ARCHIVED - Telecom Decision CRTC 84-11

Telecom Decision

Ottawa, 30 March 1984

Telecom Decision CRTC 84-11

Bell Canada and British Columbia Telephone Company - Implementation of Decision Permitting Attachment of Subscriber-Provided Terminal Equipment

For related documents see: CRTC Telecom Public Notices 1979-35, 30 November 1979; 1980-11, 1 February 1980; 1980-13, 13 February 1980; 1980-14, 25 February 1980; 1980-38, 5 August 1980; 1981-8, 10 March 1981; 1981-21, 29 May 1981; 1981-25, 19 June 1981; 1981-29, 29 July 1981; 1981-32, 25 September 1981; 1981-36, 20 October 1981; 1981-37, 22 October 1981; 1983-29, 23 March 1983; 1983-30, 23 March 1983; and Telecom Decisions CRTC 80-13, 5 August 1980; 81-19, 22 October 1981; 81-21, 2 November 1981; 81-23, 16 November 1981; 82-14, 23 November 1982.

Table of Contents

I BACKGROUND

II UNBUNDLING OF SET AND LINE RATES

A - Objectives

B - Set Rates

i) Basic Set Rates

ii) Premium Rotary Set Rates

iii) Other Set Rates

C - Line Rates

i) Individual and Multiline Rates

ii) Two-Party and Multi-Party Rates

iii) Other Line Rates

1. Centrex

2. WATS

3. Information System Access Line

4. Voicecom I and Multicom I

5. Voicecom II and Multicom II

6. Foreign Exchange and Foreign Central Office Service

7. Other Services

D - Push-Button Rates

III COMPANY-PROVIDED JACKS

IV MAINTENANCE SERVICES

A - Maintenance of Subscriber-Provided Equipment

B - Diagnostic Maintenance Charges

V TECHNICAL ISSUES

A - Application of Diagnostic Maintenance Charges

B - Interpositioning

C - Acoustically Coupled

D - Prohibited Network Interface

E - Connection of Internal Communications Systems

F - Channel Deriving Equipment

G - Notification

H - Certification of Company-Provided Equipment

I - Further Requirements

J - Attachment of Equipment to Private Lines

K - Measured Business Service

L - Services Prohibiting Subscriber-Provided Equipment

M - Access to WATS Lines

N - Sharing of Key Systems and PBXs

O - Distinguishing Between a PBX and a Key System

P - Certification of Certain Components

VI TELEPHONE DIRECTORIES

VII SUBSCRIBER EQUIPMENT RECORDS

VIII IMPLEMENTATION

I BACKGROUND

On 13 November 1979, Bell Canada (Bell) applied to the Commission to amend Rule 9 of its General Regulations. The application was intended to bring before the Commission the question of whether the liberalization of the rules regarding the attachment to Bell's facilities of subscriber-provided terminal equipment, and particularly network-addressing terminal equipment, would be in the public interest.

Following consideration of comments on the issue, in Bell Canada - Interim Requirements Regarding the Attachment of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 80-13, 5 August 1980 (Decision 80-13), the Commission concluded on an interim basis, pending final consideration of the matter in a full public process, that certain subscriber-provided terminal equipment should be permitted to be attached to Bell's network.

In British Columbia Telephone Company - Interim Terms and Conditions Regarding the Attachment of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 81-19, 22 October 1981 (Decision 81-19), the interim requirements established in Decision 80-13 were made applicable, mutatis mutandis, to British Columbia Telephone Company (B.C. Tel).

Following further deliberation with the benefit of a complete and thorough public process, the Commission issued Attachment of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 82-14, 23 November 1982 (Decision 82-14). In this decision, the Commission affirmed its interim determination that a liberalized terminal attachment policy is in the public interest and that it should be made applicable to all federally regulated terrestrial telecommunications common carriers. The Commission also finalized the degree of liberalization which should apply and the terms and conditions under which the carriers should participate in the terminal equipment market.

Under the terms of the interim requirements prescribed in Decisions 80-13 and 81-19, subscriber ownership of the first or main telephone set associated with the provision of primary residence or business exchange service was prohibited. In Decision 82-14, the Commission concluded that this interim prohibition should not be continued. However, with regard to subscriber ownership of telephone sets for use with two-party and multi-party lines, the Commission decided that certain problems associated with the electrical characteristics of these lines made subscriber ownership of telephone sets in such cases impractical at this time.

Regarding the issue of whether ownership of single-line main telephones should be mandatory or optional, the Commission was not persuaded that there are sufficient practical or policy concerns to require that subscribers be deprived of the opportunity to choose the arrangement most convenient for them. Consequently, the Commission ruled that subscribers should have the choice of purchasing or leasing their single-line main telephone sets.

In order to implement the decision, Bell and B.C. Tel were directed to file for approval, by 1 March 1983, proposed tariff revisions including unbundled rates for business and residence individual line and party-line primary exchange service, unbundled line and set rates for touch-tone service, revised premium set rates and revised charges for the installation and maintenance of one or more jacks for single-line residence and business subscribers. Proposed charges for certain maintenance services which Bell and B.C. Tel indicated they intended to provide for subscriber-provided terminal equipment, and revised charges for diagnostic maintenance applicable to repair visits where subscriber-provided equipment is involved, were also required to be filed.

