Piac 2010 43 Evidence Final

Telecom Notice of Consultation CRTC
2010-43
Obligation to serve and other matters
(Formerly Proceeding to review access to basic
telecommunication services and other matters)
Comments of Canada Without Poverty, Option

consommateurs and Rural Dignity of Canada
("The Consumer Groups")
April 26, 2010
John Lawford
Counsel
Public Interest Advocacy Centre
One Nicholas Street, Suite 1204
Ottawa, Ontario K1N 7B7
(613) 562-4002 x.25

jlawford@piac.ca
Telecom Public Notice CRTC 2010-43
(Formerly Proceeding to review access to basic telecommunication services and other matters)
April 26, 2010
Table of Contents
Executive Summary ............................................................................................................ 3
Introduction ......................................................................................................................... 5
Part 1 – Canada’s Telecommunications Accessibility Plan ................................................ 6
Access to Voice Service and Access to Broadband Internet .......................................... 6
Deferral Accounts Follow-Up and “Double-Dipping” ................................................... 7
First, Do No Harm (Preserving Ubiquitous Telephone Service) .................................... 8
Broadband Internet Access – The Time Has Come ........................................................ 9
The Statutory and Regulatory Context ......................................................................... 10
Part 2 – Responses to the Commission’s Questions ......................................................... 12
Obligation to serve ........................................................................................................ 12
Extension of Obligation to Serve to Broadband Carriers ......................................... 14
Should Wireless Satisfy the Obligation to Serve? .................................................... 14
Service Improvement Plans ...................................................................................... 27
Local service subsidy .................................................................................................... 32
Basic service objective .................................................................................................. 35
Preserve the Basic Service Objective Basics ............................................................ 35
Extend the Basic Service Objective to Include Broadband ...................................... 38
Local competition and WNP in the territories of the small ILECs ............................... 48
Mobile wireless data services ....................................................................................... 50
Appendix A – Evidence of John Todd, Elenchus Research Associates Inc. .................... 50
Appendix B – Evidence of Heather E. Hudson ................................................................ 50
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April 26, 2010
Executive Summary
Introduction
Canada lacks a path to universal broadband access. This proceeding provides

an opportunity for the Commission to follow the U.S. National Broadband plan.
Such access to broadband should not reward recipients of Deferral Accounts
funds twice, should preserve access to the legacy telephone network for the
forseeable future and responsibly promote universal access to broadband.
Obligation to Serve
All classes of local exchange service providers when operating in a non-HCSA

should have an obligation to serve in their serving territory. Thus, the time has
come to extend the obligation to serve to CLECs to achieve regulatory symmetry,
as per the Policy Direction.
Market forces are sometimes inadequate to render reliable and affordable high
quality telecommunications services to Canadians in all areas of Canada, even
where there is competition, thus the obligation to serve must be preserved.
The obligation to serve exists independently of statute and contract and arises
from a broader common law duty to serve, which cannot be removed. The
existence of competition does not change or remove the common law obligation
to serve.
If the Commission expands the basic service obligation to include broadband

access, the obligation to serve should be imposed on the “first mover” ISP under
the Consumer Groups’ broadband subsidy plan.
Wireless service cannot satisfy the obligation to serve unless there is no

functional difference between the wireless and wired broadband, the price is
within 15% more (or is less) and an acceptable quality of service is achieved
under all conditions of normal use.
Local Service Subsidy
The Consumer Groups have prepared a model contribution regime for the
support of broadband expansion in “High Cost High Speed Internet Service
Areas” (HCHSISAs) in Canada should the Commission consider adding
broadband connectivity to the basic service objective. The present HCSA
subsidy would remain largely intact and similar, with only minor adjustment.
Basic Service Objective
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April 26, 2010
The present basic service objective (BSO) has been a success, ensuring basic
service that is accessible, affordable and functional. The Commission must
maintain all elements of the BSO with regard to voice service or providers will
either seek to eliminate them or charge customers a separate fee for them.
The basic service objective needs to be modernized to include broadband

access. Broadband is available to and used by a majority of consumers but the
lack of availability to a minority of consumers can result in social exclusion and
public intervention is warranted.
To match universal broadband plans being rolled out in other countries and in
particular the U.S., the Commission should mandate an actual speed target of 4
Mbps download/1 Mbps achievable by 2020 to all Canadians with an interim
requirement of 2 Mbps/800 Kbps by 2015.
For wireless broadband to satisfy the BSO, there must be no functional

difference between the wireless an wired broadband, the price within 15% more
(or is less) and an acceptable quality of service achieved under all conditions of
normal use.
Local Competition and WNP in the Territories of Small ILECs
Small ILECs should maintain their obligation to serve throughout their incumbent
serving territory and any territory that they enter as a competitor, in line with our
proposal to make all LECs have an obligation to serve in areas where they offer
service.
Local number portability (LNP) and wireless number portability (WNP) are in
great demand by consumers, as they increase competition in the local market by
stimulating carriers to offer lower prices and better services and increasing
consumers’ ability to exercise real choice in a competitive market.
The requirements that small ILECs implement LNP should be maintained.

Carriers refusing to port should demonstrate that there are truly disproportionate
costs or technical difficulties to connect customers to port them into their carrier’s
system.
Mobile Wireless Data Services
The Consumer Groups will file their comments on mobile data services
forbearance under the separate written process.
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April 26, 2010
Introduction
1. Canada Without Poverty, Option consommateurs and Rural Dignity of
Canada ("The Consumer Groups") by their counsel the Public Interest
Advocacy Centre (“PIAC”) are pleased to provide the Commission with
comments on the issues raised by Telecom Public Notice CRTC 2010-43,
Obligation to serve and other matters (Formerly Proceeding to review access
to basic telecommunication services and other matters), 25 October 2010
(“PN 2010-43”) as modified in TNC 2010-43-1 and TNC 2010-43-2.
2. The Commission has called for comments regarding twenty-two (now twenty-
one)1 questions grouped into the broad categories of Obligation to serve;
Local service subsidy; Basic service objective; Local competition and WNP in
the territories of the small ILECs; and, in a separate written proceeding,
Mobile wireless data services forbearance. In regards to this latter
proceeding, the Consumer Groups understand that parties are able to
address issues in this proceeding that may revolve around the regulation or
not of wireless data services without concern that such submissions will be
ruled out of scope and we proceed with our comments accordingly.
3. Part 1 of our comments discusses the Consumer Groups’ overall “plan” for
access to telecommunications (including access to broadband) in the public
interest. Part 2 of our comments addresses the Commission’s questions,
starting with the obligation to serve, the local service subsidy, including a new
model of that subsidy regime that includes a broadband subsidy and
preservation of the local service subsidy for basic, the basic service objective,
and small ILEC and WNP issues. PIAC will file comments on the wireless
data forbearance questions later this week.
1
As modified by TNC 2010-43-2.
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April 26, 2010
Part 1 – Canada’s Telecommunications Accessibility

Plan
Access to Voice Service and Access to Broadband Internet
4. Canada lacks a clear path to broadband access for all Canadians.2 The
Consumer Groups’ propose that the Commission use this proceeding to
ensure all Canadians have access not only to basic service (formerly a
wireline telephone) but to broadband Internet access and improved access to
wireless telephone and wireless Internet service.
5. In this effort, the recently released U.S. National Broadband Plan (“USNBBP”)
is a guide and an inspiration.3 In the absence of a Canadian plan, it makes
sense for the Commission to have serious regard to the USNBBP as many of
the market characteristics of wireline voice, wireless voice and data, and
broadband (via cable, DSL, fibre, satellite or wireless technologies) in both
countries are very similar. In short, it makes no sense for the Commission to
“re-invent the wheel”.
6. The Consumer Groups discuss below their vision for the results of this
proceeding before we turn our attention to the specific questions posed by the
Commission in each of the related areas of the obligation to serve, the basic
service objective, reform of the local service subsidy, small ILEC competition
and wireless number portability and forbearance from mobile data services
regulation.
2
Some may say, not for lack of trying. The National Broadband Task Force reported in June 2001
and made recommendations to achieve basic broadband access by 2004; likewise, the Telecom Policy
Review Panel in 2006, in Recommendation 8-1, called for a broadband plan:
As a key part of its national ICT strategy, the federal government should
(a) ensure that Canada remains a global leader in the deployment of broadband networks,
and
(b) immediately commence a program to ensure that affordable and reliable broadband
services are available in all regions of Canada, including urban, rural and remote areas,
by 2010 at the latest.
3
See FCC, “Connecting America: The National Broadband Plan” (March 16, 2010). Online:
http://download.broadband.gov/plan/national-broadband-plan.pdf Please also see the summary of the
plan’s key provisions in the Evidence of Dr. Heather Hudson, Appendix B, at p. 12-13.
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April 26, 2010
7. In addition, the Consumer Groups also discuss preliminarily the complication
of the Commission proceeding regarding broadband Internet roll-out for
certain ILECs as a result of the Deferral Accounts Decision.
Deferral Accounts Follow-Up and “Double-Dipping”
8. One difference between the Canadian and American situations4 is the

Deferral Accounts Decision.5 This decision now confirms the Commission’s
clear jurisdiction to make orders transferring funds raised by
telecommunications service providers of any telecommunications service to
any other service (for example, from wireline to broadband) in the context of
ratemaking, writ large, in order to achieve the public interest policy goals
embodied in s. 7 of the Telecommunications Act.6
9. Interestingly, however, the Deferral Accounts Decision, and the build-out of

broadband to be ordered by the CRTC under that decision,7 parallels the one-
time broadband funding supplied by the American Recovery and
Reinvestment Act of 2009 (ARRA)8 and raises some similar problems.
10. As discussed below in the Consumer Groups’ discussion of their proposed

revised local service subsidy and Contribution Fund, one cardinal tenet of the
CRTC’s decision in this proceeding should be that funds approved through
the Deferral Accounts Follow-Up proceeding should be deducted from any
subsidy that the same parties might otherwise receive under the proposed
Contribution Fund in the future. In short, the Commission should not permit
these ILEC ISPs to “double-dip” into funds made available for broadband
expansion under this proceeding and the Deferral Accounts Follow-up
4
Note the uncertainty involving the jurisdiction of the FCC to regulate cable-based ISPs since the
D.C. Court of Appeals decision invalidating its Title I ancillary jurisdiction in Comcast Corp. v. FCC,
April 6, 2010. Online: http://pacer.cadc.uscourts.gov/common/opinions/201004/08-1291-1238302.pdf
5
See Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40. Online:
http://csc.lexum.umontreal.ca/en/2009/2009scc40/2009scc40.html
6
Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40. See esp. para. 72: “And the
policy objectives in s. 7, which the CRTC is always obliged to consider, demonstrate that the CRTC need
not limit itself to considering solely the service at issue in determining whether rates are just and
reasonable. The statute contemplates a comprehensive national telecommunications framework. It does
not require the CRTC to atomize individual services. It is for the CRTC to determine a tolerable level of
cross-subsidization.”
7
See Follow-up to Telecom Decision CRTC 2008-1 - ILECS are to file detailed plans rolling out
broadband service to the approved communities by 31 December 2013 (including construction start date
and service introduction date), revised cost studies, and estimated drawdowns for approved broadband
proposals, CRTC File No. 8638-C12-200817505. Ongoing. Online:
http://www.crtc.gc.ca/PartVII/eng/2008/8638/c12_200817505.htm (hereafter “Deferral Accounts Follow-
up Decision”).
8
American Recovery and Reinvestment Act of 2009, Pub L. No. 111-5, 123 Stat. 115 (2009).
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April 26, 2010
proceeding.9 To do otherwise would be to make residential telephone
subscribers of the ILECs pay twice, an additional burden on this group that
cannot be justified by the end of broadband expansion.
First, Do No Harm (Preserving Ubiquitous Telephone Service)
11. The Commission’s first goal in this proceeding should be to preserve

