Intervention: City of Lethbridge (Intervenor 221)

Document Name: 2015-134.223923.2393345.Intervention(1f@pt01!).pdf
July 3, 2015
**** Mr. ****:
Re: CRTC **** ID 708838

The CRTC has forwarded to TELUS a copy of your correspondence dated **** 1, 2015 regarding TELUS’ decision not to install infrastructure as part of the shallow utility coordination stage in the Blackwolf Phase 4 neighbourhood being developed by Avonlea in **** Lethbridge, Alberta. The CRTC requested that TELUS respond directly to you with a copy to the CRTC.

By way of background, business and consumer local telephone services provided by TELUS, in exchanges within the City of Lethbridge, are deregulated or “forborne.” Forbearance results from many factors, but the most important consideration is that the CRTC has found that there is competition in the exchange area for the provision of local telephone service, giving customers a choice of service providers. Indeed, as you have noted in your correspondence with the CRTC, Shaw, a local telephone provider, is installing its infrastructure at the shallow utility coordination.

With respect to the Avonlea development, TELUS has confirmed that Shaw is deploying infrastructure to support residential telephone service, As a result, residents in the neighbourhood will have access to telephone services, including 9-1-1 calling. TELUS remains open to discussions with Avonlea about a potential network build-out in the new neighbourhood. TELUS will be contacting Avonlea to discuss TELUS’ investment policy in new neighborhoods and discuss the mutual benefits to serving the Avonlea subdivision.

It is important to understand that TELUS does not have an obligation to install telephone infrastructure at the unilateral request of a developer.1 TELUS continuously evaluates its 1 There is a framework governing TELUS’ obligation to serve end customers – not developers -- with telephone services within a forborne exchange. That framework applies to the relationship between the service provider and the end customer specific to stand-alone telephone service.

Because there are no end customers in the neighbourhood at present, and no prospective end investments to ensure that the Company is serving our Consumer and Business customers effectively. In the course of this evaluation process, TELUS has determined there are wide variations in the financial arrangements across serving regions in new neighbourhood development. This has resulted in adjustments to TELUS’ policy when it comes to funding developments, particularly developments without residents. In this competitive environment, TELUS has limited capital funds, meaning that it must dedicate those funds to those projects that will generate the greatest benefits to customers in a timely fashion. Such an approach maximizes the benefits of our capital investments to consumers and businesses.

One effect of TELUS policy to infrastructure construction is that the timing of infrastructure investment shall be more tightly aligned with maximized occupancy of a development.

TELUS’ experience indicates that high-cost infrastructure deployed in new subdivisions and Multi Dwelling Units (MDUs) often sits idle for long periods of time prior to occupancy, or remains under-utilized. The result is a very low return on investment at the neighbourhood development stage, therefore forcing TELUS to reconsider the business relationship between itself and property developers if TELUS is requested to install facilities, on a speculative basis, at the development stage.

Previously, in an environment in which it was typically the sole provider of telephone services, TELUS bore the majority of the cost of connecting such developments. TELUS has now adopted a policy of requesting that developers share in the up-front costs of connecting new neighborhoods, much as developers may partly or entirely fund the connection of other infrastructure services such as sewer and water as well as local roads.

This standardized model will require that developers pay for conduit, placement costs and in-building wiring needs. These types of arrangements are mutually-beneficial, with the development obtaining facilities from TELUS and TELUS being able to reduce the upfront capital commitment providing infrastructure to customers who do not yet exist. These arrangements bring infrastructure construction by TELUS into better alignment with the norms for other utility providers and will contribute to making TELUS services available in more settings.

customer has yet to request telephone services from TELUS, the CRTC framework is not engaged at this time.

Construction in unoccupied subdivisions is a commercial arrangement between TELUS and a developer that is not governed by CRTC regulations. That said, TELUS works to maintain positive relationships with developers so that the Company can build capital infrastructure in a mutually-beneficial manner. It is certainly in TELUS’ interest to serve customers in Lethbridge. TELUS conducts negotiations with developers in order to use TELUS’ finite capital budget in a way that maximizes benefit to as many customers as possible. TELUS applies this approach consistently across Western Canada to stretch the application of investment capital over a broader area and a larger number of projects.

