Agreement emerges around Rogers’ proposal for IP interconnection regime

GATINEAU—Telco executives say they expect the CRTC to implement new rules requiring incumbent telcos to connect competitors’ IP-based phone calls wherever they have the ability to do so. Some companies say the new rules would be based on a proposal submitted this week by Rogers Communications Inc. that garnered support from the telecom industry at the commission's hearings on interconnection issues. Support for the proposal solidified Tuesday morning when BCE Inc. offered small amendments to establish tests that would determine when the requirements would kick in. The company suggested the requirement to connect competitors’ IP-based phone calls when an incumbent is offering IP interconnections to an affiliated company or in geographic areas where the incumbent is offering IP-based local voice services to its customers. In the latter case, Bell emphasized, the incumbent should only be required to offer other carriers IP-to-IP connections on lines where the incumbents' retail customers are using IP-based voice services. In either situation, the two companies said, incumbents should be required to negotiate with competitors to establish shared costs and points of interconnection for IP-to-IP connections. The issue of mandated IP interconnection services and shared interconnection costs arose as an issue at the CRTC hearing as faster cable and fibre services are expected to lead to an increase in IP telephony services across the country. Following five days of commission hearings last week and Monday, the hearings concluded Tuesday with responses from incumbents and smaller providers. Mandated connections, as supported by Bell and Rogers, would allow customers on different IP-based voice networks to call one another without requiring the telcos to go through the costly process of converting those calls to the traditional telephone circuit-switched signals that are predominantly used by the incumbent telco wireline providers. If neither of the proposed conditions are present, IP-based telcos would continue to absorb the costs of converting the signals for transmission on the incumbent’s networks, Rogers told commissioners Tuesday. The CRTC should only step in to regulate interconnection arrangements if the companies cannot negotiate a commercial agreement by a certain deadline, Rogers and Bell added. “We think this is the way should go, and we hope they will,” David Watt, Rogers’ vice-president of regulatory for telecommunications, said in an interview Tuesday. “I think they’ll really weigh the fact that there was considerable support for it.” By the end of the day Tuesday, the proposal had broad support from other incumbents, including Telus Communications Corp., SaskTel, and MTS Allstream, as well as other competing telcos and IP-based wireless providers, such as Quebecor Media Inc.'s Videotron Ltée. and Wind Mobile. Shaw Communications Inc. also appeared to support aspects of the amended Rogers’ proposal despite some concern that it could lead to a proliferation of unnecessary and costly interconnection points. "The Rogers trigger would reduce the geographic coverage of interconnection to the area covered by the IP switch. This could mean significantly more points of interconnection and substantially smaller interconnection areas," Jean Brazeau, Shaw's senior vice-president of regulatory affairs, told commissioners. "That would be an extremely unfortunate outcome, since several parties have noted throughout this proceeding that IP interconnection offers the potential for larger, not smaller, interconnection areas and therefore less duplication of costly and unnecessary interconnection arrangements." The most vocal opponent to the Rogers’ proposal Tuesday was Cogeco Cable Inc. The company called for the commission to reach beyond Bell’s proposed “second trigger” and require incumbents to offer IP-to-IP interconnections for entire cities and regions using incumbents' IP switches, not just the customers enabled to place IP-based calls over the switch. Shaw's Brazeau also seemed to prefer this option, saying: “We would agree with Cogeco and this is what we were arguing this morning about multiple connections.” Bell said Cogeco’s suggestion would cost incumbents “a fortune.” “It cannot be, by the fact that we’ve turned up IP in a few customers, that suddenly we have to do all of Quebec City, all of Toronto, and all of Montreal,” Jonathan Daniels, BCE’s vice-president of regulatory affairs, told the chair. Michel Messier, Cogeco's director of regulatory affairs, said it wouldn’t make sense for his company to pursue IP-to-IP interconnection agreements with Bell if they only applied to a small percentage of Bell customers. “That’s pretty useless to us, if I might say so,” Messier said. Daniels said Bell's new networks are increasingly based on IP technologies, including networks connecting users to wireless services. “All of our growth, it’s all going to happen on an IP-basis,” Daniels said. “This is the first step and this is our growth area.” The only group representing consumers at the hearings, the Public Interest Advocacy Centre (PIAC), also favoured the Rogers proposal Tuesday, but it offered some brief caveats. The group called on the commission to impose a six-month window on any IP-to-IP interconnection negotiations to ensure the incumbents cannot drag their feet and delay a competitor’s entrance into the marketplace. Others also called for a similar fallback option to ensure all parties bargained in good faith, with most agreeing that either a six-month or 12-month window would suffice. Only Bell expressed hesitation on this point, noting that it may be difficult to complete all negotiations along those timelines if a new CRTC ruling on the issue led to a rush of telcos seeking to add IP interconnections to Bell networks. PIAC also called for a gradual move away from the current regime, in which competitors pay the entire costs of converting signals for transmission on the incumbents’ circuit-switched networks. “This incentive should encourage to move to IP more quickly and therefore the efficiencies gained by IP interconnection should begin the trickle down to consumer while new innovative services appear for consumers more quickly,” Gerry Wall, president of Wall Communications Inc., said on PIAC’s behalf. Daniels told The Wire Report that the Rogers’ proposal would facilitate a quicker move to IP technology for incumbents and eventually lead to new types of consumer services that could combine voice, data and video capabilities. He said any commission decision that gives incumbents the ability to negotiate IP-to-IP interconnections with individual competitors would provide Bell with more flexibility to reach agreements that work in each situation. “Really, what’s been hindering that development is that we didn’t have that flexibility until now,” he said. Rogers’ proposal came as a surprise to many in attendance Monday as the company abandoned an earlier request that the commission require incumbent telcos to absorb the costs of converting IP signals for circuit-switched transmissions. “That was sort of the seminal moment of the hearings,” Ted Woodhead, Telus’ vice-president of telecom policy and regulator affairs, told The Wire Report. Bell’s proposed amendments also represented a change in position. The company had argued a week earlier that the commission should not impose any regulations on IP-to-IP interconnections. nkyonka@thewirereport.ca

Agreement emerges around Rogers’ proposal for IP interconnection regime

News | November 1, 2011

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Agreement emerges around Rogers’ proposal for IP interconnection regime

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