Pursuant to the Commission's directives, Bell and B.C. Tel filed, on 1 March 1983, tariff revisions necessary to implement the terms and conditions outlined above. On 23 March 1983, the Commission issued CRTC Telecom Public Notices 1983-29 and 1983-30, relating to Bell and B.C. Tel respectively, outlining, and requesting comment on, the proposed tariff changes. Although both companies filed cost studies for which each claimed confidentiality, the Commission requested that each place an abridged version on the public record. In response to its public notices, the Commission received comments from the following:

Action Bell Canada (ABC); Nigel David Allen; Canadian Telecommunications Group (CTG);
CNCP Telecommunications (CNCP); Consumers' Association of Canada (CAC); Gatling
Communications, Inc.; Government of Ontario (Ontario); Government of British Columbia
(B.C.); Independent Telephone Companies of B.C. (ITCBC); Ontario Hospital Association,
Executone Limited, Telephone Answering Association of Canada, Canadian Business
Equipment Manufacturers Association, Canadian Industrial Communications Assembly,
Canadian Manufacturers Association and Canadian Trans-Lux Corporation (collectively
referred to as OHA et al).

II UNBUNDLING OF SET AND LINE RATES

Prior to Decision 82-14, the main telephone set was required to be provided as part of primary exchange telephone service. Since this will no longer be the case, it is necessary to separate or "unbundle" the rate charged for such telephone service into two components with one rate being charged for the line component and a separate rate being charged for the main telephone set, if rented from the telephone company.

A - Objectives

In support of their proposed rate restructuring to unbundle set and line rates, both Bell and B.C. Tel described three fundamental objectives which they considered must be taken into account by the Commission in making its decision. The first of these objectives was that the rate restructuring should not have a significant impact on aggregate operating revenues.

CAC took the position that there may be certain cost savings to the companies as a result of liberalized terminal attachment and that, with constant revenues, these cost savings could result in the companies earning excess profits. In response, Bell and B.C. Tel stated that, while their revenue estimates had been based on the assumption that their proposed rates would not result in decreased demand, a negative impact on telephone set rental demand was probable and that the effect of this would be that the companies would experience a decrease rather than an increase in revenues.

The basic purpose of this decision is to put into effect a restructuring of telephone company rates as a direct consequence of the opening of the terminal equipment market to competition. In these circumstances, it is the Commission's view that it would not be reasonable either to penalize Bell and B.C. Tel by requiring them to sustain a loss of revenues as a result of such restructuring or to permit them to derive additional revenues from the general body of their subscribers. The decision is based on this fundamental premise.

With this premise in mind, the Commission has, where it has varied certain of the rates proposed by Bell and B.C. Tel, made offsetting adjustments to other rates so as to maintain a minimal aggregate revenue impact on the companies. Deviations from this approach have occurred only where, in the Commission's opinion, the revenue effects of the changes it has required are not sufficiently large to require offsetting modifications.

A second objective to which both Bell and B.C. Tel ascribed is that telephone set rental rates should reflect competitive market realities.

The Commission fully recognizes that there are different economic conditions associated with operating in a competitive as opposed to a monopoly environment and agrees that such conditions should be taken into account. The Commission will nevertheless require that telephone set rental rates recover, at a minimum, their associated costs including a fair return on investment.

Thirdly, both Bell and B.C. Tel stated that, to the extent possible, the rate restructuring brought about as a result of unbundling their rates should be designed to mitigate any detrimental impact on subscribers.

The Commission also concurs with this objective but notes that Bell and B.C. Tel proposed increases of $0.50 and $0.30 respectively in the rate paid by a single-line residential subscriber continuing to rent a basic rotary dial telephone set from them. These subscribers represent a significant segment of the residential telephone subscriber market and the Commission is of the view that any rate increases to be experienced by them should be minimized to the extent possible consistent with the above three objectives.

B - Set Rates

Bell has proposed monthly basic set rental rates of $1.45 for residence subscribers and $2.25 for business subscribers. The corresponding rates proposed by B.C. Tel are $1.50 and $1.95 respectively.

Each company has also proposed various changes to the rates for premium rotary telephones and other miscellaneous telephone set types. The companies' proposals with regard to rates for push-button telephone sets are discussed separately in Section D.

i) Basic Set Rates

Currently, a basic rotary dial telephone set is provided by both companies as part of their exchange service to all individual line subscribers. Such sets are also provided as part of extension service, multi-party service and various other services such as WATS. Both companies have proposed that there should be one rate for a basic rotary dial set regardless of whether it is a main or extension set.

The Commission notes that the proposed rates for such sets are considerably less than the current extension rates and that approval of these rates would thus cause a substantial revenue loss from this source. Given the objective that the rate restructuring should have a minimal impact on aggregate company revenues, this loss of extension revenues requires that other rates involved in the restructuring must necessarily be higher than would otherwise be the case. To mitigate this impact, it would be necessary either to increase the proposed rates applicable to set rentals or to establish an extension set rental rate in excess of the main station rental rate.

Having considered the record on this issue, the Commission is satisfied that there should be one rate applicable to both main and extension sets. However, the Commission has not been convinced by the evidence presented by the companies that setting rates higher than proposed would adversely affect their competitive position. The Commission concurs with the view of both companies that market share erosion will occur with the introduction of increased competition. However, the Commission is of the view that the magnitude of the likely erosion does not justify the magnitude of the set rental rate reduction proposed by both companies.

As regards the proposed differential between business and residence set rental rates, the Commission notes that both companies are satisfied that such a differential is feasible given existing market conditions. The Commission is of the view that such a differential is appropriate at this time.

In light of the above findings, the Commission has determined that the basic set rental rates for residence and business exchange service should be increased by $0.10 per month above their proposed levels. The companies are directed to increase these rates accordingly.

The Commission directs Bell to increase its proposed PBX extension set and intercommunicating set rates by $0.10 per month so as to bring them in line with the approved basic set rental rates.

ii) Premium Rotary Set Rates

Both companies have proposed revisions to the monthly rental rates applicable to certain premium rotary telephone sets. In Bell's case the rates are set out in the tariff as surcharges to the basic set rental rates and are proposed as follows: (1) $1.45 for Princess, (2) $1.90 for Contempra and (3) $4.50 for Decorator type.

