Ottawa, 19 May 2011 Our References: 8661-C12-201102350

8638-C12-201016882

BY E-MAIL

DISTRIBUTION

Dear Madam or Sir:

Re: Review of billing practices for wholesale residential high-speed access services,
Telecom Notice of Consultation CRTC 2011-77, 8 February 2011, as amended
(TNC 2011-77) and “Follow-up to Regulatory Policy CRTC 2010-632:
Wholesale high-speed access services proceeding (cost studies – ILEC)” –
Request to merge the two proceedings

The Commission has received a letter from the Canadian Network Operators Consortium Inc.
(CNOC), dated 2 May 2011, requesting that the Commission join the business component of
the wholesale high-speed access services proceeding (Business Wholesale proceeding) with
the proceeding initiated by TNC 2011-77 (Residential Wholesale proceeding) into a single
proceeding (Merged proceeding) by making the following changes:

1. including both of the proceedings in the oral hearing scheduled for July pursuant to
TNC 2011-77;
2. allowing parties to file one written reply argument on 29 July 2011 with regard to
both proceedings; and
3. including in the Merged proceeding the issue of whether value-of-service pricing (i.e.
non-cost-based pricing distinctions between wholesale business and residential high-
speed access services) for business wholesale high-speed access services should be
eliminated.

The British Columbia Broadband Association and Vaxination Informatique filed letters,
dated 2 May 2011 and 13 May 2011 respectively, supporting CNOC’s request.
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CNOC argued that if the Business Wholesale and Residential Wholesale proceedings are
kept separate, parties will have to repeat many of their submissions in both proceedings,
resulting in confusion, unfairness, and inefficiency, which it perceived to be contrary to the
statutory requirement in paragraph 7(f) of the Telecommunications Act.

CNOC also argued that parties participating in the Business Wholesale proceeding will be
disadvantaged relative to those participating in the Residential Wholesale proceeding because
the Business Wholesale proceeding does not include an oral hearing. CNOC stated that
separate proceedings will result in the regulation of ILEC business wholesale high-speed
access services being based on less scrutiny than the regulation of third-party Internet access
(TPIA) or ILEC residential wholesale high-speed access services.

CNOC further argued that by keeping the two proceedings separate from one another, the
Commission is depriving CNOC and other parties of the ability to fully canvass the topic of
value-of-service pricing.

The Commission notes that a Commission staff letter, dated 13 April 2011, was issued to
clarify the information set out in TNC 2011-77-2.

When the Commission initiated TNC 2011-77, it determined that the scope of the proceeding
would be a review of the billing practices for wholesale residential high-speed access
services only, and subsequent amendments (TNC 2011-77-1 and TNC 2011-77-2) have not
altered that determination. In TNC 2011-77-2, dated 8 April 2011, the Commission stated
that it was adding only the residential component of the wholesale high-speed access services
tariff proceeding to the TNC 2011-77 proceeding. The Commission indicated that this
inclusion would (a) provide a more comprehensive record for the assessment of alternative
proposals for billing methods based on the principles outlined in TNC 2011-77, and (b) allow
for disposition of the tariff proceedings related to wholesale residential high-speed access
services as part of the proceeding.

The Commission does not consider that the separation of the proceedings causes confusion or
is unfair to parties. The Commission notes that the proceedings are split as much as possible
between business and residential wholesale services and that the parties will have sufficient
opportunity in each proceeding to provide comments and address relevant issues.

The Commission does not consider that the parties participating in the Business Wholesale
proceeding are at a disadvantage because that proceeding does not include an oral hearing.
The Commission notes that the majority of parties are participating in both proceedings and
that tariff approval processes do not typically include an oral hearing. The Commission
considers that the lack of an oral hearing will not result in the regulation of ILEC business
wholesale high-speed access services being based on less scrutiny than regulation of TPIA or
ILEC residential wholesale high-speed access services.
 3

The Commission further considers that the issue raised by CNOC regarding the appropriate
pricing principles can be addressed in the context of the Business Wholesale proceeding.

In light of the above, the Commission denies CNOC’s request.

Sincerely,

Original signed by:

Robert A. Morin
Secretary General
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