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5 April 2011 Our Reference: 8638-C12-201014620

BY E-MAIL

To Distribution List

Re: Follow up to Telecom Regulatory Policy CRTC 2010-632, Wholesale high-speed


access services proceeding – Request for disclosure of costing information filed in
confidence

This letter addresses requests for disclosure of information for which a claim of confidentiality
has been made by Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron
Ltd., Rogers Communications Inc., and Shaw Communications Inc. (collectively, the cable
carriers).

On 18 March 2011, the Canadian Network Operators Consortium Inc. (CNOC) filed a request
for disclosure of information for which confidentiality had been claimed.

On 25 March 2011, the cable carriers filed with the Commission their response to the above
request for disclosure.

Disclosure

Requests for disclosure of information for which confidentiality has been claimed are addressed
in light of sections 38 and 39 of the Telecommunications Act and section 331 of the Canadian
Radio-television and Telecommunications Commission Rules of Practice and Procedure (the
Rules of Procedure). In evaluating a request, an assessment is made as to whether there is any
specific direct harm likely to result from the disclosure of the information in question. Further,
in order to justify a claim of confidence, any such harm must be sufficient as to outweigh the
public interest in disclosure. In making this evaluation, a number of factors are taken into
consideration, including the following:

The degree of competition that exists in a particular market or that is expected to occur is
an important consideration in assessing requests for disclosure. All things being equal,
the greater the degree of actual or expected competition, the greater the specific harm that
could be expected to result from disclosure;

1
The new Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the
Rules of Procedure) came into force on 1 April 2011; section 33 of the new Rules of Procedure replaces section 19 of
the old CRTC Telecommunications Rules of Procedure.
2

Another factor in assessing the extent of harm is the expected usefulness of the
information at issue to parties in furthering their competitive position. In this regard, an
important consideration is the degree to which the information at issue is disaggregated.
Generally speaking, the more aggregated the information, the less likelihood that harm
will flow from its disclosure;

The expectation that specific direct harm might result from disclosure is not, by itself,
sufficient to justify maintaining a claim of confidentiality. In certain circumstances,
substantial harm from disclosure may still be outweighed by the public interest in
disclosure; and

It should be noted that the treatment of confidentiality requests should not be taken as an
indication of the manner in which such matters would be dealt with in the future in
different circumstances.

In addition, in the circumstances of this case, the extent to which similar information was
disclosed on the public record of the proceeding leading to Cogeco, Rogers, Shaw, and
Videotron - Third-party Internet access service rates, Telecom Decision CRTC 2006-77, 21
December 2006, was considered.

Having regard to all of the considerations set out above, the information filed under a claim of
confidentiality in response to the interrogatories and cost studies listed in Attachment 1 is, to the
extent set out in the Attachment, to be placed on the public record of this proceeding. In each
case where full or partial disclosure is to occur, it is considered that the specific direct harm, if
any, likely to be caused by disclosure would not outweigh the public interest in disclosure.

Other Matters

It should be noted that in several interrogatory responses, certain requested information was
either not provided or was incomplete. Accordingly, the cable carriers are to revise their
responses to 15 September 2010 and 4 February 2011 interrogatories, as specified in
Attachment 2.

In addition, certain information is being requested which is considered to be important to the


record of this proceeding. The cable carriers are requested to respond to the interrogatories
included in Attachment 3.

In their responses to Attachments 3, the cable carriers are to provide information on the public
record consistent with the disclosure requirements above.

Filing Requirement

It is to be noted that additional questions are required to assess the additional information
provided in response to the 4 February 2011 interrogatories. Accordingly the process is modified
to allow additional time to provide responses to the additional questions identified in
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Attachment 3. The cable carriers are accordingly required to provide the information sought in
Attachments 1, 2 and 3 by 20 April 2011.

The information to be disclosed by the cable carriers, as set out in Attachment 1, or to be


provided, as set out in Attachment 2 and 3, is to be filed with the Commission and served on all
interested parties, by 20 April 2011. The above material must be received, not merely sent, by
this date. Copies of the documents should also be sent to mohammed.omar@crtc.gc.ca.

