Telecom regulator says incumbent phone and cable carriers have to disclose more costing data for wholesale rate changes. However, they still can ask for data to remain confidential

Large carriers lose another decision at CRTC

The country’s large telecommunications carriers will have to release more costing information to competitors when proposing wholesale rate changes, the CRTC has ruled.

In a decision released Friday, the Canadian Radio-television and Telecommunications Commission said carriers such as BCE Inc.’s Bell Canada, Rogers Communications and Telus Corp. haven’t been giving enough information to the commission for competitors to analyze before hearings.

The information is used by the commission to set wholesale rates large carriers can charge telecom and Internet service providers for buying access. The commission doesn’t regulate retail rates.

“Smaller companies offer competitive and innovative choices to Canadians by using access they have purchased at wholesale prices from the large companies,” said commission chair Jean-Pierre Blais explained in a release.

 “Today’s guidelines will increase transparency and allow Canadians to better understand how we establish wholesale rates.”

Companies will continue to have the right to protect competitively sensitive information submitted to the CRTC. At the same time competitors can continue to request disclosure of any information.

“Excellent news,” Iain Grant, managing director of the SeaBoard Group, a telecommunications consultancy, said in an email. “More transparency may even help make the market more competitive — this is a good first step toward a more dynamic and open wholesale environment which will be good news for consumers, business and providers alike.”
“Excellent news,” Iain Grant, managing director of the SeaBoard Group, a telecommunications consultancy, said in an email. “More transparency may even help make the market more competitive — this is a good first step toward a more dynamic and open wholesale environment which will be good news for consumers, business and providers alike.”

 “We think it’s a fantastic decision,” said William Sandiford, chairman of the Canadian Network Operators Consortium (CNOC), which represents a number of independent Internet service providers across the country. He also heads Telnet Communications.

He called it an “extremely pro-competitive” ruling that will ensure Canadians have access to better-priced Internet service from a variety of providers.

“The commission hit the nail on the head.”

Shawn Hall a spokesman for Telus Corp. said the carrier has no trouble with the ruling. “We understand why the commission wants to make proceedings as transparent as possible, and we support that.”
A spokesperson for Bell said the telco is still studying the decision.
 
He also noted that the ruling still allows Telus to ask that certain costing and forecast information to be given in confidence to the commission if it puts the carrier at a competitive disadvantage.
The decision could be a boon for independent Internet and telecommunications providers who have long complained they don’t see the entire costs large carriers say they bear when faced with rate increases.

When large carriers want to make changes in their wholesale rate typically they submit economic studies to the CRTC, which sets the cost of a service and applies a markup. Generally, carriers insist these studies be confidential.

When the commission asked earlier this year if more data should be publicly disclosed, virtually all large carriers – including Bell, Telus, Rogers, SaskTel, Cogeco Cable, Videotron and Shaw Communications – insisted they give enough costing data on the public record for competitors to make decisions at rate hearings.

On the other hand CNOC as well as Manitoba’s MTS Allstream and SSi Micro insisted more costing data should be out in the open.

In explaining its decision, the commission noted that usually large carriers allow a limited amount of costing information to be publicly disclosed; the CRTC has to order increased disclosure. When that happens, it adds, a better hearing results.

So it has issued new guidelines on what carriers have to publicly disclose when applying for rate changes.

Not everything has to be put on the table – for example, large carriers won’t have to divulge how many customers they have for a particular service, sensitive service demand predictions or specific labour or equipment costs.

But they will have to publicly release what is called the aggregate demand for a wholesale service from competitors. They will also have to release their aggregate costs of labour and equipment for a particular wholesale service.

 

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