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Ottawa, 10 May 1991
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Telecom Decision CRTC 91-6
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BELL CANADA V. DISTRIBUTEL COMMUNICATIONS LIMITED ET AL AND LONDON TELECOM V. BELL CANADA - RESALE OF LOCAL SERVICES
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I BACKGROUND
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In Bell Canada - Application to Deny Resale of Centrex III Service by Distributel Communications Limited, Telecom Decision CRTC 89-2, 7 February 1989 (Decision 89-2), the Commission denied an application in which Bell Canada (Bell) requested that the Commission prevent Distributel Communications Limited (Distributel) from offering a service called Metroplus. Metroplus involves the resale, for a flat monthly fee, of Centrex III Service provided from a Toronto core exchange. This core exchange has extended area service (EAS) with many surrounding exchanges that do not have EAS with each other. By accessing the Centrex installation in the core exchange, a Metroplus customer can place, without incurring message toll charges, calls to which such charges would otherwise apply. For example, a Metroplus subscriber in Markham can call the Distributel Centrex in Toronto and have the call forwarded to a number in Oakville. Since both legs of the call are local, no toll charges apply. Toll charges would apply, however, to a direct call between Markham and Oakville.
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In Decision 89-2, the Commission noted that, in Resale to Provide Primary Exchange Voice Services, Telecom Decision CRTC 87-1, 12 February 1987 (Decision 87-1), it had identified Centrex as a primary exchange voice service, while in Tariff Revisions Related to Resale and Sharing, Telecom Decision CRTC 87-2, 12 February 1987 (Decision 87-2), it had defined an interexchange service as one that is configured to operate between any two exchanges where message toll charges would apply. The Commission found that Metroplus is a form of Centrex service, and is not itself configured to operate between exchanges where message toll charges would apply. Rather, Metroplus is accessed using the public switched telephone network (PSTN) and, in that manner, provides the capability to make interexchange calls. Accordingly, the Commission concluded that Metroplus is appropriately described as a local service.
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In other words, using the example of a call from Markham to Oakville via Toronto, the Commission ruled that Distributel was reselling only the service between Toronto and Oakville. Since that is local service, Distributel was not violating any of the rules governing resale and sharing. The first leg of the call, i.e., from Markham to Toronto, was provided by the call originator, and not by Distributel.
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II BELL'S CURRENT APPLICATION
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A. Introduction
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On 20 December 1990, the Commission received an application from Bell naming as respondents Distributel, 839286 Ontario Ltd., carrying on business as Metro Telepoll Services (Metro), and London Telecom (London). Bell requested that the Commission issue an order stating that services planned or currently offered by the respondents (or any other parties) using primary exchange service to forward calls between successive EAS locations constitute the provision of basic interexchange voice service with access to the PSTN contrary to the company's General Tariff and to the rules governing resale and sharing established in Decision 87-1, Decision 87-2, and Resale and Sharing of Private Line Services, Telecom Decision CRTC 90-3, 1 March 1990. Bell also requested an order prohibiting resale to provide such services.
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London filed its answer to Bell's application on 2 January 1991. Metro and Distributel filed their answers on 21 January 1991. Bell filed its response on 31 January 1991. Bell filed additional comments concerning Metro on 6 March 1991. Metro filed a reply on 18 March 1991.
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B. Positions of Parties
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Bell stated in its application that, on 26 September 1990, it was approached by Distributel with a proposal to expand Metroplus service beyond Toronto and its EAS locations to Georgetown via a Centrex III installation in Brampton. Bell noted that, by utilizing the call forwarding features of two Centrex switches, in tandem, a call could be placed from Markham to Georgetown (via Toronto and Brampton) without incurring the long distance charges that would normally apply between Toronto and Georgetown or between Markham and Georgetown.