Canada’s commitment to achieving universal and affordable voice (telephone)
service. Therefore, whatever other adjustments are made for example to the
basic service objective, obligation to serve or the local service subsidy, the
Commission should ensure that such service is accounted for and protected.
12. Canadians rely heavily on the functionality and reliability of the telephone
network for crucial aspects of their daily life. As this proceeding progresses,
suggestions that we are entering a new era should be tempered with an
appreciation of the telephone network in Canada and a commitment to
preserving the universal access goals for this baseline service. In particular,
residential voice service subscribers who do not want nor need broadband
service should not, by the present process, be forced into taking such
service.10
13. The Consumer Groups’ answers to the issues raised by the Commission in
this proceeding are designed to continue this universal voice (telephone)
service, but in addition, responsibly to promote a new telecommunications
objective, namely broadband Internet access.
9
The USNBBP specifically deducts amounts paid under other broadband grant programs, including
the ARRA, from subsidies to be paid under the new broadband “Connect America Fund”. See USNBBP,
at ch. 8, p. 145: “Revenues should include all revenues earned from broadband-capable network in-
frastructure, including voice, data and video revenues, and take into account the impact of other regulatory
reforms that may impact revenue flows, such as ICC, and funding from other sources, such as Recovery
Act grants.” and at footnote 73: “See, e.g., Florida Public Service Commission Comments in re NBP PN
#19, filed Dec. 15, 2009, at 5 (carriers should not be able to double dip from different federal agencies for
the same project); US Cellular Comments in re NBP PN #19, filed Dec. 7, 2009, at 15; Centurylink
Comments in re NBP PN #19, filed Dec. 7, 2009, at 27.”
10
The Consumer Groups here cite the submission of the National Association of State Utility
Advocates (NASUCA) before the FCC in matters GN Docket Nos. 09-51, 09-47 and 09-137 (National
Broadband Plan proceeding; Broadband Data Improvement Act proceedings), dated January 27, 2010 at
page 9 (online: http://www.nasuca.org/archive/DA10-61%20Reply%20Comments1-27-10%20FINAL.pdf
):
In the end, AT&T is seeking to abandon the customers who do not have, and may not want or
need, broadband. This is what the “[c]onsensus … building in Washington that the subsidies for
telecommunications should be invested in broadband infrastructure, not telephony…” misses: that
is, the consumers who continue to rely on traditional telephone service, and should not be forced
into broadband with its additional costs, both for initial access and on-going service. [original
footnotes omitted]
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April 26, 2010
Broadband Internet Access – The Time Has Come
14. The time has come for Canada to ensure all of its citizens have access to
broadband Internet telecommunications. Many comparable countries have
begun such efforts, notably Australia,11 the United Kingdom,12 Finland,13
France14 and the United States under the National Broadband Plan.
15. As noted above, studies and reports have urged successive Canadian federal
governments to undertake a comprehensive Internet broadband plan, yet
none has seen fit to promote the project politically, despite the oft-stated need
for such a plan.
16. In this context, the Commission should be both cautious about applying U.S.
solutions in their entirety yet should be open to the concepts and arguments
expressed in the USNBBP and the Federal Communications Commission
(FCC) proceedings leading up to it,15 as well as implementation processes.16
11
The Australian Broadband Guarantee is an initiative of the government to help residential and
small businesses access a metro-comparable broadband service regardless of where they are located. The
Government has allocated $250.8 million over four years to 2012 to fund the Broadband Guarantee. On
April 7, 2009, the Australian Government announced it would establish a company to build and operate a
new high speed National Broadband Network to complement the Broadband Guarantee. Online:
http://www.dbcde.gov.au/broadband/australian_broadband_guarantee and
http://www.dbcde.gov.au/broadband/national_broadband_network.
12
The Digital Britain Bill received Royal Assent in 2010 and became the Digital Economy Act 2010.
This Act created the Digital Britain project, which is overseeing many projects to update Britain’s digital
laws and infrastructure. The Next Generation Fund is a fund overseen by the project and the Department
for Business Innovation and Skills worth 1 billion pounds of investment. This will be used to help roll out
broadband to 90% of the country. Online: http://interactive.bis.gov.uk/digitalbritain/2010/01/next-
generation-fund-launched/
13
In October 2009, Finland’s Minister of Communications announced that Finns everywhere would
be getting 1Mb/s service by July 1, 2010. Finland is also mandating that "the average speed of downstream
traffic must be at least 75 per cent of the required speed in a measuring period of 24 hours. In a four-hour
measuring period the speed must be at least 59 per cent of the required speed." Finland’s parliament began
the debate on a national broadband policy in 2004, when it adopted a resolution on the national broadband
policy. Please see online: http://arstechnica.com/tech-policy/news/2009/11/finland-spain-bring-1mbps-
broadband-to-everyone.ars and http://www.laajakaistainfo.fi/english/index.php
14
The President of France, Nicolas Sarkozy, says the government intends to invest EUR4.50 billion
(USD6.59 billion) to underpin the deployment of ultra-high speed broadband networks in the country, as
well as the development of innovative services, as part of a EUR35 billion bond issue known as the ‘grand
emprunt’. The program was funded through a bond issue. France also named a public servant charged
specifically with modernizing their infrastructure called “le Premier Ministre du secrétariat d’état chargé de
la prospective, de l’évaluation des politiques publiques et du développement de l’économie numérique.”
Please see online: http://www.epractice.eu/files/media/media2298.pdf
15
Please see the heading and chart “Broadband Contributions to National Development” detailed in
Evidence of Dr. Heather Hudson, Appendix B, p. 2 and p. 13 which
16
Please see Federal Communications Commission. Notice of Inquiry and Proposed Rulemaking:
“In the Matter of Connect America Fund; A National Broadband Plan for Our Future; High-Cost Universal
Service Support.” Washington, DC, April 21, 2010.
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April 26, 2010
17. The Consumer Groups therefore have retained the services of Mr. John
Todd, Elenchus Consulting, to prepare a model contribution regime for the
support of broadband expansion in “High Cost High Speed Internet Service
Areas” (HCHSISAs) should the Commission consider adding broadband
connectivity to the basic service objective, as recommended by the Consumer
Groups.
18. Mr. Todd’s evidence is found at Appendix A, and the Consumer Groups make
extensive reference to this evidence in relation to the Commission’s questions
about reform of the local service subsidy.
The Statutory and Regulatory Context
19. The Commission can achieve both of the goals of voice service and
broadband Internet service and satisfy the relevant objectives set out in s. 7
of the Telecommunications Act:
(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; [. . .]
(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; [. . .]
(h) to respond to the economic and social requirements of users
of telecommunications services. [. . . ].
20. As submitted by the Consumer Groups17 in the past proceeding most parallel
to this, namely, Telecom Public Notice CRTC 97-42: Telephone Service to
High Cost Serving Areas,18 Canadians living in rural and remote regions of
Canada19 deserve no less access to these telecommunications services than
other Canadians:
17
At that time, the Consumer Groups (“ACA et al.” were composed of the Alberta Council on Aging
(ACA), the Consumers’ Association of Canada (CAC), the Fédération Nationale des Associations de
Consommateurs du Québec (FNACQ), the National Anti-Poverty Organization (NAPO) and Rural Dignity
of Canada (RDC)).
18
Telecom Public Notice CRTC 97-42: Telephone Service to High Cost Serving Areas. Online:
http://www.crtc.gc.ca/eng/archive/1997/PT97-42.HTM This Public Notice led to the Commission’s design
of the initial contribution mechanism for high-cost serving areas in Telecom Decision CRTC 99-16,
Telephone Service to High-Cost Serving Areas (19 October 1999). Online:
http://www.crtc.gc.ca/eng/archive/1999/DT99-16.HTM
19
For the purposes of this proceeding, the Consumer Groups propose to rely upon the definition of
“rural” and “remote” given in Telecom Regulatory Policy 2009-304, at footnote 2: “Urban areas are
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April 26, 2010
There is a clear direction provided to the Commission by way of

these [s. 7] objectives: rural and remote regions of Canada are
not be ignored. The delivery of reliable and affordable
telecommunications service to these areas is no less important
than the delivery of such service to urban areas. Nor is it to be
compromised by the desire to rely more on market forces. Indeed,
market forces are to be supplemented by efficient and effective
regulation wherever they are incapable, on their own, of achieving
the other stated objectives. [Emphasis in original].
21. Canada lacks a comprehensive strategy for ensuring such access in rural and
remote regions, however. Dr. Heather Hudson, whose evidence is attached
at Appendix B to these comments, summarizes the U.S. “E-rate” program that
offers broadband connectivity to schools and libraries in these regions in the
U.S. at subsidized rates.20 Dr. Hudson notes that such connections can
create focused demand and “providers may have incentives to expand into
previously unserved or underserved communities” as has apparently
happened in far-north communities in Alaska.21
22. The Commission therefore has an opportunity to develop a framework to

deliver this connectivity to Canadians in rural and remote areas of Canada.
23. The Consumer Groups submit (see further below) that despite the edicts of
the Policy Direction, that these objectives are not changed and that rather the
Policy Direction only affects to some extent the Commission’s possible
choices in how to achieve the goals of ensuring affordable and reliable
telecommunications services are accessible to all Canadians.
24. The Consumer Groups now comment upon the specific questions posed by
the Commission in Telecom Notice of Consultation 2010-43.
generally considered to include rate bands A and B; rural areas rate bands C to F; and remote areas, rate
band G. For Northwestel Inc. only, remote areas are those locations where there are fewer than two full-
time technicians normally based there, and the community is accessible only by air, or a technician
travelling to the community by road would normally take three hours or more for the round trip from where
the technician is normally based.”
20
See Evidence of Dr. Heather Hudson, Appendix B, at pp. 10-11.
21
Ibid.
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April 26, 2010
Part 2 – Responses to the Commission’s Questions

Obligation to serve
Q1. In which market(s) (for example, forborne, non-forborne, high-cost) and to what
extent, if any, is an obligation to serve necessary? Specify what type(s) of service(s), if
any, should be subject to an obligation to serve. Explain whether the provision of service
through alternate technologies, for example wireless service, should satisfy an obligation
to serve regarding local voice service.
25. The Consumer Groups submit that the Commission must affirm and maintain
an obligation to serve in all markets, both forborne and non-forborne as well
as in high cost serving areas.
26. The Policy Direction requires the Commission “to rely on market forces to the
maximum extent feasible as the means to achieve Parliament’s
telecommunications policy objectives.”22 Section 7(b) of the
Telecommunications Act states that one of the objectives of
telecommunications policy in Canada is “to render reliable and affordable
telecommunications service of high quality accessible to Canadians in both
urban and rural areas in all regions of Canada.”
27. Once again, the Consumer Groups point out that the Policy Direction edicts
are not an end in themselves but a direction as to the preferable means to the
end of the policy objectives.
28. The Consumer Groups submit that market forces cannot always be relied
upon to render reliable and affordable high quality telecommunications
services to Canadians in urban and rural areas in all regions of Canada, thus
the obligation to serve must be maintained in a competitive environment. For
some areas, competitive forces are inadequate to provide basic service.
29. The Policy Direction requires regulatory measures to be efficient and

proportionate to their purpose and to “interfere with the operation of
competitive market forces to the minimum extent necessary to meet the policy
objectives.”23 No doubt, some of the parties in this proceeding may argue
that this requirement of the Policy Direction should prompt the removal of the
obligation to serve from forborne areas, limiting the obligation to serve to only
exchanges that are not forborne. The Consumer Groups submit that the
obligation to serve must be preserved in forborne exchanges as there are
scenarios where market forces may fail in forborne exchanges.
22
Policy Direction, section 1(a)(i).
23
Policy Direction, section 1(a)(ii).
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April 26, 2010
30. One such scenario is in low-income areas within forborne exchanges. These
low-income areas are currently provided with service, but without an
obligation to serve, they would not wield sufficient financial incentive for a
LEC to continue to provide service at an affordable price. Thus, service in
these pockets within forborne areas may be at risk,24 as they may become
underserved or lose access to basic service despite the existence of
competitive forces.
31. Likewise, there are certain groups of customers who may be unattractive to
all local service providers and in particular ILECs. These customers are
those presently on “stand-alone” service,25 as well as groups that may make
up a larger proportion of stand-alone users, namely persons with disabilities
and the elderly. Without an obligation to serve, it is possible that such
customers will be shunned by all carriers or dropped when the opportunity
presents itself.
32. Another scenario where market forces may fail is in uncontested areas within
forborne exchanges. For example, market forces are less effective in rural
areas, which are still primarily served by ILECs.26 However, because of the
aggressive local forbearance rules under the Decision 2006-15 criteria, many
of these rural exchanges now are forborne. Preserving the obligation to serve
in uncontested and rural areas ensures that these customers will continue to
have access to affordable and reliable telecommunications services.
24
The Commission acknowledged the possibility of “pockets of uncontested residential and business
customers in forborne markets” in creating stand-alone primary exchange service (“stand-alone PES”) in
Telecom Decision 2006-15, as amended, at para. 355.
25
The Commission specifically carved out the stand-alone service exception to forbearance in Telecom
Decision 2006-15 because of concerns with both the status of vulnerable customers (who have affordability
concerns even in a competitive market) and the possibility of uncontested “pockets” of customers (at para.
355):
The Commission recognizes that for some customers, particularly residential customers, the
operation of market forces after forbearance may result in either a loss of services on which they
are reliant or potential increases in prices for services which are essential to their daily lives. The
Commission also considers that there may be pockets of uncontested residential and business
consumers in forborne markets. The Commission is also cognizant of the arguments raised by
ARCH and the Consumer Groups regarding the position of vulnerable customers, including
persons with disabilities, and their unique needs with respect to telecommunications services. The
Commission considers that market forces alone may not be sufficient to protect the interests of
these customers.
26
See SaskTel’s 13 November 2009 Comments in TNC 2009-575, Call for comments --
Identification, scope, and prioritization of issues regarding obligation to serve, basic service objective, and
local service subsidy regime at para. 8: “The drivers which caused the Commission to introduce the
obligation to serve continue to exist. Rural areas, where market forces are least likely to be effective, are
still served primarily by ILECs. As market forces are less effective in rural areas, the right of residents of
those areas to access reliable and affordable telecommunications services must be protected through the
continued existence of the obligation to serve and of certain other regulatory measures.”
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April 26, 2010
33. Looking further ahead, it is conceivable that former incumbent telephony-
based carriers may abandon or remove copper facilities to premises without
first replacing them with fibre connections. Alternatively, these companies
may simply not roll-out fibre to the home in certain areas (such as poor
neighbourhoods in urban areas, or disadvantaged suburban neighbourhoods)
and once traffic is moved to fibre facilities only, these customers will no longer
be served. Without an obligation to serve, this possibility may become a
reality for the types of customers in the areas described above or indeed in
any area where the business case for upgrading service does not match with
the service provisioning costing (if for example, running connections on
“legacy” copper loops becomes expensive to an otherwise mostly fibre-based
telephony carrier).27
Extension of Obligation to Serve to Broadband Carriers
34. Should the Commission consider expanding the basic service objective as
recommended by the Consumer Groups below to include broadband access,
the Consumer Groups submit that, in accordance with the high speed Internet
(broadband) subsidy plan proposed in the evidence of John Todd, that the
“first mover” ISP who obtains an access subsidy under the plan should bear a
corresponding obligation to serve in the relevant geographical area.28
35. As broadband high cost areas began to support the entrance of ISPs, the
Commission could, on an ad hoc basis, consider proceedings to apply the
obligation to serve upon competing ISPs, in particular, once the “first mover”
ISP’s access subsidies had been reduced to zero.
Should Wireless Satisfy the Obligation to Serve?
36. There is no theoretical reason why a wireless local service telephone

connection could not satisfy an obligation to provide local voice service or
even voice and broadband Internet access. The Consumer Groups support
the principle of technological neutrality in the Commission’s decisions and
submit it is an important – though not overriding – principle in the design of
the obligation to serve.29
27
The Consumer Groups consider that this was the scenario imagined by the Telecom Policy
Review Panel (2006) in ch. 6, where the Panel recommended (Recommendation 6-1) a positive statutory
enactment requiring all ILECs to be obliged to serve unless relieved therefrom in an application to the
Commission.
28
See Evidence of John Todd, Appendix 1, at p. 9 (heading 2.1(6)(d).
29
The USNBBP states that technological neutrality is a principle of the U.S. international
telecommunications agenda: “The policies contained in the plan form the basic foundations of the U.S.
international telecommunications agenda. These principles include support for regulatory frameworks that
are pro-competitive, transparent and technology-neutral.” See USNBBP at 60.
14
April 26, 2010
37. In theory, there is no difference between practice and theory; however, in
practice, there is. So while the Consumer Groups support increased access
to telecommunications via wireless or any technology, such systems must be
capable of maintaining the “high quality” of telecommunications in Canada, a
quality that is part of the subs. 7(b) policy objective under the Act.
38. Wireless still is not a good substitute for local voice service as its connections
are less reliable than a wireline connection. Very simple practical challenges
to connectivity still bedevil wireless voice and data service from a home
connection perspective. For example, wireless signals are disrupted by tree
cover, uneven terrain, interference from other signals and the occupant’s
position in a dwelling, to name but a few.
39. Secondly, wireless voice service (especially post-paid) consistently is on

