ARCHIVED -  Telecom Order CRTC 96-1057

Telecom Order

Ottawa, 25 September 1996

Telecom Order CRTC 96-1057

IN THE MATTER OF an application by Direct Dial Inc. (Direct Dial) dated 3 January 1996 (enclosing two affidavits dated 22 December 1995), for contribution exemption for Centrex systems used for both single-hop and double-hop services, and for circuits used for administrative traffic.

Reference: 96-2094

WHEREAS Bell Canada (Bell) filed letters on 9 February, 27 March, and 19 June 1996;

WHEREAS Direct Dial filed letters on 26 February, 1, 13 and 24 May, and 14 July 1996;

WHEREAS originally, Bell submitted that Direct Dial's application for administration circuits should be deferred pending clarification of the precise nature of the service configuration and the administrative use involved;

WHEREAS however, following a further submission by Direct Dial on 13 May 1996, Bell agreed that the evidentiary requirements have been satisfied and that the requested exemption should be granted effective December 1994;

WHEREAS the Commission is of the view that Direct Dial's application for exemption on circuits used for administrative traffic meets the Commission's evidentiary requirements;

WHEREAS Direct Dial was granted an exemption for circuits used to provide single-hop services in Telecom Order CRTC 94-1339 (Order 94-1339) and subsequently, double-hop services were added to these systems;

WHEREAS in its letter of 9 February 1996, Bell noted that for the Centrex systems of the eight exchanges identified, its records identify only seven;

WHEREAS Bell stated that of these, three are configured with only one virtual facilities group (VFG) and the remainder with two VFGs;

WHEREAS Bell stated that classification of calls, as exempt or subject to contribution, and routing of calls to each VFG are controlled by the applicant;

WHEREAS Bell also stated that it has no means of verifying that calls are not forwarded from the systems with one VFG to a second system to complete double-hop calls;

WHEREAS Bell submitted that a technical audit is therefore required to verify the accuracy of the call classification process and the routing of calls, and to clarify whether controls or procedures are in place to ensure the continued compliance of the configuration with the requirements for an exemption;

WHEREAS Direct Dial noted the approvals given in Order 94-1339 and stated its understanding that an exemption had already been granted to the circuits listed in its affidavit;

WHEREAS Bell responded by noting that while an exemption was granted for single-hop services, because the systems identified in the application are no longer used solely for single-hop services, a new exemption is required;

WHEREAS in its 1 May 1996 letter, Direct Dial maintained its view that an exemption had already been granted, but submitted that if the Commission concludes that its filing constitutes an application for contribution exemption, the requested effective date should be the same as in Order 94-1339;

WHEREAS in its letter of 19 June 1996, Bell stated that although a new application for exemption from contribution charges should have been submitted by Direct Dial in recognition of the changes in service configuration, no application was made;

WHEREAS Bell noted that it did not discuss this requirement with Direct Dial at the time, but that in any event, Direct Dial is responsible for submitting such applications;

WHEREAS Bell stated that it was remiss in not applying contribution charges immediately to all Public Switched Telephone Network (PSTN) connections of the reconfigured systems following the reconfiguration of Direct Dial's systems;

WHEREAS Bell stated that it identified this oversight in October 1995 and advised Direct Dial that a new application was required;

WHEREAS Bell stated that when no application was submitted after almost two months, despite repeated discussions with Direct Dial to reinforce the necessity to apply to the Commission, Bell initiated billing of contribution charges on the system in question;

WHEREAS Bell stated that it was only after it initiated billing of contribution charges that Direct Dial responded to the requirements to make an application, with the affidavits dated 22 December 1995 (submitted to the Commission on 3 January 1996);

WHEREAS the Commission notes there appears to be confusion on the number of Centrex systems which have single-hop and both single-hop and double-hop services and is of the view that Direct Dial should clarify the situation;

WHEREAS where single-hop and double-hop configurations have been installed on the same Centrex system, the Commission usually requires the applicant to provide technical audits to verify the usage and separation of the single-hop and double-hop services;

WHEREAS the Commission is of the view that additional evidence in the form of audits is required to verify the usage and separation of the single-hop and double-hop services;

WHEREAS with respect to the effective date of any exemption that is granted, the Commission notes that Bell, in its letter dated 19 June 1996, stated that: (a) although a new application for exemption from contribution charges should have been submitted by Direct Dial in recognition of the changes in service configuration, no application was made; (b) it did not discuss this requirement with Direct Dial at the time; (c) it was remiss in not applying contribution charges immediately to all PSTN connections of the reconfigured systems; (d) in October 1995, it identified this oversight and advised Direct Dial that a new application was required; and (e) when no application was submitted after almost two months, despite repeated discussions with Direct Dial to reinforce the necessity to apply to the Commission, it initiated billing of contribution charges on the system in question;

WHEREAS the Commission is of the view that, taking into account the foregoing factors, Direct Dial should not be penalized for the period between the addition of double-hop circuits and October 1995 since Bell did not immediately discuss the requirement for an exemption with Direct Dial and it was remiss in billing the new contribution;

WHEREAS the Commission is of the view that Direct Dial was also remiss in not applying immediately in October 1995 after Bell indicated to it that a new application was required;

WHEREAS Direct Dial should be responsible for contribution payment between October 1995 and 3 January 1996 (the date of its application); and

WHEREAS consistent with usual practice, the Commission is of the view that the effective date for exemption should be 3 January 1996 (compatible with the Commission's policy as set out in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993, and that the systems for which a technical audit is required be given interim approval pending receipt of the audits -

IT IS HEREBY ORDERED THAT:

1. Direct Dial is directed to:

(a) clarify the number of Direct Dial Centrex systems in service carrying customer traffic;

(b) determine which systems are configured as single-hop only and which are configured as single-hop and double-hop [provide a list summarizing items (a) and (b)]; and

(c) provide a technical audit to verify the usage and separation of simple-hop and double-hop services for each system configured as single-hop and double-hop. The audits should verify the accuracy of the switching data in the software tables, to determine the existence of, as well as the nature of, any controls in place to ensure the continued compliance of the configuration to the conditions on which the exemption is based. The auditor should provide a sworn affidavit affirming that the information provided in the report accurately reflects the results of the audit, and that the service configuration has been accurately described by the applicant.

2. The application for exemption from contribution on administrative circuits is approved effective December 1994.

3. The application for systems with both single-hop and double-hop circuits is granted interim approval effective 3 January 1996 (date of application) with final approval subject to receipt of the clarification noted in 1(a) above as well as of satisfactory technical audits.

4. Direct Dial is not responsible for contribution payment for systems with both single-hop and double-hop circuits between the date of installation of the double-hop circuits and October 1995; however, it is responsible for contribution payment for those systems between October 1995 and 3 January 1996.

5. The clarification and technical audits mentioned above are to be provided within 60 days.

Allan J. Darling
Secretary General