatory framework for access to MDUs was a matter that related
in pith and substance to telecommunications and was, therefore, within
federal legislative jurisdiction. They further argued that it was
trite law that once federal constitutional jurisdiction was established,
the fact that its exercise would have incidental effects on property
rights would not detract in any way from federal authority. |
|
|
|
|
110. |
The Commission has, over the years, developed
regulatory frameworks to promote the development of competition in
telecommunications markets, with a view to implementing the Canadian
telecommunications policy objectives set out in section 7 of the Act.
Among the Canadian telecommunications policy objectives are the following:
|
|
a) to facilitate the orderly development
throughout Canada of a telecommunications system that serves to safeguard,
enrich and strengthen the social and economic fabric of Canada and
its regions; |
|
b) to render reliable and affordable telecommunications
services of high quality accessible to Canadians in both urban and
rural areas in all regions of Canada; |
|
c) to enhance the efficiency and competitiveness,
at the national and international levels, of Canadian telecommunications; |
|
……….
|
|
f) to foster increased reliance on market
forces for the provision of telecommunications services and to ensure
that regulation, where required, is efficient and effective; |
|
g) to stimulate research and development
in Canada in the field of telecommunications and to encourage innovation
in the provision of telecommunications services; |
|
h) to respond to the economic and social
requirements of users of telecommunications services; … |
111. |
As noted earlier, in Decision 94-19
the Commission established a comprehensive framework for promoting
competition as a basic means of achieving the telecommunications policy
objectives. Since that time (indeed since the 1970's) the introduction
of telecommunications competition has led to a greater choice of products,
services and suppliers in both business and residential markets, and
to significant price decreases for most services, including long distance,
Internet, data, mobile and international services. |
112. |
The Commission has recognized that competition
means giving end-users choice and in Decision 94-19
it determined that end-users should have the opportunity to choose
whatever package of services and whichever suppliers best fit their
particular needs. In order for service providers to be able to compete
for the business of end-users and be able to provide service to them,
LECs must be able to connect to the telecommunications facilities
at the end-user's premises. |
113. |
In fostering the development of competition,
the Commission has sought to ensure that service providers can access
and serve subscribers in a number of ways including through reselling
services, leasing facilities, and installing and operating their own
facilities. In numerous decisions, it has sought to remove obstacles
limiting the ability of service providers to serve end-users by any
of these means.5 |
114. |
At the same time, the Commission has determined
that the full benefits of local competition, including high quality,
affordable service, innovation and service differentiation, would
best be realized through facilities-based competition, and that facilities-based
competition would, in the long run, be the most effective and sustainable
form of competition to achieve the policy objectives set out in section
7 of the Act.6 In the Commission's
view, facilities-based competition and end-user choice go hand in
hand. |
115. |
In Decision 97-8,
the Commission affirmed the rights of end-users, including tenants
in MDUs, to access the service providers of their choice in all situations.
In order to maximize end-user choice, the Commission required that
all LECs, as a condition of providing service, ensure that the end-users
they served are able to have direct access, under reasonable terms
and conditions, to services provided by any other LEC serving in the
same area. The Commission also determined that, in order to promote
competitive entry and foster consumer choice, it was reasonable to
mandate that end-users be permitted to connect the wire within their
premises to the network of any LEC in whose serving area they were
situated. |
116. |
The Commission notes that the parties representing
building owners in the present proceeding submitted that, while they
supported competition and end-user choice, they did not support or
accept the end-users' right to have access to the facilities-based
carriers of their choice in all situations and submitted that the
right to such choice might only be accomplished through leased unbundled
loops. |
117. |
In the Commission's view, however, while
access to end-users in MDUs through leased unbundled loops represents
an important alternative to facilitate entry and the development of
facilities-based competition, such access alone is not sufficient.
Reliance on unbundled loops binds LECs to the technology and rate
structure of another LEC, to the detriment of service differentiation,
service innovation, price competition and, ultimately, end-user choice.
LECs must be able to physically connect to end-users through the facilities
of their choice in order to be able to respond to the needs of end-users.
The ability to connect through their own facilities is essential to
the operation of their undertaking. |
118. |
The Commission therefore considers that,
while LECs have the right to access end-users via unbundled loops,
they should not be obliged to use unbundled loops as a result of being
denied access to end-users via their own facilities.7 |
|
|
119. |
The Commission considers that MDUs, which
for the purposes of this Decision include buildings with at least
two units and at least one unit occupied by a tenant, constitute
a significant segment of the local telecommunications market. |
120. |
The Commission notes that the parties to
the present proceeding provided estimates of the share of the total
local residential service market attributed to customers in MDUs that
ranged from 22% to 42%. The Commission considers that, even if it
were to accept 22% as a reasonable estimate, the local residential
MDU market would still represent a significant market segment. In
particular, the Commission notes that, based on the total of 12.9
million local residential lines and the $5.25 billion in local residential
revenues reported for the year 2001 in the Report to the Governor
in Council: Status of Competition in Canadian Telecommunications Markets,
Deployment/Accessibility of Advanced Telecommunications Infrastructure
and Services, December 2002 (the second GIC report), the total
local residential MDU market would account for 2.8 million lines,
representing annual revenues of $1.15 billion. |
121. |
The Commission also considers that business
customers located in MDUs account for a significant share of the local
business service market. Based on the parties' estimates of the average
number of lines and the total square footage of commercial office
space, the Commission estimates that there are approximately 5 million
business lines located in commercial MDUs. Based on the second GIC
report's estimated total of 7.6 million business lines and $4.47 billion
in total local business revenues for the year 2001, the Commission
estimates that local business customers in MDUs account for approximately
two-thirds of all business lines, representing some $3 billion in
annual revenues. |
122. |
In addition to the millions of customers
and the billions of dollars in annual revenues attributed to the MDU
market, the Commission notes the cost efficiencies that may be derived
from serving a large number of customers in close proximity using
a minimal number of facilities. The ability to amortize costs over
a larger customer base also provides LECs the opportunity to make
use of high-capacity technologies and offer a larger range of new
and enhanced services, in a cost effective manner. |
123. |
The Commission considers that the high
concentration of MDUs in urban areas also provides LECs the opportunity
to acquire a critical mass of geographically concentrated customers,
which would allow them to achieve a scale of operations that would
not otherwise be feasible with a smaller pool of dispersed customers.
