ARCHIVED -  Telecom Order CRTC 98-154

Telecom Order

Ottawa, 13 February 1998

Telecom Order CRTC 98-154

By letter dated 24 July 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) applied for an order confirming that: (i) the administrative circuits described in its attached attestation qualify for an exemption from contribution until 31 December 1997 based on the fact that these facilities are, and have always been, configured exclusively for administrative purposes; and (ii) AT&T Canada LDS is not liable for contribution on the administrative circuits, to be described, from the date such circuits were first put in service.

File No.: 8626-A4-02/97

1. AT&T Canada LDS noted that Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2) explicitly states that the Commission would grant contribution exemptions for those circuits which are used by Alternate Providers of Long Distance Service (APLDS) for administrative purposes: "Where interconnecting circuits are used solely for a competitor's own administrative traffic, no contribution charges are applicable. In general, applications for exemptions for administrative circuits will be granted where those circuits are separated from circuits carrying competitive traffic and where the Commission is satisfied in the circumstances that the number of such circuits is reasonable."

2. AT&T Canada LDS noted that it has been informing TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI) (the TELUS companies) of additions to its administrative circuits in accordance with the procedures set out in Decision 93-2. AT&T Canada LDS stated that it has been providing the TELUS companies with attestations that circuits for which AT&T Canada LDS was requesting an exemption from contribution were configured exclusively for administrative purposes. AT&T Canada LDS attached to the application an example of such an attestation.

3. AT&T Canada LDS stated that the TELUS companies, until very recently, had not billed AT&T Canada LDS for contribution on these circuits - many of which were installed prior to the availability of equal access in Alberta. AT&T Canada LDS stated that, however, the TELUS companies are now disputing the status of contribution on these circuits on the basis that they were not respondents to Decision 93-2 nor to Telecom Order CRTC 93-620 dated 30 July 1993 (Order 93-620) pursuant to which the Commission granted an exemption for AT&T Canada LDS' dedicated circuits leased from the telephone companies. AT&T Canada LDS stated that according to the TELUS companies, AT&T Canada LDS' exemption for dedicated circuits, including circuits leased from the telephone companies and dedicated for AT&T Canada LDS' own internal administrative use, granted in Order 93-620, is therefore invalid in the territories of the TELUS companies.

4. AT&T Canada LDS stated that it is therefore applying for a contribution exemption for administrative circuits in TCI and TCEI territory so as to confirm their exempt status. AT&T Canada LDS stated that it has filed the list of administrative circuits for which it seeks an exemption from contribution. AT&T Canada LDS stated that in addition, it has filed an affidavit attesting to the fact that the circuits in question are used solely for domestic administrative purposes.

5. AT&T Canada LDS also noted that the Commission further stated in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 (PN 95-26) that it will grant exemptions from contribution for administrative circuits retroactive to the date of installation of those circuits. AT&T Canada LDS submitted that since it is clear that the circuits in question have always been used for administrative purposes, it would be appropriate to grant exemptions to the attached circuits retroactive to their date of installation. AT&T Canada LDS also confirmed that it has the appropriate procedures in place to ensure the continued compliance of the configuration with the conditions for exemption.

6. By letter dated 25 August 1997, TCI, on behalf of the TELUS companies, submitted that it appears that AT&T Canada LDS has assumed that contribution exemption has been granted to the administrative circuits it leased from the TELUS companies in accordance with the Decision 93-2 directives.

7. TCI submitted that contrary to AT&T Canada LDS' assertion and characterization of the circumstances surrounding the contribution exemption status of the above-noted circuits, TCI's position has been that AT&T Canada LDS is required to apply to the Commission for contribution exemption in accordance with the directives in AGT Limited - Interconnection of Interexchange Carriers and Related Resale and Sharing Issues, Telecom Decision CRTC 93-17, 29 October 1993 (Decision 93-17). TCI submitted that while the framework and guidelines for granting contribution exemption were set out in Decision 93-2 and specific exemptions were granted to AT&T Canada LDS in Order 93-620, to which the TELUS companies were not a respondent, the Commission stated clearly at Item 8.(b) of Appendix 1 to Decision 93-17 that: "Where an interconnecting circuit associated with line side access, a Canada-U.S.A. circuit, an overseas access circuit is used to provide a data service or a dedicated service, the contribution charges specified in Item 7 shall not apply, provided that Unitel applies to the Commission on a case by case basis and provides evidence satisfactory to the Commission that by reasons of the technical, economic or operational characteristics of the service, it is unlikely that the connections will be used significantly for voice service. " [emphasis added]

8. TCI stated that in accordance with the Commission's directive in Decision 93-17, TCI has established an Interexchange Carrier Group, and has been working with AT&T Canada LDS on interconnection issues, including the requirement for AT&T Canada LDS to apply to the Commission for contribution exemption approval. TCI submitted that it has made a sincere effort, through the Interexchange Carrier Group activities, to accommodate AT&T Canada LDS regarding the issue of contribution exemption for its administrative circuits by not assessing contribution charges while awaiting AT&T Canada LDS' required application to the Commission. TCI further noted that PN 95-26 clearly stated that: ..."in the interests of certainty for all parties, the Commission considers that applications for contribution exemptions should be made in a timely fashion." TCI submitted that given that Decision 93-17 was issued in October of 1993, AT&T Canada LDS' 24 July 1997 application can hardly be considered timely.