Yours sincerely,

Original signed by

Yvan Davidson / for


Lynne Fancy
Director General
Competition, Costing and Tariffs
Telecommunications

cc: Yvan Davidson, yvan.davidson@crtc.gc.ca


Mohammed Omar, mohammed.omar@crtc.gc.ca
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DISTRIBUTION LIST:

regulatoryaffairs@nwtel.ca; bell.regulatory@bell.ca; reglementa@telebec.com;


iworkstation@mtsallstream.com; regulatory@bell.aliant.ca;
Regulatory.Matters@corp.eastlink.ca; Regulatory@sjrb.ca; marcel.mercia@cybersurf.com;
reglementation@xittel.net ; regulatory@distributel.ca; lisagoetz@globalive.com;
regulatory@primustel.ca; telecom.regulatory@cogeco.com; regaffairs@quebecor.com;
ken.engelhart@rci.rogers.com; regulatory.affairs@telus.com; crtc@mhgoldberg.com;
eric@rothschildco.com; gfletcher@incentre.net; berzins@nucleus.com;
babramson@mccarthy.ca; regulatory@execulink.com; ctacit@tacitlaw.com; abriggs@cogeco.ca;
slavalevin@ethnicchannels.com; crtc@les.net; LBC_Consulting@live.ca;
andre.labrie@mcccf.gouv.qc.ca; bob.Allen@abccomm.com; ghariton@sympatico.ca;
lefebvre@rogers.com; kirsten.embree@fmc-law.com; bruce@brucebuchanan.net;
jonathan.holmes@ota.on.ca; cataylor@cyberus.ca; chris.allen@abccomm.com;
regulatory@vianet.ca; piac@piac.ca; tom.copeland@caip.ca ; hemond@consommateur.qc.ca;
blackwell@giganomics.ca; jhpratt@msn.com; crtc@paul.ca; regulatory@lya.com;
regulatory@teksavvy.com; dmckeown@viewcom.ca; David.Wilkie@tbaytel.com;
regulatory@fibernetics.ca; jfmezei@vaxination.ca; stephen.scofich@tbaytel.com;
regulatory@bcba.ca; crtcmail@gmail.com; telecom@gov.bc.ca;
regulatory@telnetcommunications.com; apilon@acninc.com; regulatory@cnoc.ca;
jp@electronicbox.net; pris@pris.ca; michelle.duguay@telus.com;
document.control@sasktel.sk.ca
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Attachment 1

Disclosure of Confidential Information

The cable carriers are to provide on the public record the information filed with the Commission
in confidence, as set out below:

Cogeco(CRTC)4Feb11-107 b)

Provide the year over year percentage growth, based on the combined (total of upstream and
downstream traffic) average monthly Internet usage levels per end-user for each of the years
2006 to 2010, on the public record.

Cogeco(CNOC)11Feb11-1

Disclose the forecasted growth in traffic levels as requested.

Cogeco(CNOC)11Feb11-4 b)

Disclose the average working fill factors (AWFF) as requested.

Rogers(CRTC)4Feb11-106 b)

Provide the year over year percentage growth, based on the combined (total of upstream and
downstream traffic) average monthly Internet usage levels per end-user for each of the years
2006 to 2010, on the public record.

Rogers(CNOC)11Feb11-2 b)

Disclose the average working fill factors (AWFF) as requested.

Rogers(CNOC)11Feb11-3 e)

Disclose the forecasted growth in traffic levels as requested.

Shaw(CRTC)4Feb11-105 b)

Provide the year over year percentage growth, based on the combined (total of upstream and
downstream traffic) average monthly Internet usage levels per end-user for each of the years
2006 to 2010, on the public record.

Shaw(CNOC)11Feb11-3 b)

Disclose the average working fill factors (AWFF) as requested.


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Shaw(CNOC)11Feb11-4 e)

Disclose the forecasted growth in traffic levels as requested.

QMI(CRTC)4Feb11-106 b)

Provide the year over year percentage growth, based on the combined (total of upstream and
downstream traffic) average monthly Internet usage levels per end-user for each of the years
2006 to 2010, on the public record.

QMI(CRTC)4Feb11-111 b)

Refer to the response to QMI(CRTC)15Sept10-101. For each of the TPIA services, provide the
ratio of the present worth of annual costs (PWAC) associated with equipment maintenance to the
Total PWAC costs on the public record.

QMI(CRTC)4Feb11-116

Refer to the response to QMI(CRTC)15Sept10-101. Provide the productivity factors for CMTS,
routers and others used in the Economic Study on the public record.

QMI(CNOC)11Feb11-3 b)

Disclose the average working fill factors (AWFF) and life estimates as requested.

QMI(CNOC)11Feb11-4 e)

Disclose the forecasted growth in traffic levels as requested.


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Attachment 2

Further responses to Interrogatories

Cogeco is to provide further response to the interrogatory identified below to the extent set out
below:

Cogeco(CRTC)15Sept10-108.

Provide a complete response to parts e) and f) and place an abridged version on the public
record.
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Attachment 3

Interrogatories for Rogers Communications Inc.

