ARCHIVED -  Telecom Order CRTC 97-207

Telecom Order

Ottawa, 19 February 1997

Telecom Order CRTC 97-207

IN THE MATTER OF various applications by Advanced Network, a reseller of Centrex III Service (Centrex), requesting exemptions from the contribution charges specified 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 (Decision 92-12).

Reference: 96-2139

WHEREAS in Telecom Order CRTC 96-329 dated 4 April 1996 (Order 96-329), the Commission granted interim approval for contribution exemption for Centrex systems at sites in Hamilton, Hagersville, Beamsville and Grimsby, and directed Advanced Network to conduct a technical audit of these sites;

WHEREAS by letter dated 14 June 1996, Advanced Network provided the technical audit and the auditor's affidavit affirming that the information provided in the report accurately reflects the results of the audit;

WHEREAS by letter dated 31 July 1996, Bell Canada (Bell) agreed that the auditor has verified the usage and separation of single-hop and double-hop traffic;

WHEREAS Bell also stated that the auditor has verified the accuracy of the Switching Data in the Software Tables;

WHEREAS Bell noted that the auditor has proposed to Advanced Network a mechanism that might be used to monitor and control the programming of routing tables on an ongoing basis;

WHEREAS Bell stated that it is reluctant to agree with this proposal since the widespread employment of such a compliance mechanism might be unreasonably burdensome for the company and further, it does not wish to be directly or indirectly responsible for continued compliance where it does not have control over the configuration;

WHEREAS Bell noted that some methods which have been employed by other resellers include the following: (1) written approval from an officer of the company is required to authorize a change in the programming of the software routing tables; such written approval is kept on file for future inspection; also, written documentation of internal compliance procedures is prepared and made available to employees responsible for monitoring compliance; (2) monthly internal reviews of the switch programming are conducted to ensure continued compliance; the resulting monthly verification report is prepared by a switch technician and signed off by an officer of the company; the reports would be kept on file for future inspection; also, written documentation of internal compliance procedures is prepared and made available to employees responsible for monitoring compliance; and (3) the implementation of the tracking and retention of call attempt archive files which capture records of call treatment; these files are retained for future inspection;

WHEREAS Bell submitted that a combination of these control procedures might also be appropriate;

WHEREAS Bell also submitted that, in cases where compliance is dependent upon accurate software programming, the option to conduct future random audits continues to be an appropriate mechanism to ensure future compliance;

WHEREAS Bell agreed with the requested exemption subject to the implementation of appropriate controls and procedures to ensure that the configuration remains unchanged or, when changes are required, to verify and record all future changes made, along with a substantiating report to the Commission;

WHEREAS Bell also noted that the auditor, at page 2 of his report, has also identified the existence of another similar configuration involving a call controller in St. Catharines which will be the subject of a future contribution exemption application and technical audit;

WHEREAS Bell stated that it is currently billing contribution for the St. Catharines system;

WHEREAS Advanced Network filed an affidavit dated 21 August 1996 which was received by Bell on 18 September 1996 to cover the single-hop circuits for the St. Catharines configuration which it took over from Niagara Telecomm Inc. (Niagara) on 25 January 1996;

WHEREAS by letter dated 18 September 1996, Advanced Network found Bell's suggestion as outlined in Item (2) above to be acceptable;

WHEREAS Advanced Network attached a description of the proposed procedure for the monthly reporting, sign-off and record retention;

WHEREAS by letter dated 15 October 1996, Bell noted the affidavit dated 21 August 1996 wherein Advanced Network affirms that with respect to a Centrex system in the St. Catharines exchange, it utilizes separate virtual facility groups controlled by a computer-driven call controller for single-hop and double-hop traffic;

WHEREAS Bell noted that in its affidavit, Advanced Network also requested that its contribution exemption be effective 25 January 1996, the date on which it assumed responsibility for the Centrex system from Niagara;

WHEREAS Bell noted that an auditor has already submitted a technical audit report dated 16 August 1996 and an addendum report dated 11 September 1996 with respect to the same St. Catharines Centrex system;

WHEREAS Bell stated that this audit was submitted in connection with a similar application for this same system that was made by Niagara for the period prior to 25 January 1996;

WHEREAS Bell stated that the audit was performed in July 1996 during the time since Advanced Network assumed control of the system;

WHEREAS in this regard, Bell submitted that the audit report should also apply with respect to this application;

WHEREAS Bell noted that the auditor has verified the usage and separation of single-hop and double-hop services based upon a review of the service configuration, observation of actual calls in progress and the placement of test calls to verify each route;

WHEREAS in this respect, Bell noted that all calls are routed through a centralized call controller which monitors the calls and assigns the appropriate route based on the end customer's preauthorized routing assignment and the system software configuration;

WHEREAS Bell stated that the auditor has also indicated that a review was conducted of the routing tables in the personal computer that controls the CPI-112 call controller, and that a sample inspection of customer data files was conducted;

WHEREAS Bell stated that as a result of this analysis, the auditor has confirmed that the appropriate type of Public Switched Telephone Network access is being assigned based upon the type of call being placed, and that the customers included in the sample of data files are correctly assigned to the appropriate routing arrangement;

