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Telecom Decision CRTC 2005-51
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Ottawa, 9 September 2005 |
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Follow-up to Allstream v. MTS - Sherbrook Central Office, Telecom
Decision CRTC 2003-62
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Reference: 8638-C12-200314211 |
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In this Decision, the Commission directs
incumbent local exchange carriers (ILECs) to provide network reconfiguration
information to affected competitive local exchange carriers (CLECs) at least
six months prior to the planned implementation date of an ILEC-initiated
local network reconfiguration. |
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The Commission also determines that ILECs and
CLECs are to bear their own costs with respect to a planned ILEC-initiated
local network reconfiguration. However, when a CLEC alleges that a local
network reconfiguration has a discriminatory negative impact on its
operations or customers and negotiations between the CLEC and ILEC to settle
the issue have failed, the Commission will address each situation on a
case-by-case basis when brought to its attention by the affected party. |
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Background
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1.
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In Allstream v. MTS - Sherbrook Central
Office, Telecom Decision CRTC
2003-62, 19 September 2003 (Decision
2003-62), the Commission expressed the view that when an incumbent local
exchange carrier (ILEC) plans to reconfigure its local network, a
consultation process should take place between the affected competitive local
exchange carriers (CLECs) and the ILEC, in order to ensure that all services
provided to the CLEC continue to operate and to minimize any adverse impact
on the CLEC. |
2.
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The Commission also expressed the preliminary
view that each ILEC should provide the following information to affected
parties at least six months prior to the planned implementation date of an
ILEC-initiated local network reconfiguration: |
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a) a general description of the reconfiguration,
including reasons why it is to be undertaken; |
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b) a planned schedule for the reconfiguration;
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c) a map, or maps, defining the serving area(s)
affected; |
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d) information to each CLEC, detailing how the
unbundled loops and other ILEC-provided facilities it uses will be affected;
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e) reasons why the network reconfiguration
cannot be accommodated without impacting a CLEC's network or customers; and
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f) rationale for the proposed change where, as a
result of a network reconfiguration, the level of service to a CLEC and its
customers would diminish relative to the level of service to the ILEC and its
retail customers, and a cost analysis of each CLEC's costs where such a
change is proposed. The cost analysis should include items such as the cost
of reconfiguring CLEC co-location sites and conditioning of circuits used by
CLECs, as appropriate. |
3.
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In Decision
2003-62, the Commission considered that a follow-up proceeding should be
held to address these issues and to permit all potentially affected parties
the opportunity to comment. Accordingly, the Commission initiated a show
cause proceeding to consider procedures for the implementation of network
reconfigurations that affect competitors, and also requested interested
parties to provide their views on the responsibility of affected carriers for
the costs incurred as a result of a network reconfiguration. |
4.
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The Commission received comments from
Aliant Telecom Inc., Bell Canada, MTS Communications Inc. (MTS), Saskatchewan
Telecommunications and Société en commandite Télébec (collectively, the
Companies); TELUS Communications Inc. (TCI); Microcell Solutions Inc.
(Microcell); Allstream Corp. (Allstream),1
FCI Broadband (FCI); and Call-Net Enterprises Inc. (Call-Net).2 |
5.
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Allstream, the Companies, Call-Net, FCI, and TCI
filed reply comments. |
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Positions of parties
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The Companies
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6.
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The Companies submitted that the rules set out
in Notification of Network Changes, Terminal-to-Network Interface
Disclosure Requirements and Procedures for the Negotiation and Filing of
Service Arrangements, Telecom Letter Decision CRTC
94-11, 4 November 1994 (Letter
Decision 94-11) and in Local
competition, Telecom Decision CRTC 97-8,
1 May 1997 (Decision 97-8), remained
suitable today and need not be altered. |
7.
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The Companies agreed with the Commission's view
in Decision 2003-62 that, when a local
exchange carrier (LEC) reconfigured its network, it should provide the
affected parties with the information referenced at subparagraphs 2 a) to e)
above. The provision of such information was, in the Companies' view,
consistent with the requirements set out in Letter Decision
94-11 and Decision
97-8 and provided reasonable notice. |
8.