As noted in the second GIC report, a primary focus of competitor entry
plans has been, and continues to be, the business market in core urban
areas, in view of the high density of population and the presence
of large sophisticated customers in these areas. |
124. |
Given the size of the MDU market and the
cost efficiencies that may be derived from serving customers in that
market, the Commission concludes that obstacles to access to customers
in MDUs can have a significant negative impact on LECs. The Commission
considers that the resolution of access issues related to MDUs is
of central importance to the development of local competition and
in particular facilities-based competition, and the achievement of
end-user choice. |
|
|
125. |
The record of this proceeding demonstrates
a number of significant barriers to entry limiting end-user choice
in MDUs. The Commission notes that end-users located in single dwellings
are able to exercise their right to select the service provider of
their choice, without interference by third parties interposed between
service providers and themselves. End-users in MDUs, however, are
often not able to exercise this right. In the Commission's view, end-users
should have the right to the service provider of their choice regardless
of the type of dwelling in which service is provided. |
126. |
In addition to outright bans on their entry
into MDUs, CLECs described situations where they were prevented from
serving their customers on a timely basis and lost potential customers,
as a result of unreasonable delays in attempting to negotiate acceptable
agreements with building owners. CLECs also described situations where
the terms and conditions, including fees, sought by building owners
were so onerous that they were compelled to refuse to serve customers
in the MDU. They also noted that there were situations where, in order
to serve their customers, they had capitulated to the building owners'
demands or had signed access agreements under circumstances that,
in their view, amounted to duress. |
127. |
ILECs also reported increasing difficulties
in gaining access to MDUs, whether to serve new customers or to provide
additional services to existing customers. They also reported situations
where they had been advised that a building owner had entered into
arrangements that prevented other LECs from gaining access to serve
customers in the MDU as well as cases where they were faced with expulsion
from MDUs if they did not match what they regarded as excessive fees
demanded by building owners from CLECs. |
128. |
The Commission notes that the absence of
a rational, non-discriminatory fee structure, providing for reasonable
compensation of building owners, represents one of the major areas
of concern in this proceeding. LECs submitted a number of examples
of the fees imposed by some building owners to illustrate how these
fees made it difficult, if not impossible, to have viable business
cases for offering service in some MDUs. A review of the access agreements
filed in this proceeding indicates that some building owners are charging
a wide range of access fees, in addition to fees for the use of facilities
and services. In particular, the Commission notes that, among the
fees being charged, there are significant entry fees; fees based on
factors that are unrelated to the use of facilities in MDUs, such
as LEC revenues or the square footage of buildings; and fees that
escalate by amounts unrelated to costs incurred or services provided
by the building owners. The Commission also notes that there is evidence
on the record of this proceeding of instances where the fees charged
for comparable access differed between LECs serving the same building.
The Commission notes that in many MDUs ILECs continue to serve
their customers under terms and conditions that existed when they
were operating under monopoly conditions, without written access agreements
and without paying any fees. |
129. |
The Commission finds that many of the fees
charged by building owners appear to be more of a function of the
building owners' gatekeeping role in an era of competition. Based
on the record of this proceeding, the Commission considers that building
owners have both the ability and incentive to charge fees that in
its view are excessive and that unreasonably restrict LEC access to
their buildings. The Commission considers that this represents a major
barrier to entry into MDUs. |
130. |
With regard to the use by LECs of in-building
wire under the responsibility and control of building owners, the
Commission considers that some building owners are imposing unreasonable
terms and conditions, including excessive fees. This effectively denies
LECs facilities-based access to customers in MDUs and unfairly restricts
end-user choice. |
131. |
The Commission notes that the difficulties
described by CLECs in gaining access to in-building wire under the
building owners' control are not limited to situations where they
attempt to serve their customers using their own facilities, but also
include situations where they attempt to serve their customers using
leased unbundled loops. The Commission notes that several parties
raised concerns with respect to the added complexity and cost of having
to deal with building owners to extend unbundled loops to their customers'
suites and submitted that such situations represent a further barrier
to entry and hence, to local competition. As noted earlier, the Commission
considers that the ability of CLECs to use leased unbundled loops
will continue to be an important option for CLECs. The Commission
considers that unreasonable terms and conditions, including fees,
as well as the delay and expense of negotiating access to MDUs in
such situations, often place CLECs at a competitive disadvantage relative
to ILECs. |
132. |
The Commission considers that many of the
terms and conditions in the access agreements filed on the record
of this proceeding have the effect of limiting the quality and the
range of telecommunications services provided to customers in MDUs.
