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Interim Rates for Wholesale Residential and Business High Speed Access Services

Interim Rates for Wholesale Residential and Business High Speed Access Services

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Published by Mark Goldberg

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Published by: Mark Goldberg on May 26, 2011
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11/07/2012

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 20 May 2011
Our Reference: 8661-C12-2011023508611-C12-201016882BY E-MAIL
To Distribution List
Re: Interim rates for wholesale residential and business high speed access services
 Dear Madam/Sir,In December 2010, the incumbent local exchange carriers (ILECs) and the cable companies filedproposed tariffs to implement speed matching and point of interconnection (POI) aggregationservices, as required by the Commission in Telecom Regulatory Policy 2010-632. Some of theseproposed tariffs have subsequently been refiled and/or modified because of the launch of Telecom Notice of Consultation 2011-77 (NoC 2011-77) and the Commission staff letter of 13 April 2011. In that letter, Commission staff indicated that the issue of implementing interimrates for these services would be addressed shortly.Commission staff notes that, as stated in NoC 2011-
77, the Commission’s approach with regard
to these services is based on two principles:
i.
 
As a general rule, ordinary consumers served by small Internet Service Providers( ISPs) should not have to fund the bandwidth used by the heaviest retail Internetservice consumers.
ii.
 
It is in the best interest of consumers that small ISPs, which offer competitivealternatives to the incumbent carriers, should continue to do so.Commission staff recognizes the importance of providing competitors with access to the higherspeed and increased POI aggregation services as soon as possible and notes that any delay
impacts the competitors’ ability to
provide consumers with more choice. However, Commissionstaff also recognizes that the underlying structure of the proposed tariffs, including how usageshould be measured and its costs recovered, are at the very heart of this proceeding. As such, in
Commission staff’s view,
it would not be appropriate to commit to any particular model byproviding interim approval to any of the tariffs as filed.
 
- 2 -As an alternative, Commission staff is proposing a simplified approach for interim rates for bothresidential and business
1
high speed access services as explained below. Such an approach doesnot require any determinations, even on a preliminary basis, regarding the structure of theproposed tariffs, nor does it signal any change from the principles outlined above. Instead, insta
ff’s view it relies on market forces in the retail and business high speed services markets as a
benchmark for interim rates that allow for competitive pricing in the retail and business marketwhile still allowing for recovery of costs.It should be noted that the approach identified below does not reflect a final determination by theCommission but rather, reflects an expedient approach to provide competitors access to thehigher speed and increased POI aggregation services with as minimal a delay as possible. Inparticular the issue of whether there should be a usage component, and if there is a usagecomponent how will it be calculated and imposed, will be the subject of the July hearing. Noinferences of any kind should be drawn from the fact that this interim tariff, given its shorttransitory nature, contains no separate usage component.Parties are invited to provide their views on
Commission staff’s preliminary view
on the methodto establish the interim rate approach for these services. Parties are also invited to provide theirviews on how the Commission should approach any retroactive adjustment to rates back to thedate interim rates were established.
Proposed Interim Rate Approach
2
 
 
Set wholesale access rates based on the company
s lowest
3
retail access rates for thecorresponding speed options, minus $7.50 to recognize activities pertaining to retail thateither do not apply or do not apply to the same extent to wholesale (e.g. back-end Internetconnectivity, billing, help desk, advertising and sales, offset by additional costs which wouldapply only to wholesale). Where this resulting wholesale access rate is higher than the
company’s proposed wholesale access rate, set the wholesale access rate equal to thecompany’s proposed wholesale ac
cess rate.
4
 
 
No usage rate would apply.All parties may file written comments with the Commission, serving copies on all other parties,by
30 May 2011
. Comments from the ILECs and cable carriers should also identify, withsupporting rationale, the earliest date by which they could implement the interim rates under theproposal.
1
Note that the NoC 2011-77 proceeding is limited to residential wholesale services. The business wholesaleservices are addressed separately in the Speed Matching proceeding (file 8611-C12-201016882).
2
The proposed interim rate approach would apply to both residential and business services, as applicable. It relates
to the ILEC’s new matching speeds and the cable carriers’ POI aggregation.
 
3
Where a company offers lower retail rates through contracts or bundles, these would be the applicable rates.
4
This condition does not apply to the services provided by Bell Aliant Regional Communications, LimitedPartnership (Bell Aliant) in Ontario and Quebec and Bell Canada (collectively, the Bell companies). Unlike theother tariff filings, the Bell companies have not filed a proposed wholesale access rate that includes usage costs.
 
- 3 -All parties may file reply comments with the Commission, serving copies on all other parties, by
1 June 2011
.The above material must be received, not merely sent, by the dates specified. Copies of thedocuments should also be sent to Tom Vilmansen (tom.vilmansen@crtc.gc.ca), Richard Pagé(richard.page@crtc.gc.ca), and Mohammed Omar(mohammed.omar@crtc.gc.ca
 
).Yours sincerely,
Original signed by
Lynne FancyDirector GeneralCompetition, Costing and TariffsTelecommunicationscc: Yvan Davidson, yvan.davidson@crtc.gc.ca;  Richard Pagé, richard.page@crtc.gc.ca;  Tom Vilmansen, tom.vilmansen@crtc.gc.ca;  Mohammed Omar, mohammed.omar@crtc.gc.ca 

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