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Telecom Decision
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Ottawa, 11 October 1990
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Telecom Decision CRTC 90-23
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APPLICATION BY UNITEL COMMUNICATIONS INC. REQUESTING THE SUSPENSION OF FAXCOM SERVICE
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I BACKGROUND
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On 12 December 1989, both Bell Canada (Bell) and British Columbia Telephone Company (B.C. Tel) submitted applications (under Tariff Notices 3368 and 2029, respectively) providing for the introduction of FaxCom service, a subscription service for the long distance transmission of facsimile (fax) messages. Under Tariff Notice 45, dated 4 June 1990, Maritime Telegraph and Telephone Company Limited (MT&T) also applied for the introduction of FaxCom service. The New Brunswick Telephone Company Limited (NBTel) filed a similar application under Tariff Notice 20, dated 5 June 1990.
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The Commission granted interim approval to all these applications, effective 1 June 1990 for Bell and B.C. Tel, 1 July 1990 for MT&T, and 3 July 1990 for NBTel. The Commission also issued public notices initiating proceedings to consider the final disposition of the applications. Those proceedings have not yet been completed.
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FaxCom provides for the transmission of long distance fax messages at rates lower than those applicable to long distance voice messages. In support of their applications, the companies submitted that the service is designed, in part, to preserve market share, and the attendant contribution, in the face of competition from FacsRoute, a long distance subscription fax service offered by Unitel Communications Inc. (Unitel).
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FaxCom service is designed to transmit messages originating from fax terminal equipment adhering to the Group 3 fax transmission protocol established by the Comité consultatif international télégraphique et téléphonique (CCITT). In their respective applications, the companies indicated that FaxCom access lines would be electronically monitored by fax discrimination equipment. All calls having a "1" as the first digit of the dialing sequence would be routed through this equipment, which would detect any call not compatible with the Group 3 standard. (Incompatible calls would consist of fax transmissions not based on the Group 3 protocol, other forms of data transmission, and voice transmissions). Such calls would be interrupted and routed to a recorded announcement. However, a 30 second voice allowance would be provided to accommodate any Group 3 fax transmissions requiring voice set-up.
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The approved tariffs of all four telephone companies specify that all calls originating from FaxCom lines and having a "1" as the first digit of the dialing sequence are to be monitored by fax discrimination equipment, and that calls not for the purpose of Group 3 fax transmission are to be interrupted.
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II UNITEL'S APPLICATION
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By letter dated 12 July 1990, Unitel applied to the Commission requesting the suspension of the FaxCom tariffs of Bell, B.C. Tel, MT&T and NBTel. Unitel stated that it had conducted a series of tests, in Vancouver on 13 June 1990 and in Montréal on 28 June 1990, in order to evaluate the effectiveness of the discrimination equipment used to monitor FaxCom lines. Unitel stated that it had successfully completed voice transmissions in excess of 30 seconds from both Vancouver and Montréal to Toronto. Unitel submitted, based on the results of its tests, that the provision of FaxCom does not comply with the service descriptions provided by the telephone companies or with their tariffs. Unitel submitted that FaxCom service, as offered, amounted to a discounted voice service, without the appropriate economic justification and tariff approval.
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Unitel noted that the Commission's rulings governing its interconnection with Bell and B.C. Tel (see Telecom Decision CRTC 79-11, 17 May 1979, and Telecom Decision CRTC 81-24, 24 November 1981, respectively) permit the removal of restrictions on Type I or Type II connections for the purpose of providing a data service, when the Commission is satisfied that, by means of the technical, economic or operational characteristics of the service, it is unlikely that the service will be used significantly for voice service.
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Unitel also noted that, in Telecom Order CRTC 87-750, dated 8 December 1987, its original application to provide an interconnected fax service had been denied because the Commission was not satisfied that it was unlikely that the proposed service would be used significantly for voice service. Unitel had proposed in that application either to require its customers to sign affidavits attesting that they would not use the interconnected service for voice communication (other than for voice coordination) or to monitor the usage of the network on a random sample basis. The Commission approved the interconnection only when Unitel re-applied, proposing to use voice/data discrimination equipment certified by an independent laboratory to prevent the use of its fax lines for voice communications lasting longer than approximately 70 seconds. Unitel submitted that there appears to have been no independent testing of the respondent telephone companies' fax discrimination equipment, or no reporting of the results to the Commission.
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Unitel submitted that the respondent telephone companies should either (1) file independent test results indicating that FaxCom service does not allow voice calls lasting longer than 30 seconds, in accordance with the service description, or (2) refile tariffs indicating that they are, in fact, providing a discounted long distance voice service. Unitel requested that the Commission suspend FaxCom tariffs until such time as tests results are filed or tariff revisions are approved. Unitel also submitted that the telephone companies should cease new sales and installations pending (1) the production of conclusive technical proof that voice services are not being provided in contravention of the FaxCom service description, or (2) the filing and approval of new tariff pages that match the service actually provided.
