MTS position smoke and mirrors: Bell

With final arguments in the CRTC's essential facilities and wholesale services regime set for this Friday, Bell Canada urges the commission not fall for the position put forward by MTS Allstream Inc. "It's important not to fall for the MTS smoke and mirrors," Mirko Bibic, chief of regulatory affairs at Bell Canada, tells Network Letter, noting that the inclusion of leased and owned facilities in the definition of a facilities-based carrier in the business market was made for local forbearance determination purposes. He adds that this shouldn't be confused with the Policy Direction to the CRTC, which talks about increasing incentives for the construction of telecommunications networks. "What MTS is trying to do is...say in one avenue the federal government has defined facilities-based competitors as being companies that lease therefore that's the definition that has to apply in the Policy Direction," he explains. "And then they're saying since we're one of those facilities-based carriers that has network but leases we're already where the policy direction wants us to be....And the only way we got there is because of the current rules, so don't change the rules." Bibic maintains the current rules discourage network builds and they will not incent additional telecommunications facilities construction. The only way for the commission to encourage more competing networks to be built is by not allowing more access as suggested by MTS, but by significantly decreasing the level of access to ILEC facilities by competitors, he explains. The current level of network access is governed by the CDN regime, which came into force in February 2005 with Telecom Decision 2005-6. The ruling expanded the number of ILEC facilities that competitors were able to access at mandated wholesale rates. The incumbent telephone companies panned the decision as being a step backwards in the development of facilities-based competition in Canada. "CDN has completed distorted the build-buy decision because competitors including ourselves look at it and say we could go into a building and it's going to cost X or we can lease CDN and it's going to cost less than X. Obviously, we're going to lease CDN," says Bibic. Bell and Telus Corp. stated many times throughout their testimony in front of the commission that after the CDN decision they halted investments in their own facilities out of territory. They said it made more economic sense to lease rather than build. MTS, on the other hand, stated during its time on the stand that the current CDN regime has allowed it to invest in its out-of-territory network facilities. Bibic says much of the problem relies on the equation being used to determine whether a network can be built economically. It shouldn't be comparing the cost to build with the cost to lease, it should be determining whether the revenue to be generated from building a network will exceed the cost to build that network. Providing wholesale a key business for BellDespite concerns raised by competitors that negotiating wholesale access to ILEC facilities will be a monumental challenge, Bibic notes that it's in its best interest to lease facilities to competitors at wholesale rates. "If you're going to lose a customer, you might as well lose who's going to be on your network because then you're going to get some revenue," he says. "These are business incentives that come into play." Bibic points to the courier business as a prime example of a non-mandated wholesale business operating properly. For example, courier companies with extra capacity on aircraft will more than willingly sell that space to competing companies. "No one is forcing the courier companies - the Fedexes and the Puralators - to sell capacity to each other, but it happens. It happens because it makes business sense that if the plane is taking off you might as well fill it," he points out. For those that may believe Bell's words to be hollow, the company is trying to allay those concerns by introducing a wholesale primary exchange service in the future. Bibic wouldn't provide any further details of the service and when it might be introduced commercially.

MTS position smoke and mirrors: Bell

News | November 7, 2007

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