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Public Notice CRTC 2000-81
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Ottawa, 9 June 2000
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Revised policy concerning
inside wire regime; Call for comments on proposed amendments to section 10 of the
Broadcasting Distribution Regulations |
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In this notice, the Commission announces
its revised policy concerning the inside wire regime. This policy emerges from the
Commissions consideration of comments received in response to Public Notice CRTC
1999-124. The Commission also calls for comments on proposed regulatory amendments
necessary to give effect to the revised policy. |
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Introduction |
1. |
Section 10 of the Broadcasting Distribution
Regulations (the regulations) issued in December 1997 provides for a transfer of
ownership model with respect to inside wire. This was part of a broader Commission policy
intended to remove barriers to competitive access that could result from cable ownership
of inside wire (see Public Notice CRTC 1997-150, which introduced the new regulations).
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2. |
Section 10 of the regulations currently
stipulates the following:
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(1) Subject to subsections (2) and (3), if a
licensee owns the inside wire, it shall offer it for purchase to a customer when the
customers oral or written notice to terminate basic service is received.
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(2) In the case of a single-unit dwelling, the
licensees offer under subsection (1) shall be at a price of not more than $5.
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(3) If the customer is the owner or operator
of a multiple-unit dwelling, the licensee shall offer to the customer for purchase the
inside wire of each subscriber residing in the multiple-unit dwelling.
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(4) If a customer decides not to purchase the
inside wire, the licensee owning the wire may remove it within seven days after the date
of the termination of service.
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(5) If a licensee decides not to remove the
inside wire under subsection (4), the licensee shall not later interfere with the ability
of any person to use the wire.
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3. |
As announced in PN 1997-150, the Commission
subsequently established a working group of the CRTC Interconnection Steering Committee
(CWCISC) for the purpose of resolving any issues associated with implementation of the new
transfer of ownership regime, including such matters as:
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- processes for customer transfer between competitive distributors,
including such things as development of service intervals, process maps, ordering and
billing, and information exchange standards; and
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- agreement on alternative demarcation points, with particular reference to
multiple-unit dwelling (MUDs), and on a valuation of inside wire and other related
equipment in MUDs.
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4. |
Following some months of discussion by the
working group, and after the expenditure of considerable time and resources by all parties
to develop effective implementation procedures for the new regulations, the Canadian Cable
Television Association (CCTA) announced that its members were not offering up the inside
wire for sale to customers, as required by section 10, in either single- or
multiple-unit dwellings.
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5. |
On 1 February 1999, in response to the
position taken by the incumbent licensees, a number of new entrant licensees filed an
application pursuant to section 12 of the Broadcasting Act (the Act). The
application requested that the Commission reach a determination that the CCTAs
members were in deliberate non-compliance with section 10 of the regulations, and that it
take various forms of action in response to such non-compliance.
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6. |
The Commission notes that it was not for some
time following the filing of this application that the incumbent licensees, through the
CCTA, proposed an alternative means to achieve the objectives of section 10 of the
regulations. Specifically, on 19 May 1999, the CCTA filed a request that the Commission
amend section 10 of the regulations. Among other things, the CCTA contended that, contrary
to the intended purpose of the current rules, section 10 causes unnecessary confusion for
customers cancelling service with a licensee and creates inconvenience for existing
customers. The CCTA also submitted that owners of MUDs have expressed concern and
dissatisfaction with the current regulations.
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7. |
The Commission views the apparent
non-compliance with the current transfer regime by certain, if not all, incumbent cable
licensees to be an extremely serious matter. The Commission emphasizes that licensees are
required to comply with the regulations pertaining to their broadcasting activities at all
times, and it expects them to comply with all applicable policies and regulatory
frameworks governing them.
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8. |
In its approach to the issues surrounding
inside wire, the Commissions intention has always been to enable customers to use
the service provider of their choice. This has been a fundamental element of the
Commission's efforts in both broadcasting and telecommunications and is a linchpin in its
efforts to promote the competitive provision of all communications services. The
Commission remains committed to end-user choice.
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9. |
Notwithstanding the very serious nature of the
Commissions concerns, because the CCTA proposal sought to explore an alternative
method of attaining the objective described above, the Commission decided that it would be
appropriate to initiate a proceeding to consider whether it could better meet its
regulatory goal in all the circumstances. Accordingly, on 29 July 1999, the Commission
issued Public Notice CRTC 1999-124 calling for comments on the CCTA's proposal.
