CP 1016 Succ Pointe Claire

Pointe Claire, Québec H9S 4H9

Canada +1 514 394-0348
www.vaxination.ca

February 17th, 2011

Mr. Robert A. Morin

Secretary General
Canadian Radio-television and
Telecommunications Commission
Ottawa, Ontario K1A 0N2

Subject: Telecom Notice of Consultation CRTC 2011-77

Review of billing practices for wholesale residential high-speed access services
File number: 8661-C12-201102350

Mr. Morin,

1. I am writing because I have serious concerns about the content and context of the announcement of
the CRTC 2011-77 Notice of Consultation and request a re-framing of the consultation to ensure a
meaningful result.
2. The UBB decisions are a manifestation of serious problems at the Commission. Failure to correct those
problems will result in yet another wrong UBB decision. Yet another round of submissions will not result
in any new evidence/argument being filed that hasn't already been filed in the multiple rounds on
UBB since march of 2009. Fundamental problems on how the Commission interprets both its own role
as well as the nature of the service it regulates must be solved before attempting what is essentially a
replay of the 2010-803 consultation.
3. In fact, if the Commission were to suddently see the light, it would not need another consultation since
it already has all the evidence and arguments in the existing public record since TN7181 was filed to
initiate its own R&V and come to totally different conclusions from the currently standing decisions.
4. If the Commission is not willing to include, in the consultation, issues that are at a much deeper level
than just the discount level, then it should wait for the government to respond to the petition to Governor
in Council to give the Commission guidance on how to proceed with the GAS and TPIA services.
5. Some (but not all) of the issues and detailed in the following pages.

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What is GAS ?
6. In order for participants to make meaningful submissions in a consultation, the Commission and
participant must agree on the true nature of the service being discussed. In the last 3 years, 2 different
interpretations of the GAS service have emerged. While parties have continued to assume the original
definition of GAS as a bulk data communication service offering no connectivity to the Internet, the
Commission, through its many decisions, appears to have adopted Bell Canada's definition of GAS as a
white label resale of Bell's retail ISP business.
7. Paragraph 1720 of the evidence of the February 3rd Standing Committee on Industry, Science and
Technology ("INDU") on February 3rd, INDU meeting:
Mr. Konrad W. von Finckenstein: You keep saying “accept the caps”. This is a cap that
Bell imposes on its own residential users. Bell's residential users—I don't know what the
numbers are but it's in the millions. They've just said that when they resell, they want to
impose that same cap on the people who take Bell's product and resell it. That's what it
boils down to.

8. If the Commission insists on reclassifying GAS as a resale of Bell Canada's retail internet service, then
there should either be a proper public consultation to challenge the issue, or a formal declaration by the
Commission which can then be challenged by Cabinet.
9. Further debate on GAS is meaningless until there is agreement on the definition of the service. The
Commission must formally define what the GAS service is as soon as possible.

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Is retail Internet access to be regulated ?
10. Both the Commission chairman's speech at the INDU meeting as well as the text of the 2011-77
consultation announcement refer to fairness of pricing at the retail level to ensure that heavy retail users
are not subsidized by light retail users.
11. As of today, the Commission has not issued any statement/decision formally announcing that it would
end its forbearance of retail internet service. The Commissions's web site still confirms that the CRTC
does not regulate retail internet services.
12. Therefore, the premise of the 2011-77 consultation is puzzling since it seeks to define fair retail pricing
philosophy to be imposed on retail ISP services which Commission pretends it does not regulate.
13. The Commission should either announce it is regulating all retail ISPs, or continue forbearance and
forego any regulation that implicitely forces independent ISPs to use a specific billing practice.
14. Should the Commission confirm that it has no intentions of regulating retail ISP services, then it must
amend the text of its Notice of Consultation to ask what is the best pricing paradigm for services such
as GAS and TPIA and remove any references to types of retail users.
15. Should the Commission confirm its intentions to end forbearance on retail ISPs, it needs to confirm
whether its own regulatory symmetry principles would result in incumbents' own retail ISP business being
regulated as well.
16. Meaningful submissions cannot be made when the Commission asks for input on questions over which
it has no jurisdiction. This issue must be decided before the Commission can start to ask about retail
pricing.

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Fair and Reasonable ?
17. With the 2011-77 consultation, the Commission seeks to find a fair and reasonable method of billing
for either wholesale GAS/TPIA or for retail ISP customers, depending on whether the Commission
intends to regulate retail ISP business or not. This implies that the current billing paradigm does not fit
this criteria.
18. It must be noted that:

• The tariffs in effect today (without UBB) have been approved as "Fair and Reasonable" as per
27-1 of the Act.
• In its UBB decisions, the Commission went as far as confirming that Bell Canada recovers
the costs (operation/investment/profit, as per Phase II costing) with the GAS and AHSSPI
components.
• During the INDU hearings, Bell Canada did not deny that the current rate structure was
profitable to Bell. (in fact, it went out of its way to avoid answering the question).
• In its UBB decisions, the Commission confirmed that UBB was accepted at an incumbent
dictated rates because it was pitched as an ITMP and not a cost/revenue issue. An ITMP is a
method to control network traffic . Its goal is to have a large display at a network operations
centre remain free of little red lights that indicate congestion; its goal is not to send large bags
full of money to Bell Canada's bank accounts.

