Friday, January 26, 2007

 

CRTC driving wholesale access to NGN

CRTCA series of Telecom Orders released by the CRTC yesterday point to the Commission driving an agenda that fosters the availability of wholesale DSL and advanced network access, thereby enabling a more competitive broadband marketplace.

In Telecom Order 2007-20, the CRTC sets out requirements for a wholesale ethernet access service as well as transport and connection services:
The Commission determines that the incumbent local exchange carriers (ILECs) shall provide to competitors, as part of their Ethernet services, an Ethernet access service, together with the Ethernet transport service and the Ethernet central office (CO) connecting link service.
Telecom Orders 2007-21 through 2007-25 set out determinations to provide wholesale DSL services by each of the major ILECs across the country, including substantial changes to the originally proposed tariffs.

All of these Orders contribute to simplifying the ability for competitors to offer a uniform suite of services to business and residential consumers. The Orders appear to be a significant win for MTS Allstream and other competitors by getting rid of volume commitments and contracted terms. The Orders directly address concerns about ethernet, next generation networks and the broadband internet market becoming a virtual duopoly.

There is an underlying subtext that needs to be explored at another time. The CRTC found that wholesale ethernet and ADSL are non-essential services, yet the Commission is imposing rates and terms that differ from those initially proposed by the ILECs. Contrast this to the Minister's direction that requires the CRTC to determine the extent to which regulation of non-essential services should be phased out. Your comments are always welcome.

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Comments:
The definition of essential services is subject to an interesting debate among economists. In the past the CRTC has neatly sidestepped participating in that debate by creating via the category of near-essential services. That category allowed it to satisfy a relatively orthodox rendition of one side of the debate, in its narrow "essential services" definition, and satisfy the other side of the debate by inserting the rest into "near-essential services".

An environment without near-essential services is presumably one which revisits what are defined as essential services, too.
 
In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, the Commission established two categories of Competitor Services in order to clarify the pricing treatment of these services. The Commission determined that Competitor Services in the nature of an essential service would be known as Category I competitor services. Category I competitor services include essential services, near-essential, and interconnection and ancillary services. The Commission indicated that near-essential services are critical inputs required by competitors in light of the very limited competitive supply for these services.

The Commission determined that the second group of Competitor Services would be those services developed for use by telecommunications service providers - other than services in the nature of an essential service - and would be known as Category II competitor services.

Is it correct to assume Ethernet Transport Services and ADSL Services (which were labelled Category II services by the Commission) are properly charachterized as near-essential services?
 
What about wholesale access to cable high-speed networks. I believe the CRTC originally ordered it in 1999 but so far the major cablecos have yet to open their networks.
 
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