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10. |
Under the CCTA's proposal, one that it
characterizes as a "non-interference model", section 10 of the regulations would
be amended to read as follows:
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(1) A licensee shall not restrict or otherwise
interfere with a customers use of the inside wire.
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(2) A licensee that owns the inside wire of a
single-unit dwelling shall not charge for use of the wire.
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(3) A licensee that owns the inside wire of a
multiple-unit dwelling may charge for the use of that wire in accordance with such terms
as may be agreed to by the parties or determined by the CRTC.
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11. |
In support of its proposed amendments, the
CCTA enunciated four principles that, in its view, should be used in interpreting and
implementing a new transfer regime. The four proposed principles are:
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- where the licensee owns the inside
wire, it shall retain ownership of it, i.e., there is no transfer of ownership of the
inside wire;
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- the licensee that owns the inside wire
will be prohibited by regulation from interfering with a customer's use of it;
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- there will be no charge for use by
another licensee of the inside wire in single-unit dwellings; in circumstances to be
identified by the CRTC through the CISC process, there will be a charge (also to be
determined by the Commission) for use by another licensee of the inside wire in
multiple-unit dwellings; and
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- all licensees will refrain from
damaging another licensee's distribution system, cable drops, customer service enclosures
and panel boxes.
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Positions of the parties
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12. |
Twenty-seven comments were submitted in
response to PN 1999-124. The incumbent cable distributors argued that the Commission
should accept the CCTAs proposal to establish a non-interference regime for inside
wire, and that the elimination of ownership issues would significantly improve the
practicality of the inside wire regime. They also stated that customers would be able to
receive service from the distributor of their choice, and that ownership of the inside
wire would remain with a party that is regulated by the Commission.
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13. |
The incumbent cable distributors further
submitted that it would now be appropriate for the Commission to direct the CISC to
consider the circumstances under which charges should apply for the use of inside wire in
MUDs and the amount of such charges. The incumbents believe that progress by the CWCISC
working group on the matters of facility access, network integrity and customer service
intervals would be significantly enhanced if the Commission were to make an express policy
determination in respect of access to the demarcation point in MUDs. The incumbents
believe that no licensee should be required to grant another licensee access to its panel
box. They further submitted that the CISC should be directed to complete its work on
disconnection procedures and service intervals within four months of the Commissions
decision on the CCTAs application.
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14. |
The new entrants opposed the CCTAs
application. Generally, the new entrants suggested that section 10(3) of the regulations
should be given a plain language interpretation, and that the landlord or owner of a MUD
should be the party who purchases the wire. They submitted that the CCTAs proposal
that there be no ownership transfer represents an attempt by incumbents to retain control
of a facility that has bottleneck characteristics.
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15. |
They further submitted that the CCTAs
proposal should be rejected since it ignores the industry trend towards customer
ownership. They also argued that it leaves the issue of assigning value in MUDs
unresolved; is based on a leased access model previously rejected by the Commission; makes
no business sense; leaves open the possibility of the cable company reclaiming the wire;
and increases risk of cable companies signing exclusive contracts.
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16. |
The new entrants further submitted that the
Commission must ensure their efficient and non-discriminatory access to the incumbent
cable distributors panel boxes or other facilities located where the inside wire
connects to the demarcation point. They argued that the Commission must also extend the
winback restrictions to make these restrictions effective in a MUD environment.
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17. |
The building owners and building managers who
offered comments on this matter submitted that the CCTA had failed to provide
justification for the amendments and that its application should be dismissed. They
proposed that section 10 be amended to require that the inside wire be offered for
purchase by the owner of the property at a reasonable price.
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18. |
Friends of Canadian Broadcasting strongly
opposed the CCTAs request. This organization urged the Commission to take the
opportunity afforded by this review to reaffirm its commitment to end-user choice,
including specifically the option to purchase the inside wire.
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Commission's position with respect to
the CCTAs non-interference model
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19. |
The Commission considers that the CCTA's
proposal has merit. The Commission has reached this determination, notwithstanding the
arguments raised by interveners, and despite the Commissions very serious concerns
about the apparent non-compliance by the CCTAs membership with existing regulations.
