Immediate benefits to Microcell follow CRTC ruling on ‘networks of networks’

A new regime for interconnection could have as a significant benefit the enhancement of local number portability (LNP) in areas where the CityFido product is sold. Microcell Telecommunications Inc. says that with a single point of interconnection in new local interconnection regions (LIR) established by the CRTC this month, the cellco can begin making a new business case for LNP in areas where it was previously too costly. Microcell executives cheer what they see as two principle positive consequences stemming from the decision (Telecom Decision 2004-46). First, the ruling allows competitive telephony providers to consolidate a number of trunks used to interconnect with incumbent providers’ networks, explains Dean Proctor, VP of regulatory affairs at Microcell. Under the old rules, he says it was extremely inefficient because CLECs needed to have separate trunks for local traffic, long distance services, and interconnecting for transport. "In fact (it was) exceedingly inefficient because all that could be easily done through one pipe," he adds. "The only reason that one party may not wish to have that efficient arrangement is if you are trying to artificially impose costs on the other party. That really was a rule that had to go and the commission saw the wisdom of that," Proctor tells Report on Wireless. Writes the commission in 2004-46: "The Commission is of the view that, even without further changes to the existing trunking arrangements, the introduction of new larger LIRs will improve the trunking efficiency of interconnecting LECs. The ability to combine interconnection facilities previously required to serve individual exchanges into facilities serving a single POI for a larger LIR will reduce the total number of trunks required while improving the trunk groups’ performance." Second, newly created local LIRs should allow Microcell to offer number portability to a greater number of customers in a local calling area. Citing the example of Vancouver – where the company first rolled out its CityFido wireline replacement initiative – Proctor explains that Microcell can now begin offering number portability to all residents in the Greater Vancouver Area, something it couldn’t do under the old rules because it had to interconnect with more than a dozen local exchanges in what would be a common calling area. "In Vancouver where we have our CityFido going strong, we quite simply don’t have the points of interconnection in all those areas because we couldn’t do a cost benefit analysis that worked," explains Proctor, adding that it was for this reason that a large number of TELUS customers couldn’t port their numbers to Fido. "Because you no longer have to have points of interconnection in every single exchange in order to offer number portability, we can offer number portability to a greater number of customers," Proctor tells RoW. The CRTC concludes in its ruling that it was no longer appropriate to use ILECs’ local exchange boundaries as the unit for interconnection following its decision in November 2000 to change the contribution regime from collecting monies from the long distance carriers to a regime based on revenue from all telecommunications service providers. This led the commission to initiate Telecom Public Notice 2001-126. "The Commission considers that, as a combination of the introduction of the new contribution regime, the cost reductions in the transmission costs of carrying traffic, and the introduction of next generation networks by both the incumbent carriers and new entrants, the Companies proposal to retain exchange-based LIPs does not meet the objective set out in Public Notice 2001-126. In particular, the status quo fails to improve the overall efficiency of interconnection arrangements," the CRTC writes. "The Commission finds that consolidation of exchanges to form larger LIRs, would generally provide more efficiency, lower the overall costs of interconnection and further the co-carrier relationship between CLECs and ILECs. Consolidating some exchanges would alleviate the problem of underutilized trunks that are generally found in less dense exchanges." The decision may bolster Microcell’s business case not only in terms of lowering its operational costs going forward, but also allowing the company to reach a greater number of potential customers for its CityFido service. Proctor wouldn’t talk about new regions where the service might be offered, but says the ruling "certainly enhances it (CityFido) where it is offered in terms of number portability, particularly in expanding the number of folks that will be able to gain access to this." He adds: "In the sense of wireline to wireless number portability, in Vancouver or in other areas where we’re offering number portability over a greater area than we previously were, we will be able to benefit from this in a much earlier timeframe." Proctor adds that this decision will add some certainty to a new environment governing Voice over Internet Protocol. "We’re extremely happy that the commission is continuing to advance its framework in a technology neutral fashion, and not only is it good for us as a wireless CLEC, but I think it bodes well for other future technologies such as Voice over IP. It’s a very positive decision and I think it bodes very well for how the commission is looking at the future," he says.

Immediate benefits to Microcell follow CRTC ruling on ‘networks of networks’

News | July 27, 2004

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