ARCHIVED -  Telecom Order CRTC 97-1556

Telecom Order

Ottawa, 23 October 1997

Telecom Order CRTC 97-1556

By letter dated 31 July 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) filed an application pursuant to sections 24, 25, 27 and 32 of the Telecommunications Act and Part VII of the CRTC Telecommunications Rules of Procedure. AT&T Canada LDS sought orders from the Commission with respect to a billing dispute between AT&T Canada LDS and Bell Canada (Bell) concerning the charging of contribution on a number of local circuits that AT&T Canada LDS had ordered on behalf of its customers.

File No.: 8622-A4-01/97

1. AT&T Canada LDS stated that it offers one-stop network design and management services to its larger customers and that the ability to offer such services was critical to the company's ability to compete in the business market. AT&T Canada LDS further stated that network designs often involve the supply of telecommunications facilities from multiple suppliers including both AT&T Canada LDS and the local telephone company.

2. AT&T Canada LDS stated that an increasingly common request by customers with critical applications is for back-up dial facilities. AT&T Canada LDS stated that these facilities are local business lines and/or Integrated Services Digital Network (ISDN) lines from the customer's premises to the Public Switched Telephone Network (PSTN). AT&T Canada LDS stated that to meet this demand, on behalf of its customers, it has been ordering local accesses from Bell but that Bell is taking the position that such circuits are contribution bearing and is billing AT&T Canada LDS contribution for these circuits notwithstanding the fact that the circuits in question are not interconnecting circuits since they do not terminate on the facilities of a reseller or interexchange carrier (IXC).

3. AT&T Canada LDS stated that furthermore, Bell has informed AT&T Canada LDS that Bell has decided to levy contribution on the local circuits in question on a per-circuit basis, rather than on a per-minute basis, notwithstanding the fact that it has the capability to bill such circuits on a per-minute basis. AT&T Canada LDS submitted that it appears that Bell has decided to implement a policy of improperly picking and choosing the method by which it bills contribution, presumably to optimize the amount collected.

4. AT&T Canada LDS stated that it has had a number of meetings with Bell regarding the circuits in question without any resolution of the dispute. AT&T Canada LDS stated that furthermore, it wrote to Bell on 11 July 1997 stating: (1) the circuits were ordered on behalf of the customer who is not a registered reseller; (2) the circuits terminate on the end-user's premises; (3) the circuits are used solely by the customer; and (4) the circuits are not used to originate or terminate other interexchange carrier traffic. AT&T Canada LDS stated that it even offered to provide attestations to Bell from the customer on whose behalf the circuit was ordered. AT&T Canada LDS stated that Bell refused to accept such evidence.

5. AT&T Canada LDS submitted that in retrospect, its offer to provide Bell with attestations to resolve this dispute went far beyond what should be necessary in this situation. AT&T Canada LDS submitted that end-customers should not have to sign affidavits when acquiring resold local services. AT&T Canada LDS argued that it is clearly anti-competitive for Bell to be able to sell local services to end-customers without attestations, but to require attestations from the end-customer of a competitor reselling local access. AT&T Canada LDS submitted that such a result unfairly places roadblocks in the way of local resale and is therefore contrary to the principles espoused by the Commission with respect to the development of local competition in Canada.

6. AT&T Canada LDS noted that Bell's tariffs define interconnecting circuit as follows: "Interconnecting Circuit means a circuit or path that connects an IXC's facility to a facility of the Company to provide access to the Company's public switched telephone network (PSTN). An interconnecting circuit may connect: (1) an IXC's facility to a Company central office to which customer lines are directly connected (end office); or...(4) an IXC's facility to a Company central office to which end offices are directly connected in order to originate or terminate toll traffic (toll office)."

7. AT&T Canada LDS submitted that based on the above-noted definition of an "interconnecting circuit", local circuits provisioned from an end-customer premises (where the end-customer is not a reseller/IXC) to a telephone company end-office are not interconnecting circuits for contribution purposes because the circuits do not interconnect with an IXC or reseller facility. AT&T Canada LDS submitted that therefore, Bell should not be charging contribution on these facilities and that such charging was a violation of Bell's tariffs. Furthermore, AT&T Canada LDS submitted that it need not invoke the contribution exemption process because the circuits do not connect to IXC or reseller facilities and are therefore not interconnecting circuits as defined.

8. AT&T Canada LDS understood that when it orders up local service on behalf of an end-customer, Bell may not be aware of whether or not the circuit is terminating on IXC facilities or end-customer facilities. AT&T Canada LDS stated that therefore, it had proposed a process to demonstrate to Bell that the lines in question have been ordered on the end-customers' behalf, that the circuits do not terminate on IXC or reseller facilities, and that the circuits are used solely by the end-customer. AT&T Canada LDS stated that Bell has refused to co-operate.

