CRTC settles DND’s ongoing use of Bell’s network

After several months of trying to reach an arrangement regarding the Department of National Defence's sensitive connectivity requirements, the CRTC put the matter to rest late last week with an offer from Bell Canada winning the day. The decision comes after Bell and Public Works and Government Services Canada appeared before the commission in a public hearing that began on January 22 in effort to finalize DND's use of Bell's network for DVACs services during what has been a complicated and lengthy migration to Telus Corp. DVACs are specialized circuits that are critical to DND's communications capabilities. Throughout the public hearing, Bell and PWGSC put forth a number of arrangements that were initially refused by the other party. The commission ultimately settled on a deal proposed by Bell. "The panel has considered the issue in light of submissions this morning, the clarifications and after due consideration...the offer as put forward by Bell this morning in accordance with the terms and the clarifications given today is the appropriate under the circumstances," announced CRTC chair Konrad von Finckenstein on Friday. The commission plans to issue written reasons for its decision within three weeks. The hearing sought to deal with two matters: commission jurisdiction to intervene in a case involving a commercial contract dispute and to determine whether the rates offered by Bell to DND in a short-term usage contract were just and reasonable. The CRTC determined on January 22 that it had the jurisdiction to intervene and then told the parties to reach an agreement or it would impose one. Representatives from Bell and PWGSC were unavailable to comment at press time. Last ditch effort by Telus to intervene rebuked The hearing wasn't without drama, with Telus seeking a last-minute delay so that it could "present evidence and submissions relevant to the determination of just and reasonable rates." The company wanted a one-week adjournment to file its evidence. "The evidentiary record of the proceeding is flawed because it shows, erroneously, that there will be no transition of DVAC services throughout the full 24- and 36-month periods. This mis-information has upwardly biased the benchmarks established in the expedited hearing," Telus told the commission in its letter. During the hearing the commission set upper and lower benchmarks from which Bell and PWGSC would negotiate a settlement for the use of DVACs services over a two-year period with an option for a third year. But Telus said the CRTC ignored the fact that DVACs transition would take place during those two years therefore reducing Bell's costs. This, according to Telus, means that the lower benchmark has been set too high. "A benchmark based on absolutely no transition for DVACs is not at the low end of the range and, in fact, is at the high end of that range and constitutes a fundamental mathematical error upon which the commission is called upon to make a rate setting determination," read Telus' letter. In addition, Telus said it's wrong for the commission to suggest that there won't be any transition of DVACs services during the two-year period, noting that it's "practically, logically, logistically or technically possible to conceive" that all of the DVACs services required by DND would be switched to Telus on the last day of the last month of the contract. "It is a practical impossibility that results in substantial overpayment. There is a fundamental error in the evidence before the commission that must be corrected." The CRTC didn't buy Telus' argument or request for a one-week delay, chastising the company for not raising objections earlier in the process. Reading the commission's response to Telus' letter, CRTC vice-chair of telecommunications Len Katz said the company had ample opportunity to comment both on the PWGSC application and the process followed by the commission. "Telus' request comes well over a month after the process was established and after two sittings of the oral public hearing on January 22 and January 27, 2009. The commission notes that Telus is a sophisticated and experienced participant in commission proceedings and considers that it was incumbent on Telus to make any objections known at the earliest possible opportunity and not on the eve of the commission decision," Katz said. The commission also discounted Telus' argument regarding the transition of DVACs services. "At many points in the proceeding both public and confidential PWGSC made clear that its contractual requirements are for at least 1,014 DVAC SIPs for two years with an option for a third year regardless of the migration schedule. Indeed, this fact was on the public record of this proceeding as far back as PWGSC's application dated 10 November 2008," Katz said. "The commission considers that Telus has had ample opportunity to raise this matter and failed to do so until the last moment. According Telus' application is denied."

CRTC settles DND’s ongoing use of Bell’s network

News | February 2, 2009

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