Thank you for bringing your concerns to our attention. I trust the information provides the clarification you require and confirms TELUS’ positon in this regard.

Yours truly,
**** Dasilva
TELUS, Regulatory Affairs

Intervention: City of Lethbridge (Intervenor 221)

Document Name: 2015-134.223923.2393346.Intervention(1f@p%01!).html

To the CRTC Commission on Telecommunication ServicesThe City of Lethbridge is a City in southern Alberta with a population of approximately 95,000. The City of Lethbridge is undertaking an intelligent communities initiative and fundamental to this concept is universal access to broadband internet. As a result, we are working to facilitate access to high quality and competitive internet access within our community. We believe that in the 21st century broadband internet has become an essential service. Lethbridge currently has two telecommunications providers, Shaw and TELUS. City Concerns:Physical Space in Right of Ways (ROW) – Line AssignmentsCooperation between the City electrical department, ATCO Gas, Shaw and TELUS has been excellent in that infrastructure for new developments has been installed under a four party trench agreement. This allows one trench to be used, saving costs and places electrical, Shaw and TELUS in a single line assignment making efficient use of the ROW. The standard City ROW designs were done on the basis of the 4 party trench agreement so there is very little space to allow additional line assignments. This makes it physically difficult to find space for other telecommunications providers. In addition there is increasing pressure to reduce ROW widths in support of building denser communities and making more efficient use of land. This means that space within the ROW will only become more scarce.Timing of Telecommunication Infrastructure Installation for New DevelopmentsRecently, due to financial considerations, described in the attached response we received from TELUS, they have decided not to install their infrastructure until there is sufficient demand for their services in certain subdivision phases. This essentially means that nothing will be done in these areas until after the homes are built and customers begin signing up. The problem for the municipality is that now the municipal infrastructure is in place along with electrical and Shaw wires so, TELUS will need a new line assignment and there may not be space since the road cross sections in Lethbridge have been designed with 4 party trenching as an assumption. In addition TELUS will be digging through new municipal infrastructure as well as disrupting the neighbourhood who will have newly landscaped yards. Digging through new infrastructure has a significant impact on its life span. No matter how diligently it is restored, it will never have the same life span as before it had been cut through and repaired.Universal access and choice for citizensFrom a community perspective TELUS’ ability to decide to provide service or not, means that some of our citizens are forced to use Shaw for their telecommunications. The two existing telecommunications providers have an almost unsurmountable advantage given the extents of their legacy infrastructure. This makes it nearly impossible for any other companies to catch up. Given that these entities are large companies, corporate level decisions are unlikely to consider the needs of people in a small community like Lethbridge. This could result in a situation where one of the providers could withdraw from Lethbridge because it is determined there is insufficient return on investment. This would leave the remaining provider in a monopoly position which will not support high quality and competitive telecommunications access.Multiple Parallel Infrastructure SystemsWith recent decisions made by TELUS which have them picking and choosing which new developments they will install infrastructure into the City has wondered if a distribution network model similar to what is done with the electric utility might be considered for telecommunications. This model would have the advantage of 1) by placing conduit banks were several telecommunications providers can use a single line assignment, 2) multiple fiber strands per wire means the cost is incremental 3) A single distribution system provider simplifies work with the municipality in terms of planning, and the impacts on City infrastructure. 4) Improved competition since ISPs could rent or purchase a fiber or conduit instead of having to find a line assignment and then install additional infrastructure. 5) A single shared distribution system saves resources and should in the long run reduce costs to the customer. The down side for telecommunications companies especially legacy providers like TELUS and Shaw is that in this scenario they lose a significant advantage.BYRON J. BUZUNIS, M.Eng., PMP, P.Eng. URBAN CONSTRUCTION MANAGERCITY OF LETHBRIDGE 910 - 4th Avenue ****, Lethbridge, Alberta, *** *** Phone: *-***-***-**** Cell: *-***-***-****