ARCHIVED -  Telecom Order CRTC 97-147

Telecom Order

Ottawa, 4 February 1997

Telecom Order CRTC 97-147

Reference: 96-2484

WHEREAS City Access stated that the Centrex systems have two groups of Public Switched Telephone Network (PSTN) connections controlled by its own computer, one with dial 9 access, and one with dial 8 access;

WHEREAS City Access stated that the PSTN connections with dial 9 access are used exclusively to call the local area, i.e. Newmarket, Aurora, Oak Ridges, Keswick, Queensville, Mount Albert and Bradford, and the PSTN connections with dial 8 access are used to double hop, through Oak Ridges, to Metro Toronto;

WHEREAS City Access stated that this configuration was installed on 1 October 1994;

WHEREAS City Access submitted that the dial 9 PSTNs should be contribution exempt and the dial 8 PSTNs should attract contribution;

WHEREAS City Access stated that the dial 9 PSTNs are already exempt as per a sworn affidavit submitted to the Commission on 5 September 1994;

WHEREAS City Access stated that the dial 8 PSTNs were installed on 1 October 1994 and are being billed to include contribution;

WHEREAS City Access inquired whether a new affidavit (affirming that the dial 9 PSTNs are not used for double-hop service) is required, or whether additional information is required;

WHEREAS City Access stated that its letter of 10 October 1996 is a duplicate of a letter written in October 1994, which was either never sent through an error on the company's part, or "was never responded to directly, although it may have been responded to as part of a larger concern";

WHEREAS City Access stated that, in either case, it requested a response;

WHEREAS in a letter dated 23 October 1996 Bell Canada (Bell) noted that the affidavit referenced by City Access, dated 6 September 1994, as well as a subsequent revised affidavit, dated 24 January 1995, were filed as part of the proceeding which resulted in Telecom Order CRTC 95-481, 20 April 1995 (Order 95-481);

WHEREAS City Access was granted a contribution exemption in Order 95-481 with respect to Centrex services provided in the Oak Ridges and Newmarket exchanges on the basis of the affidavits filed;

WHEREAS Bell noted that the filing of a valid affidavit is acceptable evidence to justify an exemption for systems used only for single-hop resale;

WHEREAS however, Bell also noted that the systems which were the subject of the previous application are no longer used solely to provide single-hop resale services, and therefore the configuration is no longer as described in the affidavits;

WHEREAS accordingly, Bell submitted that the previous evidence submitted to support the contribution exemption is no longer valid;

WHEREAS Bell stated that in support of similar applications by other resellers offering both single-hop and double-hop calling on a single Centrex system, the Commission has required that an independent technical audit be performed to verify that the configuration conforms to the requirements for a contribution exemption;

WHEREAS in this case, Bell submitted that since the service configuration has changed from a single-hop arrangement to one which provides for both single-hop and double-hop calling which is controlled via customer owned and maintained equipment, it is appropriate to require a technical audit to support the continued contribution exemption;

WHEREAS based on the above, Bell submitted that City Access should be directed to provide the necessary further evidence, in the form of a technical audit, to support the continuation of its contribution exemption under the new service configuration;

WHEREAS by letter dated 29 November 1996, Bell provided clarification by stating that it understood that the Centrex system in Newmarket is configured to provide both single-hop and double-hop services, as previously submitted;

WHEREAS however, Bell stated that City Access provides double-hop services in Oak Ridges using a Centrex system that is dedicated solely to that purpose, and that is separate from its Oak Ridges single-hop system, which was previously granted an exemption from contribution charges in Order 95-481;

WHEREAS Bell stated that the Oak Ridges system used for double-hop services is subject to contribution, and not eligible for an exemption;

WHEREAS based on this clarification, Bell submitted that new evidence, in the form of a technical audit, is required only for the Newmarket system, which provides both single-hop and double-hop services, and therefore no longer satisfies the conditions on which the original exemption was based;

WHEREAS Bell stated that it is satisfied that the existing exemption remains valid for the Oak Ridges single-hop system;

WHEREAS in accordance with its previous submission, therefore, Bell submitted that City Access should be directed to provide the necessary further evidence, in the form of a technical audit, to support the continuation of its contribution exemption for interconnecting circuits associated with the Newmarket system that are used solely to provide single-hop services;

WHEREAS the Commission is of the view that, based on the evidence, the existing exemption remains valid for the Oak Ridges single-hop system (based on carrier verification);

WHEREAS the Commission is of the view that, based on the evidence, a technical audit is required for the Newmarket system (which provides both single-hop and double-hop services);

WHEREAS the Commission notes that a long period has elapsed from the date of installation of the double-hop circuits and the date of application;

WHEREAS the Commission notes City Access' submission that "its letter of 10 October 1996 is a duplicate of a letter written in October 1994, which was either never sent through an error on the company's part, or was never responded to directly, although it may have been responded to as part of a larger concern";

WHEREAS the Commission considers that a similar situation arose with City Access' application for its Aurora Centrex system which eventually led to Telecom Order CRTC 96-942, 27 August 1996 (Order 96-942);

WHEREAS in Order 96-942, the Commission found that, among other things, City Access was a relatively inexperienced applicant and there was misdirection of City Access' correspondence to the Commission;

WHEREAS the Commission notes that although it has granted the requested exemption in Newmarket in these circumstances, effective the date of installation of the double-hop circuits forward, all parties seeking contribution exemption are expected to be familiar with, and follow the applicable rules as set out in Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992, Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993, Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 and the relevant portions of the Orders which have been issued to date regarding this subject -

IT IS HEREBY ORDERED THAT:

1. The existing exemption remains valid for the Oak Ridges single-hop system.

2. The existing exemption for the Newmarket single-hop system continues on an interim basis from the date of installation of the double-hop circuits forward with final approval subject to the receipt of a technical audit within 30 days of the date of this Order which verifies the usage and separation of the single-hop and double-hop services.

3. City Access is to demonstrate in its technical audit for the Newmarket system that appropriate controls and procedures have been implemented to ensure that the configuration described in the audit remains unchanged.

Allan J. Darling
Secretary General