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Telecom Order
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Ottawa, 13 October 1999
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Telecom Order CRTC 99-991
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File No.: 8640-S1-04/98
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1.On 14 December 1998, Stentor Resource Centre Inc. (Stentor)
requested that the Commission refrain from exercising some of its
powers, pursuant to section 34 of the Telecommunications Act (the
Act), in relation to the provision of current and future mobile
wireless services by BC TEL, Bell Canada (Bell), Island Telecom
Inc., Maritime Tel & Tel Limited, MTS Communications Inc., NBTel
Inc. (NBTel), NewTel Communications Inc. and Québec-Téléphone (the
companies).
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2.Stentor requested that the Commission refrain from the regulation
of the provision of:
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(1) mobile wireless services connected to the public switched
network, otherwise known as public switched mobile voice services,
with respect to sections 24 (in part), 25, 29, 31 and subsections
27(1), 27(5) and 27(6) of the Act; and
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(2) other mobile wireless services, with respect to sections 24,
25, 27, 29 and 31 of the Act.
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3.Stentor stated that the companies are not requesting forbearance
for primary exchange services where the local exchange carrier utilizes
mobile radio technology, in whole or in part, to provision local
exchange services. As well, the application does not include certain
older mobile radiotelephone services which use obsolete technology,
are costly to provision, and are thus not viable competitive alternatives
to cellular or personal communications service (PCS). Also, the
application excludes wireless wide area networking (WAN) service
(i.e., wireless data networking services which are connected to
customers' equipment using an Ethernet, Token Ring or asynchronous
transfer mode (ATM) interface).
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4.Stentor copied the application to interested parties to Review
of Joint Marketing Restrictions, Telecom Public Notice CRTC 97-14,
25 April 1997 and Review of Bundling and Joint Marketing Restrictions,
Telecom Public Notice CRTC
97-21, 6 June 1997. Comments were received from TELUS Communications
Inc. (TCI).
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Background
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5.As defined in Regulation of Mobile Wireless Telecommunications
Services, Telecom Decision CRTC
96-14, 23 December 1996 (Decision 96-14), public switched mobile
voice services include cellular services, personal communications
services (PCS), enhanced specialized mobile radio (ESMR) services,
and satellite-based mobile services. The category "other mobile
wireless services" includes paging services, other mobile data services,
and two-way non-switched radio services such as repeater and trunk
radio services.
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6.In Regulation of Wireless Services, Telecom Decision
CRTC 94-15, 12 August
1994 (Decision 94-15), the Commission found that the cellular and
public cordless telephone service markets were sufficiently competitive
to warrant forbearance pursuant to section 34(2) of the Act. The
Commission forbore in part from regulating these services where
offered through a structurally separate affiliate of a regulated
telephone company providing primary exchange service.
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7.In Decision 96-14, the Commission extended this forbearance
regime to include all mobile voice wireless telecommunications services
provided by Canadian carriers, other than regulated telephone companies
providing primary exchange service (in-house dominant primary exchange
service providers), in respect of sections 24 (in part), 25, 29
and 31, and subsections 27(1), (5) and (6) of the Act.
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8.In NBTel Inc. - Forbearance from Regulating Cellular and
Personal Communications Services, Telecom Decision CRTC
98-18, 2 October 1998 (Decision 98-18), the Commission forbore
in part from regulating the provision of cellular services and PCS
by NBTel. In the Decision, the Commission stated that competitive
safeguards such as the split rate base and price cap regime are
in place to effectively limit anti-competitive cross-subsidies to
wireless services provided by a telephone company.
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9.In Decision 96-14, the Commission also forbore from regulation
of other mobile wireless services in respect of sections 24, 25,
27, 29 and 31 of the Act, when such services were not provided by
a regulated telephone company providing primary exchange service.
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10.In Application by Bell Canada to Review and Vary Telecom
Decision CRTC
96-14, Telecom Decision CRTC
98-15, 2 September 1998 (Decision 98-15), the Commission extended
complete forbearance, as granted with respect to other mobile wireless
services, to paging services provided by Bell on an in-house basis.
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Positions of Parties
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11.Stentor submitted that, consistent with the Commission's approach
in Decision 94-15 and its conclusions in Decision 98-18, additional
measures such as the split rate base and price cap regime have been
imposed on its member companies to limit the likelihood and incentive
of cross-subsidization from Utility to Competitive segments of the
companies, thereby sufficiently reducing their incentives and ability
to pursue an anticompetitive cross-subsidy strategy.
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12.Further, Stentor noted that the Commission has already forborne
from regulation of certain mobile wireless services provided in-house
by the companies, such as Bell's paging services in Decision 98-15,
and, in part, from regulation of cellular services and PCS provided
by NBTel in Decision 98-18.