average more expensive than wireline basic local service.30 This raises the
issue of affordability of local service, should the Commission declare that
wireless can satisfy the obligation to serve. Wireless is typically billed on a
per call basis or where offered as part of a plan, may have a limit to airtime
(above which the user pays per call) or have billed and non-billed periods.
This contrasts with local wireline voice service pricing, which is typically less
expensive and is billed on a flat rate basis at any time of the day or week.
40. Wireless broadband services can also be more expensive, on average, than
comparable speed wireline broadband. Wireless data plans are typically
similar in base price per month, but require a concomitant subscription to a
voice plan and can increase substantially should a use exceed their included
data allotment. Thus, while seemingly promising, the Commission should, if it
were to include broadband access in the basic service objective, as
suggested by the Consumer Groups below, carefully consider the affordability
of such access, when it is used in a typical fashion by a consumer.
41. Fixed wireless may present a more stable solution, particularly in the far
north.31 However, connection issues continue to challenge even this mode.
42. The Consumer Groups’ therefore submit that alternate methods of delivering
voice service (and of delivering broadband Internet) can only be substitutes
where there is no functional difference between the services, the price is
within 15% more (or is less) and an acceptable quality of service is achieved
under all conditions of normal use.32 However, for the reasons given below in
reference to question 15,33 this premium (15%) should be charged only for 12
months to permit the wireless provider to recoup some capital costs without
30
See CRTC, Navigating Convergence Report (February 2010) at App. 6.
31
See Evidence of Dr. Heather Hudson, Appendix B, at p. 6.
32
These criteria are also discussed more fully in answer to the Commission’s question 15, below.
33
In the answer to Q15, see also our comments on the appropriate definition of wireless and wireline
markets.
15
April 26, 2010
unduly burdening these customers such that service remains permanently
less affordable than wireless service offered in urban and non-HCSA areas.
43. These requirements are dictated by a practical and purposeful reading of the
policy objectives of subss. 7(a), (b), (f) and (h) as well as market realities,34
including the fact that most of Canada’s major wireless providers are also
major wireline providers of Internet and voice telephony, thereby permitting
them to leverage considerable economies of scope.35
Q2. Should any particular class of service provider (for example, ILECs, competitive
local exchange carriers) be subject to an obligation to serve and, if so, how should they
be selected?
44. The Consumer Groups submit that all classes of local exchange service
providers, when operating in non-HCSAs, should be subject to an obligation
to serve within their service territories.
45. The Consumer Groups note that the Policy Direction requires non-economic
regulatory measures to be “implemented in a symmetrical and competitively
neutral manner.”36 Currently, only ILECs have an obligation to serve.
Extending the obligation to serve to all LECs within their serving territories
would result in regulatory symmetry in a competitively neutral manner.
46. Symmetry and competitive neutrality in non-economic regulatory measures

have already been pursued elsewhere by the Commission. For example, in
Telecom Regulatory Policy 2009-156, the Commission eliminated some
regulatory requirements to provide information to customers, but also in some
cases extended the requirement to provide information to customers to all
TSPs in order to achieve regulatory symmetry.37 The Commission in this
case extended the general obligation to inform consumers about their policies
regarding annoying and offensive telephone calls and the requirement to
provide alternative formats for billing statements and inserts to visually
impaired customers to all TSPs to make the requirement symmetrical.38 The
Commission also maintained the existing information requirements about 9-1-
34
Note that in Alaska a wireless service provider promised wireless broadband to remote Alaskan
villages at a rate not to exceed the rate in Anchorage: Evidence of Dr. Heather Hudson, App. B, p. 10.
35
For an in-depth description of these economies of scope, please see the evidence of Trevor
Roycroft, July 10, 2006, paras. 22-25, filed as Evidence of the Consumer Groups in proceeding PN 2005-2,
which led to the Commission’s decision in Telecom Decision 2007-27 (the Third Price Cap decision).
Online: http://www.crtc.gc.ca/public/partvii/2006/8678/c12_200605553/643090.zip
36
Policy Direction, section 1(b)(iii).
37
Telecom Regulatory Policy CRTC 2009-156, Revised regulatory requirements to provide
information to customers (24 March 2009).
38
TRP CRTC 2009-156 at paras. 49 and 82.
16
April 26, 2010
1 services and noted that the requirements were as symmetrical as possible
given the technological limitations of various 9-1-1 service providers.39
47. The most recent example of achieving symmetry and competitive neutrality in
non-economic regulatory measures by imposing regulation on all LECs was in
the recent review of terms of service for disconnection and deposits.40 In
Telecom Regulatory Policy 2009-424, the Commission found that policies for
disconnection and deposits are required for regulated markets, since market
forces are generally minimal or non-existent in these areas. The Commission
directed the Commissioner for Complaints for Telecommunications Services
(CCTS) to develop an industry code for disconnections and deposits and
determined that the CCTS should have the ability to recommend an industry
code that was as symmetrical as possible to all LECs operating in forborne
markets.41 Above, the Consumer Groups submitted that similar to
disconnection and deposit policies, market forces alone are not adequate to
ensure that consumers have access to basic telephone service, especially
low-income consumers in rural areas and customers in uncontested areas.
48. The Consumer Groups consider that the time has now come for the
Commission to extend the obligation to serve to CLECs to achieve regulatory
symmetry. The Consumer Groups note that as detailed in the latest
Telecommunications Monitoring Report, numerous markets now have some
significant market share in the local cable carrier CLEC. As these markets
become increasingly dominated by the ILEC/CLEC-cableco duopoly, that it is
incongruous that only ILECs be subject to an obligation to serve. It also is
unfair to the customers who may be refused service in a territory by a
competitive choice CLEC, thereby defeating the benefits of competition.
49. Extending the obligation to serve to CLECs is also appropriate because

market forces may not be sufficient to ensure that all areas (both forborne and
regulated, non-high cost) are served. Therefore the potential customers of
that CLEC in that non-HCSA should be able to enjoy a guarantee that service
will be offered to them on reasonable terms and without discrimination in the
same manner as a customer in an urban region.
50. Should the Commission consider that such a requirement would be unduly
burdensome on smaller CLECs, the Consumer Groups would support a
similar rule to that for membership in and contribution to the CCTS, namely
that LECs with telecommunications services revenues in excess of $10
million a year be obligated to serve in their service territories.
39
TRP CRTC 2009-156 at para. 69.
40
Telecom Regulatory Policy CRTC 2009-424, Revised regulatory requirements for management of
customer accounts (17 July 2009).
41
In Telecom Regulatory Policy CRTC 2010-27 deciding on an application submitted by the CLECs
to review and vary TRP 2009-424, the Commission found that a request to the CCTS does not impose a
legal obligation on CLECs, thus it did not assert regulation over CLEC deposit and disconnection policies,
denying the CLECs’ application.
17
April 26, 2010
Q3. What legal considerations exist, for example the Bell Canada Act, which would
prevent a modification or the removal of the obligation to serve?
51. Only Bell Canada has an explicit statutory obligation to serve. Since 1902,
Parliament has imposed a duty on Bell to provide telephone service and
telephones, upon request in any locality in which it provided a general
service, and telephone service to premises fronting upon any highway, etc. or
situated no further than 200 feet from such highway, etc. upon tender or
payment of the lawful rates therefor semi-annually in advance.42 This
obligation to serve has survived as subs. 6(1) of the present day version of
the Bell Canada Act and reads as follows:
6. (1) Where a telephone service is requested by any

person or organization for any lawful purpose in a
municipality or other territory within which a general
telephone service is provided by the Company, the
Company shall, with all reasonable dispatch,
(a) furnish the service; and
(b) subject to any order of the Commission under section

13 that restricts the right or ability of the Company to be a
supplier of telephones, furnish telephones of the latest
improved design then in use by the Company in the
municipality or territory.43
52. With the establishment of the Commission in 1976, universal service emerged
as a distinct objective of federal regulatory policy, as the Commission focused
on the maintenance of universal availability of basic phone service at
affordable rates. The Commission stated that it “must … ensure that all
segments of the public have reasonable access to telephone service.”44 The
Commission viewed an assessment of accessibility to phone services as a
necessary ingredient in determining the justness and reasonableness of
rates.45
53. Thus, the Commission has expressed the view that there is a duty upon
telephone companies to serve. In Decision 79-11, the Commission defined
some parameters of the obligation to serve, stating that “Bell and CNCP, in
respect of their monopoly services – public telephone service and PMS
42
S.C. 1902, c. 41, s. 2.
43
S.C. 1987, c. 19, s. 6.
44
Decision 77-7, Bell Canada, Increase in Rates at pp. 8-9. Universal service was also discussed by
a task force appointed by Canada’s Minister responsible for communications in 1986. See the 1986 Report
of the Federal-Provincial Examination of Telecommunications Pricing and the Universal Availability of
Affordable Telephone Service.
45
Michael H. Ryan, Canadian Telecommunications Law and Regulation at 6-68.
18
April 26, 2010
respectively – have the obligation to serve anyone seeking service in their
entire operating areas irrespective of location at prices that are, in regard to
local telephone service, similar for similar sized local populations, and in
regard to long distance telephone and telegraph services at prices that are
related to distance between points and not to particular routes.”46 However,
the Commission stated that competitive services do not always operate on a
universal basis.
54. In Telecom Decision 86-7, the Commission formalized the obligation to serve
in the draft Terms of Service of the telephone companies.47
55. In 1992, the present Telecommunications Act was passed, with the
telecommunications policy objectives, including subs 7(b), in place.
56. In Decision 99-16, the Commission took the view that all incumbent local
carriers have an obligation to serve in their territories. This means that an
ILEC must provide service to subscribers in its service territory at a
reasonable price without unjust discrimination. The Commission found that
the concept of an obligation to serve developed within the context of a
traditional, regulated monopoly in telecom services, and defined the content
of the obligation in terms of the provision of basic telephone services. The
Commission contemplated whether the obligation to serve should be altered
where competition is present and concluded that effective local service
competition would not likely occur in the short term, thus ILECs must retain
their obligation to serve.48
57. In Decision 2006-15, as amended by OIC 2007-532, the Commission

considered that in order to ensure that residential stand-alone PES is
available to all residential customers in forborne markets, it was necessary to
retain in forborne markets the ILECs’ obligation to serve with respect to stand-
alone PES, as set out in Decision 99-16.49 Thus, the Commission confirmed
that ILECs retain their obligation to serve, at least in relation to these “stand-
alone” customers, in forborne areas.
46
Decision 79-11, CNCP Telecommunications: Interconnection with Bell Canada at p. 226-7.
47
Decision 86-7, Review of the General Regulations of the Federally Regulated Terrestrial
Telecommunications Common Carriers at Appendix I, arts. 4.1 and 4.3. The telephone companies are Bell
Canada, British Columbia Telephone Company, NorthwesTel Inc., and Terra Nova Telecommunications
Inc. The obligation to serve was stipulated in the draft Terms of Service as Article 3.1, which only allowed
carriers to refuse service in certain cases where applicants owed amounts that are past due or refused to
provide reasonably required deposits, or refused to assume unusual expenses which the carriers would have
to incur. Unfortunately, the final text implied the obligation to serve by listing the events which would
excuse performance. The draft text discussed prior to the final decision was clearer in expressing the duty:
“The Company must provide service to all who apply for it, except where . . .”
48
Decision 99-16, Telephone Service to High Cost Serving Areas at paras. 31-36.
49
Decision 2006-15, Forbearance from the regulation of retail local exchange services at para. 381. The
Commission noted that any existing exceptions or limitations to the obligation to serve would also continue
in a forborne market.
19
April 26, 2010
58. The Consumer Groups contend that, despite the protestations of the ILECs to
the contrary in their “unregulated terms of service” that it is not conclusively
established that they do not have an obligation to serve despite the
Commission’s unconditional forbearance from price regulation under s. 25 of
the Act, as confirmed in Decision 2006-15.
59. This is because the obligation to serve exists independently of statute or

contract and arises from a broader common law duty to serve. This common
law duty flows from the special nature of the carrier’s position. This common
law duty requires telecommunications carriers to supply service to all those
who seek it at a reasonable price and without undue discrimination.50
60. Canadian cases imposing a duty to supply an essential facility can be traced
back to 1860.51
61. Dr. Barbara A. Cherry extensively studies the legal regime of common
carriage as it applies to telecommunications service providers. Dr. Cherry
traces the history of the regulatory regime for common carriers under the
common law in the United States, noting that the common law imposed
unique obligations on common carriers:
These status-based tort obligations evolved as an