9. AT&T Canada LDS stated that in another application filed by AT&T Canada LDS on 11 July 1997 regarding local resale contribution exemptions, Bell had demanded that AT&T Canada LDS prepare an affidavit attesting to the fact that there are no interexchange private lines connected either directly or indirectly to the resold local facilities (Centrex systems) in question. AT&T Canada LDS stated that in the present circumstances involving simple resale of local PSTN accesses to an end-customer, AT&T Canada LDS could not be expected to have knowledge of the entire end-customer's network, nor should the existence of IX private lines or tie trunks from an end-customer PBX to other end-customer sites be a barrier to that end-customer obtaining resold local PSTN connections.

10. AT&T Canada LDS submitted that to provide services such as single bill, network engineering and network management, it must be able to obtain and rebill local PSTN accesses on behalf of end-customers. AT&T Canada LDS submitted that such end-customers must not be disqualified from obtaining such services from it where, for instance, their networks have other IX facilities, while being able to obtain the required services from Bell without the need for an affidavit of any sort.

11. AT&T Canada LDS also submitted that Bell is clearly aware of the locations of the local circuits in question (i.e., where they terminate) and the fact they do not correspond to the locations of AT&T Canada LDS' points of presence used to terminate AT&T Canada LDS' line-side circuit groups. AT&T Canada LDS further submitted that the number of circuits per location is small compared to the very large trunk groups generally employed by AT&T Canada LDS to terminate long distance traffic via line-side access.

12. AT&T Canada LDS submitted that in the proceeding leading to Per-Minute Contribution Mechanism for Line-Side Connections, Telecom Decision CRTC 96-12, 12 December 1996 (Decision 96-12), the telephone companies stated that the vast majority of their switches were capable of measuring per-minute line-side contribution.

13. AT&T Canada LDS submitted that given this, even if contribution were payable on the subject circuits, it is entirely inappropriate for Bell to pick and choose the method of billing line-side contribution where line-side per-minute capability exists. AT&T Canada LDS stated that this is contrary to Decision 96-12, wherein the Commission directed the telephone companies to implement the line-side per-minute contribution mechanism on 1 July 1997.

14. In light of the aforementioned issues, AT&T Canada LDS sought from the Commission: (1) an order requiring Bell to cease billing contribution on the end-customer local circuits ordered by AT&T Canada LDS on behalf of end-customers where such circuits do not terminate on IXC or reseller facilities, and reverse any contribution charges already applied to these circuits; (2) an order requiring Bell to negotiate a process with AT&T Canada LDS, within 30 days of a Commission order, for avoiding future disputes of this nature; (3) specific direction as to the nature of the attestation required to support a contribution exemption if the Commission considers that a contribution exemption application is required where local circuits are ordered on behalf of an end-customer; (4) a determination that sufficient special circumstances exist that a retroactive exemption be available from the date of the installation of the local circuits, rather than the date of the filing of the actual attestations in the format to be determined by the Commission; and (5) an order from the Commission ordering Bell, where contribution is applicable, to apply per-minute billing of contribution from all equal access capable end-offices without resort to per-circuit billing of contribution on a selective basis.

15. With respect to items 1) and 3) above, in a letter dated 29 August 1997, Bell submitted that in a recent application from AT&T Canada LDS dated 23 June 1997, AT&T Canada LDS had requested a contribution exemption for another local resale arrangement involving Centrex services. Bell further submitted that the type of exemption required in that application was analogous to the present case in that both situations involved the resale of local business exchange services.

16. Bell also stated that when AT&T Canada LDS orders local services on behalf of its customers, Bell is not aware of whether or not a local circuit may terminate on AT&T Canada LDS' interexchange facilities. Accordingly, Bell maintained that some form of evidence is required from AT&T Canada LDS to confirm that the configuration is not connected to AT&T Canada LDS' network and is resold to provide local service.

17. Bell stated that in its previous contribution exemption application related to Centrex services, AT&T Canada LDS expressed the view that 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 end-customers". Bell, in its response, dated 30 July 1997, agreed with this proposal. Bell stated that in light of the similarity of these two applications, Bell submitted that the same evidentiary requirements are appropriate in the present case.

18. Bell noted that this requirement would also be consistent with the case of Optel Communications Corporation (Optel) (Telecom Order CRTC 97-139, 30 January 1997).

19. Bell noted that it is not proposing a process that would involve the requirement for AT&T Canada LDS to submit multiple affidavits associated with the same contribution exempt service configuration. Bell submitted that, as long as the type of service configuration remains unchanged, it should generally be appropriate to support this class of exemption with a single affidavit affirming that the lines are not connected to an AT&T Canada LDS switch and that AT&T Canada LDS resells the services to provide local services to its customers. 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 and overwhelming for the reseller, the Commission and Bell.

