RESTRICTED
WORLD TRADE S/NGBT/W/3/Add.12/Rev.1
23February 1995
ORGANIZATION(95-0392)
Original: English/French Negotiating Group onBasic Telecommunications
COMMUNICATION FROM CANADA
Response toQuestionnaire onBasic Telecommunications
Revision
Theattached communication iscirculated attherequest ofCanada totheMembers ofthe
Negotiating Group onBasic Telecommunications.
_______________
Note: Questions andcomments bytheSecretariat areinnormal script, while Canadian responses
areinboldscript.S/NGBT/W/3/Add.12/Rev.1
Page2
PartI
Definition andMarket Structure
Definition
1. What areconsidered tobebasic telecommunications under yourregulatory regime? Howare
theydefined? How doesyourregulatory regime define thatwhich isnotconsidered basic
telecommunications?
R IntheCanadian context, thegeneral term "basic telecommunications" asused inthis
questionnaire, maybeunderstood tocomprise thefollowing fundamental elements:
Public telecommunications networks
Public telecommunications services
-provided byowners ofPublic Telecommunications Networks
-provided byresellers ofPublic Telecommunications Services
Private telecommunications networks
Note: Intheresponses toquestions inthisdocument theterm"private telecommunications network"
or"private network" means atelecommunications facility owned andoperated byany"person" for
itsownuseandwhich isnotisnotusedtoprovide atelecommunications service thatisoffered to
another person forcompensation.
InTelecom Decision CRTC 84-18 issued July12,1984, theCanadian Radio-television
and Telecommunications Commission (CRTC) defined basic and enhanced
telecommunications services asfollows:
"Abasic service isonethatislimited totheoffering oftransmission capacity for
themovement ofinformation."
"Anenhanced service isanyoffering overthetelecommunications network which
ismore thanabasic service."
Theprimary reason todefine enhanced telecommunications services atthattimewasto
prevent anti-competitive behaviour byfacilities-based carriers when theyareproviding
enhanced services incompetition withother providers wholease underlying transmission
facilities from thecarriers.
(Note: Thedefinition ofbasictelecommunications inCanada isnotqualified byarequirement
tobe"offered tothepublic generally".)
2. Does yourregulatory regime distinguish between networks (facilities) andservices indefining
basic telecommunications? Ifso,howisthisdistinction made?
R InCanada 'sTelecommunications Actof1993, "telecommunications", "telecommunications
service" and"telecommunications facility" aredefined asfollows:S/NGBT/W/3/Add.12/Rev.1
Page3
"telecommunications" means theemission, transmission orreception ofintelligence
byanywire, cable, radio, optical orother electromagnetic system, orbyanysimilar
technical system.
"telecommunications service" means aservice provided bymeans of
telecommunications facilities andincludes theprovision inwhole orinpartof
telecommunications facilities andanyrelated equipment, whether bysale,lease
orotherwise.
"telecommunications facility" means anyfacility, apparatus orother thing that
isusedoriscapable ofbeing usedfortelecommunications orforanyoperation
directly connected withtelecommunications, andincludes atransmission facility.
3. Arethereanynetworks orservices which would beconsidered tobebasictelecommunications
within thescope oftheGATS definition which would notbesoconsidered byyournational
definition? Ifso,whatarethey?
R No,notthatweareaware of.
Market structure
4. Listanybasic telecommunications sub-sectors orcategories which arereserved tosupply by
monopoly orexclusive supplier(s).
R Local paytelephone service isprovided onamonopoly basis inCanada. IntheProvince
ofSaskatchewan, local andlongdistance telephone services areprovided onamonopoly
basis bySasktel. Teleglobe Canada isthesoleauthorized Canadian operator offacilities
usedtoprovide Canada/overseas telecommunications services. Telesat Canada isthesole
operator ofspace segment facilities fordomestic fixed satellite service.
5. Doesyourregime designate oneoralimited number ofmonopoly/exclusive suppliers tosupply
anybasic telecommunications nationally, onageographical basis, orforparticular market
segments? How isit(orthey) constituted (e.g. government ministry oragency, wholly
government-owned corporate entity, company partly owned bythegovernment, privately
owned)?
R Seeresponse toquestion 4.Thefederal government doesnotcurrently holdanownership
interest inanytelecommunications carrier. Allsuppliers noted intheresponse toquestions
4and5areprivately owned except Sasktel which isacrown Corporation owned bythe
Province ofSaskatchewan.
6. Isforeign equity participation orownership ofmonopoly orexclusive suppliers permitted?
Ifso,whatisthemaximum percentage share allowed andwhatisthecurrent levelofidentifiable
foreign participation?
R Direct foreign ownership ofupto20% ispermitted inanyfacilities-based carrier.
(reference -Telecommunications Acts.16) Foreign ownership ofupto331/3% ispermitted
inholding companies thatinvest infacility-based carriers. Historically, GTE Corp holds
approximately 51%ofbothBCTelandQuebec-Telephone andis"grandfathered" under
theownership andcontrol policy.
Other company-specific provisions include:S/NGBT/W/3/Add.12/Rev.1
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AGT Limited -Nooneperson asbeneficial owner noranygroup ofassociated persons
asbeneficial owners shallholdvoting shares which exceed 5%ofthetotalnumber ofissued
andoutstandingvotingsharesofTELU SCorporation,theparentcompanyofAGTLimited.
Inaddition, thenumber ofvoting shares heldbynon-residents ofCanada asbeneficial
owners shallnotexceed, intheaggregate, 10%oftheissued andoutstanding voting shares.
(reference -Alberta Government Telephones Reorganization Acts.11)
Teleglobe Canada Inc.-Foreign carriers maynotholdanyvoting shares. (reference -
Teleglobe Canada Acts.5(2))
Maritime Telegraph andTelephone Company Limited (MT&T) -Aprovincial statute
ofNova Scotia provides thatnomore than1,000 shares ofMT&T maybevoted byany
oneshareholder. (reference -Maritime Telegraph andTelephone Company Limited Act
s.11)
Theestimatedcurrentlevelofidentifiableforeignparticipationinexclusiveserviceproviders
suchasBCE isapproximately 5%.
7. Ifyourregime isgenerally characterized asnotpermitting competition, please indicate
(a) ifcertain activities orcategories ofwhatcould beconsidered basictelecommunications
arenotreserved tothemonopoly, e.g.facsimile, telex, datatransmission, mobile,
satellite services;
(b) arethere areanyother means through which foreign suppliers ofbasic
telecommunications areormayparticipate inthesupply ofbasictelecommunications,
e.g.sub-contract orbuild-operate-transfer arrangements withthemonopoly suppliers.
R Notapplicable
8. Please listandbriefly describe anyintergovernmental agreements, bilateral orotherwise, that
yourgovernment hasentered intorelating tothesupply ofbasic telecommunications networks
andservices.
R INTERGOVERNMENTAL AGREEMENTS ENTERED INTO BYCANADA
Multilateral Agreements
ITU-International Telecommunication Union
Constitution andConvention,
ITURadio Regulations,
ITUInternational Regulations.
INTELSAT
Agreement Relating totheInternational Telecommunications Satellite Organization
"INTELSAT";
Operating Agreement Relating totheINTELSAT (1971)
INMARSAT
Convention ontheInternational Maritime Satellite Organization (INMARSAT, 1976);
Operating Agreement onINMARSAT (1976).S/NGBT/W/3/Add.12/Rev.1
Page5
ORGANIZATION OFAMERICAN STATES
Charter oftheOrganization oftheAmerican States;
Inter-American Telecommunications Conference (CITEL)
NORTH ATLANTIC TREATY ORGANIZATION (NATO);
Civil Communications Planning Committee (CCPC) oftheNorth Atlantic Council
Working Arrangement Among theTelecommunications Entities ofCanada, Mexico and
theUnited States forSharing theGeostationary Satellite Orbit Between 103oand123o
West Longitude andCertain Frequency bands Allocated totheFixed Satellite Service.