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III SUBMISSIONS FROM THE TELEPHONE COMPANIES
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B.C. Tel submitted that it had undertaken tests both prior to the filing of its proposed FaxCom tariffs and after the filing of Unitel's application. B.C. Tel stated that those tests confirmed that the fax discrimination equipment it employs functions in accordance with the technical capabilities attributed to it in the company's tariff application. B.C. Tel stated that calls originating from the FaxCom lines used by Unitel had not been routed through fax discrimination equipment because, at the time the service order was processed, its personnel had not followed procedures requiring the class-marking of FaxCom lines. B.C. Tel also indicated that a number of FaxCom lines other than the ones reported by Unitel were not properly class-marked. B.C. Tel stated that it has audited its FaxCom service orders to ensure that the appropriate class-marking is in place, so that all FaxCom "1+" calls would be routed through discrimination equipment. In addition, the company stated that it had taken immediate steps to ensure that proper procedures for the processing of service orders are strictly followed.
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B.C. Tel noted that, without the appropriate FaxCom class-marking, long distance calls over FaxCom lines would be processed and billed at regular Message Toll Service (MTS) rates. The company submitted that, therefore, it has not been providing a discounted voice service. However, B.C. Tel went on to state that it intends to refund to the affected FaxCom customers all charges in excess of the appropriate FaxCom rates for fax transmissions.
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Bell submitted that the situation described by Unitel is one of a number of similar cases caused by human error. Like B.C. Tel, Bell stated that the proper procedures for ensuring the routing of FaxCom "1+" calls through fax discrimination equipment had not been followed. Bell submitted that the problem had arisen because the service was new and all personnel were not fully aware of the prescribed company practices. Bell stated that administrative practices had been changed to ensure that FaxCom lines are properly installed and that, as a result of Unitel's application, it had taken the opportunity to ensure that all FaxCom lines were tested and were working correctly. The company also stated that it had re-tested all fax discrimination equipment and had confirmed that it performs according to specification.
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MT&T noted that Unitel's complaint is based on tests conducted within the territories of Bell and B.C. Tel. MT&T therefore submitted that Unitel's application is unfounded and without merit as it pertains to MT&T's FaxCom service.
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NBTel stated that, due to supply problems associated with fax discrimination equipment, calls placed over FaxCom lines in areas not served by DMS switches are not being routed through discrimination equipment. NBTel indicated that approximately 20% of its FaxCom lines are not routed through discrimination equipment. The company stated that it planned to reduce this percentage to 10% by 31 August 1990 and to zero by the end of the year. NBTel also stated that, as an interim measure, FaxCom lines not routed through fax discrimination equipment would be randomly sampled to ensure that FaxCom service is not misused.
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IV UNITEL'S REPLY
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In its reply, Unitel stated that, when it initially filed its application, it had presumed that the fault lay with non-functioning discrimination equipment. Unitel submitted that the evidence filed by Bell, B.C. Tel and NBTel indicates that the problem appears to arise from improperly equipped FaxCom lines.
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Unitel stated that the problem was the result of the telephone companies' haste to introduce FaxCom service, and that none of the evidence on the record had allayed its concerns with respect to the provisioning of FaxCom service. Unitel submitted that, in fact, the comments filed added further evidence as to the inability of the telephone companies to provide the service as described in their tariffs.
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Unitel was particularly concerned with NBTel's statement that not all of its FaxCom lines are routed through discrimination equipment, and that the company would randomly sample such lines as an interim measure.
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Unitel submitted that the Commission should satisfy itself that problems will not recur, and that the remedies applicable should reflect the different circumstances of the companies. Accordingly, Unitel modified its application to request that the telephone companies be directed to cease new sales and installations pending: (1) the production of conclusive independent technical proof that voice services are not being provided in contravention of the FaxCom service description; or (2) the filing and approval of new tariff pages matching the service actually provided.
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Unitel considered that MT&T and NBTel are unable to provide FaxCom service in compliance with their filed tariffs. Therefore, the Commission should rescind its interim approval and order the immediate suspension of their FaxCom tariffs. Unitel requested that the suspension remain in effect until MT&T & NBTel meet condition (1) or (2) above.
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V CONCLUSIONS
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The record of this proceeding indicates clearly that Bell, B.C. Tel and NBTel have failed to ensure that FaxCom service is offered in compliance with the approved tariffs. In this case, the non-compliance relates to an important condition for ensuring that Faxcom service is economically justified, i.e., that it not be used for voice transmissions. Furthermore, the service is a competitive one.
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In the case of Bell and B.C. Tel, it appears that non-compliance can be attributed either to the failure to establish proper and complete internal administrative procedures or to the failure to observe such procedures as were established.