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Bell stated that it had also received requests from Metro and London for the installation of Centrex and other local services that would enable them to provide toll-free calling through the Toronto/Hamilton corridor. Bell noted that London had proposed leasing Centrex Service in Burlington and in Oakville, which would enable a caller in Hamilton to place a call to Burlington (within the Hamilton EAS area), link the call via call forwarding to Oakville (which has EAS with Burlington), and subsequently to Toronto (which has EAS with Oakville). Bell stated that this arrangement would permit a business in Toronto to receive calls from customers or branch offices in Hamilton without incurring toll charges.
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Bell also noted that London had discussed the possibility of equipping the Oakville Centrex for Direct Inward System Access (DISA). Bell stated that, with such an arrangement, a user could dial any number within the Oakville free-calling area, including Toronto, rather than being restricted to a single preprogrammed terminating number, as is the case without DISA. Bell stated that this arrangement would enable a business located in Hamilton to access customers or suppliers in Toronto without incurring otherwise applicable toll charges.
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Bell submitted that the service configuration described above cannot be justified on the basis of the rationale underlying Decision 89-2. Bell noted that the portion of the call provided by the reseller would no longer be contained within a single exchange or free-calling area. Rather, the component provided by the reseller would itself be configured to operate between exchanges where message toll charges would apply (for example, the Burlington to Toronto legs of a call from Hamilton to Toronto). Bell submitted that the configuration in question would provide service that is equivalent to interexchange service as defined in Decision 87-2.
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In their answers, the respondents argued, among other things, that Bell had mischaracterized the service configuration as a single continuous service (in the example cited above, a Burlington to Toronto service). They submitted that there is not one continuous service, but rather a series of local services, each like the one permitted in Decision 89-2. They argued that a customer in Hamilton is permitted, pursuant to Decision 89-2, to make a local call to a reseller's Centrex in Burlington, which forwards the call to Oakville. They argued further that it is appropriate that the customer be able to forward the call to any legitimate telephone number in Oakville, including that of a second Centrex system that, in turn, would forward the call to Toronto. They submitted that it is the customer that decides to have the call routed from the first Centrex to the second, and that the respondents themselves do not provide any fixed connections between the two. Accordingly, they submitted that the two systems are distinct local services that are both allowed under the present rules governing resale and sharing.
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In addition to the above, Metro submitted that Bell's application constitutes an attempt to obtain a review and variance of Decision 89-2 without meeting the criteria established by the Commission. Metro argued that Bell has attempted to disguise the nature of its application by implying that the addition of a third EAS area distinguishes the service configuration from that permitted in Decision 89-2.
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C. Conclusions
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In the Commission's view, Bell's characterization of the service configuration is correct. The Commission allowed the service configuration at issue in Decision 89-2 based on the finding that the reseller provides only one leg of the end-to-end call. Since message toll charges would not apply to that leg, the Commission concluded that no violation of the rules governing resale and sharing is entailed. However, the configuration at issue in this proceeding, is clearly distinguishable from that at issue in Decision 89-2. Specifically, the configuration here involves the linking of local services by the reseller to provide service between exchanges where message toll charges would apply. Therefore, the service being provided by the reseller is an interexchange service. Since the current resale and sharing rules do not permit the resale of local services (such as Centrex) to provide an interexchange service, Bell's application is granted and the service proposed by the respondents is disallowed.
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As indicated above, the Commission has concluded that the service configuration at issue in this proceeding is substantively different from that at issue in Decision 89-2. Accordingly, the Commission rejects Metro's argument that Bell's application is, in effect, an application for the review and variance of Decision 89-2.
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III APPLICATION BY LONDON
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On 2 January 1991, the Commission received an application from London. London stated that it had ordered Centrex Service from Bell and that it intended to resell that service in order to provide a service similar to that discussed in the previous Part. Bell refused to provide the service, indicating that it had applied to the Commission for a ruling that would disallow the service that London proposed to offer. London argued that, pending a final determination of Bell's application, Bell had an obligation to provide the service pursuant to the dispute resolution process set out in Decision 87-2.
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In light of the Commission's decision with respect to Bell's application, London's application is denied.
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Allan J. Darling
Secretary General
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