The North American Free Trade Agreement (NAFTA) contains achapter on
telecommunications services (Chapter Thirteen) aimed primarily atensuring thataccess
toanduseofbasic telecommunications services ineachofthethree signatory countries
willbemade available toindividuals andfirms from other NAFTA countries onreasonable
andnon-discriminatory terms forintracorporate useandfortheprovision ofenhanced
telecommunication services. (1992)
Bilateral Agreements
CANADA-USA
Canada hasalarge number ofbilateral agreements, conventions andmemoranda of
understanding withtheUnited States, many ofwhich relate tothesharing oftheradio
spectrum. Thekeyagreements arelisted below.
AgreementbetweenCanadaandtheUSAgoverningRadioCommunicationsbetweenPrivate
Experimental Stations inthetwocountries (1929, 1934)
Agreement between Canada andUSA relating toAirNavigation (1938)
Convention relating tooperation bycitizens ofeither country ofcertain radio equipment
orstations intheother country (1952)
Agreement relating totheallocation oftelevision channels (1952)
Exchange ofNotes Between theGovernment ofCanada andtheGovernment oftheUnited
States ofAmerica covering theCoordination ofFrequencies above 30Mcps. (1962)
Agreement relating totrans-border radio paging operations (1971)
Canada/U.S.exchangeofletters(1972)ontheuseofdomesticfixedsatellitesfortransborder
carriage oftraffic between thetwocountries under specified circumstances.
Exchange ofLetters between theCanadian Department ofCommunications andthe
Commerce Department 'sNational Telecommunications andInformation Administration
(NTIA) relating tocertain "Common Use" wide-area channels tomeet short-term,
temporary applications (1979)
Canada/U.S. exchange ofletters (1982) broadening thearrangement of1972 toinclude
theuseoftheparties 'respective domestic fixed satellites foraspecific range oftransborder
telecommunications services -private business communications (leased "private line"S/NGBT/W/3/Add.12/Rev.1
Page6
services), occasional point-to-point video services andreception oftelevision programming
signals.
Arrangement concerning mobile satellite communications cooperation between theUS
National Aeronautics andSpace Administration andtheCanadian Department of
Communications (1983)
Free Trade Agreement (FTA): contains asectoral annex ontheprovision of
telecommunications-network-based enhanced services, including access to,anduseof,
basic telecommunications transport services. (1987)
Memorandum ofUnderstanding between theCanadian Department ofCommunications
andtheUSFederal Communications Commission oncross-border frequency co-ordination
(1989)
Satellite News Gathering -exchange ofletters between U.S. Federal Communications
Commission Chairman andtheCanadian Deputy Minister ofCommunications. This
administrative arrangement facilitates theexpeditious authorization bytheFCCandDOC
oftheroaming ofSNG units between Canada andtheU.S.(1992)
CANADA-FRANCE
Co-ordination Agreement between theDepartment ofCommunications ofCanada and
theMinistère despostes etdestélécommunications ofFrance regarding theuseofthe
frequency bands 150.050 -162.000 MHz, 451.500-454.500 MHz and456-460 MHz paired
with466-470 MHz intheArchipelago ofSaint Pierre etMiquelon (Dec14,1992, effective
Jan1,1993). Thisagreement relates primarily tolandandmaritime mobile services.
CANADA-JAPAN
Memorandum ofUnderstanding onStandards and Certification Systems for
Telecommunications Terminal Equipment. (1986)S/NGBT/W/3/Add.12/Rev.1
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PartII
Competition
Forthesub-sector andcategory headings insections AandB,thefivequestions listed below
should beaddressed foreachsub-sector andcategory thatyoudescribe. Recognizing thatsubsectors
andcategories mayoverlap, please keepinmind thatitistheintroduction ofcompetition andtheway
ithasbeenintroduced thatshould determine howtoselect which sub-sectors andcategories covered
inyourresponses.
(i) Overview. What arethemain government policies andregulations regarding the
competition inthissubsector orcategory? Canforeign suppliers participate inthesupply
ofbasic telecommunications inthissubsector orcategory?
(ii) Modes ofsupply. Inyourview, howdotheGATS modes ofsupply (cross border,
consumption abroad, commercial presence, andpresence ofnatural persons) apply
tothissubsector orcategory? What kinds ofrequirements, conditions, orlimitations
areapplied inthissubsector orcategory which relate toeachmode ofsupply?
Note: Responses onmodes ofsupply should notnecessarily belimited tomeasures which might relate
tomarket access ornational treatment asdefined bytheGATS. Information provided mayhelpadvance
discussions onhowthemodes ofsupply, particularly cross border andconsumption abroad, relate
tobasic telecommunications.
(iii) Market access. What kindoflimitations onmarket access areapplied? (I.e., Arethere
anyquantitative limitations on,oreconomic needs testsapplied to,thenumber of
suppliers? Arethere anylimits onthetotalvalue oftransactions, totalnumber of
operations, quantity ofoutput, orthetotalnumber ofpersons thatmaysupply basic
telecommunications orbeemployed byasupplier? Arethere anyrestrictions or
requirements regarding typeoflegalentity thatmaysupply basictelecommunications?
Arethere anylimits onforeign ownership orequity participation?)
(iv) Nationaltreatment.Whatkindoflimitationsonnationaltreatmentareinplaceextending
toforeign suppliers treatment lessfavourable thanthatfordomestic suppliers? (E.g.
Arepreferences given todomestic suppliers orrestrictions orobligations imposed on
foreign suppliers withrespect toanyprocedures orregulations, including licensing?
Arethere anylimitations onthenationality orresidency ofmanagers, directors, or
board members? Arethereanyrestrictions onforeign ownership oflandorfacilities?)
(v) Licensing. Iflicensing isrequired inthissub-sector orcategory, briefly describe the
procedures concerned andexplain themain requirements, criteria andfeesapplied.
What aresome oftheprincipal terms andconditions onlicensees, oncealicence is
obtained?
Note: Licensing isintended tobeunderstood inabroad sense, toinclude processes suchasapproval,
authorization, registration orcertification, asapplicable.
R Broad policy objectives fortelecommunications inCanada arecontained inthe
Telecommunications Act,s.7,asfollows:
"7.Itishereby affirmed thattelecommunications performs an
essential role inthemaintenance ofCanada 'sidentity andS/NGBT/W/3/Add.12/Rev.1
Page8
sovereignty andthattheCanadian telecommunications policy has
asitsobjectives
(a)tofacilitate theorderly development throughout Canada ofa
telecommunications system thatserves tosafeguard, enrich and
strengthenthesocialandeconomicfabricofCanadaanditsregions;
(b)torender reliable andaffordable telecommunications services
ofhighquality accessible toCanadians inboth urban andrural
areas inallregions ofCanada;
(c)toenhance theefficiency andcompetitiveness, atthenational
andinternational levels, ofCanadian telecommunications;
(d)topromote theownership andcontrol ofCanadian carriers by
Canadians;
(e)topromote theuseofCanadian transmission facilities for
telecommunications within Canada andbetween Canada andpoints
outside Canada;
(f)tofoster increased reliance onmarket forces fortheprovision
oftelecommunications services andtoensure thatregulation, where
required, isefficient andeffective;
(g)tostimulate research anddevelopment inCanada inthefield
oftelecommunications andtoencourage innovation intheprovision
oftelecommunications services;
(h)torespond totheeconomic andsocial requirements ofusers
oftelecommunications services; and
(i)tocontribute totheprotection ofprivacy ofpersons."