19. In order for participants to make meaningful submissions, the Commission must provide proper guidance
on whether UBB will be viewed as a non-cost ITMP, or whether it is to become a cost-based component
(and again, wether at retail or wholesale levels). The onus is also on the Commission to produce facts
that show that the tariffs it approved under phase II costing are no longer profitable to Bell Canada.
20. Throughout the TN7181 history, the Commission has gone out of its way to avoid mentioning AHSSPI
in its decisions, allowing Bell Canada's arguments on GAS being flat rate priced to stand despite
arguments made by partipants to the contrary. The Commission should state whether it will now
entertain evidence and arguments on AHSSPI or whether it will continue its policy to ignore this capacity
based conponent of the tariff.
21. Therefore, in order to make this consultation meaningful, the Commission must provide facts on why
the current GAS tariffs (GAS and AHSSPI components) are no longer acceptable and whether UBB
will be treated as an ITMP or as an integral part of service costing.

Missing evidence
22. During both the Commission Chairman and Bell Canada's presentations to the Standing Committee on
Industry, Science and Technology, there was mention of a proposal received/made for some form of
averaged UBB rate structure with an up to 40% discount.
23. Such proposal should be made part of the public record immediately as it is akin to a tariff notice
and participants must be allowed to comment on it.

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Prejudged decision
24. When the Commission Chairman's spoke to the Standing Committee on Industry, Science and
Technology on February 3rd, he made several worrisome statements which limit the scope of possible
decisions on the issue. In particular:

• "We Believe the principle is right". (referring to UBB, at paragraph 1615 of the transcripts of
the hearing). This prejudges any decision on the issue. During the May 8th INDU hearing,
ISPs were asked why they had failed to convince the Commission against UBB. It is pretty
clear now that there was nothing participants to TN7181 could have said to convince
the Commission otherwise because it had already made up its mind that UBB would be
implemented one way of the other. And this is about to be repeated.
• " This is the principle I just enunciated here: the ordinary user should not subsidize the heavy
users" (paragraph 1635 of transcripts). It must be noted that this is a totally new principle
for the Commission. Since the introduction of TN7181, UBB has been pitched exclusively as
an ITMP and not as a cost based issue and the user subsidy issue was not raised in CRTC
decisions. No matter how or why this policy was adopted, it clouds the public consultation
process because the consultation asks how to best implement a paradigm instead of asking
whether that paradigm is correct or not.
• During the same presentation, the Chairman indicated a possible 40% discount, with UBB
based on average consumption by ISP's retail users. Does this mean that the decision on
this consultation has already been made and that the consultation is just a side show ? The
Chairman did state that decisions were made months before they were made public in his
presentation to INDU.

25. The Commission should issue a clarification to the Notice of Consultation to confirm that the
Commission is ready to hear about any billing paradigm.
26. The Commission should amend its Notice of Consultation to state that it is looking to confirm a billing
paradigm which properly compensates incumbents when usage patterns of indepedent ISP's retail
customers increase.
27. The Commission must remove from its Notice of Consultation any reference to UBB or heavy end
user subsidy or billing practice which directloy affect retail customers as this prejudges what billing
paradigm will be accepted by the Commission.

Terminology
28. In various locations of the Notice of Consultation, the Commission uses the term "bandwidth" in a way
where its interpretation can lead to confusion. In telecommunications, "bandwidth" refers to the amount
of capacity on links. ("I have 12gbps of bandwidth available"). Incumbents' marketing departments
have erroneously used the term in their marketing to denote the amount of data transferred (usage).
29. The Commission should therefore revise the text of the Notice of Consultation to use "capacity" or
"usage" depending on its intentions.

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Conclusion
30. The Commission has undertaken a biased Consultation at a time where its interpretation of the Policy
Direction document has been put into question. Until this far more important question has been settled,
any decision made by the Commission risks being clouded by the same misinterpretation of the Policy
Direction.
31. Furthermore, the text of the Notice of Consultation shows that the Commission is itself confused on
whether it regulates retail ISPs or not. This issue must be resolved before undertaking any tariff or
major policy decisions since participants to a public process will have no idea on what ground the
Commission is standing.
32. I support a public hearing on the matter only because contact with Commissioners provides some insight
on what they understand and what they don't understand and helps us trying to figure out why the
Commission steers decisions in a particular way.
33. The Commission is losing its impartiality as a regulator, it is losing the trust Canadians had that it would
protect them from monopolies and foster competition. This consultation has been made to look like a
gathering of arguments to support a decision that has already been made.

Regards
Jean-François Mezei
Vaxination Informatique
CP 1016 Succ Pointe Claire
Pointe Claire, QC H9S 4H9
jfmezei@vaxination.ca

CC:. Hon Tony Clement, Industry Minister (email)

list participants in the Commission's Feb 15 letter on this issue. (email)

*** end of document ***

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