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The Companies submitted, however, that the
requirement to provide the information referenced in subparagraph 2 f) was
unworkable. |
9.
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The Companies submitted that they had little or
no information regarding a CLEC's customers, none regarding the services
which a CLEC provided to those customers, and little or none regarding the
equipment used by competitors. The Companies argued that it would be
virtually impossible for the Companies to provide an assessment of whether an
ILEC's services would be improved or diminished in relation to those of a
CLEC without detailed information. |
10.
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The Companies submitted that CLEC
representatives at the Network Working Group of the CRTC Interconnection
Steering Committee refused to provide any information to the ILECs regarding
the services CLECs intended to provide utilizing ILEC loops because such
information provided invaluable marketing information about a CLEC roll-out
plans. |
11.
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The Companies argued that any assessment of the
costs incurred by an affected carrier must be balanced against potential
savings and/or network efficiency improvements achieved by such a carrier as
a result of the network reconfiguration. The Companies submitted that this
information would be even more difficult to generate. |
12.
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The Companies submitted that changes to a LEC's
local network were regarded properly as a part of conducting business and
were rendered necessary by a number of factors, including geographic and
demographic changes, changing customer requirements, evolving technology, and
the obsolescence of buildings and other network facilities. |
13.
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The Companies also submitted that the costs
borne by the Companies as a result of network reconfigurations were typically
greater, by orders of magnitude, than those incurred by any affected
competitors. |
14.
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The Companies noted that responsibility for
costs associated with network changes was addressed in innumerable
interconnection and co-location agreements between Canadian carriers which
had received Commission approval. The Companies also noted that network and
compatibility requirements in such agreements invariably placed
responsibility for maintaining compatibility on each carrier. |
15.
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The Companies submitted that it would be
incorrect for the Commission to impose a penalty on the Companies as a result
of network reconfigurations by forcing them to pay for costs associated with
changes which might need to be made to reconfigure competitors' facilities or
services provided to such competitors. |
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TCI
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16.
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TCI submitted that the information referenced in
subparagraphs 2 a), b), c) and d) of this Decision represented reasonable
information to be made available to affected parties for a planned network
reconfiguration. |
17.
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With regard to subparagraph 2 e) above, TCI
indicated that it generally agreed that to the extent possible it would
provide such rationale. TCI noted however that there might exist many factors
that are unknown to it concerning a CLEC's network and the services it
provided its customers that would preclude compliance with this item. TCI
submitted that it could provide a CLEC with sufficient information on the
planned network reconfiguration such that a CLEC should be able to evaluate
impacts to its network and services it provided to its customers. |
18.
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TCI also submitted that the requirements to
provide the information referenced in subparagraph 2 f) above were
problematic. In TCI's view, implementation of these conditions might not be
possible due to unknown factors or lack of information on the configuration
of a CLEC's network and its service design practices. |
19.
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TCI considered that a network reconfiguration
would often benefit all parties including end-customers. TCI submitted that
were it to be penalized with additional costs with a particular network
reconfiguration, it may cause TCI to reconsider its network reconfiguration
plans or to consider other solutions, which would not bring potential
benefits to the CLECs. |
20.
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TCI noted that each network reconfiguration
would have distinct characteristics making it inefficient to develop broad
general assumptions regarding implementation costs and benefits, and
operational issues. TCI submitted that it would be more appropriate to
address the issue of a network reconfiguration on a case-by-case basis. |
21.
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TCI submitted that affected parties should bear
their respective costs associated with a network reconfiguration and that
where sufficient notification of a network reconfiguration was provided this
should not create undue hardship on a CLEC. |
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Allstream
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22.
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Allstream submitted that the Commission's
proposed consultation process should apply to all ILEC-initiated network
reconfigurations. Allstream argued that the sharing of information pertaining
to a planned network reconfiguration would allow parties to determine whether
the network reconfiguration was mutually beneficial to both the ILEC and the
affected competitors and would enable competitors to contribute to the
efficiency of the network changes. Allstream was of the view that the
consultation process would also provide a check in the system to ensure that,
whether intentionally or otherwise, the network changes did not produce an
anti-competitive consequence. |
23.
