ARCHIVED -  Telecom Order CRTC 97-1555

Telecom Order

Ottawa, 23 October 1997

Telecom Order CRTC 97-1555

By letters dated 23 June and 11 July 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) applied for an exemption from contribution for Centrex Public Switched Telephone Network (PSTN) connections to be used for local PSTN access by end-users obtaining re-sold Centrex locals from AT&T Canada LDS. In its 11 July 1997 submission, AT&T Canada LDS stated that it had mistakenly claimed confidentiality with respect to the entire application, filed under cover of its 23 June letter submission and clarified that it wished to claim confidentiality with respect to Attachment 2 only, with a copy to Bell Canada (Bell) only. AT&T Canada LDS stated that it did not provide an abridged version of Attachment 2 because it would be meaningless.

File No.: 8626-A4-01/97

1. AT&T Canada LDS stated that it is contemplating a local Centrex resale opportunity in Bell's serving territory, referring to Resale to Provide Primary Exchange Voice Services, Telecom Decision CRTC 87-1, 12 February 1987. AT&T Canada LDS stated that under the proposed scenario, it would buy Centrex locals from Bell, and arrange to have the Centrex locals physically provisioned at various sites throughout a particular Centrex serving area corresponding to the location(s) of AT&T Canada LDS' customers (end-user customers). AT&T Canada LDS stated that the end-user customers would utilize the Centrex locals as a substitute for business local lines.

2. AT&T Canada LDS stated that the Centrex PSTN connections for which a contribution exemption is being sought will be used strictly for local PSTN traffic of the end-user's customers. AT&T Canada LDS stated that it has attached information which clearly identifies the configuration for which it seeks a contribution exemption, including the name of the wire centre and the CLLI [common language location identifier] code. AT&T Canada LDS stated that it has also indicated the estimated date on which the PSTN connections will be in use.

3. AT&T Canada LDS submitted that consistent with Telecom Order CRTC 95-757, 6 July 1995 (Order 95-757), the proposed Centrex PSTN connections that are the subject of this application should be eligible for a contribution exemption, subject only to Bell verification that the connections do in fact handle only local calling.

4. By letter dated 15 July 1997, Bell submitted that when line-side Centrex access circuits are resold as a local service, there is a requirement to seek contribution exemptions from the Commission pursuant to its General Tariff Item 24.1.

5. Bell noted that with respect to the appropriate evidentiary requirement for such exemptions, the Commission has prescribed such requirements pursuant to Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2). Bell submitted that in Decision 93-2, the Commission reviewed a similar configuration and concluded that applications for exemptions for this configuration are to be supported by an affidavit by the applicant attesting to the fact that there are no interexchange private lines connected to the switch.

6. In response to AT&T Canada LDS' comments regarding Order 95-757, Bell noted that the configuration at issue in the proceeding associated with Order 95-757 involved single-hop and multiple-hop Centrex resale, whereby multiple Virtual Facilities Groups (VFGs) are required to distinguish between those local calls which originate and terminate within a single Extended Area Service (EAS) area from those calls which bridge more than one EAS area. Bell submitted that the second arrangement attracts contribution charges. Bell stated that in such cases, Bell controls the routing of local PSTN calls entering the Centrex network configuration and can verify if they are routed on a single-hop or multiple-hop basis.

7. Bell submitted that this Centrex configuration is quite different from the one described by AT&T Canada LDS in its application. Bell stated that based on its understanding of the service description provided by AT&T Canada LDS, the configuration will typically involve the termination of local circuits (i.e., Centrex locals or trunks) on the premises of business customers to connect with PBXs, other Centrex systems or key systems. Bell submitted that it cannot be expected to be aware of where the end-customer traffic originates in light of the nature and size of the business telephone systems through which the calls are switched before accessing the Centrex system. Accordingly, Bell submitted that it cannot affirm, with any reasonable degree of assurance, that the systems handle only local calling. Further, Bell submitted that it would not be appropriate, in this case, for it to be expected to do so.

8. Bell submitted that the process prescribed in Decision 93-2 had been employed by other resellers of local service, where the local exchange service being resold utilizes Centrex service (Telecom Order CRTC 97-139, 30 January 1997 (Order 97-139) for Optel Communications Corporation (Optel)). Bell submitted that this same process is appropriate in this case, since it is consistent with that which applies to other resellers of local exchange service. Accordingly, Bell submitted that AT&T Canada LDS should be directed to file an affidavit with the Commission and Bell affirming that it uses the circuits to provide local exchange service only and that no local or interexchange private lines, whether provided by AT&T Canada LDS or any other carrier or reseller, are connected directly or indirectly to the resold Centrex systems.

9. By letter dated 25 July 1997, AT&T Canada LDS submitted that if the Commission adopts Bell's suggested evidentiary requirements, the prospect for local competition via resale will be severely compromised, and will likely result in significantly greater work for the Commission. AT&T Canada LDS raised four issues in this regard:

(i) AT&T Canada LDS stated that the business plan anticipates resale of local service at over 125 Centrex sites with more than 50,000 customer lines over the next two years. AT&T Canada LDS stated that it cannot possibly produce a single affidavit with the above wording suggested by Bell.

(ii) AT&T Canada LDS stated that with Bell's suggested affidavit requirements, local resale would have to involve lawyers in the drafting and review of end-customer affidavits in order for local Centrex service to be provided to end-customers without contribution. AT&T Canada LDS submitted that for reasons of competitive equity, it would be discriminatory for competitors to be obligated to provide such end-customer affidavits if, as is the case today, Bell did not similarly require such affidavits from its own direct Centrex customers.