Premium set rates proposed by B.C. Tel for residence subscribers are $2.75 for Compact sets and $3.45 for Styleline sets. For business subscribers, the proposed rates are $3.20 and $3.90 respectively. Since Compact sets are currently provided at no extra charge, B.C. Tel has proposed that existing subscribers would pay a rental rate below that proposed for new users of Compact sets.

In support of their submissions on premium set rates, both companies provided cost studies to demonstrate that their proposed set rental rates are fully compensatory.

While the proposed rates are below those currently in effect, the Commission is of the view that some reduction is appropriate in the new competitive environment and is satisfied that, at the levels proposed, they are compensatory. Consistent with its ruling with respect to basic set rentals, the Commission considers that premium set rental rates should be raised by $0.10 per month above the level proposed. In the case of Bell, it follows that the proposed surcharges are approved. In the case of B.C. Tel, it follows that the proposed rates are to be increased by $0.10. These rates will, in all instances, apply to both new and existing subscribers.

iii) Other Set Rates

To compensate for loss of multiline extension revenue, B.C. Tel has proposed various changes to its multiline telephone set rates. These proposals are approved as filed.

Bell has proposed a $4.95 monthly rental rate for Data Control units consisting of a telephone set with an integrated line control switch used only in conjunction with a data modem. Currently, an integrated line switch is leased separately. The Commission is satisfied with the Company's proposal and accordingly approves the proposed rate.

C - Line Rates

i) Individual and Multiline Rates

For primary exchange individual line service, both companies have proposed reductions to line charges intended to reflect the fact that a basic telephone set will no longer be provided as part of such service. This reduction is referred to as a set credit. In Bell's case, the proposed reduction is $0.95 per month and is based on its estimate of the average resource cost savings resulting from the non-provision of new sets plus a contribution margin. The reduction proposed by B.C. Tel is $1.20 per month, which amount is equal to its estimate of the avoidable short run incremental costs of basic set provision. B.C. Tel proposed that the reduction should not apply in the case of multiline service.

OHA et al argued that there would be a positive revenue impact from the sale of terminals, maintenance service and jack charges. In view of this, OHA et al stated that the set credit should equal the set rental rates as is the case in the United States. Furthermore, concern was expressed as to the methodology of the resource cost study upon which the set credit proposed by Bell was arrived at. CAC, on the other hand, stated that, since unbundling could result in a rate increase for some subscribers, there is a need for a public hearing. CAC went on to say that Bell had used the wrong methodology to determine line charges and that these should be based on causal costs less an appropriate cross-subsidy.

Bell replied to the interveners' submissions by stating that, for revenue purposes, it had assumed the same demand for sets with and without unbundling and that, therefore, its revenue impact calculation is simply based on a reprice calculation. Based on its experience following Decision 80-13, however, Bell expressed the view that there will be a decrease in demand for telephone set rentals. Further, Bell reiterated an earlier statement that the repricing exercise performed by the company does not include the one-time cost of $10 million to implement Decision 82-14. Bell also stated that, should the set credit equal the set rental rate, the company would lose a significant portion of its revenue.

OHA et al submitted that the creation of a multiline access rate is discriminatory as telephone sets are currently included with the access rates in the existing General Tariff. CAC raised similar arguments as were raised by it in commenting on Bell's proposed tariffs.

B.C. Tel observed that it does provide single-line sets to multiline subscribers if requested but that the majority of these subscribers do not request these sets. There is, B.C. Tel argued, a greater value of service for multiline subscribers as most of them make use of an overline feature which allows the line to handle a larger volume of calling. Furthermore, since most multiline subscribers pay extra for their sets, the existing tariffs do recognize an additional benefit for multiline over single-line subscribers as the latter receive a free set for the same rate. Should B.C. Tel be made to offer a set credit for multiline service, it is of the view that a substantial revenue loss would result.

B.C. Tel stated that additional revenues would not accrue to its as a result of unbundling and that subscribers who would receive a rate increase could avoid this increase by providing their own terminal equipment.

The Commission has examined the supporting cost studies filed in confidence by Bell and B.C. Tel and has concluded that, in both instances, costs may be understated. Given also that the proposed line rate reductions, or set credits, are less than the proposed set rental rates, it follows that the rate restructuring will have a direct negative impact on single set subscribers. To mitigate this impact, the Commission has determined that the proposed set credits should be increased by an amount that will offset the revenue increases accruing to the companies as a result of changes to proposed rates ordered by the Commission elsewhere in this decision.

As noted previously, B.C. Tel has proposed that the rate reductions proposed for single-line service should not apply to multiline individual and multiline overline subscribers. The rationale for the proposal is that, currently, a telephone set is not provided as part of such services and that no rate reduction is therefore necessitated as a result of unbundling. The Commission has concluded that it would be inappropriate to have different line charges depending upon whether the line is terminated on a single- line or multiline telephone set. The Commission notes, however, that the bulk of multiline service subscribers use overline facilities. It considers, therefore, that the same set credit should be applied for multiline individual service as for single-line service, while no reduction should be applied to existing, individual or multiline, overline rates.

For the same reasons, the surcharge levied by Bell for equivalent service should be increased by the same amount that individual line rates are reduced as a result of applying the set credit.

Taking into account these modifications and those required in the part of this decision relating to set rental rates and touch-tone calling rates, the Commission considers that the revenue impact objective will be satisfied if B.C. Tel's proposed individual line set credit is increased from $1.20 to $1.35 and if Bell's is increased from $0.95 to $1.35.