For example, provisions allowing a building owner to determine, at
its discretion, the size, type and configuration of telecommunications
equipment, those preventing the sharing or cross-connection of LECs'
telecommunications equipment, and those requiring that LECs use a
common wiring infrastructure, can affect the design and operation
of a LEC's network, and the types of services that the LEC can provide
to its customers. Other terms and conditions, such as a provision
allowing a building owner to prohibit any changes to the services
provided to customers without the written permission of the building
owner, can also have an adverse effect on a LEC's ability to adequately
serve its customers. While the Commission considers that LECs should
be minimally disruptive and respectful of the condition of buildings
to which they are provided access, provisions unreasonably restricting
a LEC's ability to access the MTR or other parts of the building would
necessarily affect the LEC's ability to connect to the in-building
wire, and to maintain or repair any telecommunications facilities
necessary to provide service to its customers. |
133. |
A number of LECs submitted that they were
often unable to meet service commitments as a result of restrictions
imposed by building owners preventing them from installing their own
in-building wire and equipment to meet their customers' needs. In
particular, LECs noted that copper in-building wire was often unsuitable
to meet their customers' service requirements and that, in some cases,
they needed to extend fibre-optic cable directly to customers in order
to meet their customers' demands. The Commission recognizes that LECs
need to have the ability to install specialized wiring and equipment
as well as to upgrade or install additional copper wiring in order
to be able to offer their customers more innovative services and meet
the particular needs of their customers. In the Commission's view,
LECs should not be restricted in the technology they adopt and customers
should not be forced to accept less than optimal solutions as a result
of obstacles imposed by building owners preventing the upgrading or
the installation of in-building wire and other telecommunications
facilities. |
134. |
The Commission also considers that LECs
must have access to MDUs during the construction phase, in order to
have service available upon occupancy, to minimize disruption, and
to avoid the additional costs associated with the installation of
facilities after completion of the MDU. LECs that are prevented from
accessing an MDU during this period will face higher costs and have
greater difficulty in attracting customers than those who had access
to the MDU during the construction phase. |
135. |
In sum, based on the record of this proceeding,
the Commission finds that there exists a variety of barriers to entry
into MDUs that prevent LECs from providing service to end-users in
MDUs, and thereby restrict the choice of these end-users and impair
the ability of LECs to effectively compete in the local telecommunications
market. |
|
|
136. |
As indicated earlier, ARC et al. and all
LECs, with the exception of Futureway, argued that, since some
building owners were creating barriers to entry into MDUs, regulatory
intervention by the Commission is necessary at this time to ensure
that access to this crucial segment of the local market is made
available on reasonable and equitable terms and conditions. |
137. |
As noted earlier as well, parties representing
building owners suggested that there were no access problems in MDUs
and that if there were, market forces would, over time, serve to ensure
that end-users in MDUs had access to the telecommunications services
and the LECs of their choice. These parties referred to the Critical
Connections survey to support their position that a very high percentage
of end-users in MDUs were being served by the telecommunications providers
of their choice. The Commission agrees, however, with the parties
that submitted that the results of this survey were of limited value,
given the absence of Canadian tenant participation in the survey,
and in light of the evidence on the record of this proceeding regarding
barriers to entry in the Canadian MDU market. |
138. |
As regards the suggestion that market forces
would resolve the issue of access to MDUs, the Commission is not persuaded
that tenants can, in fact, exert sufficient influence to ensure end-user
choice. The Commission considers that the length of leases and the
expense and difficulty of moving to a new location means that relocation
does not generally represent a practical solution for tenants to obtain
telecommunications services from the service provider of their choice. |
139. |
The Commission notes that it has conducted
a number of proceedings and issued several decisions since 1997 with
a view to ensuring that LECs have reasonable and equitable access
to serve end-users in MDUs. The Commission also notes that the SWG,
comprised of representatives of building owners, ILECs, CLECs and
consumers, has discussed MDU access issues for the last four years.
It appears clear, however, that agreement on a number of important
access issues has not yet been reached; that adherence to the Voluntary
Code of Conduct adopted by the SWG has not been widespread; and that
barriers to LEC entry into MDUs continue to exist. In light of the
above, the Commission considers that regulatory intervention is required
at this time. |
140. |
As to the nature and extent of proposed
regulatory intervention, the Commission notes that parties have, during
the course of this proceeding, proposed a number of different approaches
to ensure that access to MDUs be made available on reasonable and
equitable terms and conditions. These include mandated access agreements,
Commission-specified terms and conditions, and standard access agreements.