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Allstream submitted that given that the
Commission's proposed consultation process should allow a determination of
whether the planned network changes were mutually beneficial to both the ILEC
and affected competitor(s), it would provide a basis for determining whether
the competitor must reconfigure its network and, if so, whether the cost
should be borne solely by the ILEC. Allstream noted that if the planned
network changes did not benefit the affected competitor and its customers, or
would result in a degradation of the competitor's services, the ILEC should
incur all costs resulting from the network reconfiguration. |
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Microcell
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24.
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Microcell submitted that it fully supported the
Commission's preliminary view made in Decision 2003-62.
Microcell submitted that timely and informative notification of
ILEC-initiated network reconfigurations was the necessary first step to
determining whether the planned reconfigurations were driven by
competitively-neutral considerations or by less constructive motivations. |
25.
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Microcell submitted that without knowing the
full range of ILEC network changes that would be considered 'network
reconfigurations' in the current context, it was reluctant to propose
absolute rules for CLEC cost recovery. Microcell further submitted that at a
minimum, there should be an obligation on the part of the ILEC to pay CLEC
costs whenever the planned ILEC network reconfiguration was deemed to have a
discriminatory negative impact on CLEC operations or customers. |
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Call-Net
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26.
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Call-Net submitted that it supported the
Commission's preliminary view and requested that the information referenced
in paragraph 2 above be the mandatory minimum that ILECs must provide in the
event of a proposed network change or reconfiguration. |
27.
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Call-Net submitted that these changes
potentially impacted competitors in terms of re-location or reconfiguration
of existing customers. Call-Net argued that the inability to reach fair and
equal competitive interconnection and access under the ILECs' new network
evolution could represent a significant competitive barrier to competitors
and undue competitive advantage to the ILECs. |
28.
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Call-Net submitted that the principles of
continuity and reliability in services, non-discrimination and maintaining
parity of quality of service for CLECs, should govern the manner in which
CLECs interconnect with the ILECs in the rapidly evolving ILEC networks.
Call-Net further submitted that adherence to these principles required that
ILEC-initiated local network changes and reconfigurations should not expose
CLECs to financial and competitive disadvantage. |
29.
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Call-Net argued that all ILEC-initiated network
reconfigurations might have huge impacts on a CLEC's entire interconnection
investment and sunk costs. |
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FCI
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30.
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FCI submitted that the ILECs should pay all
expenses incurred by competitors as a result of an ILEC's network
reconfiguration. |
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Reply comments
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The Companies
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31.
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The Companies noted that Allstream, Call-Net,
FCI, and Microcell provided no rationale in support of the Commission's
analysis of its advance notification proposal and provided no comments on the
issues regarding the implementation of the Commission's preliminary view. |
32.
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The Companies submitted that consistent with the
Commission's conclusions in Letter Decision 94-11,
notification requirements should apply only with respect to bottleneck
services and facilities and to essential services. |
33.
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The Companies argued that the introduction of
new services and technologies has, on a number of occasions, required
customers to replace or upgrade their own systems and equipment if they
wished to take advantage of new technologies or services. |
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TCI
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34.
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TCI submitted that there was general agreement
from the interested parties supporting the notification principles
established by the Commission in Letter Decision
94-11 and the information
described in subparagraphs 2 a) to e) above. TCI submitted that these items
represented all the information that is required in order for a CLEC to
evaluate the costs/benefits resulting from an ILEC network reconfiguration. |
35.
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In regard to the requirement for the ILEC to
perform a cost/benefit analysis on behalf of the CLEC as outlined at
subparagraph 2 f) above, TCI argued that such a requirement would only result
in creating an unworkable and costly process. |
36.
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TCI submitted that entities that are to treat
each other as peers should bear their respective costs for network
reconfigurations or other network changes provided the network notification
intervals, as required in Letter Decision
94-11, were adhered to. |
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Allstream
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37.
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In regard to subparagraph 2 f) above, Allstream
argued that ILECs would know the rationale for a reconfiguration and,
furthermore, would know whether the network reconfiguration would have a
negative impact on competitors. Allstream noted that, in fact, TCI recently
identified which of Allstream's circuits would or might be negatively
affected by a proposed network change and even suggested a variety of
solutions to the problems caused to Allstream as a result of that network
reconfiguration. |
38.