1001. Refer to the Economic Study provided by the company in response to the Commission
interrogatories dated 15 September 2010. For each of the TPIA services, derive the ratio
of the present worth of annual costs (PWAC) associated with equipment maintenance to
the Total cost impacts and place the ratio on the public record.

1002. a) Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic
Evaluation, provide revised proposed costs and rates per end-user, for each of the
following change in assumptions:

i. For each year of the study period, apply a productivity factor of 10 percent for
traffic driven components (e.g. CMTS, Transport and Router).

ii. For each year of the study period, apply a productivity factor of 15 percent for
traffic driven components.

iii. the growth in traffic levels, provided on page 3 of the response to


Rogers(CRTC)15Sept10-107 is 20% per year, except for the first two years where
the annual growth is assumed to equal the actual annual traffic growth
experienced in 2010 over 2009.

iv. combine parts i) and iii) above.

v. combine parts ii) and iii) above.

b) Provide the average annual change in the combined Segmentation and CMTS costs per
end-user from 2006 to 2010 provided in the response to Rogers(CRTC)4Feb11-108.
Further explain how the average annual change in the combined segmentation and CMTS
cost per end-user was derived from the information, with supporting rationale.

c) With respect to the response to parts a) i) and a) ii) above, comment on the extent to
which equipment capacity for traffic-driven cost components are increased over time to
satisfy higher traffic demand without significantly increasing the overall provisioning
costs per end-user and thereby causing significant unit cost decreases per peak period
bandwidth for this category of costs.

1003. Refer to Rogers(CRTC)4Feb11-103b) where the company has stated that the relationship
between traffic speed and volume is derived from the sampling of speed. Explain the
relationship between traffic speed and volume that has been assumed in the study with
supporting rationale. Provide the ratio(s) between volume (monthly average traffic
volumes in MB per end-user) and traffic speed (peak period traffic in Mbps) that have
been derived from the sample data, including all supporting assumptions, with rationale.
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1004. Refer to the response to Rogers(CRTC)15Sept10-105a)(iii). For each of DOCSIS 2.0 and
DOCSIS 3.0 services, provide a step-by-step calculation in an Excel spreadsheet to derive
the CMTS per-downstream channel cost.

Interrogatories for Quebecor Media Inc., on behalf of its affiliate Videotron Ltd.

1001. Refer to Tab “Annex 1” of the Attachment to QMI(CRTC)04Feb2011-107.

a) Provide the costing methodology and assumptions used to estimate cost per node -
modernization in Rows 31, and cost per node - regular decongestion and pre-
modernization deployment in Row 32. Further, provide the changes in costing
methodology and assumptions, if any, from those used in the cost study submitted in
the proceeding leading to Decision 2006-77 to estimate these costs, with supporting
rationale.

b) Explain the purpose of using a multiplicative factor in the calculation of


“modernization cash flows- gross value” in Row 49, with supporting rationale.
Further, confirm that the same multiplicative factor was used in the cost study
submitted in the proceeding leading to Decision 2006-77 to estimate these costs. If
not, explain the changes in this calculation, with supporting rationale.

c) Identify all the cash flows that are included in Row 55 titled “Economic study
disclosed cash flows (gross of 90% attribution)”. Further, for each of these cash
flows, provide the calculation and all relevant data (such as capital unit costs /factors)
used to estimate these cash flows by updating Annex 1 and providing the capital unit
costs and the associated drivers used.

d) Confirm that the ”Estimated cash flows - IP Layer” calculated in Row 59 are to
replace the “Total IP Layer – Variable” cash flows provided in Row 101 in tab
“Model ING” in Attachment 1 to the response to QMI(CRTC)15Sept10-101. If yes,
provide an update of Attachment 1 to the response to QMI(CRTC)15Sept10-101
reflecting this change. If no, identify which IP Layer cash flows are excluded in Row
59 and for each of the IP Layer cash flows that are excluded, provide the calculation
and all relevant data (such as capital unit costs /factors) used to estimate these cash
flows; further provide a revised Annex 1 that exclude the IP Layer cash flows.

