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ARCHIVED -  Telecom Order CRTC 96-1003

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Telecom Order

Ottawa, 6 September 1996
Telecom Order CRTC 96-1003
IN THE MATTER OF an application by ACC TelEntreprises Ltd. (ACC) dated 8 March 1996, for an exemption from contribution charges for services it provides to Internet Canada Corp. (Internet Canada).
Reference: 96-2051
WHEREAS ACC submitted that since the services involved are dedicated, an exemption is warranted;
WHEREAS ACC provided an affidavit from Internet Canada stating that the services are used for data and are configured as dedicated interexchange private lines;
WHEREAS by fax dated 15 March 1996, ACC provided an improved circuit schematic;
WHEREAS by letter dated 17 April 1996, Stentor Resource Centre Inc. (Stentor) responded on behalf of AGT Limited (AGT), BC TEL, Bell Canada (Bell) and MTS NetCom Inc. (MTS) (collectively, the companies), since the application included sites in their territories;
WHEREAS Stentor submitted that Internet Canada is a reseller, the services in question are not dedicated to the use of a single end user, and therefore, an exemption for dedicated services is not appropriate;
WHEREAS Stentor noted that in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2), the Commission indicated that where a competitor provides both switched voice and data, an exemption for data-only circuits will be granted provided that the competitor can satisfy the Commission that the voice and data traffic are carried on different networks;
WHEREAS Stentor submitted that in the present case, suitable evidence would consist of: (a) an affidavit by Internet Canada affirming that it is a data-only service provider, that it does not offer voice services, and that the services which are the subject of the application are used only to provide data services, and (b) a suitable proof, in the form of carrier verification or a technical audit, that the services provided by ACC to Internet Canada comprise a separate network solely for data use, or solely for Internet Canada's use;
WHEREAS Stentor stated that with respect to the facilities in Manitoba, MTS has verified that the facilities are dedicated to the use of Internet Canada;
WHEREAS Stentor stated that the companies for the other locations (Alberta, British Columbia, Quebec and Ontario) were unable to provide carrier verification that the services are configured for the exclusive use of Internet Canada;
WHEREAS Stentor noted that Internet Canada indicated in its affidavit that the services in question were installed on 31 July 1995 and that the application for an exemption was not submitted until 8 March 1996;
WHEREAS consistent with Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995, Stentor submitted that the earliest effective date for an exemption should be the date of application;
WHEREAS Stentor submitted that it would be appropriate for the Commission to grant interim approval, effective the date of application, subject to the provision, within a reasonable time period, of a new affidavit by Internet Canada and a technical audit report and affidavit by ACC for the locations identified above;
WHEREAS by letter dated 6 May 1996, ACC agreed to provide, in the very near future, a revised affidavit from Internet Canada which would confirm that it is a data-only service provider that does not offer voice services and that the services for which contribution exemptions are being requested are used only to provide data services;
WHEREAS ACC maintained that its configuration is identical in Manitoba, Alberta, British Columbia, Quebec and Ontario;
WHEREAS ACC submitted that since MTS was able to verify that the configuration is dedicated to Internet Canada, then the other carriers are also able to provide carrier verification that the services are configured for the exclusive use of Internet Canada;
WHEREAS ACC stated that in its network configuration, the Centrex lines are attached to modems;
WHEREAS ACC stated that as a result it is impossible to use the configuration for voice traffic;
WHEREAS ACC stated that any changes to the Centrex configuration, in order to facilitate voice capability, require that ACC send a service order to the carriers;
WHEREAS by letter dated 28 May 1996, Stentor stated that while the submissions of comment and reply would normally complete the record of this proceeding, it considered that, in light of certain statements made by ACC in its reply, and in light of a recent change in the corporate relationship between ACC and Internet Canada, a further response was necessary to correct and to clarify the record;
WHEREAS Stentor noted that contrary to ACC's view, the configurations are not identical;
WHEREAS Stentor stated that in Winnipeg, the services provided by MTS terminate on premises used by Internet Canada and are cross-connected to ACC Megastream Terminating Equipment at a MTS central office;
WHEREAS Stentor stated that MTS controls this service arrangement and, on that basis, has verified the configuration;
WHEREAS Stentor considered that, since the service configuration in Winnipeg has been verified, a prima facie case has been made by ACC for an exemption from contribution charges;
WHEREAS Stentor stated that in contrast, in AGT, BC TEL and Bell operating territories, the local services provided by the companies terminate at ACC premises, where other resale businesses are also carried on;
WHEREAS Stentor stated that in these locations, the service configuration and routing of traffic are controlled by ACC, and not by the companies;
WHEREAS Stentor noted ACC's statement that no interexchange channels are involved in the configuration;
WHEREAS Stentor stated its understanding, based on the description provided by Internet Canada and as confirmed for Manitoba by MTS, that interexchange services are used to link each location to a central site at which Internet Canada currently provides services to its customers;
WHEREAS Stentor submitted that ACC's statement appears to contradict its own evidence;
WHEREAS Stentor noted that in a press release from ACC dated 14 May 1996, ACC announced that it had purchased Internet Canada;
WHEREAS Stentor stated that the press release indicates that the purchase includes the acquisition of the existing Internet Canada customer base, its technology platform and its human resources;
WHEREAS Stentor stated that the press release also indicates that ACC has been working jointly with Internet Canada for over a year, and that Internet Canada's professional staff and technology platform will now be fully integrated with ACC's customer service and marketing operations;
WHEREAS in light of this development, Stentor submitted that since ACC, as a reseller of voice long distance services is now in control of the entire Internet Canada operation, the need for a technical audit for those locations where the companies cannot provide carrier verification becomes even more critical;
WHEREAS the Commission considers that the issues raised by this application are similar to those raised in the application by Bell Advanced Communications Inc. (BAC), a subsidiary of Bell, for exemption from contribution charges for dedicated cross-border data circuits provided by Bell and BC TEL;
WHEREAS BAC's application resulted in Telecom Order CRTC 96-64 dated 23 January 1996 (Order 96-64), wherein the Commission found that an affidavit (affirming that the circuits in question are used to provide data-only services and that it does not provide voice services to its customers) met its evidentiary requirements;
WHEREAS the Commission considers that the evidence found to be appropriate for BAC in Order 96-94 is also appropriate for this application;
WHEREAS the Commission notes that in this case, ACC filed with its application an affidavit from Internet Canada;
WHEREAS the Commission considers that Internet Canada properly should have filed the application but that in the circumstances it is appropriate to treat ACC's application as that of Internet Canada; and
WHEREAS the Commission considers that if Internet Canada is amalgamated with ACC, a technical audit would be required to verify the usage and separation of voice and data traffic by ACC at sites which cannot be verified by the relevant carrier -
IT IS HEREBY ORDERED THAT:
1. Contribution exemption is approved for the configuration in AGT, BC TEL and Bell territories effective the date of application (8 March 1996), subject to the receipt within 30 days of this Order, consistent with ACC's undertaking, of a revised affidavit from Internet Canada which confirms that it is a data-only service provider that does not offer voice services and that the services for which contribution exemptions are being requested are used only to provide data services.
2. Contribution exemption is approved for the configuration in Winnipeg based on MTS verification, effective the date of application.
3. If Internet Canada and ACC amalgamate, a technical audit in AGT, BC TEL and Bell territories would, in that event, be required within 60 days of the amalgamation to verify the usage and separation of voice and data traffic, or that equipment is attached to preclude voice usage.
Allan J. Darling
Secretary General

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