early form of consumer protection to protect
individuals from economic coercion, exploitation and
the illegal wielding of bargaining power in commercial
transactions by those engaged in public callings. A
customer’s economic vulnerability was deemed to
arise, not on the basis of the existence of monopoly
power, but on the nature of the circumstances
prevailing between the provider and the customer.52
50
Michael H. Ryan, Telecommunications Law and Regulation at 3-16.2. Telegraph and telephone
companies, like suppliers of electricity, gas and water, are sometimes described as “public utilities”, which
has no precise definition in law, but apply to enterprises that hold themselves out to the public at large as
suppliers of a service or commodity that is essential, or in widespread demand, and that is typically
provided on a monopoly or quasi-monopoly basis. Note that the carrier’s common law duty to supply
services is limited to the supply of existing services along existing lines of supply. A carrier has no duty to
introduce new services or to extend its lines into territory outside that which it professes to serve. The
carrier may be required to build extensions of its line to serve new customers within its existing service
territory or to enlarge its plant where that is necessary to alleviate unjust discrimination (LaChance v. Bell
Telephone Co. (1958), 77 C.R.T.C. 294).
51
Commercial Bank v. London Gas Co. (1860), 20 U.C.Q.B. 233, 1860 CarswellOnt 311 (U.C.Q.B.).
52
Evidence of Dr. Barbara A. Cherry filed on behalf of “The Consumer Groups” in Telecom Public
Notice CRTC 2008-19, Review of the Internet traffic management practices of Internet service providers.
Dr. Cherry also notes that this vulnerability exists between the customer and carrier of electronic
transmission of information under later developed forms of electronic technologies. See Barbara A.
Cherry, “Maintaining Critical Rules to Enable Sustainable Communications Infrastructures” (2008) 24 Ga.
St. U. L. Rev. 947 at p. 967, where she argues: “Furthermore, without the protection of the traditional ex
ante rules embedded in common law common carriage obligations, myriad forms of discrimination are
20
April 26, 2010
Dr. Cherry notes that the historical evolution of common carriage in Canada,
both under the common law and its subsequent statutory codification is
similar to that of the United States. She argues that failure to enforce
common carriage principles under the Telecommunications Act ostensibly to
increase reliance on competitive market forces may create legal gaps and
policy sustainability problems.
62. The Consumer Groups submit that the obligation to serve cannot be
removed. Even if the statutory obligation to serve were removed from both
the Telecommunications Act and Bell Canada Act and if the contractual
obligation to serve were removed from the Terms of Service of the telephone
companies, the common law duty to serve would still apply.53
63. Furthermore, the existence of competition does not change the common law
obligation to serve, just as the presence of monopoly is not a precondition for
the duty. The duties such as obligation to serve are rooted in tort duties that
do not rely upon the monopoly status or otherwise of the legal person with the
duty.54
64. The Consumer Groups contend that the explicit inclusion of the defined term
“telecommunications common carrier” in subs. 2(1) of the
Telecommunications Act is intended by Parliament to import the common law
duties of common carriage to telecommunications carriers, if there is even
any doubt that they are subject to common carriers’ duties generally.
65. However, the Consumer Groups understand that a major unresolved issue is
whether the obligation to serve should continue in forborne areas (given our
view of the common law); should continue to apply to “stand-alone” service
customers under Decision 2006-15; or even be removed in non-forborne
exchanges (often also HCSAs).
66. ILECs (other than Bell Canada) have preserved their obligation to serve in
“competitive” exchanges under Decision 2006-15, as amended. Their
“unregulated” terms of service reflect this.55 The Consumer Groups contend
legally permissible and threaten consumers’ ability to have access at reasonable prices and under
reasonable terms and conditions.”
53
For more on common carriage in telecommunications, see: LIABILITY OF TELEGRAPH
COMPANIES FOR FRAUD, ACCIDENT, DELAY AND MISTAKES IN THE TRANSMISSION AND
DELIVERY OF MESSAGES, (1884), 32 Am. L. Reg. 281 at 285: “But in reality, such statutes are only
declaratory of the common law. Telegraph companies are bound to serve the public faithfully, skilfully and
impartially, whether any statute commands it or not. Their duty to do so arises from the very nature of their
employment [citations omitted].”
54
Barbara A. Cherry, Misusing Network Neutrality to Eliminate Common Carriage Threatens Free Speech
and the Postal System, 33 N. Ky. L. Rev. 483, 501 (2006) at 492.
55
See, for example, MTS Allstream, Terms of Service - Unregulated:
ARTICLE 2: OBLIGATION TO PROVIDE SERVICE
21
April 26, 2010
that this is because their view of the law confirms an obligation to serve or at
the least betrays a large uncertainty whether the Commission’s forbearance
order can affect this duty.
67. Bell’s “Unregulated Terms of Service” are similarly ambiguous, but

necessarily so given the clear wording of subs. 6(1) of the Bell Canada Act.
Bell’s Unregulated Terms of Service have a parallel section to art. 4.1 of Item
10 of its General Tariff 6716, but the wording does not directly address the
underlying obligation to serve, only the circumstances in which service may
be refused, which are largely similar to the old tariff language.56
68. TELUS frankly states that: “the precise limits and jurisdictional basis of the
obligation to serve have never been fully explained by the Commission.”57
We agree. The Commission must make a clear legal finding on the basis of
its jurisdiction and the scope of this fundamental duty.
69. Without this determination, it is difficult to judge if competition plays a role. If

competition does not, then the discussion of the Policy Direction is irrelevant.
Likewise, the forbearance order in Decision 2006-15 cannot affect it. Finally,
discussions of the effect of “the competitive and technological environment”
as suggested by TELUS are of no consequence unless they are made to
legislators who ultimately amend the common law obligation to serve in an
2.1 MTS is not required to provide service to an applicant in certain circumstances, including
where:
(a) MTS would have to incur unusual expenses which the applicant will not pay; for example, for
securing rights-of-way or for special construction;
(b) the applicant owes amounts to MTS that are past due other than as a guarantor;
(c) the applicant does not provide a reasonable deposit or alternative required pursuant to these
Terms; or
(d) MTS cannot acquire or maintain the equipment, facilities, rights-of-way, rights-of-access, or
space in or on buildings that are necessary to provide service.
2.2 Applications for service or for additional service and/or equipment in connection with service
already established may be made orally or shall be in writing if MTS so requires in order to
establish the identity of the applicant or customer in circumstances where MTS has reasonable
grounds for believing that the applicant or customer intends to defraud MTS or to evade payment.
2.3 Where MTS does not provide service on application, it will provide the applicant with a
written explanation upon request.
56
See Bell Canada’s Unregulated Terms of Service, art. 7, which reads:
7. Obligation to Provide Service. Bell may refuse, at any time and without liability, to
provide Services to you where Bell would have to incur unusual expenses such as, but not limited
to, securing rights of way or for special construction. Bell may provide such Services if, upon
Bell’s request and agreement, you agree to pay an amount for these unusual expenses. Agreements
on such matters shall be in writing and signed by you and Bell.
57
Comments of TELUS Communications Company in Telecom Notice of Consultation 2009-575
(13 November 2009) at para. 27.
22
April 26, 2010
amendment to the Telecommunications Act or otherwise legislate the right
away.58
70. If competition or monopoly status do play a role, then the discussions

suggested in this question about the modification or elimination of the
obligation to serve and TELUS’s submissions on the new competitive and
technological environment, the Policy Direction’s effect, regulatory symmetry,
etc. can be undertaken.
71. Nonetheless, as the Consumer Groups see few opportunities to express

themselves (there is no written reply stage before the oral hearing) we are
compelled to express our opinion on these matters, even if we are of the view
that the obligation to serve cannot be abrogated without legislative
enactment.
72. First, we must discuss obligation to serve in “competitive” areas. Because of

the test for price forbearance articulated by the Cabinet modification of
Telecom Decision 2006-15, namely two “facilities-based” competitors (one of
which can be a wireless carrier) serving at least 75% of an exchange, it is the
Consumer Groups’ view that there is a risk that there will be pockets of
customers who may be nominally served by a competitor, but will not be in a
desirable area for the ILEC, or will be in the 25% of the exchange not served
by competitors, with the result that the ILEC will no longer be required to
provide service and competitors will not provide service either at all or at the
level required by the BSO.
73. If there is no obligation to serve, therefore, there is a risk ILECs will pull out of
unprofitable neighbourhoods or refusal to provision with latest service (e.g.
fibre). This appears to have been the situation sought to be avoided by the
Telecom Policy Review Panel Recommendation 6-1. The Commission
should consider if competitors should be permitted to buy facilities in this
situation, as raised for discussion in the TPRP Report.
74. In such a scenario, the Consumer Groups would support the TPRP Report
requirement of an application to drop an obligation to serve no matter whether
there is regulatory forbearance from price regulation or not, wherever an ILEC
(or both ILEC and CLECs, if the Commission were to consider our proposal to
clothe CLECs in an obligation to serve) has facilities.
75. Overall, any modification of the obligation to serve should be contemplated

with caution. The Consumer Groups submit that if the obligation to serve is
modified to include the obligation to provide basic broadband service, as
suggested below, that the original obligation to provide basic telephone
58
The Consumer Groups note that the legislators could just as well confirm the obligation to serve
and make this explicit in the Telecommunications Act, as recommended in Recommendation 6-1 of the
Telecom Policy Review Panel Report.
23
April 26, 2010
services not be abandoned. Stated differently, support for “legacy voice-only
networks” must be maintained in the obligation to serve, as traditional voice
service remain important for rural customers and broadband services cannot
replace traditional telephone service. 59 Thus, the Commission must make
clear, at least, that ILECs remain subject to their obligation to provide basic
telephone services even as they provide IP-based networks. Further, should
the Commission extend the obligation to serve to CLECs, it should likewise
ensure, that CLECs retain obligation to serve for voice services even as they
roll out their IP-enabled networks. That is, once CLECs have become
established as voice service providers, their users should not be stranded by
a change in emphasis at these companies from phone service to integrated
IP service simply as it is higher margin or more in line with business priorities.
Once undertaken for voice service, a customer should not be abandoned.
Q4. Should a service provider that has the obligation to serve be compensated and, if
so, in which market(s)? What should be the criteria, for example the cost of service, for
determining whether compensation is required? Specify the appropriate compensation
mechanism.
76. There should be no compensation for a telecommunications service provider

based solely on their designation as having an obligation to serve. As
described above, the Consumer Groups propose that all TSPs serving as
local exchange carriers (as defined under the modified BSO) in non-HCSAs60
be required to have the obligation to serve,61 in accordance with the BSO,
which makes a compensation factor unnecessary and likely to distort the
market.
77. Under the Consumer Groups’ proposed model for broadband subsidy, the
“first mover” ISP will attract an obligation to serve, as the Consumer Groups’
model is based on competitive factors and the formula for access subsidies is
designed to increase competition amongst ISPs to serve HCHSISAs with
broadband Internet service, while ensuring access to broadband for all
customers in a particular HCHSISA.
59
See Reply Comments of NASUCA, footnoted supra, dated 27 January 2010, In the Matter of A
National Broadband Plan for Our Future, GN Docket No. 09-51.
60
Unless the LEC’s territory was already all or substantially all a HCSA, such as Northwestel, in
which case the obligation to serve would apply despite the HCSA.
61
The Consumer Groups realize that their proposal does not provide an answer to the question of
ensuring there is an obligation to serve on at least one provider in a HCSA, however, the Consumer Groups
are confident that their proposed subsidy regime would help fill this hole. Should the Commission detect a
reluctance on the part of ILECs, for example, to build the necessary access infrastructure (which now
would enable broadband competition, since by definition under the new BSO, it would be broadband-
capable) even given the continuing HCSA subsidies, the Commission could address this in a separate
hearing.
24
April 26, 2010
78. The Consumer Groups generally oppose a “compensation factor” for an
obligation to serve for three additional reasons. Firstly, the Consumer Groups
believe that there is a common law duty on common carriers which requires
them to serve all customers and that normally, there is no need to
“compensate” a party, even in a regulatory scheme, for simply following a
legal duty.
79. Secondly, such a charge would amount to a simple rate increase for service
that ILECs in most cases would provide service at their own cost or with a
subsidy under the Consumer Groups’ proposed contribution mechanism.
80. Thirdly, building such a compensation scheme into a regulatory scheme

presents a moral hazard to carriers and encourages gaming of the system by
carriers who again would claim compensation for the “burden” of serving
customers they would normally serve in any case.
Q5. Should there be limits to the obligation to serve and, if so, what should those
limits be? Indicate whether the current service extension charges and parameters (for
example, distance from the network, amount paid by the customer and/or the service
provider) remain appropriate. Should these charges and parameters be made generally
consistent across relevant service providers?
81. Generally, there are limits on the common law obligation to serve. The
carrier’s common law duty to supply services is limited to the supply of
existing services along existing lines of supply. A carrier has no duty to
introduce new services or extend its lines into a territory outside that which it
professes to serve.
82. A similar limit is contained in Bell Canada’s statutory obligation to serve. The
Supreme Court of Canada held that Bell Canada’s statutory obligation to
serve is not intended to impose a requirement upon Bell to extend its services
into new areas or to enter a territory already served by another telephone
company.62 This limit is specified in s. 6(2) of the Bell Canada Act and reads
as follows:
6(2) Nothing in subsection (1) requires the Company

to furnish the service or a telephone where:
(a) the premises for which the service is requested

are not fronting on a highway, street, lane or other
area along, over, under or on which the Company
has a main or branch telephone service or system;
62
Metcalfe Telephones Ltd. v. McKenna, [1964] S.C.R. 202.
25
April 26, 2010
(b) the telephone on the premises would be situated
more than 62 metres or such other distance as the
Commission may specify from the highway, street,
lane or other area; or
(c) if the Commission has not otherwise specified, the