The Commission is not persuaded, however, that these measures are
appropriate at this time. The Commission considers it appropriate
instead to proceed in the following manner. |
141. |
As noted earlier, pursuant to Decision
97-8, all LECs are required, as a
condition of providing service, to ensure that the end-users they
serve are able to have direct access, under reasonable terms and conditions,
to services provided by any other LEC serving in the same area. Based
on the record of this proceeding, the Commission considers that it
is necessary to amplify the condition imposed in Decision 97-8
in order to ensure that existing and potential end-users in new and
existing MDUs can have direct access to the LEC of their choice. Accordingly,
pursuant to its powers under section 24 of the Act, the Commission
requires that the provision of telecommunications service by a LEC
in an MDU be subject to the condition that all LECs wishing to serve
end-users in that MDU are able to access end-users in that MDU on
a timely basis, by means of resale, leased facilities or their own
facilities, at their choice, under reasonable terms and conditions
(the MDU access condition). |
142. |
The Commission considers that LECs must
have the ability to access and enter into MDUs, in order to connect
and/or install their facilities, as well as repair and maintain them
and do whatever else may be required to provide reliable, high-quality
service to end-users in MDUs. |
143. |
The Commission expects building owners
to cooperate with LECs to enable them to access end-users in their
MDUs in satisfaction of the MDU access condition. In section E
below, the Commission sets out guidelines that, in its view, should
assist parties in their negotiation of access arrangements on the
basis of just and expedient conditions. These guidelines take into
account the responsibilities of building owners to ensure the safety,
security, appearance and condition of their properties and the safety
and convenience of tenants and other persons. |
144. |
In cases where negotiations on access cannot
be concluded on a timely basis and where, following a process under
Part VII of the CRTC Telecommunications Rules of Procedure,
the Commission determines that access to an MDU has not been, or is
not likely to be, provided on a reasonable basis, the Commission will
take such further action as is appropriate, depending on the circumstances
of each case, to ensure that all LECs are able to provide
telecommunications services in an MDU, in accordance with the MDU
access condition. In particular, the Commission will be prepared to
issue an order under section 42 of the Act, subject to such conditions
as to compensation or otherwise as the Commission determines to be
just and expedient. |
145. |
Section 42 of the Act provides that: |
|
Subject to any contrary provision in any Act other than this
Act or any special Act, the Commission may, by order, in the exercise
of its powers under this Act or any special Act, require or permit
any telecommunications facilities to be provided, constructed,
installed, altered, moved, operated, used, repaired or maintained
or any property to be acquired or any system or method to be adopted,
by any person interested in or affected by the order, and at or
within such time, subject to such conditions as to compensation
or otherwise and under such supervision as the Commission
determines to be just and expedient.
|
146. |
Section 42 of the Act empowers the Commission
to issue an order requiring or permitting any or all of a very broad
range of actions, subject to such time-frames and conditions and such
supervision as the Commission determines to be just and expedient.
The Commission considers that its powers under section 42 allow it
to address situations where a LEC is prevented by another person from
providing telecommunications services in an MDU, in accordance with
the MDU access condition. For example, depending on the circumstances
of the case, the Commission could permit a LEC to construct,
install, operate or use telecommunications facilities in an MDU, or
require a building owner to provide telecommunications facilities
to a LEC. |
|
|
147. |
As indicated above, the Commission considers
that, in order to assist LECs and building owners in concluding arrangements
regarding access to MDUs, it is appropriate to establish guidelines
as to conditions that might be considered just and expedient. |
|
i) Exclusive and preferred access arrangements and
preferred marketing arrangements
|
148. |
Exclusive access arrangements refer to
arrangements between a building owner and a LEC whereby access to
an MDU is limited to one LEC. Preferred access arrangements limit
access to an MDU to a few selected LECs. Preferred marketing arrangements
refer to arrangements between a building owner and a LEC providing
for coordinated marketing activities by the LEC and the building owner
for the purpose of promoting the LEC's services in an MDU. |
149. |
The Commission notes that there was general
consensus in the present proceeding that LECs and building owners
should not enter into exclusive or preferred access arrangements that
have the effect of excluding other LECs from providing service to
end-users in an MDU. A number of parties submitted, however,
that preferred marketing arrangements should be permitted so long
as such arrangements did not limit access by other LECs to the MDU. |
150. |
The Commission does not consider that permitting
exclusive or preferred access arrangements would be consistent with
its policy objectives, with the Act or with the access condition. |
151. |
In Decision 99-10,
the Commission set out its view that any agreement between a LEC and
another party that resulted in the provision of local service to an
MDU on an exclusive basis was, prima facie, a violation of
subsection 27(2) of the Act. Furthermore, as noted in Decision 99-10,
the condition imposed in Decision 97-8,
requiring all LECs to ensure that the end-users they served had direct
access, under reasonable terms and conditions, to services provided
by any other LEC serving in the same area, also requires that a LEC
not take any action, either alone or in conjunction with another party,
which would preclude such access. |
152. |
In light of the above, the Commission concludes
that any arrangement between a LEC and another party, whether written
or unwritten, that has the effect of restricting another LEC from
accessing and serving end-users in an MDU is unjustly discriminatory,
and contrary to the MDU access condition. |
153. |
By contrast, the Commission considers that
preferred marketing arrangements could be of benefit to end-users
in MDUs and are consistent with a competitive environment. The Commission
therefore finds it appropriate to permit preferred marketing arrangements
that are limited to the marketing of a LEC's services in an MDU, so
long as these arrangements do not have the effect of limiting access
by other LECs to the MDU. |
|
ii) Fees
|
|
¨ Fees for the use of in-building wire under
the responsibility and control of building owners
|
154. |
The record of this proceeding indicates
that copper in-building wiring is generally available in MDUs and
that copper pairs can be transferred between LECs when a customer
changes service providers. |
155. |
The Commission notes that the only alternative
open to LECs that cannot use in-building wire is to install their
own. The Commission does not consider it appropriate that LECs be