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However, both Bell and B.C. Tel indicated that they have undertaken audits to ensure that all FaxCom lines are properly equipped. Bell stated that it has also modified its procedures to ensure that FaxCom lines are tested prior to putting the lines into service. B.C. Tel indicated that it had taken immediate steps to ensure that its service order procedures for FaxCom are strictly followed. Since both companies stated that they have taken steps to prevent future tariff violations, the Commission does not consider it necessary at this time to prevent these companies from adding new FaxCom customers. Accordingly, Unitel's request that Bell and B.C. Tel be directed to cease new sales and installations is denied.
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However, it is appropriate that Bell and B.C. Tel satisfy the Commission that effective procedures for ensuring ongoing tariff compliance have indeed been established. Bell and B.C. Tel are therefore directed to file, by 25 October 1990, (1) copies of the internal documentation and correspondence circulated prior to Unitel's application, setting out administrative procedures to be followed in accrediting FaxCom lines and notifying employees of those procedures, and (2) a detailed description of other training and familiarization methods used prior to Unitel's application in order to ensure compliance with all administrative procedures for accrediting FaxCom lines and otherwise ensuring compliance with FaxCom tariffs. Bell and B.C. Tel are directed to file, also by 25 October 1990, materials and information analogous to those requested in (1) and (2) above with respect to any changes made since Unitel's application was filed, including details of the steps they have taken to ensure that service order procedures for FaxCom are followed. Bell and B.C. Tel are also directed to have their fax discrimination equipment tested by an independent laboratory or other testing agency as to its ability to function in the manner described in their respective applications to provide Faxcom service. The results are to be filed by 13 November 1990.
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As indicated above, NBTel's Faxcom tariff states that calls originating from FaxCom lines are electronically monitored using fax discrimination equipment and that the equipment interrupts "1+" calls that are not for the purposes of Group 3 fax transmission. However, NBTel stated that, due to problems in the supply of fax discrimination equipment, FaxCom lines in certain areas are not being routed through discrimination equipment. Unlike Bell and B.C. Tel, NBTel's failure to properly equip some of its FaxCom lines is due to a conscious decision to offer FaxCom service in certain areas of its territory in a manner that does not comply with the tariff pages granted interim approval by the Commission.
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The Commission points out to NBTel that the existence of supply problems associated with fax discrimination equipment is not sufficient justification for ignoring the legal requirement to comply with approved tariffs. The company should have delayed the offering of FaxCom service in those areas where the equipment necessary to offer the service in compliance with the tariff was not yet available.
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In light of the above, the Commission directs NBTel, by 25 October 1990, to cease offering FaxCom to new and existing customers in all instances where it is unable to route all "1+" FaxCom calls through fax discrimination equipment. In this regard, NBTel is directed to identify to the Commission, also by 25 October 1990, exchanges in which it has Faxcom lines that have not been routed through fax discrimination equipment and, for each such exchange, the date by which it expects to be able to route FaxCom lines through fax discrimination equipment. Finally, NBTel is directed to have its fax discrimination equipment tested by an independent laboratory or other testing agency as to its ability to function in the manner described in the company's application to provide Faxcom service. The results are to be filed by 13 November 1990.
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There is no evidence on the record to indicate that there has been non-compliance on the part of MT&T. However, in the interest of ensuring continuing compliance with FaxCom tariffs, MT&T is also directed to have its fax discrimination equipment tested by an independent agency as prescribed above for Bell, B.C. Tel and NBTel and to file the results by 13 November 1990.
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The Commission reminds the companies that the Railway Act prohibits them from offering or providing tariffed products or services other than in accordance with the approved tariffs. They therefore have an obligation to ensure that the equipment and the internal procedures necessary for tariff compliance are in place before offering a service.
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VI ISSUES OF CONFIDENTIALITY
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In their letters of 15 August 1990, Bell and B.C. Tel each provided the number of FaxCom lines that had been improperly equipped and the percentage that this number represented of its total FaxCom lines. B.C. Tel claimed confidentiality for the number, but not the percentage, of improperly equipped lines. Bell claimed confidentiality for both figures. In making its claim for the confidentiality of the percentage figure, Bell stated that its release could assist the company's competitors in developing more effective business strategies, thereby causing the company specific direct harm.
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By letter dated 20 August 1990, Unitel requested that Bell disclose the percentage of FaxCom lines that had been improperly equipped. Unitel argued that it is not possible to determine market size from a percentage figure and that the true extent of the violation of Bell's tariff should be on the public record. Bell did not file a reply to Unitel's request.
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In the Commission's view, any specific direct harm that might result from the disclosure of this information does not outweigh the public interest in its disclosure. The Commission therefore directs Bell to place on the public record, by 25 October 1990, the percentage of its FaxCom lines that were improperly equipped.
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Alain-F. Desfossés
Secretary General
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