1002. a) Using the format of Tables 1 to 8 in the company’s revised 14 December 2010
Economic Evaluation report, provide revised proposed costs and rates per end-user, for
each of the following change in assumptions:

i. For each year of the study period, apply a productivity factor of 10 percent for
traffic driven components (e.g. CMTS, Transport and Router).
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ii. For each year of the study period, apply a productivity factor of 15 percent for
traffic driven components.

iii. the growth in traffic levels, provided on page 3 of the response to


QMI(CRTC)15Sept10-107 for each year is 20% per year, except for the first two
years where the annual growth is assumed to equal the actual annual traffic
growth experienced in 2010 over 2009.

iv. combine parts i) and iii) above.

v. combine parts ii) and iii) above.

b) Provide the annualized productivity factor for CMTS-related costs per kbps provided
in QMI(CRTC)4Feb11-116 b) from 2006 to 2010 and explain how this productivity
factor was derived from the information, with supporting rationale.

c) With respect to the response to parts a) i) and a) ii) above, comment on the extent to
which equipment capacity for traffic-driven cost components are increased over time
to satisfy higher traffic demand without significantly increasing the overall
provisioning costs per end-user and thereby causing significant unit cost decreases
per peak period bandwidth for this category of costs.

1003. Refer to the tab “Model ING” in Attachment 1 of the response to QMI(CRTC)15Sept10-
101. For each of Basic and High Speed service and for each of IP layer costs and Node
segmentation costs, provide the changes, if any, in costing methodology and assumptions
from those used in the cost study submitted in the proceeding leading to Decision 2006-
77.

1004. Refer to Head-ends –IP Layer related (Head-end Infrastructure) costs on page 7 of the
response to QMI(CRTC)04Feb2011-107. Explain with supporting rationale why these
costs are causal to the TPIA service. Further explain with supporting rationale how the
percentage used to attribute these costs to TPIA was estimated. Additionally, provide any
changes in costing methodology and assumptions from those used in the cost study
submitted in the proceeding leading to Decision 2006-77.

1005. Refer to the response to QMI(CRTC)15Sept2010-107 where the company provided


average monthly downstream per end-user (GB) per speed tier, average peak downstream
traffic per end-user (kbps) per speed tier based on one-day sample (last Monday of
October 2010) and peak traffic estimate per end-user based on the average measured
traffic per end-user for the week of 11-18 October 2010.

a. Provide revised average monthly downstream per end-user (GB) per speed tier
and average peak downstream traffic per end-user (kbps) per speed tier based
on a period longer than one day (e.g. three or four days).
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b. Provide revised peak traffic per end-user based on the average of the sample
data for the week of 11-18 October 2010, and 19-26 October 2010 with an
adjustment for traffic growth, if applicable.

c. Further comment on the use of above revised data to update Tables 1 through
8 of the company’s TPIA Updated economic evaluation revised 14 December
2010.

1006. Refer to Attachment 1 of the response to QMI(CRTC)15Sept10-101. Provide a copy of


Attachment 1 along with all the associated excel spreadsheets that are linked.

1007. Refer to the excel spreadsheet – section “cost drivers and volumes” referred to in part (b)
(iii), item 5 of the response to QMI(CRTC)04Feb2011-107.

a) Confirm that the downstream peak traffic per end-user provided in Row 8 is the
average for all speeds. If not, explain what it represents.

b) Provide the peak-to-average ratio used that was used in the cost study filed in the
proceeding leading to Decision 2006-77.
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Interrogatories for Cogeco Cable Inc.

1001. Refer to the Economic Study provided by the company in response to the Commission
interrogatories dated 15 September 2010. For each of the TPIA services, derive the ratio
of the present worth of annual costs (PWAC) associated with equipment maintenance to
the Total cost impacts and place the ratio on the public record.

1002. a) Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic
Evaluation report, provide revised proposed costs and rates per end-user, for each of the
following change in assumptions:

i. For each year of the study period, apply a productivity factor of 10 percent for
traffic driven components (e.g. CMTS, Transport and Router).

ii. For each year of the study period, apply a productivity factor of 15 percent for
traffic driven components.

iii. the growth in traffic levels, provided on page 2 of attachment 3 in response to


Cogeco(CRTC)15Sept10-101 is 20% per year, except for the first two years
where the annual growth is assumed to equal the actual annual traffic growth
experienced in 2010 over 2009.

iv. combine parts i) and iii) above.

v. combine parts ii) and iii) above.

b) Provide the average annual change in the DOCSIS Equipment costs per kbps from
2006 to 2010 as provided in the response to Cogeco(CRTC)4Feb11-119 a). Further
explain how the average annual change in the DOCSIS Equipment costs per kbps was
derived from the information, with supporting rationale.

c) With respect to the response to parts a) i) and a) ii) above, comment on the extent to
which equipment capacity for traffic-driven cost components are increased over time to
satisfy higher traffic demand without significantly increasing the overall provisioning
costs per end-user and thereby causing significant unit cost decreases per peak period
bandwidth for this category of costs.