forced to incur additional costs to install their own in-building
wire in MDUs where the in-building wire is suitable to serve the needs
of their customers. The Commission also considers that the need for
LECs to connect to in-building wire becomes even more critical in
MDUs where the installation of new in-building wire may not be feasible
or practical. |
156. |
The Commission notes that the majority
of in-building wire remains the responsibility and control of the
ILECs, and that building owners have responsibility and control of
such facilities only in a limited number of areas in Canada. Some
building owners have acquired the responsibility and control of in-building
wire following Decision 99-10, either
as a result of the transfer of the responsibility and control of in-building
wire from ILECs in existing buildings, or automatically in new buildings,
as required in Decision 99-10. |
157. |
The Commission recognizes that some building
owners may have incurred costs to acquire or install copper in-building
wire, or to upgrade in-building wire in order to provide superior
facilities, such as fibre-optic cable or shielded cable, and may not
have had the opportunity to recover their investment. |
158. |
Accordingly, the Commission considers it
appropriate for building owners to charge a fee for the use of in-building
wire to recover any unrecovered capital costs reasonably incurred
for in-building wire. By the same token, the Commission considers
that it would be inappropriate for building owners to charge a fee
for the recovery of capital costs of in-building wire in circumstances
where the building owners acquired responsibility and control of such
facilities at no cost. |
159. |
The Commission also considers it appropriate
that a building owner be compensated for any costs reasonably incurred
for the maintenance of in-building wire, where the building owner
is responsible for the maintenance of such facilities. Similarly,
where a LEC uses the wiring management services provided by a building
owner or an RMC on its behalf, the Commission considers that the LEC
should compensate the building owner for the costs reasonably incurred
for the services required by the LEC to connect and maintain its service
to end-users in the MDU. The Commission considers that a LEC should
not, however, be required to use and pay for maintenance or wiring
management services unless it agrees to such services. |
|
¨ Fees for space occupied by telecommunications facilities
|
160. |
The Commission considers it appropriate
that LECs compensate building owners for the use of space occupied
by telecommunications facilities. The Commission considers that fees
for a specific space should reflect fees that could have been charged
for an alternative use of that space, taking into account the location
and the amount of space occupied by the telecommunications facilities. |
|
¨ Fees based on utility infrastructure construction costs
|
161. |
The Commission considers that the costs
associated with the construction of the utility infrastructure in
new MDUs, including entrance conduits, equipment rooms, risers, runways
and other common pathways, are part of the costs of construction of
new MDUs, which would be incurred by building owners in the normal
course of construction. The Commission therefore considers that there
should be no up-front, construction-related charges for the utility
infrastructure in new MDUs. |
|
¨ Fees for additional facilities and utility services
|
162. |
Where additional floor space, ventilation
or other building facilities must be constructed or provided to accommodate
additional LEC requirements in an MDU, the Commission considers that
it is appropriate that building owners recover the costs reasonably
incurred for the provision, installation, construction and construction
supervision of additional facilities from the requesting LEC. |
163. |
Where additional costs are incurred for
electrical power or other utilities to accommodate telecommunications
equipment or other telecommunications facilities in an MDU, the Commission
considers that charges for additional utility services that are not
already included in the fees for the use of space occupied by telecommunications
facilities should be based on metered charges or allocated to reflect
the relative use of metered services. |
|
¨ Fees for other additional services
|
164. |
The Commission considers that building
owners should be compensated for any costs reasonably incurred for
providing additional services, such as the approval of plans, safety
and security measures and other similar services reasonably required
in connection with the installation and operation of telecommunications
facilities. The Commission does not consider that the costs associated
with the negotiation of access agreements should be included as part
of the fees. |
|
¨ Entry fees
|
165. |
The Commission notes that some existing
agreements between LECs and building owners not only provide for fees
for the provision of new facilities and the use of services and existing
facilities in MDUs but also provide for fees for the right to enter
the MDU. The Commission considers that fees established in accordance
with the principles set out in this Decision will provide building
owners reasonable compensation for granting LECs access to MDUs and
is, therefore, of the view that access fees for the right to enter
MDUs that are in the nature of an admission or an entry fee are not
appropriate. |
|
iii) Installation of in-building wire and other facilities in
MDUs
|
166. |
The Commission recognizes that building
owners need to manage the use of space and supervise the installation
of wiring and equipment in MDUs. However, the Commission considers
that, consistent with its policy of end-user choice, it is reasonable
that LECs have the option to install or upgrade in-building wiring
and related facilities in MDUs. |
167. |
The Commission considers that LECs that
wish to install or upgrade new in-building wire and related facilities
in an MDU should, subject to the building owner's reasonable acceptance
of the wiring plan, be given access to the closets, panels and any
common pathways required for the purpose of installing or upgrading
their facilities. The Commission further considers that LECs that
exercise this option must be responsible for the costs associated
with the installation or upgrade, including costs reasonably incurred
by the building owner. Similarly, building owners that install or
upgrade the in-building wire and related facilities at the request
of a LEC should be compensated for the costs associated with the installation
or upgrade. |
168. |
The Commission recognizes that there may
be instances where there is insufficient space available in risers
to install additional in-building wiring. In such circumstances, the
building owner may either permit the LEC to construct additional riser
space in the MDU, or allow the LEC to upgrade or replace the existing
in-building wire and related facilities to make more efficient use
of the riser space available. Where such options cannot be physically
accommodated, the LEC may be required to rely on leased unbundled
loops to serve its customers. |
169. |
The Commission notes that, in Decision
99-10, it determined that building
owners should have responsibility and control of the in-building wire
in all new MDUs. However, given that LECs have the option to install
in-building wire and facilities, the Commission finds that it is no
