ARCHIVED -  Telecom Order CRTC 95-534

Telecom Order

Ottawa, 2 May 1995

Telecom Order CRTC 95-534

IN THE MATTER OF an application by Bell Canada (Bell) under Tariff Notice 5440, dated 23 February 1995, for approval of tariff revisions, applicable to Alternate Providers of Long Distance Services (APLDS) who have not negotiated a settlement agreement with a particular independent telephone company, to flow through to the APLDS the settlement costs associated with calls between the APLDS and the independent that make use of Bell facilities.

WHEREAS Bell proposed to pass through to the appropriate APLDS a charge equal to 125% of the per-minute settlement charge specified in Bell's agreements with the Ontario Telephone Association (OTA) and the Association des compagnies de téléphone du Québec (ACTQ) for each call processed on behalf of an APLDS;

WHEREAS Bell submitted that the additional 25% will compensate the company for the collection and bad debt expenses incurred as a result of the flow-through process;

WHEREAS, in addition, Bell proposed to apply the charge associated with Flow Through Billing specified in CRTC 7396, Special Facilities Tariff, Item G-220(a)(1) to each bill it issues to each APLDS;

WHEREAS comments were received from the OTA by letter dated 17 March 1995 and from ACC Long Distance Ltd. (ACC) by letter dated 21 March 1995;

WHEREAS Bell replied by letter dated 4 April 1995;

WHEREAS ACC noted that the settlement amount referred to by Bell is the OTA and ACTQ Carrier Access Tariff (CAT) rate which includes components for contribution and for switching and aggregation;

WHEREAS ACC submitted, among other things, that Bell's proposed tariff revisions would result in ACC being charged not only Bell's CAT charges but also the OTA or ACTQ CAT charges;

WHEREAS Bell noted that the only way an APLDS may terminate traffic in the territories of the independents using Bell's interconnecting facilities is through trunk-side access arrangements at the company's access tandem switches;

WHEREAS Bell noted that such trunk-side connections would be subject to the company's contribution and switching and aggregation tariffs and submitted that the applicability of these charges to APLDS traffic terminating in an independent's territory is entirely appropriate, since such traffic is routed through the company's switching and trunking facilities;

WHEREAS Bell stated that since the facilities of two separate carriers, with two separate networks and associated cost structures, are being employed in terminating the APLDS' traffic, it is appropriate that costs incurred by both parties be recovered;

WHEREAS Bell expressed the view that it is also appropriate that both Bell's and the independents' contribution charges be imposed;

WHEREAS the Commission considers it appropriate that both Bell's and the independents' CAT charges, other than contribution charges, be applied to the traffic in question given that these charges are for the use of facilities/services and that both Bell's and the independents' facilities/services are involved in completing these calls;

WHEREAS the Commission considers, however, that applying both Bell's and the independents' contribution charges to this traffic would not be appropriate and that ideally only the independents' contribution charges should be collected from APLDS under any flow-through arrangements;

WHEREAS, given that Bell's contribution charges are applied to APLDS on a per-trunk basis, rather than on a per-minute basis, and given that these trunks are used by the APLDS to originate and terminate traffic in all areas served by Bell's switch, not just in the territories of independents, the only way to prevent collecting both Bell's and the independents' contribution is for Bell to continue to charge its per-trunk charges but to collect from the APLDS, under any flow-through arrangement, only the difference between the independent's per-minute CAT and the Bell per-minute contribution on which Bell's APLDS per-trunk charges are based;

WHEREAS ACC argued that even if a charge to an APLDS could be considered reasonable in the case of these calls, the charge should not include the 25% premium proposed by Bell;

WHEREAS ACC was of the view that the 25% premium was arbitrary and unreasonable;

WHEREAS Bell contended that the 25% premium is a reasonable amount to allow for bad debt as the result of potential default of one or more APLDS;

WHEREAS the Commission considers that the 25% premium has not been adequately justified;

WHEREAS OTA submitted, among other things, that it may be premature to address the issue of a contribution pass-through arrangement due to the fact that the issues of contribution and Carrier Access Tariffs are expected to be addressed in other ongoing Commission proceedings;

WHEREAS Bell submitted that any review of related issues should not delay approval of Tariff Notice 5440, stating that until such time as Tariff Notice 5440 is approved, the company is paying settlement charges on behalf of APLDS without being compensated;

WHEREAS Bell argued that this situation is unfair and needs to be addressed;

WHEREAS the Commission considers that disposition of Tariff Notice 5440 should not await the outcome of any current or future proceedings; and

WHEREAS, in that regard, the Commission considers that an appropriately structured pass-through arrangement is consistent with the current independent CAT regime and that, in the event that a new regime results from future decisions, any necessary changes to the flow-through arrangements could be made at that time -

IT IS HEREBY ORDERED THAT:

1. Tariff Notice 5440 is denied.

2. The Commission would be prepared to approve a flow-through arrangement modified to exclude the 25% premium and to provide, in addition to the collection of Bell's CAT charges, for the flowing through to the APLDS of the difference between the independent CAT charges and the Bell per-minute contribution charge on which Bell's APLDS per-trunk charges are based.

Allan J. Darling
Secretary General