Company has not received therefor a tender or
payment of the lawful rates semi-annually in
advance.
83. The obligation to serve of all ILECs is further limited by the CRTC-approved
Terms of Service. The Terms of Service represent an effort by the
Commission to “balance the rights and obligations of individual customers,
those of the general body of customers as well as those of the carriers.”63
84. The ILECs’ Terms of Service limit the scope of their obligations to serve in
some additional ways and generally read like Bell Canada’s art. 3 of its Terms
of Service, which is as follows:
Article 3: Obligation to Provide Service
Note: Continues to apply for residential stand-alone primary exchange

service in forborne exchanges, as identified in Item 60.
3.1. Bell Canada is not required to provide service to an applicant where:
(a) Bell Canada would have to incur unusual expenses which the
applicant will not pay; for example, for securing rights of way or
for special construction;
(b) the applicant owes amounts to Bell Canada that are past due
other than as a guarantor; or
(c) the applicant does not provide a reasonable deposit or

alternative required pursuant to these Terms.
3.2. Where Bell Canada does not provide service on application, it must
provide the applicant with a written explanation upon request.64
63
Decision 86-7, Review of the general regulations of the federally regulated terrestrial
telecommunications common carriers at p. 9.
64
Bell Canada Terms of Service, Approved in Order 86-476, amended in Order 2000-265 and Order
2003-319, online: http://www.bell.ca/en/corp/aboutbell/tariffs/. This Article was issued/published on
September 4, 2007 under Telecom Order CRTC 2007-434. Note that as per Article 7 (Deposits and
Alternatives), the total amount of all customer deposits and alternatives to deposits cannot exceed three
months’ charges for all services, including anticipated long distance charges. MTS’ obligation to serve in
their Terms of Service read similarly in the General Tariff under Item 200 at
http://www.mts.ca/tariffs/pdf/GeneralItem200.pdf. SaskTel’s obligation to serve in their Terms of Service
26
April 26, 2010
85. The Consumer Groups are generally content with these geographic and
monetary limits to the obligation to serve.
86. The Consumer Groups note that they are not privy to, and generally are
unaware if the Commission is aware,65 of the number of customers who are
refused service for any of the above three reasons.
87. It is therefore possible that the present limitations on the obligation to serve
are indeed a barrier to obtaining telephone service for certain Canadians.
88. The Consumer Groups do support a survey of the limitations of the obligation
to serve on each ILEC with a view to standardizing them and in preparation
for the imposition of an obligation on all CLECs as well in accordance with our
submissions.
Service Improvement Plans
89. As noted, this obligation to serve is limited in geographic scope to the area
actually served by the ILEC. The Terms of Service generally require payment
of all service debts, a service deposit and the right to refuse service if the
company must incur “unusual expenses”. However, consideration of the
effect of these limits is somewhat informed by examining the “Service
Improvement Plans” for HCSAs, as similar limits are placed on the
requirement to extend service under SIPs.
90. In addition, the limits on SIPs are similar to the limits on the obligation to
serve for a reason, as they are simply setting reasonable limits on the same
goal, namely providing affordable universal service. For this reason, although
the Commission has not explicitly called for commentary on the SIPs, since
SIPs are so bound up with the concept of universal service, is parallel to the
limits on obligation to serve, and since SIPs are an integral aspect to the
Consumer Groups’ proposed reform of the local service subsidy regime, we
intend to treat them in some detail below.
read similarly under Item 53 of the General Tariff, at: http://www.sasktel.com/about-us/company-

information/legal-and-regulatory/tariff-indices/attachments/basic-services-attachments/gen-terms-svc.pdf.
TELUS’ obligation to serve in their Terms of Service read similarly under Item 103 of the General Tariff,
at: http://about.telus.com/publicpolicy/tariffs/docs/CRTC214_6/General_8/Section_11/items100-124.pdf.
65
The Consumer Groups recommend that the Commission request that the CCTS track all
complaints of a failure to serve as a distinct category and log all reasons (such as the limits above) given by
complainants and TSPs. This would provide the Commission with evidence upon which to base an
informed decision if the present limits are unreasonable or present barriers to certain Canadians. This is
especially important since the Commission eliminated the regulatory requirement to file affordability
reports in Telecom Regulatory Policy CRTC 2009-183, Regulatory requirements pertaining to the
monitoring and reporting of certain data (8 April 2009).
27
April 26, 2010
91. When the Commission implemented the basic service objective, it also set
three goals for service improvement in HCSAs. To implement these goals,
the Commission directed all ILECs to file Service Improvement Plans (SIPs)
for approval. The Commission approved SIPs for Aliant, Bell Canada, MTS
Allstream, NorthwesTel, Télébec and TELUS.
92. In the design of the SIP, the Commission decided that where construction is
taking place in a specific area pursuant to the approved SIP, the customer’s
contribution to the costs shall not exceed $1,000 per premise.66 The
Commission found that requiring the customer to pay the $1,000 contribution
in an up-front payment could be a disincentive to take service.67 The
Commission thus directed ILECs providing service to unserved areas to
institute an installment plan.
93. However, if the potential customer’s unserved premise does not qualify for
service because the cost of building out would exceed the capital cost limit of
$25,000, the Commission found it appropriate for the ILEC to offer a plan
where the customer was willing to pay an amount over the $1,000
contribution to a maximum of $10,000 to bring the company’s costs within the
$25,000 allowance.68 These costs are described as large construction
charges. The Commission directed the companies to provide an installment
plan for these construction charges to be paid over a reasonable period of
time.69
94. The Commission also directed the companies with approved SIPs and
SaskTel to provide an annual tracking plan, to include requirements such as
the number and location of new customers requesting service, the number of
customers requesting service who do not qualify because of cost, and the
number of customers who have been offered service but refuse due to the
cost.
95. The Consumer Groups submit that the customer contribution of $1,000 is a
barrier to achieving affordable telecommunications services accessible to all
Canadians, particularly for low-income consumers that reside in rural and
isolated regions. In their Tracking Reports for 2003 through 2005, Aliant
reported a total of 36 customers refused service due to cost.70 In Bell
Canada’s Tracking Reports for 2003 through 2007, a reported number of
3,992 customers refused service, and 143 of these customers specifically
indicated their refusal was due to cost.71 MTS Allstream in their Tracking
66
Decision 99-16, Telephone service to High-Cost Serving Areas at para. 52.
67
Decision 2002-34, Regulatory framework for second price cap period at para. 849.
68
Decision 2002-34 at para. 853.
69
Decision 2002-34 at para. 855.
70
Aliant reported that in 2003, 11 customers declined due to cost; in 2004, 11 customers declined; in
2005, 15 customers declined.
71
Bell Canada reported that in 2003, 123 premises refused services and 10 customers indicated
refusal due to cost; in 2004, 1,102 premises refused service, 34 customers indicated refusal due to cost; in
28
April 26, 2010
Reports for 2003 through 2010 reported that 211 requests for service were
declined after receiving the quote for cost.72 In their Tracking Reports filed in
2004 to 6, TELUS noted that 252 customers either declined service after
receiving quotes for service or let the offer expire after receiving a quote. In
2007, TELUS reported that 120 offers were outstanding – they had neither
received acceptance nor rejections for service quotes.73
96. Further, it is clear that some areas of Canada remain unserved because the
cost of building extensions to these premises exceeds the capital cost
allowed by the Commission. For example, in their Tracking Reports, Aliant
noted 7 areas that they could not provide service to because the cost would
exceed the capital cost criteria.74 Bell Canada in their 2003 through 2007
Tracking Reports noted that a total of 15,645 localities did not qualify for
service because they exceeded the capital allowance.75 MTS in their 2003
through 2010 Tracking Reports noted that 30 requests for service did not
qualify because they exceeded the spending limit.76
97. The Commission should conduct a diligent study as to how

telecommunications services can be made affordable and accessible for
these Canadians that have declined service due to the cost. In particular, the
2005, 1,376 premises refused service, 84 customers indicated refusal due to cost; in 2006, 1,138 premises
refused service, 10 customers indicated refusal due to cost, in 2007, 253 premises refused service, less than
5 customers indicated refusal due to cost.
72
MTS does not specify whether a customer declined service due to cost. In 2003, 61 requests were
declined; in 2004, 61 requests were declined; in 2005, 21 requests were declined; in 2006, 16 requests were
declined; in 2007, 16 requests were declined; in 2008, 18 requests were declined; in 2009, 12 requests were
declined; and in 2010, 6 requests were declined.
73
TELUS’ 2004 Tracking Report notes that 96 quotes declined or expired. The 2005 Tracking
Report notes 139 quotes declined or expired and the 2006 Tracking Report notes 17 declined or expired.
TELUS did not indicate how many customers declined due to cost because no further response was
received from the customer. TELUS’ SIP program formally ended on December 31, 2006 but they
continued to provide Tracking Reports for SIP commitments that commenced or were committed to prior to
2006 and outstanding.
74
Aliant’s 2003 Tracking Report noted that service could not be provided to Smith’s Pond, South
Brook and Square Pond. The 2004 Tracking Report noted that service could not be provided to Winter
Trickle. The 2005 Tracking Report noted that Greenspond Highway could not be served. The 2007 SIP
Completion Report noted that Beothuck Trail Farm and Goose Berry Cove could not be served.
75
Bell’s 2003 Tracking Report noted 2,380 premises in 572 unserved localities did not qualify for
service because they exceeded the capital allowance. The 2004 Tracking Report noted 2,448 premises in
603 unserved localities did not qualify for service. The 2005 Tracking Report noted 3,028 premises in 693
unserved localities that did not qualify for service. The 2006 Tracking Report noted 3,844 premises in 811
unserved localities that did not qualify for service. The 2007 Tracking Report noted 3,945 premises in 821
unserved localities that did not quality for service.
76
MTS’ 2003 Tracking Report noted 2 requests that did not qualify for service because they
exceeded the spending limit. The 2004 Tracking Report noted 2 requests that did not qualify for service.
The 2005 Tracking Report noted 7 requests that did not qualify for service. The 2006 Tracking Report
noted 5 requests that did not qualify for service. The 2007 Tracking Report noted 5 requests that did not
qualify for service. The 2008 Tracking Report noted 3 requests that did not qualify for service. The 2009
Tracking Report noted 4 requests that did not qualify for service. The 2010 Tracking Report noted 2
requests that did not quality for service.
29
April 26, 2010
$1,000 customer contribution is too high for low-income consumers living in
rural or isolated areas of Canada.
98. As well, the Commission should undertake a study to determine whether the
threshold for maximum capital cost allowed by the Commission is too low, as
several rural and isolated premises remain unserved.
99. Similarly, there are still a number of consumers that do not have telephone
service that meets the basic service obligation – that is, they are underserved.
For example, SaskTel in their 2010 Tracking Report reported that there were
still, some ten years since the first SIP identified them, 30 underserved
residents in Garson Lake and Descharme Lake.
100. The Consumer Groups note that the apparent barriers to receiving service
under SIPs remain the high customer contribution of $1000 and the low
capital cost threshold. These limits will only further retard growth of
broadband availability in the most remote parts of Canada.
101. The Consumer Groups therefore call upon the Commission to remove the
$1000 contribution from the customer and to revise the capital cost threshold
to a higher figure. For example the capital cost figure has not even been
adjusted upward for inflation. The Consumer Groups suggest that the
Commission simply double the figure to $50,000.
102. Finally, the Consumer Groups call upon the Commission to investigate
and to closely monitor complaints regarding refusal to serve in non-HCSAs in
case the amounts required under the deposit rule or the ILECs’ interpretation
of “unusual expenses” is unreasonable in case such limits are serving as a
barrier to service as similar limits appear to be barriers in SIPs.
Q6. Should the obligation to serve be subject to service standards, for example
specific time frames for service delivery? If so, specify the standards and circumstances.
103. Many of the quality of service indicators used in the past by the
Commission for local service could be used for, or adapted to, a use that
would greatly aid the Commission in ensuring the obligation to serve imposed
on LECs by the Commission were indeed effective. The need for QoS
standards would appear to be even more important should the Commission
extend the obligation to serve to all CLECs, some of whom may be unfamiliar
with the importance of QoS indicators and to provide evidence of the actual
experience of customers, which is the true gauge of whether an obligation to
serve actually results in customers being served.
104. Simply receiving service when ordered is a first step and one that must be
monitored for timeliness and successful completion. Installations that are
30
April 26, 2010
delayed, late or do not work properly engender inconvenience, anxiety and
occasionally large expense or other disruptions to customers who had
expected to be connected to voice or broadband service. To this end, the
Consumer Groups propose that the Commission continue to apply the
following QoS indicators to ILECs and to extend them to all CLECs:
(a) 1.2 – Installation appointments met;

(b) 2.1 - Out-of-service trouble reports cleared within 24 hours; and
(c) 2.2 - Repair appointments met.77
105. The Consumer Groups note that the ILECs already are reporting on such
QoS indicators in non-forborne exchanges. The Consumer Groups contend
that if broadband access is made a part of the basic service objective that, at
least for the opening years of the broadband roll-out (until 2020) the
Commission should have QoS evidence to determine if the broadband that is
rolled out actually is of high quality.
106. In order to add broadband QoS indicators an in-depth look at the sorts of
problems customers are likely to experience with broadband service should
be undertaken. The Consumer Groups suggest that the Commission request
the CCTS to deliver to it in-depth descriptions of all reported broadband
service quality issues in order allow all parties to craft appropriate QoS
standards and indicators for all ISPs.
107. Based on the anecdotal complaints of customers received at PIAC, the

complaints expressed by users of bulletin boards such as DSLreports.org and
the public online consultation in this proceeding to date,78 and the prior PN
2008-19 proceeding,79 the Consumer Groups nonetheless propose the
following additional QoS indicators for broadband.
 Advertised speed not consistently achievable at customer’s

location;
 Late delivery of company supplied CPE (broadband modem);
 Failure of company supplied CPE (broadband modem);
 Internet traffic management practices interfering with activities or
applications that are not explicitly mentioned in ISPs’ statements on
ITMPs;
 Failure to inform customers of ITMPs prior to imposition;
 Unable to connect (including system-wide or localized outages);
 Unable to perform simple actions (such as browse web) despite
being “connected”;
 Unilateral action on the part of the ISP (deleting messages).
77
See Telecom Regulatory Policy 2009-304.
78
See online: http://support.crtc.gc.ca/applicant/applicant.aspx?pn_ph_no=2010-43&lang=E
79
See, in particular, the English Transcript of Public Comments – Topic 2 - Impact on User
Experience.
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April 26, 2010
108. The Consumer Groups would support a CISC Committee process charged
with identifying such other QoS indicators as would provide reliable Internet
broadband service.
109. Consideration of remedial measures for broadband providers who did not
meet QoS targets could also be a subject of discussion in the CISC
committee.
Local service subsidy
Q7. Should changes to the local service subsidy regime be made and, if so, to what
extent?
110. The Commission should create a separate broadband subsidy while