longer appropriate to require building owners to assume responsibility
and control of in-building wire in new MDUs. Accordingly, while building
owners may still choose to install the in-building wire in new MDUs,
they may also elect to enter into arrangements with LECs for the installation,
and subsequent responsibility and control of the in-building wire. |
|
iv) Right of entry during construction of MDUs
|
170. |
The Commission considers that the most
efficient and economical time for the installation of telecommunications
facilities, including entrance facilities to access an MDU, is during
the construction stage. |
171. |
Accordingly, the Commission considers that
LECs that wish to install telecommunications facilities during the
construction of an MDU should, subject to the building owner's reasonable
acceptance of plans for the installation of any wiring or entrance
facilities, be given access to the property, as required for the purpose
of installing these facilities. The Commission also considers that
LECs that install telecommunications facilities during the construction
of MDUs must be responsible for the costs associated with the installation
of their facilities, including any costs reasonably incurred
by the building owner for such purposes. |
|
v) Terms of liability
|
172. |
The Commission considers that the principles
of liability for negligence that are in force in the province in which
the MDU is located, should apply. Each party should seek assurance
from the other that it is adequately insured or can self-insure, in
light of its potential liability. |
|
|
173. |
The Commission considers that it is necessary
to ensure that adequate information be available in the marketplace
to enable LECs to negotiate access to MDUs on reasonable and equitable
terms and conditions, including fees. The Commission notes the concerns
expressed by Boardwalk with respect to the financial harm that could
result from disclosure of competitively sensitive information. The
Commission concludes, however, that the specific direct harm, if any,
that is likely to result from the disclosure of the terms and conditions
of access, including fees, would not outweigh the public interest
in such disclosure. |
174. |
The Commission also notes the concerns
raised by a number of parties relating to the disclosure of end-user-specific
information or building "system" information such as building
plans and wiring maps. The Commission considers that the disclosure
of this type of information is not necessary for the purpose of facilitating
negotiations for reasonable and equitable terms and conditions for
access to MDUs by LECs. The Commission further considers that disclosure
of such information raises concerns regarding building security and
the privacy, security and safety of end-users. The Commission concludes
that the specific direct harm that is likely to result from disclosure
of such information outweighs the public interest in such disclosure.
Accordingly, the disclosure conditions set out below do not require
the disclosure of building plans, including wiring maps, or information
identifying an end-user. |
175. |
The Commission therefore requires, as a
further condition of providing telecommunications service in an MDU,
that a LEC disclose on its web site all terms and conditions, including
fees, of any written access agreement concluded with the building
owner of that MDU. Existing written access agreements are to be disclosed
on the LEC's web site within two months of the date of this decision.
Any written access agreements or amendments concluded after the date
of this decision must be posted on the LEC's web site within 30 days
of having reached or amended the agreement. The Commission also requires,
as a condition of providing telecommunications service in an MDU,
that a LEC disclose on its web site, all terms and conditions, including
fees, of any unwritten access agreement concluded with the building
owner of that MDU, within 30 days of having received a request from
any other LEC operating in the same area. |
176. |
The Commission also considers that all
LECs should have an equal opportunity to install telecommunications
facilities during the construction of MDUs as this would allow all
LECs to benefit equally from cost efficiencies during the construction
phase, maximize end-user choice upon occupancy, and minimize future
disruptions for building owners in accommodating LECs requesting access
after the completion of the MDU. The Commission therefore considers
that it is necessary, in order to provide all LECs the opportunity
to benefit from early notification of construction plans, to require
that LECs provide notice of any access agreement for the installation
of telecommunications facilities during the construction of an MDU. |
177. |
Accordingly, the Commission requires, as
a condition of offering or providing telecommunications service in
an MDU, that a LEC disclose on its web site all terms and conditions,
including fees, of any written access agreement concluded with the
building owner for the installation of telecommunications facilities
during the construction of that MDU, within 10 days of having reached
such an agreement. The Commission also requires, as a condition of
offering or providing telecommunications service in an MDU, that a
LEC provide notice, on its web site, of any unwritten access agreement
concluded with the building owner for the installation of telecommunications
facilities during the construction of that MDU, within 10 days of
having reached such an agreement, and that it disclose on its web
site all terms and conditions, including fees, of such an agreement,
within 10 days of having received a request from any other LEC operating
in the same area. |
178. |
For the purposes of this Decision, an access
agreement means any agreement or arrangement between a LEC and a building
owner, its agent or its affiliate, for access to an MDU, or an MDU
under construction, including access to the MTR, access to install
or connect to in-building wire, or access to, or use of, any other
facility that may be required for the purpose of providing telecommunications
services in the MDU. |
|
|
179. |
As regards the matter of access to MDUs
through LEC facilities, the Commission considers that it is necessary
to address the following issues: the terms and conditions of access
to MDUs through unbundled loops; the transfer of responsibility and
control of in-building wire under the responsibility and control of
LECs; and the use of in-building wire under the LECs' responsibility
and control. |
|
|
180. |
Most CLECs submitted that unbundled loops
should extend to the customer demarcation point8
located at the customers' premises in order to avoid the difficulties
they faced in connecting unbundled loops to in-building wire under
the responsibility and control of building owners. Bell Canada
et al. agreed that a loop could provide a connection to the customer
demarcation point independent of which entity controlled the in-building
wire. Call-Net submitted that the extension of a loop to a customer's
premises would provide the customer the option of migrating all of
its services from the serving LEC to the LEC of its choice or splitting
the services between the serving LEC and a second LEC, using the same
unbundled loop. |
181. |
AT&T Canada and Call-Net argued
that there should be no additional charges for the use of in-building
wire in conjunction with unbundled loops. Bell Canada et al.