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Allstream submitted, however, that if an ILEC
claimed to be uncertain as to the impact a network reconfiguration would have
on competitors, the information provided to the competitors could simply
include the ILEC's rationale for the change and the circuits affected by the
network change. Allstream considered that if competitors were provided with
this information, they would be in a position to ascertain the implications
for themselves and their customers. Allstream submitted that this minor
modification to the consultation process specified in Decision
2003-62 would eliminate the ILECs'
concerns regarding the Commission's preliminary view. |
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Call-Net
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39.
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Call-Net submitted that the only issue that was
contested in this proceeding was the issue of responsibility for the costs
incurred as a result of an ILEC-initiated network reconfiguration. |
40.
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Call-Net submitted that the positions taken by
TCI and Bell Canada would result in hardship to competitors. Call-Net argued
that it would be unfair and inefficient to have competitors strand any of
these investments and incur another round of capital commitment due to
ILEC-initiated network changes and reconfigurations. |
41.
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Call-Net submitted that sufficient notification
of a network reconfiguration would relieve competitors of undue hardship. |
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FCI
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42.
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FCI submitted that portions of ILEC networks
have been deemed essential and/or near essential by the Commission. FCI
submitted that access to these ILEC network components was critical to
competitors' ability to offer services in competition with the ILECs. FCI
also submitted that without regulatory intervention, ILEC network
reconfigurations, such as the deployment of remotes, would harm competitive
forces as well as have the potential to throw competitors' networks,
developed over many years and at great expense and effort, into chaos. |
43.
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FCI argued that ILEC-initiated network
reconfigurations were intended to benefit the ILEC. Therefore, the Commission
should ensure that the competitors were able to continue to serve customers
with the same services after a network reconfiguration as they could before. |
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Commission's analysis and determinations
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44.
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The Commission notes that the type of network
reconfiguration undertaken by MTS, that led to Decision
2003-62, is becoming common as the ILECs
deploy more fibre remote facilities in their core networks. |
45.
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In the Commission's view, these network
reconfigurations will in some instances impact the competitors' networks and
may result in service degradation to existing CLEC customers if affected
competitors are not provided with the opportunity to examine the contemplated
network reconfiguration and take any required action before the change comes
into effect. |
46.
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The Commission notes that there is general
agreement from interested parties to this proceeding that ILECs should
provide CLECs the information listed in subparagraphs 2 a) to e) above of the
Commission's preliminary view, namely: |
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a) a general description of the reconfiguration,
including reasons why it is to be undertaken; |
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b) a planned schedule for the reconfiguration; |
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c) a map, or maps, defining the serving area(s)
affected; |
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d) information to each CLEC, detailing how the
unbundled loops and other ILEC-provided facilities it uses will be affected;
and |
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e) reasons why the network reconfiguration
cannot be accommodated without impacting a CLEC's network or customers. |
47.
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The Commission notes, however, that there is
disagreement amongst the parties in regards to the information to be provided
under subparagraph 2 f) above which reads as follows: |
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f) rationale for the proposed change where, as a
result of a network reconfiguration, the level of service to a CLEC and its
customers would diminish relative to the level of service to the ILEC and its
retail customers, and a cost analysis of each CLEC's costs where such a
change is proposed. The cost analysis should include items such as the cost
of reconfiguring CLEC co-location sites and conditioning of circuits used by
CLECs, as appropriate. |
48.
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The Commission notes that the ILECs submitted
that they have little or no information regarding the CLECs' networks or
service offerings and therefore, unless the information is provided to them
by the CLECs, the ILECs do not have the information required to complete a
cost analysis. |
49.
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The Commission further notes that some of the
ILECs submitted that for competitive reasons, the CLECs were reluctant to
provide the required information to the ILECs as it would put them at a
competitive disadvantage. The CLECs did not dispute this notion. |
50.
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The Commission also notes that another
difficulty faced by the ILECs in providing a cost analysis is that all
network reconfigurations are different. As a result, network reconfigurations
will have different impacts on the CLECs' networks and services. These
differing impacts, combined with the fact that each CLEC has a different
network, greatly increases the complexity of any cost analysis carried out by
the ILEC. |
51.
