ARCHIVED -  Telecom Order CRTC 98-185

Telecom Order

Ottawa, 17 February 1998

Telecom Order CRTC 98-185

By letter dated 17 September 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) submitted 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 an order with respect to a billing dispute between AT&T Canada LDS and Bell Canada (Bell) concerning the charging of contribution on a number of circuits used by AT&T Canada LDS in Bell territory for AT&T Canada LDS' own administrative purposes.

File No.: 8622-A4-05/97

1. AT&T Canada LDS stated that it utilizes certain line-side interconnecting circuits solely for its administrative traffic throughout the territories of all of the Stentor companies. AT&T Canada LDS stated that most of these circuits have been in place for many years and pre-date 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).

2. AT&T Canada LDS submitted that in Telecom Order CRTC 93-620 dated 30 July 1993 (Order 93-620) the Commission determined that Unitel (now AT&T Canada LDS) had to follow procedures for exemptions with respect to interconnecting circuits that had been established for resellers in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2). AT&T Canada LDS stated that the Commission, in that same order, had grandfathered all of Unitel's dedicated circuits leased from the telephone companies. AT&T Canada LDS submitted that this included circuits dedicated to Unitel's (now AT&T Canada LDS) own administrative use.

3. AT&T Canada LDS also noted that with respect to administrative circuits added after Order 93-620, AT&T Canada LDS has been filing attestations with the telephone companies covering the changes in accordance with the procedures set out in Decision 93-2.

4. AT&T Canada LDS stated that Bell refused to accept AT&T Canada LDS' exemption and recently began charging contribution on these circuits - approximately four years after this issue was dealt with by the Commission, thus precipitating this application.

5. AT&T Canada LDS stated that in Decision 92-12, 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."

6. AT&T Canada LDS submitted that as long as a 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 are also often referred to as administrative circuits where the user is a carrier or reseller using the circuit in the course of conducting day-to-day business. AT&T Canada LDS submitted that dedicated circuits therefore include administrative circuits as a subset.

7. AT&T Canada LDS stated that as mentioned, Order 93-620 granted an exemption to Unitel for all of its existing dedicated circuits leased by Unitel from the telephone companies. The Order stated: "WHEREAS the Commission considers it appropriate to grant an exemption for all of Unitel's existing dedicated circuits."

8. AT&T Canada LDS submitted that given that administrative circuits clearly comprise a subset of dedicated circuits, no specific reference to administrative circuits by the Commission in Order 93-620 was required. AT&T Canada LDS maintained its position that all of AT&T Canada LDS' administrative circuits are exempt from contribution pursuant to the Commission's determination in Order 93-620.

9. AT&T Canada LDS therefore sought an order requiring Bell to cease billing contribution on AT&T Canada LDS' administrative circuits and reverse any contribution charges already applied to these circuits.

10. By letter dated 17 October 1997, Bell noted that, with respect to AT&T Canada LDS' claim that administrative circuits were "grandfathered" pursuant to Order 93-620, the record of this proceeding as described in Order 93-620 deals with configurations involving Type 1 circuits as described in CNCP Telecommunications - Interconnection with Bell Canada, Telecom Decision CRTC 79-11, 17 May 1979 (Decision 79-11). Bell submitted that administrative connections were never classified as Type 1 connections. Accordingly, Bell submitted that Order 93-620 did not apply to administrative circuits.

11. Bell submitted that administrative circuits have long been established as a category requiring an exemption in their own right, not as a subset of the dedicated category of contribution exemption. Bell submitted that the Commission has clearly defined this category as separate from other types of circuits, including dedicated circuits, in numerous decisions.

12. Bell reiterated its submission that contribution exemptions granted for administrative purposes are generally effective the date of installation. Accordingly, Bell submitted that AT&T Canada LDS is not harmed in any way as a result of the requirement to seek an explicit contribution exemption for its administrative circuits in that, if an exemption is granted, no contribution would be owing.

13. Bell further stated that in Telecom Order CRTC 97-590 dated 1 May 1997 (Order 97-590), the Commission determined that certain circuits used for administrative purposes should be assessed contribution charges effective 1 January 1998. Bell submitted that, with the implementation of Order 97-590 on 1 January 1998, it will be necessary to clearly identify which circuits AT&T Canada LDS uses for administrative purposes so that the appropriate contribution can be assessed, even if an exemption is granted up to that time. Accordingly, Bell maintained that it is entirely appropriate and timely to deal with this matter at this time.

14. Bell submitted that AT&T Canada LDS' request for an order to require Bell to cease billing contribution on AT&T Canada LDS' administrative circuits be denied. In the alternative, Bell requested that the Commission determine that AT&T Canada LDS' application would more appropriately be characterized as an application for a contribution exemption with respect to its administrative circuits and that AT&T Canada LDS should be directed to file appropriate evidence, such as an affidavit, in the way that other resellers are required to provide similar evidence, to substantiate a contribution exemption for facilities that AT&T Canada LDS utilizes for administrative purposes.