maintaining the present basic service HCSA subsidy.
111. The Consumer Groups’ plan is based on the evidence of John Todd,
attached at Appendix 1. The Plan suggests to the Commission that the
Commission should create a broadband contribution regime (that is there
should be a continuation of the present local service subsidy in HCSAs for
basic service and the creation of a separate broadband subsidy for
broadband connectivity). A separate broadband subsidy regime is suggested
due to the complexity of designing an integrated fund with the present HCSA
fund.
112. Such a decision on structure of the new fund impacts mostly which parties
will pay into the fund. Although this question is addressed specifically below,
for clarity’s sake the Consumer Groups state that should a new broadband
only contribution fund be created, that our assumption is that all Internet
service providers would contribute to, and be eligible to draw from, the fund.
113. We note that wireless services providers, to the extent that their revenues
were derived from wireless data services, would be required to contribute
based on this amount to the new broadband fund and would, as a result, not
be required to contribute based on these amounts (wireless data service
revenues) to the existing local service subsidy destined for voice service only
in HCSAs. It is the Consumer Groups’ view that the CRTC has jurisdiction to
transfer amounts from service to service in this manner.80
80
Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40. See esp. para. 72: “And the
policy objectives in s. 7, which the CRTC is always obliged to consider, demonstrate that the CRTC need
not limit itself to considering solely the service at issue in determining whether rates are just and
reasonable. The statute contemplates a comprehensive national telecommunications framework. It does
not require the CRTC to atomize individual services. It is for the CRTC to determine a tolerable level of
cross-subsidization.” This form of economic regulation would also require a finding from the Commission
32
April 26, 2010
114. Under the Todd plan, the Consumer Groups therefore support the creation
of “High Cost High Speed Internet Service Areas” or HCHSISAs and “access”
and “connection” subsidies to encourage access to broadband in these areas.
Please see the details of the Todd evidence, part 2.1, and part 3, Appendix A,
for the remainder of the answers to the question posed above and the details
of the mechanics of the new broadband contribution mechanism.
Q8. How should high-cost areas be defined and what should be the associated
criteria, for example a banding structure based on loop length or density of network
access service (NAS)? Should the existing banding structure be modified to include sub-
bands?
115. The Consumer Groups support the continued definition of HCSAs as

defined in CRTC Decision 99-16 for the local service subsidy regime. The
remainder of this question is answered in the details of the evidence of John
Todd in part 4, Appendix A.
Q9. Identify the appropriate mechanism for distributing subsidy and whether the
subsidy should be paid to the service provider based on revenues and costs or a
competitive bidding process. If the mechanism continues to be based on revenues and
costs, what should be included? Are the current implicit revenue contributions
appropriate (i.e. $30 monthly rate target for primary exchange service and $5 for
monthly optional services)?
116. This question is directed to the existing HCSA local service subsidy. The
answer for the existing subsidy is in the evidence of John Todd in part 5,
Appendix A. As for the applicability of the questions to the broadband
subsidy proposed by the Consumer Groups, see the evidence of John Todd
at parts 5, 2.1 and 3. Essentially, the mechanism proposed for HCHSISAs is
a form of reverse auction.
Q10. Which service providers should be eligible to receive subsidy and under what
circumstances? Are there any circumstances in which wireless service providers should
be eligible for subsidy? Should local service subsidy be tied to the obligation to serve or
to the basic service objective?
117. As stated in the evidence of John Todd, those LECs that offer local
service in HCSAs should all be eligible for a HCSA local service subsidy as
now (provided they meet the new BSO). For those ISPs that will offer Internet
not only to “re-regulate” wireless data service in the manner suggested in the parallel mobile data services
written proceeding but also a further “de-forbearance” order in relation to s. 25 ratemaking regarding
wireless data or at the least, a de-forbearance order in order to impose conditions of service under s. 24.
33
April 26, 2010
in HCHSISAs, please see the evidence of John Todd for the explanation of
the mechanism, in particular, in part 6, part 2.1 and part 3. ISPs will have to
meet the broadband BSO (actual speed and quality detailed above) to qualify
and the “first mover” will have an obligation to serve within the HCHSISA.
118. Regarding wireless, for any wireless service provider to be eligible for
either the HCSA subsidy or the HCHSISA, that provider would have to meet
the respective price and service quality conditions detailed above in Q1.
Q11. Should there be a subsidy in forborne and/or competitive markets? Should there
be subsidized competition in high-cost areas, including small ILEC markets? In which
markets and under what conditions, if any, should the subsidy be portable?
119. In the Consumer Groups’ view, it is possible that HCSAs will overlap with
forborne/“competitive” markets, as any competition there under 2006-15 may
be very weak indeed, given the market test provided in that modified decision
(that is, “competition” will often consist of an ILEC, a threat of entry from a
cableco and be supplemented with only unreliable wireless). In these cases,
provided the HCSA otherwise meets the definition from Decision 99-16, the
subsidy should be available.
120. As for broadband, given that, all broadband markets theoretically are
forborne, it is imperative that a HCHSISA as defined in the evidence of John
Todd should be eligible for the subsidy.
121. The remainder of this question, including portability and the reason the
Consumer Groups support portable subsidies and when, is detailed in the
evidence of John Todd, in particular at part 11.
Q12. Which TSPs should be required to contribute to the local service subsidy fund?
What revenues should be contribution-eligible? Should Internet revenues be
contribution-eligible? Are any other changes to the contribution collection mechanism
necessary?
122. Given the Consumer Groups’ suggestion that the Commission create a
broadband subsidy mechanism, only one minor change is needed to the
present local service subsidy in HCSAs. VoIP revenues should be removed
from the HCSA local service subsidy. These revenues instead should be
calculated as Internet Service Revenues for the purposes of contribution to
the new broadband Internet service subsidy.
123. All TSP Internet service revenues should be included in the calculation of
the broadband subsidy mechanism (including VoIP revenues).
34
April 26, 2010
124. The rest of this question is answered in the details of the Todd evidence,
in particular in part 8.
Q13. Should the small ILECs and/or Northwestel be subject to any special
considerations or modifications?
125. The Consumer Groups understand that special considerations apply in the
unique circumstances of Northwestel and certain SILECs. However, the
Consumer Groups note that the proposed broadband subsidy has several
elements that will make Northwestel and SILECs particularly well placed to be
“first movers” and gain the most benefit from building out subsidized
broadband access.
126. The rest of this question is answered in the details of the Todd evidence,
in particular in part 9.
Basic service objective
Q. 14 Is the basic service objective still necessary and, if so, what should it comprise?
Specify the services/obligations as well as the appropriate technical specifications (e.g.
high-speed Internet access at a minimum speed of 1 megabit per second) to be included
in the basic service objective.
Preserve the Basic Service Objective Basics
127. The basic service objective is one of the means, along with notably an
appropriate contribution mechanism as well as other requirements to achieve
the goal of universal telecommunications service for all Canadians.
128. The basic service objective (BSO) as it now stands is still necessary for
local voice telephone service in Canada.
129. The Commission set the then much-needed baseline by stating the
present basic service objective in para. 24 of Telecom Decision 99-16.81 The
level of service there required is:
 Individual line local service with touch-tone dialling, provided by a

digital switch with capability to connect via low speed data
transmission to the Internet at local rates;
81
Telecom Decision CRTC 99-16 (19 October 1999). Online:
http://www.crtc.gc.ca/eng/archive/1999/DT99-16.HTM
35
April 26, 2010
 Enhanced calling features, including access to emergency services,
Voice Message Relay service, and privacy protection features;
 Access to operator and directory assistance services;
 Access to the long distance network; and
 A copy of a current local telephone directory.
130. It is true that the basic service level now offered by the ILECs and CLECs
generally meets these service levels.82 However, what this demonstrates is
not a lack of need for such a statement of baseline service levels but the
success of the Commission’s present BSO, as an assurance of universal
service that is accessible, affordable and functional.
131. The Commission must maintain all elements of the BSO with regard to
voice service as, as has been demonstrated in the interim, providers that are
freed of the BSO obligations will either seek to eliminate them or charge
customers a separate fee for them – thereby destroying the BSO’s ability to
deliver high quality, affordable access to telecommunications to all
Canadians.
132. We start at the end. The Consumer Groups have watched with alarm as
Commission staff has permitted various plans by the ILECs to change the last
of these requirements by exploiting the indefinite article preceding “current
local telephone directory” to deliver white pages directories only once every
two years (or yearly if the subscriber so requests).83
133. In addition the Commission has allowed the ILECs to move ever more
information from the introductory pages of the white pages directory to the
opening pages of the Yellow Pages (commercial) or equivalent publication in
an apparent attempt by ILECs to weaken the white pages directory to the
point where it can be eliminated.84
82
See Comments of Bell Canada, 13 November 2009, at para. 10: “Although the BSO does not
necessarily apply to CLECs, to the Companies' knowledge, all CLECs and most other TSPs that offer voice
service have provided voice service that satisfies the BSO. As such, the BSO has become the standard
upon which all LECs compete for voice customers.”
83
TELUS, Distribution of TELUS’ residential telephone directory listings, 25 April 2008, online:
http://www.crtc.gc.ca/PartVII/eng/2008/8665/t66_200806599.htm. More recently, see Bill Mah, “Number
up for White Pages? Won’t be mass delivered to homes” Edmonton Journal, 9 April 2010, online:
http://www.edmontonjournal.com/Number+White+Pages/2782101/story.html.
84
Telecom Regulatory Policy CRTC 2009-304, Follow-up to Telecom Decision 2008-105 – Retail
quality of service regime in non-forborne markets for ILECs with over 25,000 NAS, 25 May 2009 at paras.
47 & 48. The Commission modified existing information requirements to require ILECs to publish in
residential telephone directories only a reference to the retail Q of S regime and a reference to the
Commission website. Telecom Regulatory Policy CRTC 2009-156, Revised regulatory requirements to
provide information to customers, 24 March 2009 at paras. 35 & 36 and 43 & 44. The Commission
required ILECs to publish in residential directories reference to the Commission’s website for details
regarding the Unsolicited Telecom Rules, and required ILECs to publish in residential directories only a
general message of privacy issues relating to services (call display and call blocking).
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April 26, 2010
134. Yellow Pages Group (YPG), for example, has recently asked the
Commission, again outside of a formal public process, to give “concurrence”
to plans to distribute the white pages directory only to those customers who
request it (not even biennially).85
135. Despite the YPG interpretation of the requirement (upheld in Telecom

Decision 2006-15 at para. 399) of subscribers to receive a copy of white
pages and yellow pages and an entry in the white pages listings at no charge
as an “entitlement”, which must be demanded to be received, the
Commission itself has not considered the question.
136. The Commission should resist calls for replacement of the BSO
requirement to deliver a “current local telephone directory” by placing a
burden on subscribers to request one, or to not receive delivery of a “current”
one (since a “current” one does exist and is printed for those who make the
effort to request it).86
137. This is because the question whether the underlying principle for the
directory requirement (non-preferential information about the network
provided in a convenient fashion in order for consumers to benefit from the
network effect) is being satisfied by these changes or whether other changes,
such as regulation of 411 fees,87 availability and ease-of-use of online
directories, number of non-Internet users of the directory, consumer
preference, consumer inertia in “ordering” their directory when there has been
a history of free delivery, economic and environmental concerns all have not
been comprehensively studied.
138. In short, the Consumer Groups view the ILECs’ chiseling at the BSO
requirement of directories as likely indicative of the effect of market forces
that may tempt ILECs to abandon or modify several elements of the present
requirements into irrelevancy.88
85
See Letter from YPG to John Traversy, CRTC, dated April 21, 2010, RE: Proposed On-Demand
Residential Telephone Directory Distribution Plan.
86
Mere publication of an online version, which may or may not be run by the ILEC and may or may
not be as accurate as the white pages historically have been is a poor substitute. Many subscribers still do
not use the Internet and the “phone book” has the advantage of ease of use and continuing to work when
Internet service is down or interrupted.
87
For example, the Commission could examine the present fees charged for 411 service, and
determine if these could be price regulated as a consequence of providing non-current (i.e., two-year old)
directories. We note, for example, that since forbearance was granted in major forborne exchanges in
TELUS territory, that the 411 fee for wireline service is now $1.50 a call, or double what had been the rate
under the most recent price cap. This raises affordability to the extent that white pages directories are
curtailed. Certainly it is arguable that the reduction in service of restricting white pages listings or
directory distribution would merit a corresponding decrease in the cost of basic service.
88
We note that the most recent version of the Edmonton white pages has had the blue “government
pages” removed and all alphabetical business listings as well (which was a valuable source for consumers
to find businesses alphabetically by name without guessing at the categorization of the business by the
service categories given in the yellow pages). Effectively, the value-added features of the white pages are
37
April 26, 2010
139. Second last, we examine the “access to the long distance network”. Here
a company already has attempted to charge customers for access to long
distance service from their local service as an extra fee. In Telecom Decision
CRTC 2008-33, TELUS Communications Company - Network access charge
(17 April 2008), the Commission forbade TELUS from charging stand-alone
customers who did not make long-distance calls simply for the duty (part of
the BSO) of TELUS to “stand ready” to complete a long distance call. Simply
put, without the BSO requirement to provide “access to the long distance
network” this element would be separately charged, even if never accessed.
This type of billing per element of what has to this point been considered
simply as an expected functionality of basic service will become
commonplace if the Commission removes such elements from the BSO.
140. In short, the BSO provides a baseline for local voice service that satisfies
the policy objective of affordable and accessible service of high quality. It
provides a level playing field for competition. It provides a guarantee of value
to the customer for their basic monthly charge. It ensures customers are not
paying simply for connectivity but instead for the actual telecommunications
service that is permitted by such a connection.
141. As the above examples tend to illustrate, competitive market forces will
not achieve the policy goals of the Telecommunications Act for affordable
service as the market incentive is to deliver the minimum of connectivity and
then to charge for every service element, rather than to provide a suite of
useful services to the customer. Therefore the Commission may impose
regulation in the form of the BSO to achieve the policy goals of the Act.
142. However, the regulation, if required, should be applied symmetrically

unless the policy objectives cannot be pursued without differential regulation.
143. The Consumer Groups see no issue in mandating that CLECs also
comply with the BSO, so that all providers continue to provide the BSO
elements without additional charge. If CLECs are permitted to continue
without the same BSO, ILECs may face temptations to minimize, eliminate or
overcharge for individual elements of the BSO to compete.
Extend the Basic Service Objective to Include Broadband
144. As affirmed in the Consumer Groups submissions to the Commission in

preliminary proceeding TNC 2009-575, universal service for voice is just as
necessary for telecommunications service now in Canada as previously.
Now, however, the basic service objective, which was the goal of universal
being progressively removed. It is also an open question if a small business should have the BSO right to a
listing in the white pages.
38
April 26, 2010
th
wired telephone service in the late 20 century, needs to be modernized to
include broadband access.
145. Universal service for telecommunications is the means to the end of many
other social and economic goals. The Commission is directed to apply
telecommunications policy “to respond to the economic and social
requirements of users of telecommunications services” in subs. 7(h) of the
Telecommunications Act.
146. Telecommunications services now used by Canadians are those affirmed

