TELECOM REGS: CRTC to study the consolidation of interconnection regimes next week

OTTAWA – The real battle of the CRTC’s interconnection hearing that starts next week is going to be over whether the new entrant wireless service providers and long distance carriers are able to connect to incumbent and competitor networks at lower costs.
In its consultation document, the Commission has asked the telecommunications industry if it would benefit from a consolidated interconnection regime rather than the current situation with three separate regimes: one for each the competitive local exchange carriers, wireless service providers and long distance or toll traffic carriers.
Under the current rules, CLECs are considered co-carriers, or peers, with the incumbents and therefore benefit from an interconnection regime where the costs of interconnection are shared among the two. But WSPs and LD providers are considered customers of the ILECs and therefore have to pay higher rates to interconnect. WSPs can reduce their interconnection costs by becoming wireless CLECs, much like Fido did several years ago.
Wind Mobile and Mobilicity are undecided as to whether the three regimes should be consolidated, but say they are paying too much to interconnect with LEC networks. They believe the current regime for WSPs is unfair and runs counter to competitive market forces and describe the current tri-partite interconnection regime as being “asymmetrical” and prescribing “discriminatory treatment of wireless service providers”.
In a joint submission, Wind and Mobilicity say they are disadvantaged because the ILECs wireless arms “are presumed not to bear the same burden as new entrant WSPs…in relation to network interconnection costs.”
“It is, therefore, not in the public interest to stifle competition and distort market forces in mobile wireless telecommunications markets by allowing LECs, and ILECs in particular, to protect their wireline businesses by charging monopoly rents to wireless carriers for essential interconnection services.”
Bell Canada, Rogers Communications and Telus see things a little differently when it comes to wireless interconnection. If the WSP wants to benefit from a shared-cost regime, then they should obtain CLEC status, say the big three.
“The principle should remain that only those wireless carriers that are willing to undertake all of the LEC obligations should be characterized as peers and entitled to the shared-cost local interconnection regime,” Telus tells the CRTC. “Granting WSPs shared-cost interconnection with ILECs would eliminate the incentive for WSPs to become CLECs.”
With respect to some CLEC concerns over costs associated with leased facilities, Rogers says that the current regime isn’t all that fair. The media and communications conglomerate notes that when a CLEC interconnects to an ILEC using leased facilities, it has to pay the full freight, including the costs of the ILEC.
“In order for costs to be shared when the facilities are leased from the ILEC, CLECs should be charged only 50% of the applicable tariff rate for the leased facilities. Alternatively, CLECs could be charged 100% of the applicable tariff on 50% of the leased facilities if this implementation is preferable from an ILEC information systems billing perspective,” Rogers tells the Commission.
For Yak Communications (which, like Wind Mobile, is controlled by Globalive), the current approach to interconnection is working fine, but it would like to see some changes, including the elimination of multiplexing charges for toll carriers. The company says it pays in excess of $8,000 per month for this in one particular local interconnection region (LIR).
Yak proposes that “CLECs and ILECs should each be responsible for their respective multiplexing/de-multiplexing costs whether interconnection is completed through shared cost facilities or through leased facilities.”
Another key aspect of the hearing will look into whether the Commission should mandate IP to IP interconnection for voice services. Rogers says the government’s strategy of “getting all Canadians broadband-interconnected” won’t be realized if Canadian carriers aren’t required to interconnect their voice IP networks as they do now in the TDM environment.
The company isn’t proposing “detailed ex ante interconnection rules” but a “set basic default rules that will ensure that Canadian carriers can enter into efficient and cost-effective arrangements to interconnect their managed IP networks.”
Bell says a mandated migration to IP would hurt companies with a lot of legacy services, provide advantages for the cable carriers which chose IP when they introduced voice and “would force ILECs to move away from TDM technology, a non-technologically neutral coerced migration that was never imposed on IP carriers.”
A market-driven approach is more desirable says Bell.
“From a technical standpoint, a commercially-driven migration to IP (which would be progressive, both in terms of timing and in terms of which customers or which services to migrate) would be better able to iron out any wrinkles from technological change,” it writes.
The hearing begins on October 24 and is expected to run for six days.