February 3, 2005 OTTAWA-GATINEAU ¿ The Canadian Radio-television and Telecommunications Commission (CRTC) today issued Telecom Decision CRTC 2005-6 on Competitor Digital Network Service, (CDN). This decision determines the terms and conditions, as well as the rates that competitors will pay the incumbent telephone companies (telephone companies) for digital network services they rely on to provide services to their customers. In arriving at this decision, the Commission took into account: a) the competitors' reliance on the telephone companies' network facilities and services; b) the competitive supply that exists in the market place; c) the constraints competitors face in building their own networks; and d) the state of competition in the local market. This concludes a process that was initiated by the second price cap decision. The decision strikes a balance between the interests of competitors, telephone companies and consumers. Competitors will generally pay lower rates for the digital network components they require, thereby enabling them to expand their reach and customer base. Growth in their customer base and revenues will facilitate the expansion of their own networks. Telephone companies will be compensated for the revenue losses associated with these rate reductions from their deferral accounts as determined in the second price cap decision. Telephone companies further benefit from reduced prices for the digital network components they require when they operate as a competitor outside of their territory. Consumers will not pay higher rates as a result of this decision. With increased competition, consumers will benefit from greater choice and innovation in telecommunications services. This decision furthers the objective of facilities-based competition. Rates for high speed services, which are generally fibre-based and easier to replicate, have been set with sufficiently high margins to encourage competitors to invest in their own facilities. Rates for access to low speed services, which are legacy copper-based, have been set at cost plus 15%, as competitors significantly rely on these facilities to be able to provide services to their customers. Competitors face many constraints when they decide to construct their own networks. Competitors still rely heavily on the facilities of the telephone companies. By reducing the prices for underlying facilities, the competitor will be able to offer services to more customers and in more regions. Growth in their customer base and revenues will facilitate the expansion of their own networks. Reference document: Telecom Decision CRTC 2005-6 [.htm] [.pdf] - 30 - Media Relations: MediaRelations@crtc.gc.ca, Tel: (819) 997-9403, Fax: (819) 997-4245 General Inquiries: Tel: (819) 997-0313, TDD: (819) 994-0423, Fax: (819) 994-0218 Toll-free # 1-877-249-CRTC (2782), eMail: info@crtc.gc.ca TDD - Toll-free # 1-877-909-2782