The Commission notes that, with these rate modifications, single-line residential subscribers renting a basic rotary dial set will experience monthly rate increases of $0.25 in B.C. Tel territory and $0.20 in Bell territory, rather than the increases of $0.30 and $0.50 respectively that would have resulted under the companies' proposals. The Commission considers that such increases are justified in the particular circumstances of this case taking into account the necessity to restructure rates as a consequence of the introduction of competition into the terminal equipment market. Such increases will come into effect, in the case of Bell, on 1 September 1984 and, in the case of B.C. Tel, on 1 July 1984.

Moreover, as B.C. Tel has noted, such subscribers can avoid any rate increase that might result from this decision by purchasing their own main telephone set. In such cases, while they would incur a one time expense of buying a telephone set, the prices of which have been dropping substantially in the competitive environment brought about by the Commission's terminal attachment decisions, and while a minority of these subscribers would have to pay a one time charge for the installation of jacks, their basic telephone rates would be reduced by $1.35 per month.

ii) Two-Party and Multi-Party Rates

Decision 82-14 did not authorize subscriber ownership of terminal equipment by two-party or multi-party subscribers. It did, however, require that the rates for such service be unbundled, and both Bell and B.C. Tel have proposed unbundled rates that would avoid any rate impact on party- line subscribers leasing a basic rotary dial set.

Both companies proposed that set rental rates paid by two-party or multi-party subscribers should equal the rates applicable to other subscriber groups. B.C. Tel additionally proposed a line rate reduction equal to the rate for a basic rotary dial set, while Bell has proposed that the reduction should be the same as applied to single-party service and that the subscriber would receive a credit equal to the difference between the line rate reduction and the basic rotary dial set rental rate.

Each of these proposals is hereby approved, although, to reflect changes made elsewhere in this decision, it will be necessary for Bell to reduce its proposed credit and for B.C. Tel to increase its proposed line rate reduction.

iii) Other Line Rates

B.C. Tel has adopted the position that a variety of services cannot be characterized as primary service and are therefore not subject to the Commission's unbundling requirements. Bell, by contrast, has taken the view that "... in general, where a telephone is today included in an access line rate, that telephone should be unbundled and charged for separately." The latter view coincides with that of the Commission and is reflected in the balance of this section of the decision.

1. Centrex

Bell proposed that Centrex extension line rates be reduced by the same amount as individual line rates and that Centrex telephone set rates be set equal to the rates applicable to such telephones when rented for individual line service.

This proposal is approved. B.C. Tel is directed to incorporate equivalent revisions to its tariffs.

2. WATS

Although a single-line set is included with WATS service, most subscribers neither require it nor have been provided with it. Hence, both companies have proposed that there be no reduction applied to WATS line rates. Bell has additionally proposed that, where a WATS subscriber does require a single-line set, it should be provided at the same rate as when provided for individual line service.

Bell's proposals are approved. B.C. Tel is directed to incorporate equivalent revisions to its tariffs.

3. Information System Access Line

In the case of Bell, no unbundling is required as no set is provided as part of this service. In the case of B.C. Tel, the rate includes the provision of a single-line telephone. B.C. Tel is directed to unbundle this rate and to apply the line rate reduction approved for its individual residence and business line service.

4. Voicecom I and Multicom I

Bell has proposed that the line rate for these services be reduced by the same amount as individual business line rates are reduced, that for Multicom I the main station set rate be that applicable to data control units and that, for Multicom I extension sets and Voicecom I main and extension sets, the business set rental rate should apply.

These proposals are approved. B.C. Tel is directed to file similar revisions to its tariffs.

5. Voicecom II and Multicom II

Bell's submission does not address these services while B.C. Tel states that no unbundling is required. Both companies are directed to file tariff revisions for these services following the same methodology as approved for Voicecom I and Multicom I.

6. Foreign Exchange and Foreign Central Office Service

In the case of Bell, the tariffs for these services are referenced to individual line tariffs and, as a result, the unbundling of individual line tariffs suffices to unbundle these services. This is not the case with respect to B.C. Tel's Foreign Exchange service. B.C. Tel is therefore directed to reduce the line rates for such service by the same amount as for individual line service and to provide sets on an unbundled basis at the same rate as applicable elsewhere.

7. Other Services

Both companies are directed to advise the Commission of any other of their respective services in which terminal equipment is provided on a bundled basis with access to transmission service. Should the companies be of the view that unbundling is not appropriate, they should provide supporting reasons.

D - Push-Button Rates

Currently, Bell provides push-button dialing for individual line and multiparty line customers at rates of $3.35 and $4.80 per line per month for residence and business subscribers respectively. These rates were $3.20 and $4.55 respectively prior to Bell's five percent general rate increase and are tariffed as surcharges to the line charges that apply for non-push-button service. Bell has proposed to unbundle these rates into separate line and set surcharges.

The Commission notes that, under this proposal, substantial rate decreases would accrue to the benefit of single set business and residence push-button subscribers. It also notes that, while Decision 82-14 introduced further competition into the terminal equipment market, touch-tone line surcharges remain a monopoly revenue source. Accordingly, while approving the proposed touch-tone and digipulse set surcharges, the Commission does not accept the proposed touch-tone line surcharges. Setting the touch-tone line surcharges at rates that would yield revenues, when added to touch-tone set surcharge revenues, closer to those obtained prior to the restructuring, will not inhibit Bell's competitive posture in the touch-tone set rental market. At the same time, it will prevent revenue losses that, although desirable from the view point of touch-tone subscribers, would necessitate higher rates being imposed on other subscriber groups affected by the restructuring in this decision. Accordingly, Bell is directed to file touch-tone line surcharges for residence and business subscribers equal to $2.55 and $3.80 respectively. As proposed by Bell, these surcharges would not apply in the case of digipulse service. In addition, the proposed Centrex touch-tone line surcharge is to be increased to $3.80.