offered to provide CLECs the option of having unbundled loops terminate
at the MTR or at the customer demarcation point, at existing loop
rates. |
182. |
TCI submitted that, in circumstances where
it was providing an unbundled loop that consisted in part of in-building
wire controlled by the building owner, it should not be required to
assume liability for the use of wire or the quality of the loop service
that it did not control. |
183. |
CIPPREC/BOMA and Futureway were of the
view that access agreements would not be necessary for LECs that used
leased unbundled loops extending to the customer demarcation point,
as long as the loop provider had an access agreement and there was
no physical intervention in the MDU. CIPPREC/BOMA added that there
should be no obligation to inform building owners of arrangements
for the use of leased unbundled loops that extended to the customer
demarcation point. |
184. |
TCI and Call-Net were of the view that
there should be no further transfer of control of in-building wire
from ILECs to building owners. They argued that such transfers would
only make issues of access to MDUs more difficult, by allowing building
owners to exercise their gatekeeping control over in-building wire.
Bell Canada et al. submitted that there should be no concerns
associated with building owners taking control of in-building wire,
if loops extended to the customer demarcation point. |
185. |
Group Telecom considered that the transfer
of in-building wire should not be permitted until MDU access issues
were resolved. Futureway proposed that LECs that currently controlled
in-building wire should be required to retain control until 2005,
at which time the matter could be reviewed. |
186. |
CIPPREC/BOMA submitted that the building
owner should be able to control in-building wire. CIPPREC/BOMA noted
that, except in Calgary, very little transfer of control of in-building
wiring had occurred. |
|
|
|
i) Access through leased unbundled loops
|
187. |
The Commission notes that, under the current
regulatory framework, LECs using unbundled loops to serve MDUs where
the building owner has responsibility and control of the in-building
wire must negotiate with building owners in order to gain access to
the MTR and connect loops to the in-building wire at the service provider
demarcation point. By contrast, in MDUs where the responsibility and
control of in-building wire has remained with the ILEC, unbundled
loops terminate at the customer demarcation point. |
188. |
The Commission notes that the ILECs represented
by Bell Canada et al. agreed that a loop could provide a connection
to the customer demarcation point regardless of who controlled the
in-building wire. The Commission further notes that Bell Canada
et al. offered to provide the unbundled loop service to the customer
demarcation point at existing loop rates, regardless of who has responsibility
and control of the in-building wire. |
189. |
The Commission does not consider it appropriate
to define demarcation points differently depending on whether a loop
is a component of the local service provided by an ILEC or is leased
by a CLEC as an unbundled loop. The Commission considers that an unbundled
loop should provide LECs with the opportunity to connect to the end-user
regardless of who has responsibility and control of the in-building
wire in an MDU. |
190. |
The Commission notes TCI's concerns that
loop providers would be assuming additional responsibility in ensuring
the quality of service of loops terminating at the customer demarcation
point, where the building owner controlled the in-building wire. The
Commission considers, however, that unbundled loops provided in an
MDU, using the same in-building wire and access arrangements as the
loop provider's own service, should not cause the loop provider to
assume additional responsibility in ensuring the quality of service
of the unbundled loop. |
191. |
The Commission concludes that loop providers
must provide LECs the option of terminating leased unbundled loops
either at the service provider demarcation point or at the customer
demarcation point, regardless of who has responsibility and control
of the in-building wire. |
192. |
The Commission notes that the rates for
unbundled loops set out in the loop providers' tariffs include the
in-building wire as part of the loop offering. The Commission further
notes that there is no evidence on the record of this proceeding to
suggest that the rates for unbundled loops need to be adjusted to
take into account who has responsibility and control of the in-building
wire or the location at which the loops terminate. Accordingly, the
Commission concludes that unbundled loops must be provided at current
tariff rates, regardless of who controls the in-building component
of the loops, or where LECs choose to have the loop terminate. |
|
ii) Transfer of responsibility and control of in-building wire
|
193. |
As noted earlier, in Decision 99-10
the Commission set out rules for the transfer of responsibility and
control of in-building wire from LECs to building owners. Under this
regime, the service provider demarcation point was defined to be at
the MTR in all new buildings and in all existing buildings where the
building owner accepted responsibility and control of the in-building
wire. In Decision 2001-364, the
Commission noted that where building owners controlled the in-building
wire loops would end at the MTR, thereby affecting the viability of
services offered by CLECs that used unbundled loops to serve customers
in MDUs, and potentially reducing end-user choice. In light of these
concerns, the Commission, in Decision 2001-572,
directed all LECs, as a condition of offering and providing local
service, to retain responsibility and control of their in-building
wire on an interim basis, pending a final determination in the Public
Notice 2000-124 proceeding. |
194. |
The Commission notes that many LECs have
argued that there should be no further transfer of control of in-building
wire to building owners in light of the numerous difficulties caused
by the building owners' gatekeeping role. In light of the Commission's