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The Commission is of the view that although
Allstream indicated one instance where an ILEC had been able to determine the
impact of a reconfiguration on Allstream's network, ILECs generally do not
have the required information to make such determinations. |
52.
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Based on the record in this proceeding, the
Commission recognizes that it would be difficult for the ILECs to obtain the
required information to be able to carry out an accurate and complete cost
analysis of any adverse changes to a CLEC's network as a result of a
ILEC-initiated network change. |
53.
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The Commission is of the view that without this
information being available to the ILECs, it would not be appropriate to
require ILECs proposing a network reconfiguration to identify the impacts on
affected CLECs' customers, since there is no comprehensive way for the ILECs
proposing the network change to know beforehand how the affected CLECs are
impacted. |
54.
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The Commission considers that by following the
notification process outlined in the Commission's preliminary view, at
subparagraphs 2 a) to e) above, CLECs will be in a position to ascertain for
themselves the implications on their network and their customers. |
55.
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The Commission therefore directs that ILECs
provide the following information to CLECs at least six months prior to a
planned ILEC-initiated network reconfiguration: |
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a) a general description of the reconfiguration,
including reasons why it is to be undertaken; |
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b) a planned schedule for the reconfiguration; |
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c) a map, or maps, defining the serving area(s)
affected; |
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d) information to each CLEC, detailing how the
unbundled loops and other ILEC-provided facilities it uses will be affected;
and |
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e) reasons why the network reconfiguration
cannot be accommodated without impacting a CLEC's network or customers. |
56.
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In regard to the responsibility of costs
incurred when implementing a network reconfiguration, the Commission notes
that there will always be ILEC-initiated local network changes and
reconfigurations which may affect a competitor's network. These changes are a
result of the natural evolution of the network as new technologies are
introduced to either improve services or to provide new services. |
57.
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The Commission is of the view that such changes
are part of conducting business and recognizes that they may have different
effects on competitors' networks. These changes may be beneficial, adverse,
or have little or no impact on competitors' networks. |
58.
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The Commission notes that the responsibility for
the costs incurred to complete network changes has been addressed in the many
interconnection and co-location agreements between Canadian carriers which
have received Commission approval. Provisions in these agreements
consistently place the responsibility for costs on each carrier. This
approach is based on the principle established by the Commission in Decision
97-8 that CLECs are not simply customers of
ILECs but are carriers equal in stature to the ILECs in the local exchange
market with both the benefits and obligations of that status. |
59.
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The Commission notes, however, that in some
instances CLECs are customers of the ILECs for certain essential services.
The Commission is of the view that since CLECs require these services to
provide various telecommunications services to their own customers, changes
to the ILEC's local network may result in the degradation or disruption of a
CLEC's ability to serve its own customers and therefore, greatly disadvantage
CLECs in a competitive environment. |
60.
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The Commission considers that the principles of
continuity and reliability in services, non-discrimination, and parity of
quality of service for CLECs, should govern the manner in which CLECs
interconnect with the ILECs. The Commission is of the view that adhering to
these principles during ILEC-initiated local network changes and
reconfigurations will prevent CLECs from being placed at a financial and
competitive disadvantage. |
61.
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The Commission considers that there should be an
obligation on the part of the ILEC to pay CLEC costs whenever the planned
ILEC-initiated network reconfiguration has a discriminatory negative impact
on CLEC operations or customers. The Commission is of the view that if such a
negative impact exists when implementing an ILEC-initiated network
reconfiguration, it would be more appropriate to address the issue of cost
recovery of a network reconfiguration on a case-by-case basis. |
62.
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In light of the above, the Commission determines that ILECs
and CLECs are to bear their own costs with respect to a planned
ILEC-initiated local network reconfiguration. However, when a CLEC alleges
that a local network reconfiguration has a discriminatory negative impact on
its operations or customers and negotiations between the CLEC and ILEC to
settle the issue have failed, the Commission will address each situation on a
case-by-case basis when brought to its attention by the affected party. |
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Secretary General |
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This document is available in alternative
format upon request, and may also be examined in PDF
format or in HTML at the following Internet site:
http://www.crtc.gc.ca |