Bell has also proposed that the set surcharges for touch-tone and digipulse should apply, except for certain sets only equipped for pushbutton dialing, for PBX telephones (including Centrex) and for key system telephones. These rates are approved. Bell's proposed decrease in line surcharges to $6.50 for PBX and WATS touch-tone service is denied and the current surcharge of $10.50 is to be maintained. Bell's proposed rates for receiver cards are approved.

B.C. Tel's current touch-calling charges are already unbundled into a set component and a line component. The company proposes to reduce the touch-tone set surcharge for both residence and business customers from $1.15 to $0.75. No changes in line surcharges are proposed. The Commission approves these proposals but notes that, consistent with its findings above, the proposed rates, for both basic and premium touch-tone sets, are to be increased by $0.10.

B.C. Tel has proposed to extend its existing Multi-Element Plan (MEP) service charge to the installation and maintenance of all jacks. Under this plan, an On Premises Work Charge-Installation (PWI) would be applied for the installation of each jack and an On Premises Work Charge-Change would be applied to convert a hard wired outlet, except where the conversion was necessary to effect repair. Other elements of the MEP would be applied as appropriate. Currently, the PWI is applied only in respect of jacks provided in excess of a basic allowance.

Bell has proposed that the first jack installed should be provided as part of primary exchange service, with installation being charged for using the appropriate Work Function Structure (WFS) charge, and that the monthly jack charge of $0.95 payable by single-line business customers be eliminated. It further proposed that jacks in excess of one be installed for a charge resulting from application of the WFS charge plus an additional service charge of $22.50 per jack. Bell argued that the $22.50 charge is necessary to take into account the fact that existing service charges under the WFS are not compensatory and that it is currently applied for the installation of residence jacks in excess of five.

With the exception of the $22.50 service charge proposed by Bell, which the Commission has determined should continue only to be applied for the installation of residence jacks in excess of five, these proposals are approved.

With respect to specialized jacks, such as those used in connection with data terminals, both companies are directed, where applicable, to unbundle the charges therefor from any other charges imposed and submit tariffs to the Commission for approval.

IV MAINTENANCE SERVICES

A - Maintenance of Subscriber-Provided Equipment

Decision 82-14 directed carriers providing maintenance service for subscriber-provided terminal equipment to file separate rates therefor for Commission approval. Consideration of this matter has been excluded from this decision and will be dealt with separately.

B - Diagnostic Maintenance Charges

With respect to diagnostic maintenance charges for trouble testing by the carriers where subscriber-provided equipment is involved, the Commission directed the carriers to file rates, based on the company-wide representative cost of a maintenance repair visit, to be applied only where the trouble is found to be located in the subscriber-Provided equipment.

Bell proposed a rate of $41 for the first 15 minutes on the subscriber's premises with a rate of $12 for each additional 15 minutes. B.C. Tel proposed rates of $50 for the first hour with increments of $5 for each additional l/10th hour. In the case of Bell, on 16 September 1983, the Commission granted interim approval to the proposed rates for multiline subscribers and to a flat rate of $41 for single-line primary exchange service subscribers. For B.C. Tel, the Commission granted interim approval on 13 September 1983 to a flat rate of $46 for single-line subscribers and, for multiline subscribers, a rate of $46 for the first hour with $4.60 for each additional 1/1Oth hour.

The Commission grants final approval to these rates.

V TECHNICAL ISSUES

A - Application of Diagnostic Maintenance Charges

In General Tariff Item 4210, Bell proposed to levy a diagnostic charge where "no trouble is found in the Company's facilities but such trouble continues to be present when the customer-provided equipment is reconnected".

OHA et al pointed out that this proposed wording is somewhat different from that of Decision 82-14 and argued that the charge would still apply if Bell's network causes the fault upon reconnection of the terminal equipment. Bell replied that, since it does not test subscriber-provided equipment, it cannot directly locate trouble in such equipment. Bell argued that, if the trouble disappears when testing takes place solely on Bell's facilities and then reappears when the equipment is reconnected, it is reasonable to assume that the trouble is in the subscriber-provided equipment.

The Commission accepts Bell's proposed wording as being a practical application of the directive contained in Decision 82-14. Should a situation such as was contemplated by OHA et al arise, the customer could apply for a refund of any diagnostic maintenance charges which were improperly imposed. If a significant number of such situations occur, the matter will be reviewed by the Commission.

B - Interpositioning

Bell's proposed General Tariff Item 4230.4.(c) specifies the conditions for equipment-to-equipment connections. OHA et al was concerned that, as regards interpositioned equipment, it may not be possible to connect certified subscriber-provided equipment to non-certified company-provided equipment. In reply, Bell proposed changes to its wording which, in the Commission's view, satisfy this concern. Accordingly, Bell is directed to file this revised wording for approval.

B.C. Tel's proposed wording in General Tariff Item 190.C.3. specified that interpositioning would not be allowed until standards were developed in accordance with Decision 82-14. OHA et al stated that these standards had already been developed. In reply, B.C. Tel stated that it was working towards the introduction of a series jack to facilitate the connection of interpositioned equipment and would file a tariff once costing is completed and the federal Department of Communications (DOC) Certification Standard CS-03 (CS-03) is modified to include these arrangements.

The Commission notes that B.C. Tel has not identified any technical standards which are needed in order to allow for the interpositioning of certified equipment. In addition, as described in British Columbia Telephone Company - Introduction of Type 'D' Series Jack, CRTC Telecom Public Notice 1984-7, 2 February 1984 (Public Notice 1984-7), the Company has applied to introduce a series jack. In the Commission's view, the provision that interpositioning not be allowed until standards have been developed as proposed by B.C. Tel in General Tariff Item 190.C.3. is unnecessary and the company is directed to delete it.