A.Sub-sectors
Foranysub-sectorinwhichcompetitionispermittedinyourregime(i.e.,whicharenotreserved
tomonopoly orexclusive suppliers) answer questions (i)through (v)above, asapplicable. Thefollowing
listofsub-sectors isconsidered illustrative andshould besupplemented withanyother sub-sectors
orsub-activities which youmaywishtodescribe.
a. Voice telephone services
R (i) Overview
Local andlongdistance telephone service (primary exchange service, national and
international message tollservice, andinterexchange voice channels), excluding
paytelephone service, areprovided onacompetitive basis except intheprovince
ofSaskatchewan where these services areprovided onamonopoly basis bySasktel,
aprovincial government crown corporation. While Teleglobe Canada isthesole
authorized Canadian operator offacilities used toprovide Canada/overseasS/NGBT/W/3/Add.12/Rev.1
Page9
telecommunications services, itsservices mayberesold bycompeting longdistance
voice telephone service providers. Foreign suppliers may participate inthe
telephone service market asa100% foreign-owned reseller orasapartowner (up
to20%) ofafacility-based carrier. Foreign ownership ofupto331/3% ispermitted
inholding companies thatcontrol facility-based carriers.
(ii) Modes ofsupply
Seemarket access andnational treatment sections below. Inaccordance withthe
policy ofpromoting theuse ofCanadian transmission facilities for
telecommunicationswithinCanadaandbetweenCanadaandpointsoutsideCanada,
theCRTC hasimposed traffic routing conditions incarrier tariffs.
Mode 2doesnotappear toberelevant tobasic telecommunications inCanada.
(iii) Market access
Norestrictions other than: Radio facility-based providers ofvoice telephone service
(RadiocommunicationCarriers)generallyrequirearadiolicencewhichisdependant
onspectrum availability. Quantitative limitations maybeapplied toradio-based
voicetelephoneservices.TeleglobeCanadaisthesoleauthorizedCanadianoperator
offacilities used toprovide Canada/overseas telecommunications services. Its
servicesmayberesoldbycompetinglongdistancevoicetelephoneserviceproviders.
Theprovision ofcellular mobile telephone service islimited totwoproviders in
anygeographical area. Four companies have been licensed toprovide public
cordless telephone service throughout Canada.
(iv) National treatment
Nolimitations other than: Foreign suppliers mayparticipate inthetelephone
service market asa100% foreign-owned reseller orasapartowner (upto20%)
ofafacilities-based carrier. Foreign ownership ofupto331/3% ispermitted in
holding companies thatcontrol facilities-based carriers. Notlessthan80%ofthe
members oftheboard ofdirectors ofaCanadian Carrier must beindividual
Canadians. (reference -Telecommunications Acts.16) There areno
telecommunications-specific restrictions onforeign ownership ofland ornon-
telecommunicationsfacilities.SeetheCanadianScheduletotheGATSforhorizontal
limitations onforeign ownership.
(v) Licensing
Subject tolimitations noted elsewhere inthisquestionnaire, Canada hasanopen-
entry policy fortelecommunications service suppliers. Afacility-based carrier
("Canadian Carrier" asdefined ins.2oftheTelecommunications Act)providing
voice services must provide itsservices inaccordance withatariff approved by
theCRTC. (reference -Telecommunications Acts.25) TheCRTC mayforbear
fromtheexercise ofthispower (reference -Telecommunications Acts.34) Resellers
areonly required toregister with theCRTC forthepurpose ofdetermining
contribution payment levels forthevoice telephone services theyprovide. Radio
facility-based voice service providers generally require aradio licence which is
dependant onspectrum availability. Thelicensing procedure isagenerally
straightforward single stage, first-come, firstserved oneforradiocommunication
apparatusandsystems.Inrarercasesoflimitedspectrumavailability,amulti-stageS/NGBT/W/3/Add.12/Rev.1
Page10
comparative applications procedure willdetermine successful applicants from a
number ofmore orlessequally qualified applicants.
b. Packet-switched datatransmission services
R (i) Overview
Packet-switched datatransmission services areprovided onacompetitive basis
byfacility-based carriers orservice providers operating onaresale basis.
(ii) Modes ofsupply
Norestrictions
(iii) Market access
Norestrictions other than: Radio facility-based providers ofpacket-switched data
transmission services generally require aradio licence which isdependant on
spectrum availability. Quantitative limitations maybeapplied toradio-based
packet-switched datatransmission services. Direct foreign ownership inafacility-
based provider ofpacket-switched datatransmission services islimited to20%.
(iv) National treatment
Seea.(iv)
(v) Licensing
Seea.(v)
c. Circuit switched datatransmission services
R Seeresponse tob.
d. Telex services
R Seeresponse tob.
(i) Overview
Teleglobe Canada operates agateway forTelex traffic toandfrom Canada.
National Telex service isprovided byUnitel Communications andservice providers
operating onaresale basis.
e. Telegraph services
R Seeresponse tob.
(i) OverviewS/NGBT/W/3/Add.12/Rev.1
Page11
Teleglobe Canada operates agateway forTelegraph traffic toandfrom Canada.
National Telegraph service isprovided byUnitel Communications andservice
providers operating onaresale basis.
f. Facsimile services
R Seeresponse tob.
g. Private leased circuit services, and
R Seeresponse tob.
o. Other: 1)Satellite transmission services
R Seeresponse tob.
(i) Overview
Alicence issued under theRadiocommunication Actisrequired tooperate a
Canadian communications satellite. Atthepresent timeTelesat Canada isthe
soleprovider ofspace segment facilities fordomestic fixed satellite service. Fixed
satellite service between Canada andtheU.S.isprovided byTelesat andauthorized
U.S. satellite operators. Licences arerequired foralltransmit/receive earth
stations. Earth stations forCanada-Canada service may beowned by
telecommunications carriers orbyusers. Earth stations forCanada-U.S. service
must beowned byTelesat Canada. Earth stations foroverseas service must be
owned byTeleglobe Canada. Services provided byeither Telesat Canada or
Teleglobe Canada mayberesold.
MobilesatelliteservicesmaybeprovidedusingthespacesegmentfacilitiesofTelesat
Canada andterminals owned byusers. Mobile satellite services willalsobe
provided byTMICommunications Inc.,asubsidiary ofBCEInc.,when itlaunches
itsgeostationary mobile satellite in1995. TMIwillprovide arange ofnarrowband
voice anddatacommunications services toland, marine, andaeronautical mobiles
across Canada. Inaddition, mobile satellite services maybeprovided viaregional
andglobal satellite systems intheCanadian market pursuant toapolicy framework
established onNovember 5,1994.
(ii) Modes ofsupply
There arenoadditional restrictions onmodes ofsupply.
(iii) Market access
Telesat Canada isthesoleprovider offixed space segment service fordomestic
service. Fixed Satellite service between Canada andtheU.S.isprovided byTelesat
andauthorized U.S.satellite operators.
(iv) National treatment
Seeresponse toa).
(v) LicensingS/NGBT/W/3/Add.12/Rev.1
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Seeresponse toa)forasummary oflicensing procedures.
o. Other: 2)Terminal Equipment
R (i) Overview:
Theprovision ofterminal equipment isopen toforeign suppliers inthesame
manner asitisfordomestic suppliers.
(ii) Modes ofsupply:
(iii) Market Access:
There arenolimitations onmarket access.
(iv) National treatment:
Nolimitations.
(v) Licensing:
Certification asperCP-01 "Certification Procedures -Terminal Attachment
Program" isrequired todemonstrate compliance tocertification standards specified
incarrier tariffs approved bytheCRTC.
Thefollowing aresome additional examples ofbasictelecommunications networks orservices
notexplicitly listed in(a)-(g)and(o),above, forwhich responses mayberelevant: voice/non-voice
services using domestic/international private leased circuits; cable-TV-related voice telephone networks
andservices; domestic/international satellite services andsatellite links/capacity; analogue/digital
cellular mobile networks andservices; PCSnetworks andservices; paging services; mobile data
services; fixedline/wireless localaccess ;local/long distance linelinks; local/long distance switching;
international switching andother international gateway facilities. Whereas some ofthese might be
considered tofallunder (o),above, some might alsobeconsidered tobeactivities falling within sub-
sectors (a)-(g).
B.Categories
Foreachofthecategories thatfollow inwhich competition ispermitted, answer questions (i)
through (v)above, asapplicable, aswellasthespecific questions listed under agiven category.