15. By letter dated 27 October 1997, AT&T Canada LDS stated that Bell has not applied contribution on these line-side circuits on a per-minute basis, contrary to its tariffs.

16. AT&T Canada LDS stated that Type 1 connections are defined by Bell's Tariff CRTC 7476 as follows: "Type 1 Connection means the connection of a circuit owned or leased by Unitel to the Company's local central-office switching equipment through a circuit owned by the Company."

17. AT&T Canada LDS stated that Type 2 connections, on the other hand, are defined as circuits connecting to a customer of Unitel's and to either: the Bell central-office switching equipment; or to a Bell private circuit. AT&T Canada LDS stated that Bell's Tariff CRTC 7416 (sic: should be 7476) states: "Type 2 Connection means the connection of a circuit, owned or leased by Unitel, to a subscriber's equipment or facilities or a subscriber's centrex facility which in turn is connected to the Company's central-office switching equipment or to a Company private circuit."

18. AT&T Canada LDS stated that "Subscriber means a person for whom telecommunications equipment, facilities or service has been provided by Unitel".

19. AT&T Canada LDS submitted that based on the above definitions, it is clear that Type 1 circuits are circuits that connect an AT&T Canada LDS (formerly Unitel) premises to central-office switching equipment. AT&T Canada LDS further submitted that administrative line-side circuits fit squarely within the definition of Type 1 circuits.

20. AT&T Canada LDS submitted that the effect of Order 93-620 was to grandfather all of AT&T Canada LDS' line-side data circuits used for FacsRoute (based on the deployment of VDDs) [Voice Data Discriminators] and X.25 public dial access connections used for FasPac and Dialcom services. AT&T Canada LDS also submitted that Order 93-620 provided an exemption for Unitel's "dedicated circuits" while at the same time affirming that no contribution exemption was required for Direct Access Lines. AT&T Canada LDS also submitted that Order 93-620 would have little meaning with respect to "dedicated circuits" if the term did not encompass administrative circuits.

21. AT&T Canada LDS stated that it can file an application for a contribution exemption accompanied by an attestation with respect to its administrative circuits leased from Bell. However, AT&T Canada LDS submitted that a further application process is not necessary as the circuits have already been exempted by the Commission. Furthermore, AT&T Canada LDS argued that the time delay involved between the date of installation of the circuits, Order 93-620, and Bell's recent decision to apply contribution to AT&T Canada LDS' administrative circuits, combined with the near-term requirement to file new administrative circuit exemptions by 1 January 1998 (based on new criteria in Order 97-590) makes Bell's demand for a retroactive administrative circuits exemption application unnecessary and would not appear to make good use of the Commission's time.

22. AT&T Canada LDS noted that it is in the process of preparing a new contribution exemption application for administrative circuits to be effective 1 January 1998 with respect to line-side connections used by AT&T Canada LDS for administrative purposes and not directly interconnected to a service provider's interexchange network. AT&T Canada LDS stated that this process has required AT&T Canada LDS to search for a qualified independent auditor and secure the cooperation of its PBX [Private Branch Exchange] maintenance vendors. AT&T Canada LDS stated that every PBX used by AT&T Canada LDS for administrative purposes will need to be examined by the auditor with the assistance of a technician from the PBX vendor. AT&T Canada LDS stated that this cross-Canada audit is expected to be complete before the end of 1997.

23. AT&T Canada LDS noted that it has provided Bell with attestations as to administrative circuits added since Order 93-620 in accordance with the procedures established in Decision 93-2, and, if Bell so requests, AT&T Canada LDS will provide a list of administrative line-side circuits used in Bell's serving territory.

24. The Commission shares AT&T Canada LDS' concern at the length of time Bell has taken to raise the issue that is the subject of this billing dispute. The Commission further notes that Bell did not attempt to explain the delay in raising this issue.

25. The Commission considers that administrative and dedicated circuits share the same technical characteristics. The Commission notes that prior to Decision 93-2, no distinction appears to have been made between dedicated and administrative circuits or services. For instance, while circuits used to provide dedicated services were specifically identified in Decision 92-12 as being subject to the contribution exemption application process, that Decision was silent on the treatment to be afforded to administrative circuits. The Commission further notes that it was only in Decision 93-2 that the distinction was first made between dedicated and administrative circuits for evidentiary requirements purposes in connection with the contribution exemption application process.

26. The Commission agrees with Bell that since Decision 93-2, administrative circuits have been treated as a separate category from dedicated circuits. However, given that : (1) prior to that Decision, no such distinction existed; (2) the particular circuits that are the subject of this billing dispute pertained to the period that preceded Decisions 92-12 and 93-2; and (3) administrative circuits possess the same technical characteristics as dedicated circuits, the Commission finds that the exemption in Order 93-620 did include AT&T Canada LDS' administrative circuits existing at that time.

27. Based on the above, the Commission (1) finds that no contribution exemption application is required in this case; and (2) directs Bell to cease billing contribution on the administrative circuits in question and reverse any contribution charges already applied to these circuits.

Laura M. Talbot-Allan
Secretary General

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