B.C. Tel's proposal in General Tariff Item 200.A.4.(g)(4) specified that connections to the host terminal equipment could only be made with the permission of the host equipment owner. OHA et al stated that this is not appropriate because, in situations involving proprietary interfaces, the permission is more properly given by the certification holder of the host terminal equipment. In reply, the company stated that only the owner of certified equipment can permit or deny such connection as it is in his interest to protect his equipment from damage and abuse.

The Commission considers that the attachment of equipment certified for direct connection to the switched network should not require any special permission from any party and directs B.C. Tel to modify General Tariff Item 200.A.4.(g)(4) accordingly. With respect to components or other equipment which are not certified for direct connection to the switched network, B.C. Tel may indicate that, should certification procedures be developed, permission of the company would be required before such components could be attached to a company-provided host.

B.C. Tel's proposed General Tariff Item 200.A.4.(e) specifies the connecting arrangements for subscriber-provided terminal equipment. ITCBC stated that this proposed Item does not provide for the utilization of the Federal Communications Commission approved 8 pin jacking system for interpositioning. In reply to ITCBC's concern, B.C. Tel stated that it was specifying standard jack and plug arrangements as shown in the DOC's certification standards and that, until CS-03 is revised to include the 8 pin "series jack", the subscriber could plug an 8 pin adapter into a standard carrier-provided 6 pin jack. Further, the 8 pin series jack is included in CS-03 and, as noted above, the Commission has announced B.C. Tel's intention to supply this jack in Public Notice 1984-7. Consequently, the concern raised by ITCBC appears to have been resolved by B.C. Tel.

It is also noted that, in General Tariff Item 200.A.1.(d), B.C. Tel defines "host terminal equipment" , "auxiliary terminal equipment" and "ancillary terminal equipment". These same terms are defined in DOC document TRC-52, Supplement F. Should the company consider it is necessary to define these terms in its tariff, then the definitions in TRC-52 should be used.

C - Acoustically Coupled Equipment

Bell's proposed requirement set out in General Tariff Item 4200.10.(c) specified that acoustically coupled terminal equipment must also be certified. OHA et al stated that only direct electrical connection required technical standards and that, previously, acoustically coupled equipment could be connected without certification. It also pointed out that B.C. Tel's proposed filing made it clear that uncertified terminal equipment could be acoustically connected. In reply, Bell stated that the current issue of CS-03 includes a number of requirements which apply to acoustically coupled terminal equipment and that it was therefore justified in requiring that this equipment be certified.

The Commission notes that, while B.C. Tel does not currently require that acoustically or inductively coupled terminal equipment be certified, Item 170.13 of its General Tariff states that such equipment must meet certain specific technical standards which are specified in that Item.

Bell has not refuted OHA et al's statement that acoustically coupled equipment can now be connected without certification nor has Bell indicated that such attachment has caused harm to its network. In the Commission's view, specifying minimal technical standards in the tariff, as has been done by B.C. Tel, is an acceptable approach. Therefore, Bell is directed to file for approval tariff revisions specifying minimal network protection standards which could be applied as an alternative to the certification of inductively or acoustically connected terminal equipment.

D - Prohibited Network Interface Function

Both Bell's proposed General Tariff Item 4230.3.(a)(2) and B.C. Tel's proposed General Tariff Item 200.A.3.(c) prohibit the attachment of equipment which automatically changes from an on-hook mode to an off-hook mode in response to stimuli other than network-alerting or other telecommunications signals. OHA et al objected to this restriction because it would prohibit the attachment of many items of terminal equipment which automatically initiate calls. In reply, Bell proposed that the Item's wording be changed to prohibit equipment which automatically changes from an on-hook mode to an off-hook mode, except in response to an incoming call or to initiate an outgoing call. This wording appears to satisfy this concern and the companies are directed to file tariffs incorporating it.

E - Connection of Internal Communications Systems

Both Bell's proposed General Tariff Item 4230.3.(b) and B.C. Tel's proposed General Tariff Item 200.A.3.(b) specify restrictions on the interconnection of subscriber-provided transmission facilities. OHA et al stated that these restrictions could preclude subscribers from furnishing their own inside wiring or other networks between buildings on the same continuous property, which activities were both permitted by Decision 82-14. In reply, both Bell and B.C. Tel indicated that the proposed wording did not prohibit the limited type of interconnection of communications systems provided for in Decision 82-14.

According to Bell and B.C. Tel, the wording of both of these Items exempts from this restriction the interconnection of systems otherwise permitted by the companies' tariffs. However, neither company has stated where in its tariffs these "otherwise permitted" provisions are. In order to ensure clarity, the Commission considers that the tariffs of both companies should be amended to include specific reference to the limited type of interconnection of communications systems permitted by Decision 82-14. Accordingly, the companies are directed to file such tariff amendments for approval.

F - Channel Deriving Equipment

Bell's proposed General Tariff Item 4230.3.(c) prohibits the connection of voice multiplexing equipment to tie trunks. OHA et al objected to Bell's proposal as this is now permitted by its General Tariff Item 4230.2.(j). It also pointed out that B.C. Tel permits these devices to be connected to tie trunks. In reply, Bell indicated that, as allowed by General Tariff Item 4590, the proposed General Tariff Item 4230.3.(c) would enable channel deriving equipment to be connected to "Channels for Voice Without Signalling or Conditioning" and that the standards as developed by the Terminal Attachment Program Advisory Committee (TAPAC) apply to connections to point-to-point voice channels and not to facilities which connect directly to the public switched network.