(iii) AT&T Canada LDS submitted that Bell likely has numerous Centrex customers which terminate Centrex locals on PBXs, other Centrex switches and key systems and that many of these systems are in turn connected to other local or interexchange private line facilities. AT&T Canada LDS submitted that this configuration is common among customers that need to network their sites across the country (or even within a city). AT&T Canada LDS submitted that therefore, to the extent that Bell permits attachment of such equipment and facilities to Centrex local lines, Bell's proposed wording for an affidavit would limit the types of equipment AT&T Canada LDS' resale customers could attach to Centrex locals. AT&T Canada LDS submitted that this is clearly discriminatory because it limits AT&T Canada LDS' potential customer base.

(iv) AT&T Canada LDS submitted that Bell's concern that interexchange carriers could potentially terminate joint-use interexchange traffic via Centrex locals connected to Centrex systems were greatly exaggerated. AT&T Canada LDS submitted that such a configuration is not technically desirable from an Alternate Provider of Long Distance Services' (APLDS') perspective because of the resultant poor call quality.

10. AT&T Canada LDS submitted that Bell's submission is inaccurate with respect to the interpretation of past precedents. AT&T Canada LDS stated that in the Optel proceeding, the Commission indicated: "Whereas Bell noted that to satisfy the Commission's evidentiary requirements, a revised affidavit of the same form should be provided, correctly specifying Bell's services provided to Optel, and affirming that no local channels connect these services to a reseller switch, and no interexchange private lines are connected to the system." AT&T Canada LDS submitted, however, that the Commission rejected Bell's requested wording, and instead stated: "Whereas the Commission is of the view that an exemption could be granted subject to the provision of a revised affidavit specifying that the Business Line services in question are used by Optel solely to provide local services to its customers."

11. AT&T Canada LDS submitted that there is a considerable difference between the Commission's required wording with respect to Optel, and the affidavit wording suggested by Bell in response to AT&T Canada LDS' application. AT&T Canada LDS stated that Optel had not been asked to attest to the activities and actual uses of the local services by its end-user customers - nor have Optel's customers been limited with respect to the attachment of equipment and interexchange facilities. AT&T Canada LDS stated that rather, Optel was asked to attest to its use of the Business Line services in question.

12. AT&T Canada LDS submitted that should the Commission deem an affidavit necessary for an exemption in this instance, AT&T Canada LDS is willing to attest that Centrex services which are the subject of this exemption application are for use by AT&T Canada LDS solely to provide local services to its end-customers.

13. AT&T Canada LDS submitted that Bell can verify that AT&T Canada LDS is not attaching any tie trunks to the Centrex services in question for the purpose of originating or terminating joint-use interexchange traffic. AT&T Canada LDS stated that this is because Bell can, and does in fact, control the Centrex routing. AT&T Canada LDS submitted that the only thing Bell cannot verify is the subsequent attachment of other equipment and facilities to the Centrex locals on the customer side of the demarcation point located on the end-customer premises.

14. By letter dated 30 July 1997, Bell noted that it is not proposing a process that would involve the requirement to submit multiple affidavits associated with the same contribution exempt service configuration. Bell submitted that, as long as the type of network configuration remains unchanged, it should generally be appropriate to support this class of exemption with a single affidavit. Accordingly, Bell agreed with AT&T Canada LDS that the practice of requiring multiple end-customer affidavits in cases such as this one would impose a process that would be unreasonably onerous for the reseller, the Commission and Bell.

15. Bell submitted that AT&T Canada LDS' alternate approach set out in paragraph 13 above is more appropriate and also consistent with the case of Optel.

16. Bell submitted that AT&T Canada LDS should be required to provide an affidavit affirming to similar conditions with respect to the resold Centrex services. Bell also noted that, should the Commission agree that an affidavit is appropriate in this case, such affidavit cannot speak to events or circumstances which have not yet occurred. Accordingly, it should be filed after the first of the Centrex services has been installed. In light of the above, Bell agreed with the requested exemption, but submitted that AT&T Canada LDS should be required to provide a satisfactory affidavit affirming the conditions for exemption noted above.

17. The Commission notes that the parties reached a partial agreement on the evidentiary requirements in this case (the requirement of a single affidavit). The Commission agrees with AT&T Canada LDS' submission that (1) Bell can verify that AT&T Canada LDS is not attaching any tie trunks to the Centrex services in question for the purpose of originating or terminating joint-use interexchange traffic because Bell can, and does in fact, control the Centrex routing; and (2) the only thing Bell cannot verify is the subsequent attachment of other equipment and facilities to the Centrex locals on the customer side of the demarcation point located on the end-customer premises.

18. In the circumstances, the Commission considers that while there is some risk of leakage at customer sites, it is likely minimal. Given this, and because the workload for both the Commission and the parties required to process individual applications would be significant, the Commission considers that a single affidavit as proposed by both parties is appropriate.

19. Accordingly, based on the above:

(i) AT&T Canada LDS' application is approved effective the date of installation subject to it filing a single affidavit with Bell affirming that the Centrex services in question are for use by AT&T Canada LDS solely to provide local services to its end-customers.

(ii) AT&T Canada LDS must file its affidavit with Bell after the first of the Centrex services has been installed by Bell.

Laura M. Talbot-Allan
Secretary General

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