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Ottawa, 25 January 1993
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Telecom Public Notice CRTC 93-10
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BELL CANADA - PROPOSED TRANSFER OF ASSETS TO BELL SYGMA SUBSIDIARIES AND RELATED TRANSACTIONS
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On 19 November 1992, Bell Canada (Bell) filed with the Commission, in confidence, documents regarding proposed transactions under which Bell would outsource certain activities using three new subsidiaries, Bell Sygma Inc. (Bell Sygma), Bell Sygma Systems Management Inc. (BSSM) and Bell Sygma Telecom Solutions Inc. (BSTS). The documents in question consisted of a covering letter, a report and draft agreements with schedules. On 4 December 1992, Bell filed abridged versions for the public record of the covering letter and the report.
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As part of the proposed transactions described in the documents, Bell would transfer to the new subsidiaries assets used in meeting its data processing requirements, including the billing of its subscribers. Under the restructuring, Bell Sygma would serve primarily as the holding company for the other subsidiaries and would undertake certain support functions on their behalf. BSSM would provide Bell with data processing and computer network management, while BSTS would provide systems development and integration services.
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By virtue of the Bell Canada Act (the Act), the company is required, under certain circumstances, to seek and obtain Commission approval prior to disposing of certain of its assets. Subsection 11(2) of the Act states:
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Except in the ordinary course of the business of the Company, no facilities of the Company that are integral and necessary for the carrying on of telecommunications activities shall be sold, leased, loaned or otherwise disposed of without the prior approval of the Commission.
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In its 19 November filing, Bell took the position that neither the transfer of the assets nor any other aspect of the proposed transactions requires prior Commission approval under the Act. However, Bell requested on a "without prejudice" basis that, should the Commission conclude that prior approval was required, interim ex parte approval be given to the asset transfer by 1 January 1993.
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In a letter to Bell dated 17 December 1992, the Commission ruled that its prior approval was required in connection with the proposed transfer of the assets. The Commission was not persuaded that interim approval was appropriate at that time. Accordingly, the Commission denied Bell's request and indicated that it would initiate a public proceeding to consider whether the proposed asset disposition was in the public interest.
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On 22 December 1992, Bell filed an application, pursuant to section 66 of the National Telecommunications Powers and Procedures Act, requesting that the Commission review and vary its 17 December 1992 decision. By letter dated 30 December 1992, the Commission advised Bell that, upon review of its decision, a majority of the Commission had been satisfied, on a prima facie basis, that granting approval to the proposed sale of assets was in the public interest, and that issues surrounding the transactions could be satisfactorily addressed in a public proceeding that the Commission would commence. Accordingly, the Commission granted interim approval to the sale of the assets. Bell was directed to file all executed agreements, together with schedules, as soon as they were available.
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Consistent with the above, the Commission initiates a public proceeding to consider: (1) whether the proposed asset disposition is in the public interest and, if so, under what terms and conditions, if any, final approval should be granted, and (2) whether, as a result of the proposed asset sale and related transactions, adjustments are necessary for revenue requirement purposes (for example, whether a deeming or imputation mechanism, as proposed by Bell, should be applied with a view to insulating subscribers from any adverse impact or, alternatively, whether all or part of the income of the subsidiaries should be considered integral for revenue requirement purposes).
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PROCEDURE
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1. The mailing addresses to be used in this proceeding are:
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Mr. Allan J. Darling
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
Fax: (819)953-0795
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Mr. B.A. Courtois
Vice-President
(Law & Regulatory Affairs)
Bell Canada
105 Hotel-de-Ville Street
6th Floor
Hull, Quebec
J8X 4H7
Fax: (819)778-3437
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2. Persons wishing to participate in this proceeding (interveners) must file a notice of intention to participate with the Commission, serving a copy on Bell, by 19 February 1993.
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3. The Commission addressed interrogatories to Bell by letter dated 20 January 1993. Bell was directed to file responses to these interrogatories by 12 February 1993. By that date, Bell is directed to serve copies of its responses on interveners who have already notified it of their intention to participate. Bell is also to serve those interveners with abridged copies of its 19 November filing and its 22 December review application, with abridged copies of the executed agreements and related schedules, with copies of the Commission's letters of 17 December and 30 December 1992, and with any additional information that it may wish to provide. Bell is to serve copies of this same documentation on interveners who register after 12 February 1993 forthwith upon receipt of a notice of intention to participate.
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4.Requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for the disclosure, must be filed with the Commission and served on Bell by 26 February 1993.
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5.Bell's reply to requests for public disclosure are to be filed with the Commission and served on interveners by 5 March 1993.
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6. The Commission will issue a determination with respect to any such requests as soon as possible. The Commission intends to direct that any information to be released pursuant to its determination be placed on the public record and served on interveners by 15 March 1993.
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7. Interveners may address interrogatories to Bell. Any such interrogatories are to be filed with the Commission and served on Bell by 22 March 1993. The Commission will also address interrogatories to Bell by that date.
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8. Bell is to file responses to interrogatories, serving copies on interveners, by 19 April 1993.
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9. Requests by interveners for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on Bell by 26 April 1993.
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10. Bell's reply to requests for further responses and to requests for public disclosure must be filed with the Commission and served on interveners by 3 May 1993.
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11. The Commission will issue a determination with respect to any such requests as soon as possible. The Commission intends to direct that any material required by that determination be filed with the Commission and served on interveners by 17 May 1993.
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12. Interveners may file comments with the Commission, serving copies on Bell, by 7 June 1993.
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13. Bell may file a reply to any comments, serving copies on interveners, by 17 June 1993.
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14. Where a document is to be filed or served by a specific time, the document must be actually received, not merely mailed, by that time.
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Allan J. Darling
Secretary General
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