It is noted that General Tariff Item 4590.1.(c) states that "The channel does not provide for any access to the Company's exchange and inter-exchange services nor is it connected to other channels provided by the Company" whereas a tie trunk provides access to the public switched network. It is further noted that, under Tariff Notice 794, Bell proposed to allow the connection of channel deriving equipment to tie trunks provided by the company because it had received requests from customers to connect this type of equipment to them. This Tariff Notice was approved in Telecom Order CRTC 82-598, dated 17 November 1982. In the Commission's view, Bell has not justified why this provision should be removed from its tariff and, accordingly, it is directed to amend its filing to allow for the connection of channel deriving equipment to tie trunks.

G - Notification

B.C. Tel's proposed General Tariff Item 200.A.4.(o) requires those subscribers connecting their single-line equipment, and those providing their own multiline equipment, to notify the company. OHA et al took issue with this proposal and, in reply, B.C. Tel agreed that it would not require notification by the subscriber of the attachment of single-line terminal equipment. B.C. Tel is directed to file this amendment to its tariff for approval.

H - Certification of Company-Provided Equipment

The wording of Bell's proposed General Tariff Items 4230.5.(a) and (b) as well as B.C. Tel's proposed General Tariff Items 200.A.6.(a) and (b) do not require that carrier-provided network non-addressing equipment be certified. It was the position of OHA et al that all terminal equipment, regardless of supplier, must be certified. Bell did not reply to this concern and B.C. Tel stated that its Items would apply only during a phasing-in period. B.C. Tel stated that a certification requirement would not apply to network non-addressing equipment because this equipment was not included in Decision 80-13.

In Decision 82-14, the Commission required the carriers to permit any network non-addressing device which is certified by DOC, and which bears a label to that effect, to be attached to their networks. The Commission also required that all single-line and multiline network addressing terminal equipment manufactured after certain dates, whether provided by the subscriber or the carrier, must be certified by DOC and be appropriately marked.

Consistent with the intent of Decision 82-14, the Commission directs that, except where otherwise specified by the Commission, all terminal equipment manufactured after the dates specified in Decision 82-14, whether network addressing or network non-addressing, and whether provided by a carrier or a subscriber, must be certified and be appropriately marked.

I - Further Requirements

Bell's proposed General Tariff Item 4200.1. states that "Equipment, apparatus, or devices provided by a customer shall only be attached to or connected to or used with the Company's facilities in accordance with the requirements stated herein or such further and other requirements as may be specified from time to time by the Company or by special agreement."

OHA et al stated that this Item would permit Bell to make exceptions to the terminal attachment rules in a preferential or discriminatory manner contrary to section 321 of the Railway Act.

The Commission acknowledges that, in certain exceptional circumstances, the company may require flexibility to specify additional requirements for the attachment of subscriber-provided terminal equipment. It was not the Commission's intention in Decision 82-14 to limit the flexibility granted to Bell by Rule 9 of its General Regulations to make non-discriminatory provisions for these exceptional circumstances. Accordingly, the Commission does not, at this time, require that changes be made to this Item. However, should evidence be brought to the Commission's attention that this provision is being used by the carrier in a manner inconsistent with section 321 of the Railway Act, the Commission will review the matter.

Finally, the Commission notes that, while this Item allows Bell some flexibility with respect to permitting types of attachment that would not otherwise be permitted, it does not permit Bell to prohibit any attachment made in accordance with the requirements stated in the Item.

J - Attachment of Equipment to Private Lines

OHA et al expressed concern that the wording of certain tariff items proposed by Bell and B.C. Tel would require that equipment attached to private lines be certified. They stated that, for many years, Bell, B.C. Tel and CNCP have permitted subscribers to attach non-certified equipment to private lines and that, because private lines do not have access to the switched network, there is little opportunity for equipment attached to private lines to cause harm to the network. In reply, Bell stated that, although the proposed tariff items are not applicable to the attachment of terminal equipment to private lines, there is a need for some technical standards for such connections.

The Commission agrees that the proposed wording is not applicable to private lines. Should the companies be of the view that some tariff restrictions be placed on the attachment of subscriber-provided terminal equipment to private lines, an appropriate application should be made to the Commission.

K - Measured Business Service

In the view of ITCBC, B.C. Tel's proposed General Tariff Item 200.A.4.(b) unreasonably denies measured business service subscribers the right to provide their own terminal equipment. In reply, B.C. Tel stated that measured business service subscribers would not be prevented from providing their own network addressing terminal equipment and that it would submit an amendment to this Item. The Commission agrees that clarification is required and directs B.C. Tel to submit such an amendment for approval.

L - Services Prohibiting Subscriber-Provided Equipment

B.C. Tel's proposed General Tariff Item 200.A.4.(c) denies subscribers the right to attach their own terminal equipment to Voicecom II and Multicom II services. ITCBC objected to both this restriction and to the restrictions on the types of equipment which could be connected to Voicecom I and Multicom I services. In reply, B.C. Tel stated that the Voicecom II and Multicom II networks are Telecom Canada four-wire networks which remain telephone company owned and maintained. As regards the proposed restrictions on the Voicecom I and Multicom I services, B.C. Tel proposed wording changes which appear to satisfy the concerns of ITCBC.

The Commission notes that there are no technical standards for the four-wire terminal equipment used on the Voicecom II and Multicom II networks, except for Multicom II network non-addressing devices. Accordingly, except where standards are developed and a certification program is in place, terminal equipment used on these networks should continue to be solely company-provided. However, the Commission requests TAPAC to canvass whether sufficient interest exists in further standards for subscriber-provided Voicecom II and Multicom II terminal equipment to warrant the development of such standards. Should such standards be developed and certification procedures he established, the restrictions prohibiting the use of subscriber-provided equipment for these services would appropriately be removed from the tariffs.