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13.TCI submitted that, not only have mobile wireless services
already been found by the Commission to be sufficiently competitive
to warrant forbearance, but that additional separate competitive
safeguards for certain mobile wireless and wireline services, beyond
those safeguards pertaining to other competitive services, have
been found by the Commission to be unnecessary. TCI also submitted
that with price cap regulation of Utility segment services, and
the split rate base regime, telephone companies have neither the
incentive nor the ability to anti-competitively cross-subsidize
competitive segment operations from Utility segment revenues.
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Conclusion
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14.The Commission is of the view that granting the forbearance
requested by Stentor would be consistent with the Commission's conditions
for forbearance established in Decisions 94-15 and 96-14, with its
finding in Decision 98-15, where the Commission forbore fully from
regulating paging services provided by Bell on an in-house basis,
and in Decision 98-18, where the Commission forbore in part from
regulating the provision, on an in-house basis, of cellular services
and PCS by NBTel.
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15.Further, the Commission continues to be of the view that the
costing safeguards imposed by the Commission since the release of
Decisions 94-15 and 96-14, such as the split rate base and price
cap regime, sufficiently limit the opportunities for anti-competitive
cross subsidies to wireless services.
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16.The Commission notes that the degree of forbearance requested
by Stentor is similar to the degree of forbearance granted mobile
wireless services in Decision 96-14, and cellular services and PCS
in Decision 98-18. Further, it is consistent with the degree of
forbearance granted to TCI in Telecom Order CRTC 98-1343, 23 December
1998. In that Order, the Commission granted forbearance from regulation
of the provision of mobile wireless services by the newly-amalgamated
entity comprising the former TELUS Communications Inc., TELUS Mobility
Inc., and others, which now supplies mobile wireless services on
an in-house basis.
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17.In light of the above, in respect of public switched mobile
voice services, the Commission finds:
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(a) pursuant to subsection 34(1) of the Act, that to refrain from
exercising powers and performing duties under sections 24 (in part),
25, 29 and 31 and subsections 27(1), 27(3) (in part), 27(5) and
27(6) is consistent with the Canadian telecommunications policy
objectives;
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(b) pursuant to subsection 34(2) of the Act, that the provision
of these services is subject to sufficient competition to protect
the interests of users;
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(c) pursuant to subsection 34(3) of the Act, to refrain from exercising
the powers and performing the duties to the extent set out in this
Order would not likely impair unduly the continuance of a competitive
market for these services; and
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(d) that it is appropriate to retain its powers and duties under
section 24 (in part) and subsections 27(2), 27(3) (in part) and
27(4) of the Act.
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18.However, the Commission notes that the determinations in this
Order do not apply to the services described in paragraph 3, above.
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19.The Commission will retain in part its powers under section
24 of the Act to ensure that the existing conditions regarding disclosure
of confidential information to third parties continue to apply,
and to impose conditions as may be needed in the future. Accordingly,
on a going forward basis, the existing conditions concerning customer
confidentiality are to be included, where appropriate, in all contracts
or other arrangements with customers for the provision of the services
forborne in this Order.
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20.The Commission is of the view that consistent with Decision
96-14 and Decision 98-18, it is important to retain subsections
27(2), 27(3) and 27(4) in order to, for example, ensure that the
companies do not unjustly discriminate against other service providers
or customers, or confer an undue or unreasonable preference with
respect to access to their networks.
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21.The Commission considers it necessary to retain subsection
27(3) to the extent that it does not refer to compliance with any
of the powers and duties forborne from in this Order.
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22.In respect of other wireless services, the Commission finds:
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(a) pursuant to subsection 34(1) of the Act, that to refrain from
exercising powers and performing duties under sections 24, 25, 27,
29 and 31 is consistent with the Canadian telecommunications policy
objectives;
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(b) pursuant to subsection 34(2) of the Act, that the provision
of these services is subject to sufficient competition to protect
the interests of users; and
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(c) pursuant to subsection 34(3) of the Act, to refrain from exercising
the powers and performing the duties to the extent set out in this
Order would not likely impair unduly the continuance of a competitive
market for these services.
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23.In light of the foregoing, the Commission directs that pursuant
to subsection 34(4) of the Act, effective the date of this Order,
sections 24 (in part), 25, 29 and 31 as well as subsections 27(1),
27(3) (in part), 27(5) and 27(6) do not apply to the companies'
public switched mobile voice services, to the extent that they are
inconsistent with the Commission's determinations herein.
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24.In addition, effective the date of this Order, sections 24,
25, 27, 29 and 31 do not apply to the companies in respect of the
provision of other wireless services. The companies are directed
to issue tariff pages, within 15 days of this Order, withdrawing
the tariffs for those services.
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Secretary General
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This document is available in alternative format upon request
and may also be viewed at the following Internet site: http://www.crtc.gc.ca
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