in our 2009-575 comments and are informed by the work of Dr. Heather
Hudson, whose expert opinion is attached to these reasons. She identifies
the following economic and social goals for, and effects of, increased
informational connectivity in society, which the Consumer Groups contend is
now driven by broadband:
 Efficiency, or the ratio of output to cost (for managing inventories

and deliveries, through use of information on weather and soil
content to improve agricultural yields, for monitoring and managing
energy use through “smart grids”);
 Effectiveness, or the quality of products and services (such as
improving health care through telemedicine);
 Equity, or the distribution of development benefits throughout the
society (such as to rural and remote areas, to minorities and
disabled populations);
 Reach, or the ability to contact new customers or clients (for
example, craftspeople reaching global markets on the Internet;
educators reaching students at work or at home).89
147. Such principles can impact society and the economy in concrete ways
when broadband is introduced, in the areas of health care (e.g.,
telemedicine); energy (smart grid); education (distance learning); government
operations (citizen information and engagement); economic opportunity (job
creation and job training); and public safety (interoperable emergency
communications) amongst others.90
148. The Consumer Groups submit that all of these social benefits principles
currently are reflected in the public policy objectives found in s. 7 of the
Telecommunications Act, and in particular subss. 7(a), (b), (c) and 7(h).
149. Returning to the BSO as stated in Decision 99-16, the paragraph

immediately following this list is key, as it expresses the Commission’s desire
to ensure the benefits of advancement in telecommunications technology,
whatever that technology might become, flows to all:
89
See Evidence of Dr. Heather Hudson, Appendix B, at pp. 1-2.
90
Ibid.
39
April 26, 2010
The basic service objective is independent of the technology used to

provide service, and may change over time as service expectations
evolve.91
150. Regarding the first objective: “Individual line local service with touch-tone
dialling, provided by a digital switch with capability to connect via low speed
data transmission to the Internet at local rates,” the Consumer Groups
understand that virtually all carriers now install individual lines with touch tone
dialling, even in rural and remote areas, if only to support myriad optional
service offering such as call waiting.
151. What is key is the second half of the requirement. This is the requirement
for “capability to connect via low speed data transmission to the Internet at
local rates”. This requirement targets access to the Internet at local service
rates (not toll (long distance) rates). This local access to the Internet
requirement at a “flat” rate should be maintained by the Commission.
However, crucially, it should be updated to require access to a broadband
Internet connection (“high speed data transmission”) at local rates not simply
as a dial-up connection.
152. Broadband access is crucial to social and economic development,

especially of rural and remote areas, that cannot retain skilled workers or
competitive businesses without it. Citizens cannot engage with government
or their colleagues or friends elsewhere in the way that communication has
developed over the Internet in recent years without broadband access.
153. The importance of broadband for economic development and for social
inclusion was discussed in and informed the Information Highway Report and
the Telecom Policy Review Panel Report. The sources of this information
were also summarized in the Commission’s Convergence Report of February
2010, at Appendix 6 – Universal Broadband Access.92
154. As noted in our 2009-575 comments, several major economies and

countries recently have reaffirmed their commitment to universal service in
the broadband Internet era, notably the European Union and the United
States. In all of these countries, it is explicitly stated, or implied by the terms
of the plan, that universal service objectives now must be updated to include
broadband.
91
Telecom Decision CRTC 99-16 at para. 25.
92
CRTC, “Navigating Convergence: Charting Canadian Communications Change and Regulatory
Implications” (February 2010) at Appendix 6 – Universal Broadband Access, p. 80.
40
April 26, 2010
155. The EU has a process for reviewing the scope of service under its
Universal Service Directive.93 These two criteria for adding a service to the
Declaration are:
a) Are specific services available to and used by a majority of

consumers, and does the lack of availability or non-use by a
minority of consumers result in social exclusion?
b) Does the availability and use of specific services convey a
general net benefit to all consumers such that public intervention is
warranted in circumstances where the specific services are not
provided to the public under normal commercial circumstances?94
156. We submit that broadband in Canada has met these two criteria. Access
to broadband facilities in Canada is near 100% of households in urban areas
and nearly 80% in rural areas.95 The penetration rate of those who actually
subscribe is 69%.96 This level is a “substantial majority” of the population
(and the availability level is even higher).
157. The European Union appears to recognize that broadband rapidly has
become an essential aspect of telecommunications as it has recently decided
to study the inclusion of broadband access in the Universal Service
Directive.97
158. Closer to home, the USNBBP maps the pursuit of ubiquitous broadband
availability by creating the Connect America Fund (which will finance
broadband service provisioning in high cost, rural and remote areas)
reforming the Universal Service Fund to transition high cost voice service
subsidies into broadband service funds under the Connect America Fund,
and reform of Intercarrier Compensation amongst other initiatives.98
93
See Directive on universal service and users’ rights relating to electronic communications
networks and services (Universal Service Directive), 2002/22/EC of the European Parliament and of the
Council (7 March 2002). Online: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:108:0051:0077:EN:PDF
94
Universal Services Directive, supra, Annex V.
95
CRTC, “Navigating Convergence: Charting Canadian Communications Change and Regulatory
Implications” (February 2010) at Appendix 6 – Universal Broadband Access, p. 80.
96
Ibid.
97
See EurActiv Network:"EU plans to make high-speed Internet compulsory" (Dec 18, 2009).
Online: http://www.euractiv.com/en/infosociety/eu-plans-high-speed-internet-compulsory/article-188448
The article refers to the draft 18 month programme of the Council of the European Union, 27 November
2009, prepared by the future Spanish, Belgian and Hungarian Presidencies. See p. 43: "The Presidencies
will launch work on the new scope of the universal service in electronic communications and on the
incorporation of the broadband in the scope of universal service on the basis of a Commission
communication." Online: http://register.consilium.europa.eu/pdf/en/09/st16/st16771.en09.pdf
98
See three stage USNBBP, ch. 8, at pp. 135-6: “The FCC should conduct a comprehensive reform
of universal service and intercarrier compensation in three stages to close the broadband availability gap.”
41
April 26, 2010
159. The USNBBP sets a U.S. target speed of 4 Mbps download, 1 Mbps
upload minimum for all broadband connections by 2020.99 As stated in the
USNBBP:
An initial universalization target of 4 Mbps of actual download speed and 1

Mbps of actual upload speed, with an acceptable quality of service for
interactive applications, would ensure universal access. [Emphasis
added]100
160. Notably, this universal target is supplemented by a goal of 100 million

homes having affordable access to actual speeds of 100 Mbps upload and 50
Mbps download by 2020; and “by 2015, 100 million U.S. homes should have
affordable access to actual download speeds of 50 Mbps and actual upload
speeds of 20 Mbps.”101
161. As noted, this target must be actual speeds deliverable to the customer,
not advertised speeds, which are notoriously slower by large factors.102
162. In order to have measurable results for Canadians, and in order to help
ensure Canadians have access to the Internet that compares favourably with
the U.S., E.U. countries and other leading OECD countries, the Commission
should set a minimum broadband speed for the new BSO.103
163. The BSO broadband speed target should at least match, and preferably
exceed, the U.S. target speed of 4 Mbps download, 1 Mbps upload described
in the USNBBP.104
99
See USNBBP, ch.8, p. 135. This is part of a strategy to reform the U.S. Universal Service Fund
(USF) and retool it as the “Connect America Fund” (CAF) that will gradually replace high-cost telephone
subsidies with broadband subsidies for these areas.
100
Ibid.
101
See USNBBP, ch. 2, at p. 9.
102
See USNBBP, ch. 3, at p. 21: “Therefore, the actual download speed experienced on broadband
connections in American households is approximately 40–50% of the advertised “up to” speed to which
they subscribe. The same data suggest that for upload speeds, actual performance is approximately 45% of
the “up to” advertised speed (closer to 0.5 Mbps).” Note further that this variation between advertised and
actual download speeds appears to exist for all broadband access technologies: see USNBBP, ch. 3, p. 21:
“Despite this variation in performance across technologies, on a percentage basis, the gap between
advertised and actual speeds experienced by consumers is consistent and prevalent across all types of
connection technologies.” [footnote omitted.]
103
The Commission has already mandated 1 Mbps download for deferral account funded build-out
proposals – see paragraph 74 of Telecom Decision 2008-1: "The Commission is of the view that the ILECs
must make services available at a download speed of at least 1.0 Mbps in all deferral account funded
communities. However, the Commission considers that it would be in the public interest for an ILEC to
offer various speed levels, including lower priced services at a download speed below 1.0 Mbps."
The Consumer Groups submit that given the speed targets of other countries, detailed below, the actual
plans of ILECs under the deferral accounts and the rising requirements of applications, that this initial
target already is far too low.
104
See USNBBP, ch.8, p. 135.
42
April 26, 2010
164. Such a speed target is achievable. According to the Commission, 52% of

Canadians households already subscribe to broadband service with speed
exceeding 1.5 Mbps and 41% of households subscribe to broadband service
with speeds exceeding 5Mbps.105
165. We note that Bell Canada’s proposed deferral accounts follow-up

proposed roll-out of HSPA service promises 2 Mbps download speed with
800 Kbps upload.106 Given the increasing bandwidth requirements of
consumer and business applications (especially video) it is key that the
Commission set a reasonably aggressive and lasting target. Bell’s target,
while perhaps an appropriate immediate goal, is too low for a long-term goal
such as for a BSO target.
166. The Consumer Groups understand that present technologies and

infrastructure deployment, even supplemented by a new contribution regime,
will not deliver these speeds in the immediate short term – especially in rural
and remote areas. The USNBBP calls for the 4 Mbps/1Mbps
(download/upload) universal broadband accessibility requirement to be
achieved by 2020, but calls for reassessment of this goal every 4 years, in
case technology advances such that this goal is slow compared to what is
then achievable.
167. As with the USNBBP, the Commission should specify increasingly high
targets in upcoming years. Setting the BSO to at least a 4/1 Mbps
requirement (achievable over ten years, that is, by 2020) will help ensure
Canada is not leapfrogged by other OECD countries in broadband speed
objectives, in particular the U.S. The following chart taken from the USNBBP
shows several comparable countries that have set comparable universal
broadband access speeds107:
105
The Consumer Groups note the “digital divide” reported by StatsCan and cited by the Commission
in this report indicating broadband use tracking closely to income.
106
See Bell Canada, “Additional Follow-up Information Related to the Deferral Account-Funded
Broadband Expansion Program of Bell Aliant Regional Communications, Limited Partnership and Bell
Canada” (26 February 2010; Revised 30 March 2010) at para. E2. Online:
http://www.crtc.gc.ca/public/partvii/2008/8638/c12_200817505/1376436.zip
107
See USNBBP, ch. 8, p. 135, Exhibit 8-A, “Universalization Goals in Selected Countries”.
43
April 26, 2010
168. To remain competitive, ensure universal access to telecommunications as

it now has developed to include broadband and to help in maintaining
Canadian cultural sovereignty, the Commission should specify broadband
speed targets that at least parallel those of the U.S. and preferably exceed
them.
169. The Consumer Groups therefore submit that the Commission set an
interim speed goal such that by 2015, the universal BSO broadband speed
objective should be at least 2 Mbps download and 800 Kbps upload and that
then by 2020,108 that the objective should be revised upward such that 4
Mbps download and 1 Mbps upload broadband service were universally
available to all broadband subscribers.
170. As in the U.S., the Commission should consider another mechanism than
the BSO to achieve higher speed goals (such as 100/50 Mbps service, or
higher) for areas where development can proceed more quickly, whether that
is through a goal-setting exercise or as part of a comprehensive broadband
mapping and monitoring plan. Any such goal or monitoring should require or
track actual speeds to the customer and the price of such services to
determine affordability.
171. However, in setting other speed targets the Commission should remain
vigilant regarding the difference between rural and remote access speeds and
those of urban and suburban areas and build in regular reviews of the
universal access speed, as in the USNBBP.
108
Dr. Hudson notes in her Evidence that Industry Canada has set a 1.5 Mbps goal (presumably
download) but that “The CRTC may, however, conclude that the benchmark should be set higher, at 2
Mbps, as at least one service provider, Bell Canada, has proposed to deliver 2 Mbps download speed with
800 Kbps upload in rural areas as part of their “Deferral Account” service expansion.” See Evidence of Dr.
Heather Hudson, Appendix B, at p. 4.
44
April 26, 2010
Q. 15 Specify whether alternatives to wireline local service, for example wireless
service, should be considered to satisfy the basic service objective. Specify which service
providers should be subject to the basic service objective.
172. Wireless could possibly become a substitute for wireline telephone

service. The EU Universal Service Directive states that “[t]here should be no
constraints on the technical means by which the connection is provided,
allowing for wired or wireless technologies.”109
173. However, the Consumer Groups maintain that presently in Canada in

many cases, and in rural and remote areas likely in most cases, wireless is
not an adequate substitute for wired telephone service for the purpose of the
BSO.
174. As noted, based on the Consumer Groups’ price, service quality and
coverage criteria above,110 wireless service generally fails to achieve these
standards.111
175. In addition, any wireless service designated by a LEC that is intended to

be a wireline substitute,112 would, on the Consumer Groups’ new definition of
the BSO as including a broadband access component, be required to be
capable of providing adequate broadband data (Internet) service at an
affordable rate and speed.
176. In the Consumer Groups’ view, for wireless broadband, requirements

under the BSO for this component should be consistent top upload and
download speeds that matches a wireline equivalent (that is, to begin with, 2
Mbps download and 800 Kbps upload);113 is not affected by wireless
109
See Universal Service Directive, supra, at para. 8. Note that what is required is a connection to the
public telephone network at a fixed location. That is, customers are not required to move to an area where
a wireless connection would work. Rather, it must come to their household.
110
See the Consumer Groups’ answer to question 1 under Obligation to Serve, above, where we state
the conditions for wireless to meet the this requirement: “Alternate methods of delivering voice service
(and broadband Internet) can only be substitutes where there is no functional difference between the
services, the price is with 15% more (or is less) and an acceptable quality of service is achieved under all
conditions of normal use.”
111
Regarding wireless pricing in Canada, the Commission notes in the Navigating Convergence
Report at Appendix 6, para. 135 states: “Chief among these factors is that Canada‘s wireless rates,
particularly when combining local and long distance calling, remain high relative to those in the U.S. The
lack of affordable unlimited voice and data plans on the market makes cord cutting cost prohibitive in many
instances.”
112
As noted in the footnote above in regards to the Universal Service Directive, para. 8, if a service,
whether wireline or wireless, is intended to provide a connection to the public telephone network primarily
at a fixed location (customer residence), then it should meet the BSO, including broadband data targets.
113
Should wireless providers complain that consistent speed at this level is not able to be guaranteed,
the Commission could consider the Finnish requirement mandating that "the average speed of downstream
traffic must be at least 75 per cent of the required speed in a measuring period of 24 hours. In a four-hour
measuring period the speed must be at least 59 per cent of the required speed." This lower “margin” could
45
April 26, 2010
transmission issues or network load; permits all the same data transfers as on
wireline service.
177. Wireless broadband, when offered in a situation where wireless access is

intended as a wireline substitute, also should be subject to similar affordability
constraints under the new BSO, again within a price band. The Consumer
Groups suggest that this could be up to 15% more than comparable speed
wired broadband on offer in a relatively geographically proximate urban or
suburban area on the date of sign-up, for a maximum period of up to one
year. After this period, wireless broadband pricing would have to match
comparable speed wireline broadband access.
178. These affordability constraints are suggested by Bell Canada’s proposed

pricing of its HPSA offering under the deferral account follow-up, which offers
rural areas in its roll-out plan 2 Mbps/800 Kbps service for $31.95 a month,
whereas, at the moment in urban areas of Ontario, Bell offers comparable
speed wireline broadband service at $26.95 with no bundle for the first 12
months, rising to $31.95 a month thereafter (Bell’s Essential Plus service).
This represents a slightly over 18% premium for wireless broadband service,
but only over one year, after which time the services are at parity.
179. The importance of mandating wireless broadband capability as part of the