9. TCI submitted that, as the number of circuits in question appear reasonable on the basis of a preliminary review, the application be granted interim approval, pending the TELUS companies' technical audit to verify the status of these circuits. TCI further submitted that no contribution charges have been assessed to date and TCI will notify the Commission and AT&T Canada LDS by the end of two weeks as to the results of the audit, and any resulting contribution adjustments.

10. By letter dated 4 September 1997, AT&T Canada LDS submitted that it does not believe that this application was necessary, but elected to file based on questions raised by the TELUS companies in order to resolve any uncertainty - hence the phrase: "AT&T Canada LDS is therefore applying for a contribution exemption for administrative circuits in TCI and TCEI territory so as to confirm their exempt status."

11. AT&T Canada LDS submitted that the TELUS companies' stipulation that such approval should be subject to their technical audit is unnecessary and should be disregarded by the Commission.

12. AT&T Canada LDS stated that 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, at page 177, the Commission defined "Dedicated Service" as follows: ..."a telecommunications service which is dedicated to the private communications needs of a user where one end of the facility used to provide the service is terminated at equipment dedicated to the user."

13. AT&T Canada LDS stated that carriers, resellers and others use dedicated circuits for their private communications. AT&T Canada LDS submitted that as long as the circuit is used only for the private communications needs of the company, i.e., communications between a caller (customer or supplier) and the company, and one end of the facility terminates at equipment dedicated to the company, such a circuit is a dedicated circuit. AT&T Canada LDS submitted that dedicated circuits (i) are also often referred to as administrative circuits where the user is a carrier or reseller and (ii) include administrative circuits as a subset.

14. AT&T Canada LDS submitted that Order 93-620 granted an exemption to Unitel (now AT&T Canada LDS) for all of its existing dedicated circuits leased by Unitel from the telephone companies. The Order states: "WHEREAS the Commission considers it appropriate to grant an exemption for all of Unitel's existing dedicated circuits."

15. AT&T Canada LDS submitted that the TELUS companies' claim that the aforementioned Order does not apply to them with respect to AT&T Canada LDS' administrative circuits is self-serving. AT&T Canada LDS submitted that the TELUS companies are well aware that, although Decision 93-17 stipulated that Unitel (now AT&T Canada LDS) was required to apply for future contribution exemptions on a case-by-case basis, the framework and guidelines for granting contribution exemptions were set out in Decision 93-2. AT&T Canada LDS submitted that thus, it is evident that the Commission's determinations with respect to the framework for contribution exemption applications relies and builds upon previous determinations, including Decision 93-2, and in the case of AT&T Canada LDS, Order 93-620.

16. AT&T Canada LDS submitted that if the Commission grants the exemption back to the date of installation, as requested, it will not be necessary to determine whether or not the application was technically required. Moreover, such an approach is consistent with PN 95-26 wherein the Commission stated it will grant exemptions from contribution for administrative circuits retroactive to the date of installation of those circuits.

17. AT&T Canada LDS submitted that the quantities of administrative circuits involved in Alberta are modest and reasonable for a company with over 2,800 employees across Canada. Therefore, a contribution exemption is appropriate in the circumstances.

18. By letter dated 18 September 1997, TCI stated that it had completed its technical audit and that "the administrative circuits in AT&T Canada LDS' application were found to be reasonable." TCI submitted that the contribution exemption should be granted to AT&T Canada LDS.

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

20. The first issue is whether AT&T Canada LDS is required to apply for a contribution exemption. The Commission agrees with TCI that AT&T Canada LDS is required to apply for a contribution exemption given that Order 93-620 did not apply to TCI.

Accordingly, an application for contribution exemption is required in this case.

21. The second issue is whether this application should be approved. The Commission considers that AT&T Canada LDS has met the evidentiary requirements for administrative circuits, and accordingly the application for exemption is approved.

22. The third issue is the effective date. The Commission finds that, consistent with PN 95-26, the effective date is the date of installation. The Commission notes that in Telecom Order CRTC 97-590, dated 1 May 1997, it stated that the line-side connections used by APLDS for internal administrative use and directly interconnected to a service provider's interexchange network will be subject to contribution charges, effective 1 January 1998. Accordingly, the configuration will need to be reviewed for the period commencing on 1 January 1998 to determine its exempt status under the new regulations.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.