WHEREAS in light of this, Bell agreed that the auditor's finding verifies the usage and separation of such traffic for the St. Catharines Centrex system;

WHEREAS Bell stated that with respect to the requirement in such cases for ongoing control procedures, the auditor has recommended to Niagara in its 18 September 1996 submission that it implement such a procedure;

WHEREAS Bell stated that the procedure recommended is consistent with its recommendations whereby a monthly configuration verification report is prepared by a switch technician and confirmed with final sign-off by an officer of the applicant;

WHEREAS Bell stated that this verification report would confirm that the configuration continues to comply with the conditions under which the contribution exemption is granted;

WHEREAS Bell stated that the report would be kept on file for future inspection or audit;

WHEREAS Bell stated that this procedure also includes internal documentation describing the control procedure and the rationale why Advanced Network must ensure compliance with the Commission's requirements on an ongoing basis;

WHEREAS based on the auditor's description, Bell submitted that the proposed procedure appears to satisfy the requirement to monitor on an ongoing basis that the system configuration continues to satisfy the requirement for a contribution exemption;

WHEREAS however, Bell noted that Advanced Network has not confirmed to the Commission that it intends to implement the proposed control procedure;

WHEREAS in this respect, Bell also submitted that in cases where ongoing compliance is dependent upon accurate software programming, as it is in this case, the option to conduct future random audits continues to be an appropriate mechanism to ensure future compliance;

WHEREAS in light of the above, Bell agreed that final approval of a contribution exemption for the Centrex system in the St. Catharines exchange appears to be warranted;

WHEREAS however, Bell submitted that, consistent with the Commission's practice to approve such exemptions effective the date of application, the exemption should be effective as of 18 September 1996, the date of Advanced Network's application;

WHEREAS Bell submitted that such approval should also be subject to written confirmation from Advanced Network that it has implemented the appropriate controls and procedures to ensure that the Centrex configuration remains unchanged for as long as an exemption is required;

WHEREAS the Commission is of the view that Advanced Network has provided a satisfactory audit for Hamilton, Hagersville, Beamsville and Grimsby which meets the Commission's evidentiary requirements as set out in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993, subject to a demonstration that appropriate controls have been implemented and are in place;

WHEREAS the Commission is of the view that final approval for the systems in these four communities can be granted effective the dates set out in Order 96-329;

WHEREAS consistent with Commission practice, the approvals (including that for St. Catharines, discussed below), would be subject to Advanced Network providing a report demonstrating that appropriate controls have been implemented, and the configurations are subject to future random audits to ensure future compliance;

WHEREAS in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995, the Commission stated that it "is of the view that, absent special circumstances, contribution exemptions should generally not be made effective back to the date that the circuits were first installed (if this is prior to the application date), in order to avoid the evidentiary problem of establishing historical facts. By way of example, the Commission notes that a technical audit is required with respect to many circuit configurations to ensure that an exemption is warranted. In the Commission's view, it is impossible in the majority of cases for an independent auditor to attest to the fact that a system has been configured in a satisfactory manner for a period of time prior to the carrying out of the audit. Accordingly, the Commission announces that, effective immediately, contribution exemptions will generally be granted the later of the date of the application or the date of installation, absent special circumstances" [Underlining added];

WHEREAS in this case, Bell maintained that the requested exemption for the St. Catharines system be effective as of the date of application (i.e., the date it received Advanced Network's affidavit, 18 September 1996);

WHEREAS however, this very system benefited from a previous exemption, granted in Telecom Order CRTC 96-1382, 28 November 1996 (Order 96-1382) and no evidence has been given that the configuration changed;

WHEREAS the Commission notes that in Order 96-1382, it noted that Niagara transferred its St. Catharines (905-685) Centrex configuration to Advanced Network on 25 January 1996;

WHEREAS the Commission notes that a technical audit to support this configuration was carried out while the auditor was retained by Niagara;

WHEREAS the Commission is of the view that this audit is satisfactory to support ongoing exemption previously granted in Order 96-1382 and notes that Bell also agrees;

WHEREAS the Commission considers that the "special circumstances" warranting an effective date of prior to the application date are present here; and

WHEREAS the Commission is of the view that an effective date of 25 January 1996 (the date of transfer of the configuration, contrary to Bell's submission) would be appropriate, since Bell and the Commission have been fully aware of the situation and the evidence is persuasive that the underlying configuration has not changed since that date -

IT IS HEREBY ORDERED THAT:

1. Final approval is granted for the sites granted interim approval in Order 96-329 (Hamilton, Hagersville, Beamsville and Grimsby), effective the dates set out in that Order.

2. Final approval is granted for the St. Catharines site effective 25 January 1996, the date of transfer of the configuration from Niagara.

3. The approvals noted above are subject to Advanced Network providing a report within 30 days of this Order that demonstrates that appropriate controls have been implemented and are in place.

4. The configurations are subject to future random audits to ensure future compliance.

Allan J. Darling
Secretary General