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Ottawa, 5 March 1993
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Telecom Public Notice CRTC 93-28
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BELL CANADA - PROPOSED TRANSFER OF ASSETS TO WORLDLINX TELECOMMUNICATIONS INC. AND RELATED MATTERS
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Reference: Tariff Notice 4679
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Background
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On 25 January 1993, Bell Canada (Bell) filed with the Commission documents regarding the proposed detariffing of certain enhanced services and the transfer of the assets and personnel associated with these services and Alex Service to WorldLinx Telecommunications Inc. (WorldLinx), a wholly-owned subsidiary of Mediatel Inc., itself a wholly-owned subsidiary of Bell. The documents consist of a covering letter, Tariff Notice 4679, a report and draft agreements with schedules.
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In Tariff Notice 4679, Bell proposes revisions to: (1) General Tariff Item 4690, Intelligent Communications Network (ICN) Services, (i.e., Envoy 100, iNet 2000, TradeRoute and Enhanced Fax); (2) Special Facilities Tariff Item D-1011, Government Electronic Messaging and Document Exchange Service (GEMDES); and (3) Special Facilities Tariff Item D-1015, Government Message Handling System (GMHS). The effect of the revisions would be to detariff these services, effective 1 March 1993, co-incident with the proposed transfer of the associated assets to WorldLinx. In the absence of final approval, Bell requested interim approval for the detariffing of the services by 1 March 1993.
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By letter dated 8 February 1993, Unitel Communications Inc. (Unitel) filed comments regarding Tariff Notice 4679 and the proposed disposition of assets. Among other things, Unitel raised the question of whether Commission approval for transfer of the assets to WorldLinx was required pursuant to subsection 11(2) of the Bell Canada Act. Subsection 11(2) states:
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Except in the ordinary course of 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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By letter dated 18 February 1993, the Commission invited Bell to express its views concerning the application of subsection 11(2) to the proposed disposition of assets to WorldLinx. By letter dated 23 February 1993, Bell submitted that the transfer of the facilities in question did not require Commission approval pursuant to subsection 11(2), as they were not, in Bell's opinion, integral and necessary to the carrying on of its telecommunications activities.
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By letter to Bell dated 25 February 1993, the Commission stated that: (1) the proposed asset disposition would require prior approval pursuant to subsection 11(2); and (2) it was not persuaded, at this stage, that either interim or final approval of the disposition of the assets or of the detariffing of the services in question was in the public interest. The Commission stated that it would consider whether the proposed asset disposition and the application to detariff were in the public interest in the proceeding established to examine Bell's general rate increase application. The Commission also stated that it would be prepared to consider an application for interim approval of the asset disposition and the detariffing prior to the general rate increase proceeding, upon receipt of executed contractual agreements that satisfied its concerns regarding the degree of separation between the unregulated activities of WorldLinx and the activities of the regulated Stentor member companies.
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Consistent with the above, the Commission invited comment in the general rate increase proceeding on, among other things, the following issues: (1) whether the proposed asset transfer to WorldLinx and the detariffing of the services in question are in the public interest and, if so, under what terms and conditions, if any, approval should be granted; and (2) whether, as a result of the proposed asset disposition, 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).
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Procedure
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1. Persons wishing to make submissions with regard to this matter must file a notice of intention to participate in the general rate case proceeding by writing to the Commission at the address noted below by 22 March 1993. A copy must be served on Bell by the same date.
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2. The mailing addresses to be used in connection with the proceeding are:
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Mr. Allan J. Darling
Secretary General
CRTC
Ottawa, Ontario
K1A ON2
Fax: (819) 953-0795
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Mr. B.A. Courtois
Vice-President
(Law & Regulatory Affairs)
Bell Canada 105 Hotel-de-Ville Street
5th Floor
Hull, Quebec
J8X 4X7
Fax: (819) 773-6186
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3. By letter dated 2 March 1993, the Commission addressed interrogatories to Bell with respect to the proposed asset disposition and the application to detariff. Bell was directed to file responses to these interrogatories by 23 March 1993. By that date, Bell is to serve copies of its responses on all parties filing a notice of intention to participate in the general rate increase proceeding (interveners). Bell is also to serve all interveners with abridged copies of its 25 January 1993 filing, its letters dated 11 February and 23 February 1993, Unitel's letter dated 8 February 1993, the Commission's letters dated 18 February and 25 February 1993, and any additional information that it may wish to provide.
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4. The procedures established in the general rate increase application specify that interrogatories addressed to Bell must be filed with the Commission and served on the company by 22 March 1993. However, interveners may address interrogatories to Bell pertaining to the issues identified in this Public Notice by 29 March 1993. Any such interrogatories are to be filed with the Commission and served on the company by that date. The Commission will also address interrogatories to Bell by that date.
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5. Bell is to file responses to interrogatories, serving copies on all interveners, by 21 April 1993.
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6. Consistent with its recent practice with respect to general rate increase applications, the Commission will issue, prior to 21 April, a letter setting out the procedures leading up to the central hearing, scheduled to begin on 17 May 1993.
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Allan J. Darling
Secretary General
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