Local/long distance/international
R SeeA,Sub-sectors (a)
(i) Overview
(ii) Modes ofsupply
(iii) Market access
(iv) National treatmentS/NGBT/W/3/Add.12/Rev.1
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(v) Licensing
1. How arelocalanddomestic longdistance distinguished ordefined?
R Local services, generally referred toas"exchange services" incompany tariffs, range from
services thatallow voice communication totheleasing ofhigh-speed dedicated data
communication channels. Basic localservice isdefined astheprovision oftelephone service
toeachsubscriber ataresidence orbusiness fortwo-way voice communications within
anexchange area. Local calling areas (exchange areas) generally correspond tourban
andrural population centres. Across Canada, thebasic localservice package isverysimilar
andconsists ofthefollowing elements:
1)oneconnection device, often ajack
2)inside wiring tothejack
3)aprotection device
4)drop wire
5)aconnecting device totheoutside plant facilities
6)outside plant facilities tothecentral office
7)unlimited local calling foraflatmonthly fee
8)access tolongdistance services
9)access toservices ofthecompany 'soperators
10)maintenance andrepair service
11)directory listing andadirectory
Long distance voice services (also referred toasinterexchange services) includes awide
variety ofvoice services provided byalarge number ofcompeting service providers. These
services provide communication between subscribers indifferent telephone company
exchanges withcharges normally based ondistance andcallduration. Inaddition to"long
distance voice services" there arealarge number ofinterexchange dataservices provided
onacompetitive basis. These services frequently utilize thelocal telephone network and
related services foraccess.
2. Arethere anyregulatory orother distinctions between domestic (local andlongdistance) and
international networks andservices andbetween thesuppliers ofbasic telecommunications in
these market segments? Ifso,what arethey?
R No.
Wire-based
R Thissection isredundant inviewofPartII(A), Sub-Sectors.
Radio-based
Note: Please address alltypes ofrelevant radio-based telecommunications including satellite links,
access tosatellite capacity, VSAT, mobile cellular communications, paging, mobile dataservices and
other radio communication systems. Recognizing thatwire-based or"fixed" networks canberadio
based inpart, responses under thiscategory should relate toanyrequirements specifically related to
radio-based elements ofnetworks orservices.
R(i)to(iv)These sections areredundant inviewofPartII(A),Sub-Sectors.
(v) LicensingS/NGBT/W/3/Add.12/Rev.1
Page14
Alicence isrequired fortheuseofradio transmission systems andissubject to
theavailability ofspectrum andpolicies regarding itsuseforpublic andprivate
purposes. Ingeneral, priority isgiven totheuseofspectrum forthepurpose of
developing public networks.
Alicence issued under theRadiocommunication Actisrequired tooperate a
Canadian communications satellite. Atthepresent timeTelesat Canada isthe
soleprovider offixed space segment service fordomestic service. Fixed Satellite
service between Canada andtheU.S.isprovided byTelesat andauthorized U.S.
satellite operators. Licences arerequired foralltransmit/receive earth stations.
Earth stations forCanada-Canada service maybeowned bytelecommunications
carriers orbyusers. With theexception ofreceive-only earth stations receiving
broadcasting signals (which areexempt from licensing), earth stations forCanada-
U.S.service must beowned byTelesat Canada. Earth stations foroverseas service
must beowned byTeleglobe Canada.
Resale basis
R (i) Overview
Theprovision ofanybasic telecommunications service onaresale basisispermitted
except inthecaseofpaytelephone service andintheProvince ofSaskatchewan
where Sasktel doesnotgenerally permit theresale ofitsservices.
(ii)to(v)These sections areredundant inviewofPartII(A),Sub-Sectors.
3 Doyourregulations permit international resale ofprivate leased circuit capacity ifconnected
tothepublic network. Ifso,atoneend? atbothends? Under whatconditions? Isresale
ofswitched voice capacity permitted?
R Resale ofinternational leased lineservices ispermitted. Theleased linemaybeconnected
tothelocal public switched network atoneendonlyoratbothendsifregulations inthe
other country allow such arrangements. Resale ofinternational leased lineservices for
thepurpose ofproviding Message TollService (Long Distance Telephone Service) issubject
tothepayment ofContribution Charges. Conditions foruse,including resale ofleased
lineservices, aresetoutinindividual carrier tariffs forsuchservices. These conditions
include traffic routing restrictions asdescribed intheresponse tothequestion inPart
IIA.(a)(ii).Resale ofcarrier services thattypically offer "switched voice capacity" is
permitted.
4. Isresale ofprivate leased circuit excess capacity permitted? Ifso,under what conditions?
Maybasic telecommunications beresold tomake them available tothirdparties? Forwhich
basic telecommunications isthispermitted?
R Resale ofthetotalcapacity ofleased lineservices ispermitted. Theleased linemaybe
connected tothelocal public switched network atoneendonlyoratbothends. Resale
ofleased lineservices forthepurpose ofproviding Message TollService (Long Distance
Telephone Service) issubject tothepayment ofContribution Charges. Conditions for
use,including resale ofleased lineservices, aresetoutinindividual carrier tariffs for
suchservices.
Facilities-basedS/NGBT/W/3/Add.12/Rev.1
Page15
R(i)to(iv)These sections areredundant inviewofPartII(A),Sub-Sectors.
(v) Licensing
5. Maybasic telecommunications suppliers (foreign anddomestic) construct andoperate their
ownnetworks orinvest inconsortia toconstruct andoperate suchfacilities? Ifnot,what
organizations arepermitted toconstruct andoperate basic telecommunications network
infrastructures?
R Canadian Carriers asdefined intheTelecommunications Actmay ownandoperate
transmissionfacilitiesforthepurposeofprovidingtelecommunicationsservicestothepublic
subject toCanadian ownership asdescribed intheresponse toquestion 6,PartI.These
andother facilities thatform part ofatypical telecommunications system may be
constructed byanyorganization.
Public/non-public supply
R Thissection isredundant inviewofPartII(A),
Sub-Sectors.
6. Does yourregime make distinctions between suppliers ofpublic switched andnon-public basic
telecommunications? Ifso,how?
R Noformal distinctions aremade onthebasis ofthese imprecise terms.
7. What basictelecommunications doyourregulations require, explicitly orineffect, tobemade
available tothepublic generally?
R Atthepresent time, onlycompanies providing localtelephone service, orexclusive service
providers arerequired tomake theirservices available tothepublic onexplicit terms and
conditions. Those providers aredescribed briefly intheresponse toquestion 4inPartI.
8. What basictelecommunications doyourregulations permit tobesupplied onanon-public basis
(i.e., notrequired tobemade available tothepublic generally)?
R Asindicated above, thedefinition ofbasic telecommunications inCanada isnotqualified
byarequirement tobe"offered tothepublic generally".
9. What obligations orresponsibilities areincurred bystatus asapublic basictelecommunications
supplier andunder whatconditions? E.g., What kinds of"common carrier"-like obligations
areimposed (e.g.withregard touniversal service), andonwhom?
R Inaddition tobroad policy objectives setoutintheTelecommunications Act,s.7,(see
pp8-9,above) specific service obligations for"Canadian Carriers" aresetoutinthe
Telecommunications ActPart III. Insummary, rates must be"just andreasonable"
(s.27(1)), thecarrier shall notunjustly discriminate orgiveundue orunreasonable
preference toward anyperson, including itself, norsubject anyperson toanundue or
unreasonable disadvantage (s.27(2)). Ingeneral, theCRTC approves orspecifies specific
obligations forservices intheindividual service tariffs orgeneral "Terms ofService" of
eachcarrier. TheCRTC mayforbear from theexercise ofthese powers when sufficient
competition exists. (reference -Telecommunications Acts.34)S/NGBT/W/3/Add.12/Rev.1
Page16
Non-facility-based basic telecommunications service providers (Resellers) arenotsubject
toregulation under theTelecommunications Act.
