ABRIDGED File No. 8638-C12-200817505 2012 07 31

To:

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2

Subject:

Telecom Decision CRTC 2010-637, Follow up to Telecom Decision 2008-1 Proposal by Bell Aliant Regional Communications, Limited Partnership and Bell Canada to dispose of the funds remaining in their deferral account (Decision 2010-637) – Follow-Up Related to Bell Canada's Deferral AccountFunded Broadband Program

Dear Mr. Traversy, In a letter dated 4 May 2012 (i.e., the May submission), Bell Canada provided certain additional information as a follow-up to its second annual status report, which was filed 30 March 2012, related to its deferral account-funded broadband program that received final Commission approval in Telecom Decision CRTC 2010-805, Bell Canada – Application to review and vary certain determinations in Telecom Decision 2010-637 concerning the use of high-speed packet access wireless technology and the deferral account balance, dated 29 October 2010 (Decision 2010-805). This additional information consisted of a summary of the work that had been completed to date, the work that was underway and which still remained to be completed, and a draft roll-out plan which was filed in confidence. The Company also noted that it would file a detailed roll-out plan at the end of July for the public record. This represents the Company's submission in that regard. 1.

As indicated in its previous submissions, the Company will use deferral account funds to expand broadband services to 112 communities that were approved by the Commission, using either DSL or wireless technology, as per Decision 2010-805. Bell Aliant Regional Communications, Limited Partnership has already rolled out broadband services to three of these communities using DSL technology, and Bell Canada plans on deploying broadband services to the remaining communities using wireless technology. The Company will complete the roll-out of broadband services to all of these communities by 31 August 2014, consistent with the directive in Decision 2010-637:1 2.

1

Decision 2010-637, paragraph 44.

Bell Canada Jonathan Daniels Floor 19 160 Elgin Street Ottawa, Ontario K2P 2C4 Telephone: (613) 785-7507 Facsimile: (613) 560-0472 [email protected]

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The Commission notes that, as directed in the deferral account decisions, this service expansion should take place over no more than four years and should be completed by the end of August 2014. In this submission the Company is providing an update of the draft roll-out plan it filed in confidence with the Commission in its May submission, and is filing this update on the public record in the Attachment. A summary of the Company's updated roll-out plan is provided below: 3.

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DSL is currently operational in three communities, namely Bury, Nakina and Pass Lake; Broadband services will be rolled out to nine communities in December 2012, namely Blyth, Clinton, Flesherton, Goderich, Harriston, Markdale, Otter Lake, Ridgeway and Wingham; Broadband services will be rolled out to the remaining 100 communities in August 2014.

The Company notes that its current roll-out plan differs from the draft roll-out plan the Company provided in its May submission, and the possibility of changes to that draft plan was identified in that submission. The changes in the roll-out plan are due to the findings of the extensive work the Company has undertaken since the filing of its May submission which included detailed engineering and site selection activities, analyzing each community's technology requirements, assessing the status of each outstanding and planned municipal approval for construction of towers and the assessment of communities and sites to perform the roll-out in the most efficient manner. As discussed in more detail below, the results of this work necessitated a change in the approach the Company intends to follow for the roll-out of its broadband services to the remaining 109 communities and to ensure that the quality of service it is committed to provide in these areas can be delivered to customers. 4.

The Company notes that its key focus in having undertaken the detailed assessments and changing the design of its program based on the results was to ensure that performance of the wireless broadband services that will be provided in the areas at issue will be optimized for customers, and that the changes, overall, provide the most positive Internet experience for customers in the approved communities. 5.

Status of Delivering Broadband to Deferral Account-Funded Areas As indicated in the Company's May 2012 submission, there are three main components to the work required to enable the roll-out of wireless broadband services to the remaining 109 communities that are part of the deferral account-funded program but which do not yet have access to broadband services: 1) development of the IS/IT systems to support the Retail Wireless Broadband Services that will be offered to these areas; 2) construction of the wireline transport backbone to these communities; and 3) construction of the wireless access (including the tower sites) within these communities. 6.

A.

System Development

The development of the Retail Wireless Broadband Service requires modifying processes and systems to provide the approved services, including the pricing, specifically set for the deferral account-funded communities only. Until this work is completed, even if the wireless technology infrastructure was built in a community, the Company could not launch the service. This work is currently underway and will be completed before the end of 2012, prior to the launch of service to the nine communities. 7.

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Wireline Transport

Construction of wireline transport includes augmentation of the transport equipment where required in the core network and building the fibre to the tower sites in the deferral account-funded communities. These fibre optic networks are being engineered with full diversity to ensure a level of service that will be equal to what is currently available in the rest of the network 8.

In addition to the three communities that have DSL broadband services already, as of July 2012, the core network wireline transport has been upgraded and completed in 29 communities (which represents an additional nine communities from the Company's May submission), namely in: 9.