1003. Refer to the table below which provides a comparison of the monthly rate per end-user
for each speed tier provided in response to interrogatory Cogeco(CRTC)4Feb11-120 and
in TPIA Economic Evaluation filed in response to CRTC’s 15 September 2010
interrogatories.
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Monthly Rate Per End-User


Provided in Speed Speed Speed Speed Speed
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
Response to interrogatory
$30.10 $40.31 $45.97 $91.75 $186.40
Cogeco(CRTC)4Feb11-120
TPIA Economic Evaluation
filed in response to CRTC’s
$24.50 $29.20 $33.46 $52.16 $87.56
15 September 2010
interrogatories
Percent Increase in Monthly
23% 38% 37% 76% 113%
Rate Per End-User
a. Explain why Speed Tiers 4 and 5 monthly rate per end-user have increased
significantly between the two above-noted cost studies relative to other lower speed
Tiers, specifying any change in cost methodology and assumptions between the two
cost study responses, with supporting rationale.

b. For speed Tier 4 for each of the bandwidth sensitive cost component (e.g.
segmentation, IP layer, traffic aggregation) provided in response to interrogatory
Cogeco(CRTC)4Feb11-120, explain why the ratio of speed Tier 4 to speed Tier 3
bandwidth sensitive cost components is significantly higher than the ratio of speed
Tier 4 to speed Tier 3 average bandwidth allocations (i.e. equivalence factor),
provided in response to interrogatory Cogeco(CRTC)15Sep10-107, with supporting
rationale.

c. For speed Tier 5 for each of the bandwidth sensitive cost component (e.g.
segmentation, IP layer, traffic aggregation) provided in response to interrogatory
Cogeco(CRTC)4Feb11-120, explain why the ratio of speed Tier 5 to speed Tier 3
bandwidth sensitive cost components is significantly higher than the ratio of speed
Tier 5 to speed Tier 3 average bandwidth allocations (i.e. equivalence factor),
provided in response to interrogatory Cogeco(CRTC)15Sep10-107, with supporting
rationale.

d. For each speed Tier 4 and Tier 5, provide the company and ISP end-user forecast,
their respective year over year growth rates, and overall uniform growth rate. Also,
provide the methodology and assumptions used to develop these end-user forecasts.
Further, explain with supporting rationale, any significant changes (in excess of 20%)
in the company’s and ISPs’ year over year growth rates.

1004. Provide the revised attachment 1 and attachment 2 of response to


Cogeco(CRTC)15Sept10-101 that incorporates all the changes made to these
spreadsheets in response to Cogeco(CRTC)4Feb11-120 and Cogeco(CRTC)4Feb11-121.
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Interrogatories for Shaw Communications Inc

1001. Refer to the Economic Study provided by the company in response to the Commission
interrogatories dated 15 September 2010. For each of the TPIA services, derive the ratio
of the present worth of annual costs (PWAC) associated with equipment maintenance to
the Total cost impacts and place the ratio on the public record.

1002. a) Using the format of Tables 1 to 15 in the company’s 10 December 2010 TPIA
Economic Evaluation, provide revised proposed costs and rates per end-user, for each of
the following change in assumptions:

i. For each year of the study period, apply a productivity factor of 10 percent for
traffic driven components (e.g. CMTS, Transport and Router).

ii. For each year of the study period, apply a productivity factor of 15 percent for
traffic driven components.

iii. the growth in traffic levels, provided in part (b) (ii) in the response to
Shaw(CRTC)15Sept10-107 is 20% per year, except for the first two years where
the annual growth is assumed to equal the actual annual traffic growth
experienced in 2010 over 2009.

iv. combine parts i) and iii) above.

v. combine parts ii) and iii) above.

b) Provide the average annual change for each of CMTS cost per kbps, Transport cost per
kbps and Router costs from 2006 to 2010 as provided in the response to
Shaw(CRTC)4Feb11-114 a). Further explain how the average annual change for each of
CMTS cost per kbps, Transport cost per kbps and Router costs was derived from the
information, with supporting rationale.

c) With respect to the response to parts a) i) and a) ii) above, comment on the extent to
which equipment capacity for traffic-driven cost components are increased over time to
satisfy higher traffic demand without significantly increasing the overall provisioning
costs per end-user and thereby causing significant unit cost decreases per peak period
bandwidth for this category of costs.

1003. For each expense item (e.g. service call, trouble reporting and assistance) that is common
to TPIA and the company’s retail high speed Internet Service and included in the
Economic Evaluation filed in support of TPIA dated 10 December 2010, provide a
comparison of the estimate of the per end-user unit cost associated with the company’s
expenses to provide its own high speed Internet Service and to provide the TPIA Service.