10. What, ifany,restrictions arethere onorganizing andoffering aprivate network bya
telecommunications supplier?
R Private networks asdefined intheresponse toquestion 1(Part I)maybeprovided on
thebasis thatsuchaprivate network isatelecommunications facility owned andoperated
byany"person" foritsown useand which isnotisnotused toprovide a
telecommunications service thatisoffered toanother person forcompensation. Radio
facility-based private networks generally require aradio licence which isdependant on
spectrum availability. Private networks asdescribed above arenotsubject tothe
Telecommunications Actbutconditions ontheir interconnection tothenetwork ofa
Canadian Carrier maybespecified bytheCRTC incarrier tariffs forsuchinterconnection.
11. Istheoperation ofpublic pay-phones reserved tomonopoly orexclusive suppliers?
R Local paytelephone service isprovided onamonopoly basis inCanada.S/NGBT/W/3/Add.12/Rev.1
Page17
PartIII
Regulatory issues
Inrespondingtothequestionsinthissection,participantsareaskedtoprovidespecificreferences
tothesource orstatus ofthemeasures concerned (e.g., where possible, acitation ofthelaw,regulation,
rule,guideline, decision ordecree).
Relationship between regulatory andoperational functions
1. Doanybasictelecommunications suppliers become involved, directly orindirectly, inmaking
regulatory policy? enforcement ofregulations? informulating standards orenforcing standards?
R Basic telecommunications service suppliers whoownandoperate telecommunications
transmission facilities aresubject tothejurisdiction oftheCanadian Radio-television and
Telecommunications Commission (CRTC). TheCRTC isafederally-constituted quasi-
judicial independent bodyresponsible fortheregulation oftelecommunications asdescribed
intheCanadian Radio-television andTelecommunications Act,theTelecommunications
ActandtheBroadcasting Act.During theconduct ofCommission proceedings, anyperson
mayparticipate inthedevelopment of"regulatory policy" bysubmitting comments and
evidence. Carriers subject totheCommission 'sjurisdiction mayenforce regulations and
standards relating totheaccess anduseoftheir facilities andservices, butonlytothe
extent approved bytheCRTC. Generally, theformulation oftechnical telecommunications
standards istheresponsibility oftheMinister ofIndustry. Telecommunications service
andequipment suppliers areinvolved intheformulation orselection ofstandards through
theTerminal Attachment Program Advisory Committee (TAPAC).
2. Isyourregulatory authority (orauthorities) alsoresponsible forformulating standards? for
enforcing standards?
R Canadian national standards aredeveloped through theNational Standards System under
theauspices oftheStandards Council ofCanada. These national standards aredeveloped
through consensus procedures involving allinterested participants from the
telecommunications industry andusergroups. They arenormally based oninternational
standardsissuedbytheInternationalOrganizationforStandards(ISO),ortheInternational
Telecommunication Union (ITU), andareimplemented atthediscretion oftheCanadian
telecommunications service providers.
Mandatory standards fortheattachment ofcustomer-provided equipment tothepublic
switched voice anddatanetworks inCanada aredeveloped through aconsultive process
with thetelecommunications industry andusers. TheCRTC gives force toterminal
attachment standards byincluding them asacondition incarrier tariffs. Thus theonus
forenforcing adherence tothese standards isonthecarrier providing theservice towhich
theequipment isattached. TheCRTC doesnotnormally formulate technical standards.
CRTC staff participate asobservers intheTerminal Attachment Program Advisory
Committee (TAPAC).
Inaddition, theMinister ofIndustry, through provisions contained inthe
Telecommunications Act(s.15(1)), mayestablish mandatory standards inrespect ofthe
technical aspects oftelecommunications andrequire theCRTC togiveeffect tothem.
3. Howmany levels ofgovernment (e.g., national, regional, state, local) haveresponsibility for
regulation affecting basic telecommunications? Please identify anddescribe relevant levels ofS/NGBT/W/3/Add.12/Rev.1
Page18
government authority. Arethere anyprocedures enabling suppliers toresolve questions or
disputes theymayhaveortoappeal adecision withtheregulatory body concerned? Ifso,
please describe.
R TheCanadian federal government hasjurisdiction overtelecommunications undertakings
thatprovidetelecommunicationsbetweenprovincesorbetweenCanadaandothercountries.
TheTelecommunications Actprovides alegislative framework fortheexercise ofthis
jurisdiction andsetsoutthepowers oftheMinister responsible forCommunications, the
Governor inCouncil (theFederal Cabinet), andtheCRTC. Inaddition, thefederal
government exercises itsjurisdiction over allaspects oftheradio spectrum under the
Radiocommunication Act.
With respect toappeals ofregulatory decisions oftheCRTC, applications maybemade
totheCRTC toreview itsdecisions. Petitions mayalsobemade totheGovernor inCouncil
tovary, rescind orrefer back decisions oftheCRTC. Appeals maybemade onpoints
oflaworjurisdiction totheFederal Court ofAppeal. Subsequent appeals ofdecisions
oftheFederal Court ofAppeal maybemade totheSupreme Court ofCanada.
Frequency allotment orassignment
4. What aretheprocedures, requirements andcriteria applied fortheallotment orassignment
ofradio frequencies?
R Authority tousediscrete radio frequencies isassigned bylicence generally onafirst-come,
first-served basis foroneyear subject toannual renewal. While aninitial technical
application istheprincipal application document, other non-technical criteria such as
Canadian ownership requirements, development ofpublic networks andindustry structure
areapplied where appropriate.
5. Doforeign telecommunications suppliers receive national treatment under these procedures
andcriteria?
R Yes, provided thatthey are"eligible companies" interms ofCanadian ownership
requirements.
Numbering andidentification codes
6. What aretheprocedures, requirements, andcriteria usedtoassign numbering andidentification
codes?
R Canada shares several telecommunications numbering plans withtheUSand16Caribbean
countries foraddressing androuting purposes. Themostvisible ofthese plans istheNorth
American Numbering Plan(NANP) which contains most ofthecustomer dialled numbers
suchastheareacodes, theseven digit local phone numbers, andCarrier Identification
Codes. Assignment guidelines fornumbering resources under NANP aredeveloped by
theIndustry Numbering Committee (INC) which isopen torepresentatives ofany
telecommunications carrier orusergroup from thecountries thatusethese resources.
Assignment guidelines aredeveloped within INConaconsensus basis butdonotdetract
from theability ofanappropriate governmental orregulatory agency toexercise its
authorityovernumberingresourceswithinitsrespectivecountry.Theassignmentguidelines
aredeveloped insuch amanner astoreflect, asmuch aspossible, theregulatory
requirements ofthecountries involved. Government regulatory bodies arenotnormallyS/NGBT/W/3/Add.12/Rev.1
Page19
involved inthedevelopment oftheguidelines unless there isanimpasse andconsensus
cannot bereached.
TheCanadian Steering Committee onNumbering (CSCN), which wasformed todevelop
anoverall Canadian numbering strategy andtoadvise Industry Canada concerning
numbering issues, reviews theINCguidelines todetermine iftheyareacceptable foruse
inCanada. Since Canadian industry isrepresented atINC, theINCassignment guidelines
areusually accepted asissued. However, insome cases, theguidelines donotcompletely
reflect theCanadian regulatory environment andmust bemodified. Thenecessary
modifications aredeveloped bytheCSCN.
When anentity requires numbering resources foruseinCanada, anapplication ismade
totheCanadian Numbering Administrator (CNA) whofollows theCSCN approved
assignment guidelines. Once theCNA hasdetermined thattheentity hasmettheeligibility
requirements intheassignment guidelines aswellastheapplicable Canadian Government
regulatoryrequirements,theapplication,inmostcases,isforwardedtotheNorthAmerican
Numbering Plan Administrator (NANPA), which isresponsible fortheadministration
ofmostnumberingresourcesonaNorthAmericanbasis,fortheassignmentoftheresource.