M - Access to WATS Lines

ITCBC was concerned that, contrary to certain arrangements B.C. Tel provided to its own terminal equipment subscribers, B.C. Tel's proposed General Tariff Item 200.A.4.(1) seemed to prohibit the use of Direct Inward System Access lines or tie trunks to access WATS lines. In reply, B.C. Tel agreed to delete this Item and the Commission concurs with this solution.

N - Sharing of Key Systems and PBXs

B.C. Tel's proposed General Tariff Items 200.A.4.(m) and 190.4.(b) specify the terms and conditions for sharing of key systems and PBXs. ITCBC questioned whether these conditions would also apply to company-provided key systems and PBXs. B.C. Tel replied that these conditions would apply to any key system or PBX, regardless of the supplier. The Commission notes that Bell has proposed similar conditions applicable to all terminal equipment regardless of who provides it. The Commission finds the companies' approach reasonable.

O - Distinguishing Between a PBX and a Key System

B.C. Tel's proposed General Tariff Item 200.A.4.(t) specifies the conditions under which a key system must be configured in order to be considered as a key system and not a PBX. ITCBC argued that this issue was before the Commission by virtue of an application by Radio Service Engineers Limited and that the proposed Item should be rejected until the Commission rules on that application.

In Radio Service Engineers Limited v. British Columbia Telephone Company, Telecom Decision CRTC 84-6, 18 January 1984, (Decision 84-6), the Commission directed B.C. Tel to file tariff revisions requiring that, in order for a multiline system to be classified as a key system, it must be configured according to the definition of a key system contained in CS-03. The Commission directs Bell to file tariff revisions which incorporate provisions equivalent to the directives given to B.C. Tel in Decision 84-6.

P - Certification of Certain Components

The Commission notes that B.C. Tel's proposed General Tariff Item 200.A.4.(g) does not allow for the certification of components such as headsets and generic key system line cards. The Commission directs B.C. Tel to amend this Item so as to avoid the necessity for tariff revisions should certification procedures for the attachment of components be adopted.

VI TELEPHONE DIRECTORIES

In Decision 82-14, the Commission directed the federally regulated telephone companies to provide one copy of the appropriate telephone directory, at no charge, for each access line leased by a subscriber and to furnish additional copies at tariffed rates which vary by rate group and which provide for the recovery of the related costs of printing and distributing the white pages portion of the directories. The Commission directed further that, where the yellow pages and white pages portion of the directories are separately bound, one copy of each shall be provided for each access line. Both Bell and B.C. Tel were directed to file the tariffs necessary to implement the terms set out above by 1 March 1983.

On 14 February 1983 and 1 March 1983 respectively, Bell and B.C. Tel filed applications pursuant to section 63 of the National Transportation Act requesting the Commission to review and vary that part of Decision 82-14 governing the distribution of telephone directories by the federally regulated telephone companies under a liberalized terminal attachment regime. The Commission has issued a separate decision in this regard entitled Bell Canada and British Columbia Telephone Company - Distribution of Telephone Directories - Applications to Review Telecom Decision CRTC 82-14, Telecom Decision CRTC 84-8, 13 February 1984 and refers the parties to this decision for its findings and directives.

VII SUBSCRIBER EQUIPMENT RECORDS

In the section dealing with carrier participation in the terminal equipment market, Decision 82-14 addressed the issue of confidential information in the possession of the carriers, particularly as regards multiline terminal installations, which has commercial and marketing value to the carriers and which may give them an undue competitive advantage. In response to this concern, the Commission directed all federally regulated telephone companies to examine and report on the feasibility of providing all subscribers leasing multiline terminal equipment with either a copy of the subscriber's equipment record issued once a year or a copy of the subscriber's updated equipment record to be reissued whenever a significant change in equipment takes place, or whenever a change in relevant tariffs or tolls takes place.

In a letter dated 1 February 1983, Bell responded to the Commission directive and outlined its current equipment record distribution practices. The company stated that equipment records are generated when a change is made in the subscriber's service or equipment and when changes are made in relevant tariffs, including a general rate increase.

In accordance with Decision 82-14, Bell proposed to provide every multiline voice subscriber with an updated equipment record following a general rate increase or major tariff revision. During a year when there is no general rate increase or major tariff change, an annual update would be issued to the subscriber.

In a letter dated 1 February 1983, B.C. Tel responded to the Commission directive and outlined its current equipment record distribution practices. The company stated that it has provided subscribers with details of their terminal equipment rentals on their monthly bills since 1978. Equipment detail is also provided whenever a service order is processed against a subscriber's account or a rate change is implemented. However, this does not presently apply to a relatively few leased wire accounts which are used for billing services such as Foreign Exchange, Telpak and Private Lines. The system changes which would facilitate the provision of equipment details to these few subscribers were scheduled for completion late in 1983.

The Commission accepts both companies' practices and proposals. However, the Commission further directs that subscribers be entitled to request a copy of their equipment records once each year.

VIII IMPLEMENTATION

With the exception of the changes directed to be made in this decision, the tariff revisions proposed by Bell and B.C. Tel pursuant to Decision 82-14 are approved. The Commission hereby directs Bell and B.C. Tel to file by 1 May 1984, to be effective, in the case of Bell, on 1 September 1984 and, in the case of B.C. Tel, on 1 July 1984, proposed tariff revisions necessary to implement this decision.

The Commission further directs both companies to prepare, for Commission approval, a billing insert providing information regarding the terminal equipment options now available to subscribers. Included in this information should be a clear explanation of the diagnostic maintenance charges that will apply with respect to a subscriber requested premise visit where trouble is found to be located in subscriber-provided terminal equipment. Furthermore, the companies are directed to incorporate a directory page in future publications of their respective directories containing the same type of information.

J.G. Patenaude
Secretary General