Small cable companies want exclusion from CLEC obligation

The Canadian Cable Systems Alliance (CCSA) wants the CRTC to grant its members permission to operate as competitive local exchange carriers (CLECs) without first obtaining central office codes and their own telephone numbers. The applications raises questions about facilities-based competition.The organization says that the costs associated with meeting these obligations are unlikely to be recovered given the small communities its members serve. "The cost to provide local phone service for CCSA member companies is significant and disproportionately high relative to the potential customer base and many of these companies' financial resources," reads the association's Part VII application filed earlier this month with the commission. "They can limit the required investments by relying on an underlying local exchange carrier's (LEC) switching infrastructure and interconnection to the PSTN." The association states that these costs make it "financially impossible" for small cable companies serving small communities of less than 20,000 to launch telephony service. "By granting the requested relief, the commission will lower the economic barriers to entry for small companies, thereby increasing the competition and the opportunity to rely on market forces." According to commission rules set out in Telecom Decision 97-8, CLECs are required to obtain central office (CO) codes for each exchange where they rely on another carrier for their switching infrastructure and interconnections to the public telephone network (PSTN). This allows CLECs to obtain their own telephone numbers. But the CCSA says these requirements place its member companies at a disadvantage and interferes with their ability to operate as CLECs. "CCSA member companies have the ability to deliver competitive local exchange services by leveraging their existing cable infrastructure and marrying it to new Internet Protocol technologies," writes the association. "The obligation to obtain their own CO code impairs their ability to compete on the basis of the new technologies."Small cable companies are also concerned that resellers have a competitive advantage because they aren't required to follow the same rules as CLECs. The CCSA's application was made public only days after the Minister of Industry Maxime Bernier instituted his own local forbearance regime that gives small cable companies an 18-month grace period before the incumbent telcos in the area are free to compete on price. The application raises an important issue that could be contested by the incumbent telephone companies. Without the requirement to obtain a CO code, small cable companies offering telephony might be considered simply resellers. Network Letter will continue to monitor the application and will provide updated material as it comes in.

Small cable companies want exclusion from CLEC obligation

News | April 12, 2007

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