Numbering codes within theSpecial Access Code 600areadministered solely bytheCNA.
7. Doforeign telecommunications suppliers receive national treatment under these procedures
andcriteria?
R Yes.
Standards, typeapproval andequipment attachment
8. What types ofmandatory standards areinplace?
R Mandatory equipment attachment standards nowinplace are:
a) Standard CS-03, which includes sixparts:
i) PartIspecifies therequirements foranalog terminal equipment
ii) PartIIspecifies therequirements fordigital terminal equipment intended
forconnection to1.544 Mbps digital facilities
iii) PartIIIspecifies themethods ofconnection acceptable forcertified terminal
equipment
iv) PartIVisaglossary ofterms
v) PartVspecifies therequirements forthemagnetic output from handset
telephones forhearing aidcoupling
vi) PartVIspecifies therequirements forISDN terminal equipment
b) Standard CS-05 -Telex Terminal equipment
Anycustomer-provided equipment thathasbeen tested andcertified asmeeting the
requirements ofnational technical standards maybeattached tothepublic switched voice
anddatanetworks inCanada withveryfewexceptions. Thetechnical standards, designed
primarily toprevent harm tonetworks, carrier personnel, andother users, areprepared
onaconsensus basis byrepresentatives ofcarriers, manufacturers andusers. Foreign
testing laboratories maybeapproved toperform testing ofequipment inaccordance with
theCanadian standards.S/NGBT/W/3/Add.12/Rev.1
Page20
Equipment thathasnotbeencertified mayonlybeattached topublic switched networks
inaccordance withalternative arrangements thatareapproved bytheregulator.
9. When astandard isunder review oranewstandard isbeing developed byyourstandards
authority, isthere anopportunity forpublic review andcomment prior toitsadoption? May
foreigners participate inthisprocess? Maytheprivate sector participate inthedevelopment
ofstandards? Ifso,how?
R Neworrevised terminal attachment standards arereviewed intheTerminal Attachment
ProgramAdvisoryCommittee(TAPAC)whichisanopenforumwhereequipmentsuppliers,
telecommunications carriers, testing laboratories andusergroups candiscuss proposed
standards. Thiscommittee iscomposed primarily ofmembers representing theDepartment
ofIndustry, provincial governments, telecommunications carriers, various industry
associations andother interest groups. Following discussions inTAPAC, notification of
theproposed standards arepublished intheCanada Gazette toinform andseekcomments
from anyother interested party.
10. What equipment issubject totypeapproval? Isself-certification allowed? Hasyourgovernment
concluded mutual recognition agreements fortelecommunications equipment certification?
Aretheyrequired forforeign produced equipment?
R Allterminal equipment (e.g. telephones, modems) which connects topublic switched
telecommunications networks aresubject tocertification under theTerminal Attachment
Program. Certification Standard CS-03, istheprincipal standard thatmust bemet.
Terminal equipment thatisalsoradio apparatus isalsosubject toseparate typeapproval
andlicensing under theRadiocommunication Act.
Self-declaration isnotallowed.
Canada hasconcluded agreements with theUnited States andJapan forthemutual
recognition ofprocedures fortheacceptance oftestresults. Suchagreements arenecessary
fortheaccreditation offoreign testing facilities bytheCanadian certification authority,
theDepartment ofIndustry. Foreign produced equipment maybetested atanyaccredited
testing facility either inCanada orinacountry withwhich suchanagreement hasbeen
concluded.
11. Howistheability toattach terminal equipment tothenetwork regulated? What restrictions,
arethere onterminal equipment thatmaybeattached tothenetwork?
R Afacilities-based carrier (Canadian Carrier) must provide itsservices inaccordance with
a"tariff" approved bytheCRTC. Ifapplicable, technical interface standards are
incorporated incarrier tariffs asacondition ofservice. Canadian Carriers mayonly
enforce regulations andstandards relating totheaccess anduseoftheir facilities and
services totheextent approved bytheCRTC. Generally, theformulation oftechnical
telecommunications standards istheresponsibility oftheMinister ofIndustry.
Telecommunications service andequipment suppliers areinvolved intheformulation or
selection ofstandards through theTerminal Attachment Program Advisory Committee
(TAPAC) which issponsored bytheDepartment ofIndustry.
When adopting newstandards asacondition ofacarrier tariff, theCRTC willinvite
written public comment oraddress theissue inapublic hearing. They areimplemented
andenforced bythetariffs ofthecarriers.S/NGBT/W/3/Add.12/Rev.1
Page21
TheStandard, "CP-01 -Certification Procedures", explains howcertification canbe
obtained andcontinuing compliance maintained.
12. Maybasictelecommunicationssuppliersconnectedtothepublicnetworkusetheirownswitches?
R Basic telecommunications service suppliers operating onafacilities-basis oranonfacilities-
basis mayusetheir ownswitches whether ornottheyareconnected toanother public
network. Switches connected topublic telecommunications networks areconsidered to
becustomer equipment andmust becertified inaccordance with Standard CP-01
Certification Procedures.
13. Does thegovernment require network-based suppliers topermit theattachment ofcustomer-
supplied terminal equipment?
R Yes,thispolicy isapplied through decisions oftheregulator, theCRTC. Awide range
ofequipment maybeattached tocommon carrier networks provided thattheequipment
iscertified inaccordance withprocedures andtechnical standards which aredeveloped
under theauspices ofIndustry Canada.
Interconnection
14. Ingeneral, howisinterconnection regulated inyourregime? What aretheregulations applied?
R Theterms andconditions ofinterconnection arrangements between carriers orwithother
service providers aresubject toapproval bytheCRTC. (reference -Telecommunications
Acts.29ands.40.) Specific technical details andcostsharing maybeagreed tobycarriers
interconnecting onacooperative basis. Terms andconditions forinterconnection with
thelocalpublic switched telephone network foranumber ofpurposes havebeenestablished
bytheCRTC andmay insome cases involve theestablishment ofanadditional
"contribution charge" tocompensate forlossofcontribution totherevenue shortfall in
local telephone service revenues when theinterconnection isused fortheprovision of
competitive longdistance telephone service. Such contribution charges mayvarybetween
local telephone service providers. Detailed information andcompany specific tariff
conditions areavailable from theCRTC.
Pursuant toarequest inCRTC Telecom Decision 92-12 on"Competition intheProvision
ofPublic longDistance Voice Telephone Services andRelated Resale andSharing Issues",
theCanadianInterconnectionLiaisonCommittee(CILC)wasestablishedundertheauspices
oftheDepartment ofIndustry asanopen forum forallparties directly involved inor
materially affected bylongdistance telephone service interconnection inCanada. CILC
meets regularly andhasformed three subcommittees; technical, operational, and
procedures. TheCommittee 'sprimary mandate istoestablish andmaintain binding
national operational andtechnical standards togovern interconnection between telephone
company networks andthenetworks oflongdistance competitors.S/NGBT/W/3/Add.12/Rev.1
Page22
15. Doyourregulations require network-based suppliers toprovide interconnection forother basic
telecommunications network orservices suppliers? Ifso,please describe?
R TheCRTC hastheauthority toorder aCanadian Carrier toconnect itsfacilities toany
other facilities onanyterms itmayprescribe. (reference -Telecommunications Acts.40)
Ingeneral, Canadian Carriers providing local access services onamonopoly basis are
required toallow interconnection forother facilities-based carriers andresellers. Inmost
cases, such interconnection isavailable onan"equal access" basis (Trunk-side Access)
forthepurpose ofproviding competing longdistance telephone service. IntheProvince
ofSaskatchewan, Sasktel isexempt from theapplication oftheTelecommunications Act
andgenerally doesnotpermit interconnection withanycompetitor 'sfacilities. (reference -
Telecommunications Acts.133)
16. Isinterconnection between leased circuits andpublic datanetworks permitted?
R Yes.
