ARCHIVED -  Telecom Order CRTC 97-1801

Telecom Order

Ottawa, 8 December 1997

Telecom Order CRTC 97-1801

By letter dated 3 September 1997, Call-Net Enterprises Inc. (Call-Net) submitted an application for contribution exemption in respect of Canada-U.S. cross-border private lines dedicated to end users. Call-Net provided a list of end users along with their affidavits affirming that the facilities are dedicated solely to their use.

File No.: 8626-C25-04/97

1. Call-Net requested that the application be approved effective the date that each affidavit was executed. Call-Net stated that it had held back submitting individual applications for these customers in anticipation of its request in the application filed on behalf of NETCOM Canada Inc. (NETCOM), dated 13 March 1997. Call-Net stated that in that application, it had asked the Commission for an umbrella exemption order for cross-border facilities dedicated to end users (who are not resellers). Call-Net stated that in Telecom Order CRTC 97-1173 dated 25 August 1997, the Commission granted Call-Net's application in respect of NETCOM but denied the request for an umbrella order. Consequently, Call-Net stated that it has to continue to file individual applications for every customer.

2. Call-Net noted that the Commission has stated in the past that applications for exemption will be granted effective the date of the affidavit. Moreover, Call-Net submitted that there are special circumstances in this case which justified approval for an effective date earlier than the date of this application. Call-Net stated that in addition, there is no prejudice to Bell Canada (Bell) or the contribution system as these circuits are clearly exempt from contribution.

3. The list of end users and dates of affidavits are as follows: (1) Enrich International Industries Ltd. (Enrich) 10 October 1996; (2) International Exchange Networks, Ltd. (iXnet)/RBC Dominion Securities 17 June 1997; (3) S&P Data [the actual day is missing] May 1997; (4) LCI International (LCI) 23 January 1997; and (5) Sony Music Canada (Sony) 21 January 1997.

4. By letter dated 19 September 1997, Bell noted that the affidavits submitted affirm that the services are provided solely for the customer's use. However, Bell noted that the affidavit from S&P Data does not include a date. Bell submitted that a revised affidavit should be filed to provide the date of the execution of this particular affidavit. Bell noted that with respect to the contribution exemption required by LCI and iXnet, the affidavits provided by these resellers appear to satisfy the requirement for a contribution exemption for LCI's internal administrative use and for the dedicated use of a single customer of iXnet.

5. Bell also noted that pursuant to Telecom Order CRTC 97-590 dated 1 May 1997 (Order 97-590), the Commission has ordered that effective 1 January 1998, circuits used to carry a carrier's or reseller's administrative traffic, will attract contribution charges if they are interconnected to a service provider's interexchange network. In light of Order 97-590, Bell submitted that, with the implementation of this Order, the circuits of LCI will attract contribution unless LCI provides further evidence to the Commission to demonstrate that an exemption is still appropriate.

6. In light of the confirmation from the customers and resellers of the dedicated use of the facilities and Sprint's apparent confirmation that the circuits are provisioned as dedicated facilities, Bell agreed with the requested exemptions for Sprint, LCI and iXnet, subject to the receipt of a revised affidavit from S&P Data providing the date on which the affidavit was executed.

7. By letter dated 14 October 1997, Call-Net requested that, based on Bell's comments, the Commission approve the application, subject to Call-Net filing a revised affidavit for S&P Data within 60 days of the Order.

8. The Commission is of the view that the affidavits provided by Call-Net, with the exception of the affidavit from S&P Data, meet the evidentiary requirements for contribution exemption.

9. The Commission disagrees with Call-Net's submission that its decision to hold back submitting individual applications for the five customers in anticipation of a favourable decision on its request for an umbrella exemption order constitutes special circumstances. The Commission considers that acceptance of Call-Net's submission would undermine the incentive for applicants to file contribution exemption applications on a timely basis as contemplated by Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 (PN 95-26).

10. The Commission is of the view that it was clearly open to Call-Net to have filed the applications with respect to Enrich, LCI and Sony prior to the NETCOM application. Equally, it was clearly open to Call-Net to have filed the applications with respect to iXnet and S&P Data prior to disposition of the umbrella exemption application but without prejudice to the relief sought in that application. Call-Net chose not to do so.

11. The Commission notes that three out of the five affidavits predate NETCOM's application dated 13 March 1997: (1) Enrich 10 October 1996; (2) LCI 23 January 1997; and (3) Sony 21 January 1997. Two of the affidavits were sworn after the date of the NETCOM application: (1) iXnet/RBC Dominion Securities 17 June 1997; and (2) S&P Data [actual day missing] May 1997.

12. Call-Net correctly noted that the Commission has in the past granted exemption from contribution effective the date of the affidavit. However, the Commission notes that these exemptions were granted only because there was not a significant difference between the date of affidavit and the date of application. In this proceeding, however, the Commission notes that there is a significant delay between the date of affidavit and the date of the application that is the subject of this proceeding with respect to three of the affidavits: (1) Enrich 10 October 1996; (2) LCI 23 January 1997; and (3) Sony 21 January 1997. While the delays are less on: (1) iXnet 17 June 1997; and (2) S&P Data [actual day missing] May 1997, the Commission nonetheless considers that the delays are sufficiently lengthy as not to justify special circumstances.

13. Accordingly, the Commission is of the view that the application should be approved effective the date of application for the following four companies: (1) Enrich, (2) S&P Data, (3) Sony, and (4) the single customer of iXnet.

14. The Commission notes that the circuits that are the subject of LCI's affidavit are for its internal administrative use. Pursuant to the Commission's usual practice for such circuits, as set out in PN 95-26, the Commission is of the view that this exemption should be effective the date of installation.

15. The Commission is of the view that S&P Data's exemption should be subject to the receipt of a revised affidavit providing the date on which the affidavit was executed. The Commission notes that Call-Net has requested 60 days from the date of the Order for the filing of a revised affidavit. The Commission is of the view that this period should be reduced to 30 days.

16. The Commission agrees with Bell's submission that, in light of Order 97-590, circuits used to carry LCI's administrative traffic will be subject to contribution charges effective 1 January 1998 if they are interconnected to its interexchange network, unless LCI provides further evidence to the Commission to demonstrate that an exemption continues to be appropriate.

17. Accordingly, based on the above:

(a) the application filed by Call-Net is approved, modified as follows:

(b) the effective dates are as follows: (1) the date of application (3 September 1997) for the circuits with respect to Enrich, S&P Data, Sony and the single customer of iXnet and (2) the date of installation for the circuits used for LCI's internal administrative use;

(c) the exemption with respect to S&P Data is subject to the receipt of a properly executed affidavit within 30 days of this Order.

Laura M. Talbot-Allan
Secretary General

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