In the Commissions view, the proposal represents a clear acknowledgement by the
cable industry of the Commission's underlying concern that continued control by incumbents
of inside wiring constitutes a major barrier to competition and consumer choice.
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20. |
The Commission suggests that considerable time
and resources might have been saved had the CCTA come forward with its non-interference
proposal as part of the process that led to creation of the new regulations in 1997. While
late in coming, the cable industrys willingness to accept a requirement not to
interfere with or restrict a subscriber's use of the inside wire would achieve the
Commission's purpose of ensuring access to inside wiring by competing broadcasting
distributors. It would also eliminate what the cable industry contends, and the Commission
agrees, is a transfer regime that can lead to unnecessary inconvenience and annoyance for
subscribers and providers alike.
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21. |
The Commission sees further benefit in a
non-interference model, in that it would eliminate the need, in single-unit dwellings, to
ascertain whether the homeowner or the licensee owns the inside wire. As noted by the
CCTA, the non-interference model would also be preferable to the transfer regime currently
in place because it would address concerns respecting legal liability for abandoned
wiring.
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22. |
Accordingly, the Commission proposes to amend
section 10 of the regulations by replacing the current text with that set out in the
appendix to this notice. In a later section of this notice, the Commission announces the
procedures to be followed by those wishing to submit written comments on the proposed
amendment.
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23. |
The proposed amendment to the regulations
would permit a charge for the use of inside wire. The Commission notes in this regard that
the cable industry has generally advocated a charge only for the wiring installed within
MUDs, and even then, only for wiring that is new or is less than five years old. The cable
industry proposal specifically excludes any request for compensation for the wiring
installed in single-unit dwellings. The Commission further notes that the CWCISC was
negotiating a rate for the wiring newly or recently installed in MUDs just before the
suspension of the groups activities. Accordingly, the Commission requests that the
CISC cable working group meet to develop an appropriate rate, and that such a rate be in
place within two months of the coming into effect of the regulatory amendment proposed
herein. Alternatively, if consensus is not reached within that period, the Commission
requests that the CISC submit any dispute to the Commission for resolution. The Commission
considers that the value proposed by the CCTA in the proceedings leading to
PN 1997-150 (i.e. $15 per suite) is a reasonable basis for commencing negotiations on
an acceptable lease rate.
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24. |
The Commission notes that, in light of this
proposed amendment and of the other determinations discussed above, further consideration
of the application by various new entrant licensees for relief, filed pursuant to section
12 of the Act, is unnecessary.
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Other matters |
25. |
The Commission notes that a number of other
matters were raised during the course of this proceeding, relating to the broader issue of
customer access and the promotion of effective competition in broadcast distribution.
These are discussed below.
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Access to customer service
enclosures |
26. |
A number of parties claimed that the lack of
access to the customer service enclosures (CSEs) and distribution panels owned by the
incumbent distributors poses a significant barrier to entry and permits incumbent
distributors to frustrate the new entrants' effective servicing of newly acquired
customers.
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27. |
CSEs are secured (locked) metal boxes that are
usually attached to the exterior of a single-unit dwelling and serve as the point of
interconnection between the inside wire and the serving company's external distribution
plant. They serve the same purpose as the larger distribution panels housed in MUDs.
Access to these locked enclosures is a highly contentious issue and is among the matters
addressed in the fourth of the principles enunciated by the CCTA in its proposal.
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28. |
In PN 1997-150 that accompanied the new
regulations, the Commission noted that these enclosures belong to the cable licensees.
Although the Commission has not compelled these licensees to offer new entrants access to
these panels and enclosures, it agrees that such access is sometimes necessary. It is
possible that the CCTA's fourth principle is necessitated by incidents where these
enclosures have been opened without authorization, either as a matter of course or where
the incumbent has failed to appear at a pre-arranged appointment.
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29. |
The Commission understands that, in the case
of some undertakings, licensees permit access to their CSEs without requiring a
co-ordinated visit by a member of their staff. The Commission expects licensees to ensure
that this practice continues where it has been implemented. At the same time, the
Commission reminds all parties that they must respect the integrity of property they
neither own nor control. In light of the importance of respecting the integrity of this
equipment, but also with a view to ensuring expedient transfer of service in a competitive
environment, the Commission considers that further measures are required.