BSO for those wireless accounts meant to be used as wireline substitutes is
based upon, and will only grow because of, increasing wireless
substitution.114
180. The Consumer Groups note that at this time, wireless generally is not yet
considered a substitute for wireline – even for local voice service alone. In
paras. 57-62 of Telecom Decision 2006-15 (which were not affected by
Order-in-Council 2007-532), the Commission analyzed the relevant market for
wireless and wireline telephone service and determined that pricing
methodologies continue to differ, with many wireless plans and services still
usage sensitive, while wireline service remains flat rate. The Commission
found wireless is not marketed as a substitute for wireline, but as a
complementary service and bundled. Finally, the Commission noted that
while wireless substitution and wireless only households had both grown the
rate of each compared to overall wireless penetration remained anemic.
be applicable in the opening years of the new BSO, and then be removed to require the same consistent
speed as wireline access in the future as wireless facilities and competition matured.
114
The Commission’s Navigating Convergence Report at p. 32, footnote 62 indicates a forecast of
20% wireless substitution in Canada by 2015. Also of note, and a possible trend which supports requiring
wireless providers to provide adequate broadband data accessibility as part of a new BSO is the finding of
The Neilsen Company, Call My Cell: Wireless Substitution in the United States, September 2008,
summarize by the Commission in Navigating Convergence at para. 155: “Among other interesting findings
of the Neilsen study is the fact that wireless substitutors are greater adopters of wireless Internet
connectivity, leading Neilsen to consider Internet access as the ―next frontier of wireless substitution.”
46
April 26, 2010
181. All of these factors continue to suggest that from an economics point of
view, the services are not substitutes but different. Despite nearly wholescale
price deregulation since 2007, wireline continues to be flat rate, not usage-
based. Wireless substitution continues to grow but continues to be a small
minority of overall wireless usage.
182. The Consumer Groups add that coverage and signal reliability are not
comparable between wireline and wireless, at this time, therefore wireless is
still not an adequate local service substitute for the purposes of the BSO.
183. Wireless could be good enough to match as a voice service if, as noted
above, “where there is no functional difference between the services, the
price is with 15% more (or is less) and an acceptable quality of service is
achieved under all conditions of normal use.” Flat-rate pricing (at least for
local) for wireless likely would be required. As noted by the Consumer
Groups above, we propose that for wireless broadband data service, a price
difference of up to 15% (for an initial one year period, falling to wireline voice
service pricing) could be considered acceptable in considering wireless
broadband as a substitute for wired broadband, should broadband become a
BSO connectivity requirement.
Q. 16 What should be the Commission's role, if any, in regard to advancing high-speed

Internet access? Given that the contribution regime is generally limited to subsidizing
basic local service rates in high-cost areas, should the Commission reconsider its
approach and use the regime to subsidize high-speed Internet access?
184. The CRTC should take a lead role in advancing Canada’s broadband
Internet agenda. It is clear that our politicians are not doing it,115 and this
after two loud and clear calls for government intervention in the Final Report
of the Information Highway Advisory Council in September 1995 and ten
years later in the Telecom Policy Review Panel Report, chapter 8.
185. Recent political efforts to “fix” CRTC determinations have engendered

both mistrust and complications in the telecommunications industry. Clearly a
political solution creates winners and losers, rather than a sustainable policy
developed in consultation with all stakeholders.
186. While the CRTC is subject to the Telecommunications Act including

review and directives from Cabinet, the Commission has both the authority
and scope of action and discretion necessary to fashion all elements of a
115
See Comments of Tony Clement, “Companies urged to help Ottawa bridge 'digital divide'” Globe
and Mail, 14 April 2010, page B3: “They're going to have to shoulder some of the burden, some of the cost.
It can't all come from the public sector," Mr. Clement said. "They're going to have to do their bit. And we're
going to have to also come up with public policy solutions that will get us to where we have to get to.”
47
April 26, 2010
116
national broadband plan. The Commission may remake the contribution
regime to support Internet broadband roll-out. The Commission presently is
overseeing the roll-out of funds for this very purpose in the Deferral Accounts
Follow-Up proceeding.
187. The Commission has available the USNBBP which we suggest it could
copy or adapt in large parts. The Commission also has available to it not only
the two Canadian studies noted above but also the national broadband plans
of the U.K., Australia, Finland, France and other nations.
Local competition and WNP in the territories of the small ILECs
Q. 17. What are the major costs associated with implementing local competition in small
ILEC markets? Indicate which service provider(s) should incur the costs of implementing
local competition in small ILEC markets and, if appropriate, how those costs could be
reasonably recovered. Provide, where available, cost estimates for implementing local
competition in each small ILEC territory.
188. The Consumer Groups do not have comments on this question at this
time.
Q. 18. Should local competition continue to be introduced in small ILEC markets and, if
so, should there be criteria for approval? Assuming small ILECs continue to be subject to
the obligation to serve, will local competition jeopardize a small ILEC's ability to fulfil
its obligation to serve throughout its incumbent serving territory?
189. The Consumer Groups are concerned only that small ILECs maintain their
obligation to serve throughout their incumbent serving territory and any
territory that they enter as a competitor, in line with our proposal to make all
LECs have an obligation to serve in areas where they offer service.
Q. 19. If local competition continues to be introduced in small ILEC markets, should the
requirement that small ILECs implement local number portability (LNP) be maintained?
190. The Consumer Groups are very supportive of local number portability
(LNP) and have taken a strong position of support for both wide LNP and
WNP in past proceedings. As previously recognized by the Commission,
local number portability increases competition in the local market.117 The
Consumer Groups are of the view that LNP stimulates carriers to offer lower
116
The Supreme Court of Canada decision in the Deferral Accounts case clearly established a wide
decision-making and policy-framework discretion in the CRTC, which only need be exercised reasonably.
117
In Telecom Decision 94-19, the Commission concluded that increased local competition is in the
public interest and initiated proceedings to facilitate the necessary framework for local number portability.
48
April 26, 2010
prices and better services and also gives consumers the ability to exercise
real choice in a competitive market.
191. The Consumer Groups submit that even where local competition is
introduced in small ILEC markets, the requirements that small ILECs
implement LNP should be maintained. Lack of number portability is a barrier
to consumers’ ability to switch service providers. As long as barriers such as
lack of LNP remain for any numbers, consumer choice will be undermined.
192. In Public Notice 2007-7, Review of local number portability for voice over
Internet protocol services, several carriers cited technical constraints and
costs of porting out telephone numbers and porting in out-of-territory
numbers. The Consumer Groups submitted that the burden of demonstrating
real hardship to providing LNP lies on the carrier resisting LNP:
“Such a burden should not be discharged by generalized assertions

of difficulty or delay without cost evidence. … Further, hardship
should not be constituted by some costs but by costs that are
disproportionate to the benefit to competition achieved.”118
Q. 20. If local competition continues to be permitted in certain small ILEC markets, with
or without LNP, should the requirement that small ILECs implement WNP be
maintained? Should WNP be required if local competition is not permitted in certain
small ILEC markets and, if so, should it be restricted to supporting wireless-to-wireless
number portability?
193. The Consumer Groups underline the importance to consumers of the

implementation of WNP. Wireless number portability is of considerable utility
to consumers in exercising real choice in wireless service providers. As such,
the Consumer Groups generally support the maintenance of requirements for
WNP in all markets.
194. The Consumer Groups find wireless-to-wireless porting to be the most in

demand from consumers. We have also generally supported wireline-to-
wireless porting and wireless-to-wireline porting. While we are of the view
that wireless-to-wireline porting is the least frequently utilized by consumers,
this category will grow in importance as wireless substitution increases.
195. WNP is very important to Canadian consumers and restrictions to

supporting wireless-to-wireless number portability should not be put in place.
Carriers refusing to port should demonstrate that there are truly
disproportionate costs or technical difficulties to connect customers to port
them into their carrier’s system.
118
Reply Comments of the Consumer Groups in Public Notice 2007-7 at para. 45.
49
April 26, 2010
Q. 21. Would it be appropriate to permit local competition in small ILEC markets without
a portable subsidy regime and without the requirement to implement LNP/WNP?
196. The Consumer Groups again reiterate its above position that consumers’
ability to exercise choice in a competitive market will be undermined unless
barriers such as lack of LNP and WNP are eliminated. That said, should the
Commission determine that local competition be permitted in SILEC markets,
that the need for WNP and LNP be reviewed every two years.
Mobile wireless data services
Should the Commission change the scope of forbearance with respect to mobile wireless
data services, and if so, to what extent?
197. Please see our comments in the separate written proceeding to be filed
this week. Note that several of our proposals above may require additional
regulation of mobile wireless in addition to that being considered in the
outside proceeding.
Appendix A – Evidence of John Todd, Elenchus

Research Associates Inc.
Please See Attached Document
Appendix B – Evidence of Heather E. Hudson

Please See Attached Document
***End of Document***
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Telecom Notice of Consultation CRTC

Comments of Canada Without Poverty, Option

April 26, 2010

(613) 562-4002 x.25

Canada lacks a path to universal broadband access. This proceeding provides

All classes of local exchange service providers when operating in a non-HCSA

If the Commission expands the basic service obligation to include broadband

Wireless service cannot satisfy the obligation to serve unless there is no

Local Service Subsidy

Basic Service Objective

The basic service objective needs to be modernized to include broadband

For wireless broadband to satisfy the BSO, there must be no functional

Local Competition and WNP in the Territories of Small ILECs

The requirements that small ILECs implement LNP should be maintained.

Mobile Wireless Data Services

Part 1 – Canada’s Telecommunications Accessibility

Access to Voice Service and Access to Broadband Internet

Deferral Accounts Follow-Up and “Double-Dipping”

8. One difference between the Canadian and American situations4 is the

9. Interestingly, however, the Deferral Accounts Decision, and the build-out of

10. As discussed below in the Consumer Groups’ discussion of their proposed

First, Do No Harm (Preserving Ubiquitous Telephone Service)

11. The Commission’s first goal in this proceeding should be to preserve

The Statutory and Regulatory Context

(a) to facilitate the orderly development throughout Canada of a

There is a clear direction provided to the Commission by way of

22. The Commission therefore has an opportunity to develop a framework to

Part 2 – Responses to the Commission’s Questions

29. The Policy Direction requires regulatory measures to be efficient and

Extension of Obligation to Serve to Broadband Carriers

Should Wireless Satisfy the Obligation to Serve?

36. There is no theoretical reason why a wireless local service telephone

39. Secondly, wireless voice service (especially post-paid) consistently is on

46. Symmetry and competitive neutrality in non-economic regulatory measures

49. Extending the obligation to serve to CLECs is also appropriate because

6. (1) Where a telephone service is requested by any

(a) furnish the service; and

(b) subject to any order of the Commission under section

57. In Decision 2006-15, as amended by OIC 2007-532, the Commission

59. This is because the obligation to serve exists independently of statute or

These status-based tort obligations evolved as an

ARTICLE 2: OBLIGATION TO PROVIDE SERVICE

67. Bell’s “Unregulated Terms of Service” are similarly ambiguous, but

69. Without this determination, it is difficult to judge if competition plays a role. If

70. If competition or monopoly status do play a role, then the discussions

71. Nonetheless, as the Consumer Groups see few opportunities to express

72. First, we must discuss obligation to serve in “competitive” areas. Because of

75. Overall, any modification of the obligation to serve should be contemplated

76. There should be no compensation for a telecommunications service provider

80. Thirdly, building such a compensation scheme into a regulatory scheme

6(2) Nothing in subsection (1) requires the Company

(a) the premises for which the service is requested

(c) if the Commission has not otherwise specified, the

Article 3: Obligation to Provide Service

Note: Continues to apply for residential stand-alone primary exchange

3.1. Bell Canada is not required to provide service to an applicant where:

(c) the applicant does not provide a reasonable deposit or

Service Improvement Plans

read similarly under Item 53 of the General Tariff, at: http://www.sasktel.com/about-us/company-

97. The Commission should conduct a diligent study as to how

(a) 1.2 – Installation appointments met;

107. Based on the anecdotal complaints of customers received at PIAC, the

 Advertised speed not consistently achievable at customer’s