17. What aretherulesandregulations regarding thepricing ofinterconnection? Areinterconnection
charges setinrelation toanyprinciples (e.g., cost-oriented)? Isthere arequirement tosubmit
interconnection charges toaregulatory body forapproval? Arethese changes inthepublic
domain?Arethesameinterconnectionchargesappliedtoallsuppliersrequestinginterconnection
oraretheynegotiated onacase-by-case basis? What requirements orobligations existtopublish,
make publicly available, ortosupply details ofinterconnection agreements toregulatory
authorities?
R Canadian Carriers mayonlygiveeffect toanyagreement fortheinterchange oftraffic
with another telecommunications common carrier with theapproval oftheCRTC.
(reference-TelecommunicationsActs.29)Asanexceptiontothisregime,TeleglobeCanada
must submit such agreements with aforeign carrier totheCRTC ifrequired bythe
Commission,butisnotrequiredtoobtaintheCommission'sapproval.(reference-Teleglobe
Canada Acts.17) Allinformation submitted totheCRTC isavailable forpublic inspection
unless, pursuant toarequest, theCommission designates itasconfidential. (reference -
Telecommunications Acts.39) Interconnection tolocaltelephone networks bycompeting
Canadian Carriers orresellers forthepurpose ofproviding Message TollService (Long
Distance Telephone Service), issubject tothepayment ofcontribution charges thatare
cost-oriented. Conditions forsuchinterconnection aresetoutinindividual carrier tariffs.
Generally charges forinterconnection arethesame insimilar circumstances.
Competitive safeguards
18. Whatkindsofsafeguardsdoesyourregimehaveagainstanti-competitivepracticesofmonopolies
ordominant suppliers insituations where theymaycompete withother firms tosupply certain
basic telecommunications inthedomestic market? intheinternational market?
R Ingeneral, theTelecommunications Actprovides aregulatory framework forCanadian
Carriers toensure thattheir services areprovided onjustandreasonable terms to
customers andothers suchasresellers oftheirservices. Provisions oftheActaredesigned
toprevent carriers from discriminating infavour ofthemselves when competing withother
carriers orresellers. While regulated companies arealsosubject totheanti-competitive
provisions oftheCompetition Act,generally provisions ofthatActwould beapplied only
insituations where theCRTC hasforborne from theexercise ofitspowers under theS/NGBT/W/3/Add.12/Rev.1
Page23
Telecommunications Act.Thesame regime applies tothedomestic andinternational basic
services market.
19. Doyourregulations distinguish between dominant andnon-dominant suppliers? Ifso,what
arethedetails andhoware"dominant" and"non-dominant" defined? Arethereanysafeguards
concerning suppliers whohavemonopoly ordominant control ofaccess tocertain market or
network segments?
R Theterms "dominant" and"non-dominant 'arenotdefined intelecommunications
legislation. However inrecognition ofthefactthatsome carriers, particularly those whose
exclusive mandate hasended, willbedominant inthemarket, theTelecommunications
Act(s.34) requires thattheCRTC notforbear from regulating where todosowould impair
theestablishment ofacompetitive market. There isnoprovision thatprevents different
regulatory treatment ofdominant andnon-dominant carriers, andtheCRTC tends to
bemore demanding initsregulation ofdominant firms. TheCompetition Act,anact
ofgeneral application, provides specific remedies where dominant firms engage inanti-
competitive behaviour.
20. Isthereanindustry-wideantitrustpolicyand/oranytelecommunications-specificantitrustpolicy?
What aretherules andregulations regarding mergers andacquisitions?
R Canadian competition lawiscontained intheCompetition Actof1986. Thepurpose of
theCompetition Actis:"tomaintain andencourage competition inCanada inorder to
promote theefficiency andadaptability oftheCanadian economy, inorder toexpand
opportunities forCanadian participation inworld markets while atthesame time
recognizing theroleofforeign competition inCanada, inorder toensure thatsmall and
medium sized enterprises have anequitable opportunity toparticipate intheCanadian
economy andinorder toprovide consumers withcompetitive prices andproduct choices."
(s.1.1) Therules regarding mergers aresetoutinPartVIIIoftheCompetition Act.
Acquisitions ofCanadian businesses by"non-Canadians" aresubject toreview under the
Investment Canada Act,anactofgeneral application. Ingeneral, theActapplies todirect
acquisitions ofC$5million ormore andindirect acquisitions C$50 million ormore.
21. Arethere anysafeguards concerning basic telecommunication suppliers alsoengaged inthe
manufacturing oftelecommunications equipment? Ifso,please describe thecontent andworking
ofthese safeguards.
R TheCRTC imposes regulatory safeguards onthose carriers under itsjurisdiction that
areaffiliated withmanufacturers oftelecommunications equipment. TheCRTC focuses
ontheprice andpurchasing behaviour ofthose Canadian Carriers toensure thatits
subscribers donotsubsidize competitive activities orthose ofthecarriers 'affiliates. The
basic rules aresetoutinCRTC Decision 84-23 where theCRTC specified thatprices paid
byaCanadian Carrier forproducts andservices purchased from subsidiaries oraffiliates
should beaslowasorlower thantheprices paidbyanyother customer inCanada, for
comparable products andservices under similar circumstances. Inother situations, the
CRTC hasrequired thateither purchases ofgoods andservices must besubject to
competitive tendering, orthatafullexplanation besubmitted totheCommission. The
CRTC mayalsorequire periodic reports oninter-corporate transactions between affiliated
companies.S/NGBT/W/3/Add.12/Rev.1
Page24
Pricing-related measures
22. What istheroleofthegovernment oranyrelated agency withregard toestablishing prices
(e.g., tariffs, access charges, accounting rates) orpricing policy? E.g., doesthegovernment
setprices oraccounting rates, directly orindirectly (e.g.pricecapsorrateofreturn controls),
ordobasic telecommunications suppliers determine these themselves? What requirements or
obligations doesthegovernment setregarding prices charged bymonopoly/dominant suppliers?
Orother suppliers?
R ACanadian Carrier must provide itsservices inaccordance witha"tariff" approved by
theCRTC. Canadian Carriers mayonlygiveeffect toanyagreement fortheinterchange
oftrafficwithanothertelecommunicationscommoncarrierwiththeapprovaloftheCRTC.
(reference -Telecommunications Acts.29) Teleglobe Canada negotiates "accounting rates"
onabilateral basis andmust submit suchagreements withaforeign carrier totheCRTC,
butisnotrequired toobtain theCommission 'sapproval. (reference -Teleglobe Canada
Acts.17) Indetermining whether rates arejustandreasonable, theCommission may
adopt anymethod itconsiders appropriate, whether based onacarrier 'srateofreturn
onitsratebase, orotherwise. (reference -Telecommunications Acts.27(5)) Insummary,
where theCommission hasnotforborne from theexercise ofthispower, rates contained
inCanadian Carrier tariffs must be"just andreasonable" (s.27(1)), andthecarrier shall
notunjustly discriminate orgiveundue orunreasonable preference toward anyperson,
including itself, norsubject anyperson toanundue orunreasonable disadvantage (s.27(2)).
23. Doesthegovernment require tariffapproval ornotification and,ifso,whataretheprocedures?
What requirements regarding cost-accounting areputinplace toensure transparency?
R ACanadian Carrier must provide itsservices inaccordance withatariff approved by
theCRTC. (reference -Telecommunications Acts.25) TheCRTC mayforbear from the
exercise ofthispower. (reference -Telecommunications Acts.34) Procedures fortariff
approval aresetoutintheCRTC 's"Rules ofProcedure".
There arenocostaccounting rules ofgeneral applicability inplace forthesolepurpose
ofensuring transparency.
24. Towhatextent istheprinciple ofnon-discrimination applied inpricing policy? E.g., isatariff
package suchasavolume discount targeted foraspecific group allowed and,ifso,whatare
theterms andconditions applied? Areaccounting ratesapplied onanon-discriminatory basis
between countries? Ifaccounting ratesapplied indifferent agreements arenotthesame, what
arethecriteria usedtoarrive atdifferent accounting rates? Aresome ofthesecriteria required
ordefined bythegovernment?