20. Bell submitted that, similar to the case of Optel and Bell's position with respect to local Centrex services resold by AT&T Canada LDS, the single AT&T Canada LDS affidavit should affirm that the local services are not connected to its switches and that the services are resold to its customers as local services.

21. With respect to the effective date of a contribution exemption (item 4) above), Bell noted that in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995, the Commission determined that, absent special circumstances, contribution exemptions will generally be granted effective the later of the date of application or the date of installation. Bell was not aware of any special circumstances in this case, and therefore concludes that this general principle should apply.

22. With respect to item 2) above, Bell noted that when additional services are required, it currently employs a process with other carriers and resellers to monitor continued compliance with the requirements for a contribution exemption. Bell stated that this procedure avoids the need for further affidavits from the reseller, carrier or end-customer and for further submissions to the Commission. Bell stated that in such cases, where an exemption has been granted and where there is a requirement to add new services utilizing the same configuration approved by the Commission as exempt, the reseller or carrier provides an attestation to Bell when an order is submitted attesting that the services are configured in the same way and are eligible for exemption under the Telecom Order which approved the original exemption.

23. Bell stated that this procedure has been used by it for several years and has generally been found to negate the requirement for disputes in such cases. Bell stated that at the same time, the procedure is administratively simple in that a standard attestation form has been developed for submission with an order for new service, thus ensuring that such orders are processed without delay. Bell submitted that this process is also reasonable in this case in that it provides Bell with appropriate evidence with respect to the continued applicability of the exemption, while also satisfying AT&T Canada LDS' stated objective to avoid further disputes regarding billing contribution for similar service configurations. Bell also noted that should there ever be a reason to dispute the attestation, it continues to have the option to seek recourse through the Commission.

24. With respect to item 5) above, Bell noted that line-side contribution is applied to most circuits, such as Digital Exchange Access, MegaLink and Centrex services on a per-minute basis. However, a few services, such as certain MicroLink services ordered by AT&T Canada LDS, if resold in a manner which attracts contribution charges, would be assessed contribution on a per-circuit basis. However, Bell noted that should the Commission grant an exemption to AT&T Canada LDS in this case, the issue of how contribution is assessed becomes moot.

25. 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.

26. In its reply dated 8 September 1997, AT&T Canada LDS generally repeated its earlier submissions and specifically disagreed with Bell that there was an analogy between the current application and AT&T Canada LDS' Centrex application.

27. The Commission is of the view that there are three issues.

28. The first issue is whether there is a requirement for an application in this case and if so, what evidence is required.

29. The Commission notes that Bell did not disagree with AT&T Canada LDS' argument that in this case, local circuits provisioned from an end-customer premises, where the end-customer is not a reseller/IXC, to a telephone company end-office are not interconnecting circuits as defined in Bell's tariffs. The Commission agrees with AT&T Canada LDS that these circuits do not fit any of the definitions of an interconnecting circuit. Given this, no contribution exemption order is required from the Commission.

30. The Commission notes that notwithstanding the above: (1) both companies agreed that some form of evidence is required from AT&T Canada LDS to confirm that the configuration is not connected to AT&T Canada LDS' network; and (2) AT&T Canada LDS agreed (a) to provide an affidavit which affirms that the local services listed in an attachment to an affidavit are not connected to its switches and that the services are resold to its customers as local service and (b) with the suggested process for filing subsequent attestations with the telephone companies when additional local accesses are resold to its end-customers. AT&T Canada LDS' affidavit proposal seems reasonable to the Commission.

31. Accordingly, AT&T Canada LDS is directed to (a) provide an affidavit to Bell which affirms that the local services listed in an attachment to an affidavit are not connected to its switches and that the services are resold to its customers as local service and (b) commence the process for filing subsequent attestations with the telephone companies when additional local accesses are resold to its end-customers.

32. The second issue is whether Bell should be billing for the circuits in question. Since the circuits in question are not interconnecting circuits, the Commission is of the view that contribution is not applicable. Accordingly, Bell should not be billing for the circuits in question, and is directed to issue credits forthwith for amounts already billed.

33. The third issue is whether Bell is using the proper mechanism to bill contribution. The Commission notes that this issue is moot with respect to the circumstances of the present proceeding given the finding that no contribution is payable, and that a contribution exemption application is not required. However, the Commission wishes to remind Bell that to the extent that contribution is payable in a particular situation, such contribution should be billed in accordance with the company's tariffs.

Laura M. Talbot-Allan
Secretary General

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