Originally published in Blakes Bulletin on
Communications, December 2010
On December 9, 2010, the Canadian Radio-television and
Telecommunications Commission (the CRTC) issued Decision 2010-930 which clarifies whether
foreign-owned resellers are permitted to light leased dark fibre
without violating the foreign-ownership restrictions in the
Canadian Telecommunications Industry.
The fundamental issue under consideration was whether AboveNet
Canada Inc., which is a foreign-owned reseller, could attach and
operate its own optical equipment, in order to light dark fibre
which AboveNet had leased from TELUS Communications Company, a
Canadian carrier. TELUS had opposed AboveNet's registration as
a reseller arguing that, by engaging in such activities, AboveNet
would function as a "telecommunications common carrier".
Only Canadian-owned and -controlled telecommunications common
carriers are permitted to own or operate terrestrial transmission
facilities in Canada.
Several definitions in the Telecommunications Act (the
Act) are important to the decision. A "telecommunications
common carrier" is defined to mean a person who "owns or
operates a transmission facility used by that person or another
person to provide telecommunications services to the public for
compensation." For its part, "transmission facility"
includes "any wire, cable, radio, optical or other
electromagnetic system, or any similar system, for the transmission
of intelligence between network termination points, but does
not include any exempt transmission apparatus" (emphasis
added). AboveNet's position was that it would operate only
"exempt transmission apparatus" (ETA), discussed further
below, and therefore would neither own nor operate a
In its decision, the CRTC identified two primary issues that
needed to be resolved in answering this question. The first was
whether optical equipment used by a service provider to operate
leased dark fibre falls within the definition of "exempt
transmission apparatus". The second issue was whether
attaching the optical equipment to the fibre constitutes
"operation" of a "transmission facility."
The CRTC decided that, in respect of the first issue, the
conversion of electromagnetic signals into light signals, which the
CRTC identified to be the function of the optical equipment,
constitutes a change in format of the transmission of intelligence
which falls within the definition of the ETA.
With regard to the second issue, even if optical equipment were
not considered ETA, operating such equipment would not, by itself,
be operation of a "transmission facility." Having regard
to the definition of "transmission facility" in the Act,
the Commission ruled that optical equipment cannot by itself
transmit intelligence between network termination points.
Consequently, it cannot be considered to fall within the relevant
definition. The CRTC found that Parliament intended the term
"transmission facility" to include the basic transmission
medium, and not devices attached at the ends thereof.
As a result of this decision, foreign resellers are permitted to
own and operate optical equipment, which is used to light leased
dark fibre, in order to offer telecommunications services to the
public, without offending Canada's foreign-ownership
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