R Seeresponse toquestion 22above. Theprinciple ofnon-discrimination isgenerally applied
topersons insimilar conditions andcircumstances. Ingeneral, "volume discounts" are
permitted butmust bemade available toallcustomers onthesame terms andconditions
unless theCommission hasforborne from regulating theservice inacompetitive market.
With respect toaccounting rates, Canadian Carriers must submit suchagreements tothe
CRTC forapproval unless theCommission hasforborne from theexercise ofthispower.
Themajor portion ofinternational traffic isexchanged withtheU.S.bycompeting carriers
onbothsides oftheborder. TheCommission hasnotrequired uniform accounting rates
inthissituation. Asanexception, Teleglobe Canada must submit suchagreements with
foreign carriers totheCRTC, butitisnotrequired toobtain theCommission 'sapproval.
(reference -Teleglobe Canada Acts.17)S/NGBT/W/3/Add.12/Rev.1
Page25
25. Doanybasic telecommunications suppliers getinvolved insetting industry-wide tariffs?
R Joint tariffs may befiled bytwo ormore Canadian Carriers. (reference -
Telecommunications Acts.25(2)). Forexample, members oftheStentor group of
Companies (Canada 'smajor telephone companies) frequently filetariffs thathave the
effect, ifapproved, ofcreating uniform price andconditions ofservice throughout their
combined serving areas.
26. Onwhat basis areprices (e.g. tariffs, access charges, accounting rates) determined? What
concepts areapplied regarding costs? Isthere ageneral principle applied regarding allocation
ofcosts? Iscost-oriented pricing ofbasic telecommunications used orrequired bythe
government? Ifnot,dobasic telecommunications suppliers usecost-oriented pricing?
R Historically, themost important principles which have been employed byCanadian
regulators intheestablishment ofprices fortelecommunications services are:(a)value
ofservice, (b)company-wide price averaging, and(c)causality.
Thevalue-of-service concept recognizes thattelephone services aremore valuable tosome
classes ofsubscribers than toothers. Theprinciple ofvalue-of-service rating isstill
extensively applied inthecaseoflocal services where itisthebasis for"rate group"
structures andforthedifference between residence andbusiness rates. Value-of-service
hasalsobeen afactor inlong-distance prices, although toalesser extent than inlocal
service, particularly withtheadvent ofcompetition inthismarket.
Company-wide averaging means thatinthepastrates forservices withsimilar features
arethesame throughout acarrier 'soperating territory andregardless ofthetypeofterrain,
location, technology employed andsoon.Atypical example ofcompany-wide averaging
isthesituation where allsubscribers insimilar sizes ofexchanges paythesame local
exchange service rateforagiven class ofservice, regardless oftheir usage ordistance
from atelephone company central office.
With respect toageneral principle applied totheallocation ofcosts, thegeneral principle
isthe"causality principle" adopted bytheCRTC in1985 andrecently reconfirmed for
useatleastuntiltheCommission adopts incentive regulation inthenexttwoyears (Telecom
Decision CRTC 94-19). Thecausality principle istheidentification ofservice costs inan
empiricalsense(TelecomDecision85-10).Ingeneral,inadditiontotheabove,cost-oriented
pricing isoneoftheprinciples applied bythefederal regulator.
Competition intheprovision oftelecommunications services isnecessitating areview of
these concepts. Theneedtomove toprices based oncostisincreasingly recognized and
being implemented onagradual basis. Inapproving rates, theCRTC alsoensures that
thecompetitive activities oftheregulated carriers donotadversely affect themaintenance
ofaffordable rates forlocal telephone service subscribers. Themethod bywhich it
determines whether tariffs arejustandreasonable andthatthey arenotunjustly
discriminatory anddonotconfer preference oradvantage maydiffer according tothe
nature oftheservice. (reference -Telecom Decision CRTC 92-12).
With regard toconcepts thatareapplied tocosts, arecent decision ofthefederal regulator
proposes tomove rates further towards costs andapproved thegeneral rebalancing of
rates among localandlongdistance services inorder toestablish theconditions necessary
toensure thecompetitiveness ofCanadian telecommunications. Such conditions include
ensuring sustainable competition inallmarkets, through openaccess principles andpricingS/NGBT/W/3/Add.12/Rev.1
Page26
policies thatprovide incentives tousers andservice providers toconduct their business
overCanadian networks (Telecom Decision CRTC 94-19).
27 Arethere anyrules specific tothepricing ofanewservice?
R Inassessing rates fornewcompetitive services provided bydominant carriers, theCRTC
generally relies oneconomic studies todetermine iftherates arejustandreasonable.
Inmaking such adetermination, theCommission requires thattheproposed rates be
compensatory andsetatalevelthatmaximizes contribution totherecovery ofaccess and
common costcategories.
Rights ofwayfortheconstruction ofinfrastructure
28. Arebasictelecommunications services suppliers arepermitted tobuildtheirowninfrastructure
orfacilities? Ifso,whataretheprocedures andcriteria forauthorization tobuild infrastructure
orfacilities? What aretheprocedures, criteria, limitations orqualifications applied withrespect
tothegranting ofortheavailability ofrights ofwayfortheconstruction ofinfrastructure or
facilities?
R There arenolicensing requirements fortheconstruction andoperation ofnon-radio
telecommunicationsfacilitiesotherthantherequirementtooperateinternationalsubmarine
cables inaccordance with anInternational Submarine Cable Licence. (reference -
Telecommunications Acts.17)
Theacquisition ofrights ofwayistheresponsibility oftheservice provider. Provisions
relating torights ofwayonpublic property forCanadian Carriers aresetoutinthe
Telecommunications Acts.43andthose forrights ofwayonprivate property, ins.46.
Insummary, toobtain aright ofwayonpublic property, aCanadian Carrier must obtain
theconsent ofthemunicipality orpublic authority having jurisdiction, orifsuchconsent
cannot beobtained, theCanadian Carrier mayapply totheCRTC which maygrant the
permission subject toconditions. Inthecaseofrights ofwayonprivate property, Canadian
Carriers may, withtheapproval oftheCRTC, acquire anylandorinterest inanyland
pursuant totheprovisions oftheExpropriation Act.
29. Isnational treatment extended toforeign basic telecommunications suppliers under these
procedures andcriteria?
R These provisions apply toallCanadian Carriers onanational treatment basis.
Newtelecommunications services
30. Please describe anygeneral regulatory processes orprocedures thatapply todealing withthe
introduction of"new" telecommunications services. Priortoanyrelevant regulatory procedure
having beencompleted, isitnotpossible forsuchnewservices tobesupplied?
R ACanadian Carrier must provide allservices including "new" services inaccordance with
atariff approved bytheCRTC. (reference -Telecommunications Acts.25) TheCRTC
mayforbear from theexercise ofthispower. (reference -Telecommunications Acts.34)
Other thantherequirement forresellers toregister withtheCRTC forthepurpose of
determining contribution payment levels forthevoice telephone services theyprovide,
there arenoregulatory processes orprocedures thatapply toresellers, betheybasic serviceS/NGBT/W/3/Add.12/Rev.1
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providers orenhanced service providers wholeasetheirunderlying transmission facilities
from facility-based carriers (Canadian Carriers).
31. When anewservice becomes possible oravailable, whodetermines thestatus ofthenewservice
(whether itisbasic orvalue-added) andunder whatprocedure andtimeframe?
R Seeresponse toquestion 30.With respect Canadian Carriers, theCRTC determines
whether anewservice isbasic orenhanced principally toensure thatthecarrier doesnot
discriminate infavour ofitselfwithrespect tothecostofcomponents ofanenhanced service
where suchcomponents maybeprovided onamonopoly basis. TheCRTC isrequired
toapprove, disallow ormake public reasons whyithasnotacted onatariff application
within forty-five business daysafterthefiling ofatariff byaCanadian Carrier. (reference
-Telecommunications Acts.26)