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30. |
Accordingly, in order to facilitate timely
joint visits for transferring service, all licensees are required to accommodate requests
by other distributors for access to CSEs or distribution panels within 24 hours of
receiving such a request and to provide them with a 2-hour appointment window. In reaching
its decision to introduce this policy requirement, the Commission has taken into
consideration the requirements impact on distribution undertakings of differing size
and resources.
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Winback restrictions |
31. |
A second collateral issue raised in this
proceeding relates to the allegation that incumbent providers are able to circumvent the
Commission's winback policy, particularly in the case of MUDs. The new entrants argued
that when they claim a customer in a MUD and notify the incumbent provider to cancel
service, other tenants or occupants of the building are often mass marketed by the
incumbent.
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32. |
In the Commissions view, this tactic
does not involve the direct marketing of the customer who has cancelled service, and thus
falls outside the scope of the winback restrictions. Nevertheless, given the state of
competition in broadcast distribution, the Commission considers that measures are
necessary to prohibit the use of customer information for sales and marketing purposes
following a cancellation. The Commission notes that, in the telecommunications context, it
has required the establishment of carrier services groups (CSGs) in order to prevent the
use of competitive information in a manner that would confer an unfair and ultimately
anti-competitive advantage on incumbents. The Commission recently required cable companies
to establish CSGs for handling information with respect to Internet services and Internet
service providers.
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33. |
Consistent with that approach, each of Rogers
Communications Inc., Shaw Communications Inc., Vidéotron ltée and Cogeco Câble Canada
inc. is required to establish a services group that isolates competitively sensitive
customer/competitor information from the sales and marketing function. The Commission
considers that the following information, at least, should be handled through the services
group when received from a competing licensee or its agent:
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- billing name and address;
- choice of licensee;
- date of request; and
- transfer date.
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34. |
All other incumbent cable licensees are
required to develop and have in place, within two months of the coming into effect of
the regulatory amendment proposed herein, a non-disclosure agreement that the licensee
shall enter into with all competing licensees in respect of the handling of such
information. The Commission requests parties, through the CISC process, to develop a
standardised form for such agreements.
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Call for comments
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35. |
The Commission invites written comments on the
proposed amendment to the regulations appended to this notice. The Commission will accept
comments that it receives on or before 10 July 2000.
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36. |
The Commission will not formally acknowledge
written comments. It will, however, fully consider all comments and they will form part of
the public record of the proceeding, provided that the procedures for filing set out below
have been followed.
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Procedures for filing comments
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37. |
Interested parties can file their comments on
paper or electronically. Submissions longer than five pages should include a summary.
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38. |
The "hard copy" should be
sent to the Secretary General, CRTC, Ottawa, K1A 0N2.
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Parties wishing to file electronic versions
of their comments can do so by eMail or on diskette. The Commission eMail address is
procedure@crtc.gc.ca |
40. |
Electronic submissions should be in the HTML
format. As an alternative, those making submissions may use "Microsoft Word" for
text and "Microsoft Excel" for spreadsheets.
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41. |
Please number each paragraph of the comment.
In addition, please enter the line ***End of Document*** following the last
paragraph. This will help the Commission verify that the document has not been damaged
during transmission.
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The Commission will make comments filed in
electronic form available on its web site at www.crtc.gc.ca in the official language and format in which they are submitted. This will make
it easier for members of the public to consult the documents.
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Examination of public comments and
related documents at the following Commission offices during normal business hours
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Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Hull, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
FAX: (819) 994-0218
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Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia B3J 3K8
Tel: (902) 426-7997 - TDD: 426-6997
FAX: (902) 426-2721
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405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607 - TDD: 283-8316
FAX: (514) 283-3689
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55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
FAX: (416) 954-6343
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Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
FAX: (204) 983-6317
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Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
FAX: (306) 780-3319
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Scotia Place Tower Two
19th Floor, Suite 1909
10060 Jasper Avenue
Edmonton, Alberta T5J 3R8
Tel: (780) 495-3224
FAX: (780) 495-3214
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530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
FAX: (604) 666-8322
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Secretary General
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This notice is available in alternative
format upon request, and may also be viewed at the following Internet site: http://www.crtc.gc.ca |