ACTON BEACHVILLE DENBIGH GOLDEN LAKE SARNIA MICHIGAN PETAWAWA STEVENSVILLE YAMASKA

APSLEY CALABOGIE DUNHAM HASTINGS NEWTONVILLE PLEVNA TAMWORTH

BANCROFT COBDEN FORT ERIE MADOC NORTHBROOK RIDGEWAY TWEED

BARRY'S BAY CREEMORE GILMOUR MAYNOOTH PEMBROKE SELKIRK WINONA

In addition, wireline transport construction was started in 36 communities, but is not yet completed. In its May submission, the Company indicated that it started construction in 44 communities between January 2011 and May 2012. However, the work that was still underway in May 2012 for nine of these communities has since been completed, and the Company also started construction in one other community since May. As a result, the number of communities where work has begun but is not completed is 36, as noted above. 10.

Wireline transport construction in an additional 19 communities will start in 2013, and will be undertaken and completed in the remaining 25 communities in early 2014 to enable service launch by 31 August 2014. 11.

C.

Wireless Access

Construction of the wireless access includes construction of the towers and placement of the electronics on the towers for broadband transmission. This involves undertaking detailed radio frequency designs to identify the wireless network modifications and the number of new cell sites that will be needed to provide service in the approved communities and identification of the precise location of these cell sites. 12.

As a result of the detailed engineering assessments it recently completed, the Company has discovered the following: 13.

a.

b.

the requirement for an increase in the number of new sites and in the number of existing sites that will require augmentation in order to be able to provide wireless broadband services to the communities at issue which will adhere to the quality of service the Company intends to provide; and the potential requirement to deliver the wireless broadband services in the communities at issue by providing most customers an external antenna with the Customer Premise Equipment (CPE), which was not originally planned.

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As noted earlier, the key reason that the Company undertook its detailed assessments and is changing the design of its program based on the results is to ensure that performance of the wireless broadband services that it will be providing in the areas at issue will be optimized for customers, and that the changes, overall, provide the most positive Internet experience for customers in the approved communities. 14.

Based on the results of the Company's assessments referenced above, the Company currently estimates that the total number of existing sites that will require upgrades would have to increase by approximately 40%, while the number of new sites that will be required, in total, across all communities, would have to increase by approximately 15% relative to the estimates the Company provided to the Commission in its May submission. As such, construction of wireless access will be required in # tower sites in total (as opposed to the # sites identified in the Company's May submission). Of this total, # sites have existing towers but the electronics require augmentation. The remaining # sites do not exist and the work associated with building such sites includes conducting radio frequency studies to determine the location, securing rental of the land for the tower, obtaining municipal approval, construction of the tower and placing the electronics, and construction of an access road where required. 15.

In addition, in order to ensure that it is able to deliver the appropriate quality of service and optimal Internet experience for customers in the approved communities in an efficient manner, the Company determined that it will likely have to deliver the service by providing most customers an external antenna with the CPE, which was not originally planned. While this change will increase the Company's cost, the Company will comply with its commitment to charge the same rates for the services that will be provided in the approved communities as it charges for the equivalent DSL services in other parts of its serving area. As such, there will be no additional charge to end-users for this equipment. 16.

Given the changes to the Company's plan that are necessitated by the results of the assessments discussed above, the ongoing evolution of the network engineering and the limited experience of the Company in offering a fixed wireline-type of Internet service using wireless technology in remote areas, the Company believes that it is prudent to very closely monitor the take rates and experience of actual users of the services in the nine communities where these services will be launched in December 2012 prior to actually finalizing the technical design of the program, including the manner in which the CPE equipment will be installed, for the remaining areas. As such, the Company has determined that it would use the results of the rollout of broadband services to these communities, which will in essence serve as technical test beds, to validate its assumption, both technical and service-related, and based on those results, make any modifications necessary from a technical and service perspective throughout 2013. 17.

Certain information contained in this submission and the Attachment is filed in confidence with the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, 23 December 2010. In particular, the information which the Companies have provided in confidence is of a type which the Commission has indicated in that Appendix should be treated as confidential. Release of this information would provide potential competitors with invaluable competitively-sensitive information that would not otherwise be available to them, and which would enable them to develop more effective business strategies. Release of such information could prejudice the 18.

# Filed in confidence with the CRTC.

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Companies' competitive position resulting in material financial loss and cause specific direct harm to the Companies. An abridged version of this submission and the Attachment is provided for the public record. Conclusion In summary, while there is still a lot of additional work that needs to be completed in order to be able to roll out service to the large majority of the communities under this program as discussed in this submission, the Company notes that it will deliver broadband services to all of the approved communities by August 2014, which is the date by which it is required to complete that program. 19.

Yours truly, [ Original signed by J. Daniels ] Jonathan Daniels Vice President - Regulatory Law Attachment c.c.:

Lynne Fancy, CRTC John Macri, CRTC

JB/vh *** End of Document ***