determination that loop providers be required to provide unbundled
loops terminating at the customer demarcation point at current tariff
rates, and the conditions and principles for the provision of telecommunications
services in MDUs set out in this Decision, the Commission considers
that the restriction on the transfer of responsibility and control
of in-building wire is no longer necessary and, accordingly, determines
that the condition imposed in Decision 2001-572,
is of no effect as of the date of this Decision. The Commission
expects that LECs will ensure that the terms of any transfer
of responsibility and control of their in-building wire will not create
barriers to entry into MDUs and will permit LECs to provide telecommunications
service in accordance with the MDU access condition. |
|
iii) Fees for the use of in-building wire under the responsibility
and control of LECs
|
195. |
In Decision 2001-362,
the Commission required all LECs that had responsibility and control
of in-building wire to accommodate the connection of facilities of
other LECs to the in-building wire. The Commission also applied, on
an interim basis, a rate of $1 per month for such connections to copper
in-building wire. |
196. |
The Commission notes that there was very
little information provided by the parties to this proceeding to justify
a rate for the use of copper in-building wire. The Commission also
notes that Bell Canada et al. and TCI indicated that they had
largely recovered their initial investment and that the costs for
repair and maintenance of copper in-building wire were minimal. Furthermore,
Bell Canada et al. proposed that there should be no charge for
the use of such wire. |
197. |
While the Commission generally supports
the principle of cost recovery, the Commission considers that putting
in place a regulatory mechanism for the cost recovery of minimal amounts
for copper in-building wire would not be practical or in the public
interest, given the administrative complexity involved. The Commission
therefore concludes that it is appropriate to require all LECs that
have responsibility and control of copper in-building wire in an MDU
to permit other LECs to connect to and use the in-building wire at
no charge. The LECs that make use of such facilities are responsible
for their maintenance. |
|
|
198. |
Loop providers must provide LECs the option
of terminating leased unbundled loops either at the service provider
demarcation point or at the customer demarcation point, at current
tariff rates. The Commission directs the LECs that provide
unbundled loops to file, for the Commission's approval, within 30
days of the date of this Decision, proposed tariff pages reflecting
the Commission's determination. |
199. |
LECs that have responsibility and control
of copper in-building wire in an MDU must permit other LECs to connect
to and use the in-building wire at no charge. The Commission directs
all LECs that have responsibility and control of copper in-building
wire to file, for the Commission's approval, within 30 days of the
date of this Decision, proposed tariff pages reflecting the Commission's
determination. |
|
|
200. |
The Commission notes that parties raised
a number of jurisdictional issues in their submissions. In the Commission's
view, it is not necessary to address any of these issues in the
context of the specific determinations made in this Decision. |
201. |
The Commission notes that Bell ExpressVu,
CFAA, CCTA, Look, Regional and Whistler Cable submitted comments with
respect to the broadcasting industry. These parties were generally
of the view that the regulatory framework established in Revised
policy concerning inside wire regime; Call for comments on proposed
amendments to section 10 of the Broadcasting Distribution Regulations,
Public Notice CRTC 2000-81,
9 June 2000, was appropriate and that there was no need to address
access issues for BDUs at this time. The Commission does not therefore
consider that there is a need to address the terms and conditions
of access by BDUs to MDUs at this time. |
202. |
Furthermore, the Commission is not persuaded
by the facts on the record of this proceeding that there is a need
to make any determination relating to the placement of wireless telecommunications
equipment, such as antennae or satellite dishes, in MDUs. The principles
set out in this decision therefore apply only to wireline telecommunications
facilities in MDUs. |
203. |
The Commission will monitor the status
of access to MDUs with a view to determining whether the principles
set out in this decision remain appropriate, and the degree to which
it can rely on negotiations between building owners and LECs to achieve
the Canadian telecommunications policy objectives. |
|
Secretary General |
|
This document is available in alternative
format upon request and may also be examined at the following Internet
site: http://www.crtc.gc.ca
|
|
1 See
for example, Co-location, Telecom Decision CRTC 97-15,
16 June 1997.
2 See
for example, Final Rates for Unbundled Local Network Components,
Telecom Decision CRTC 98-22, 30
November 1998, and Local competition: Sunset clause for
near-essential facilities, Order CRTC 2001-184,
1 March 2001 (Order 2001-184).
3 See for example,
Rates set for access to telephone companies' support structures,
Order CRTC 2000-13,
18 January 2000.
4 See
for example, Ledcor/Vancouver - Construction, operation and maintenance
of transmission lines in Vancouver, Decision CRTC 2001-23,
25 January 2001.
5 See
for example, Decision 87-1, Decision
94-19, Decision 97-8
and Order 2001-184.
6 See
for example, Decision 97-8 and
Regulatory framework for second price cap period, Telecom
Decision CRTC 2002-34,
30 May 2002.
7
Later in this Decision, an exception to this principle is discussed
where such access cannot be physically accommodated.
8 Defined,
pursuant to Decision 99-10, as
the point at which the in-building wire and the inside wire meet.
Inside wire refers to the wire and other facilities, which are located
in, or in the proximity of, the customer's unit and which are under
the responsibility and control of the customer.
|