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Ottawa, 23 January 1998
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Telecom Order CRTC 98-27
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By letter dated 5 August 1997, ACC TelEnterprises Ltd. (ACC), on behalf of its division, ACC NetMedia, submitted an application for exemption from contribution for certain interconnecting circuits which are used by ACC NetMedia to provide Internet services. ACC attached to the application an affidavit in which ACC NetMedia attested that it is a data-only service provider and that the interconnecting circuits in question cannot access interexchange private lines or local private lines connected to a reseller switch.
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File No.: 8626-A14-01/97
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1. By letter dated 5 September 1997, Stentor Resource Centre Inc. (Stentor) provided comments on behalf of BC TEL, Bell Canada (Bell), MTS NetCom Inc., Maritime Tel & Tel Limited and TELUS Communications Inc. (collectively, the companies).
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2. Stentor noted that certain of the interconnecting circuits identified in ACC NetMedia's affidavit were the subject of an 8 March 1996 ACC application for exemption from contribution. Stentor stated that in the 8 March 1996 application, ACC's customer, Internet Canada Corp. (Internet Canada), provided an affidavit which met the evidentiary requirements for an exemption from contribution [re Telecom Order CRTC 96-1003 dated 6 September 1996 (Order 96-1003)]. Stentor stated that, however, in Order 96-1003, the Commission noted ACC's plans to integrate the operations of Internet Canada into ACC and stated: "WHEREAS the Commission considers that if Internet Canada is amalgamated with ACC, a technical audit would be required to verify the usage and separation of voice and data traffic by ACC at sites which cannot be verified by the relevant carrier."
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3. Stentor stated that it is now apparent, pursuant to ACC's latest application, that the operations of Internet Canada have been amalgamated with ACC and that ACC is currently providing Internet services through its operating division under the name of ACC NetMedia. Stentor stated that accordingly, the granting of ACC's 5 August 1997 application will depend upon verification from the companies that the interconnecting circuits in question do not carry joint-use voice traffic. Stentor stated that absent such verification and consistent with the Commission's directive in Order 96-1003, ACC would be required to support its request for an exemption with a technical audit demonstrating that the voice and data services are carried on separate networks or that equipment has been attached to the network which would preclude voice usage.
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4. Stentor stated that ACC also requested that, should its application be challenged, it be granted interim approval on those circuits where the service offered precludes voice use. Stentor stated that ACC identified one such service as Bell's Internet Service Providers (ISPs) Link Service which is used to connect with ISP's equipment. Stentor stated that Bell's General Tariff Item 6495.2(d) states that ISP Links may not be used for ordinary voice communication. However, Stentor noted that in the case of such services, the companies cannot control the use of the circuits. Accordingly, although such services are provided by the companies for data use, the companies cannot verify that the customer has restricted the circuit configuration such that only data traffic can be carried over the circuits.
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5. Stentor noted that it appears that most of the circuits in question, with the exception of one in Toronto which is out of service, terminate on modems used to carry data traffic. However, Stentor also noted that the companies do not control the traffic routed over these facilities and that most, if not all, of the facilities terminate at the same locations where ACC apparently also has facilities in place to handle voice and other traffic. Stentor submitted that, in light of the fact that the companies are not in a position to verify the use of the circuits in question or the types of traffic carried on the backbone interexchange network connected to these facilities, consistent with the directives in Order 96-1003 and the evidentiary requirements as set on in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2), a technical audit should be required for these circuits and the overall network configuration, prior to any further consideration of an exemption from contribution. In view of the foregoing, Stentor submitted that no further action be taken with regard to the circuits pending the provision of further evidence by ACC.
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6. Stentor also noted that although, in Telecom Order CRTC 97-590, 1 May 1997 (Order 97-590), the Commission determined that the requirement to assess contribution charges would not extend to ISPs, it will still be necessary for ISPs to be subject to the contribution exemption regime where Internet and joint-use voice services are provided from the same premises, as is apparently the case with this application. Furthermore, Stentor submitted that, with the implementation of certain aspects of Order 97-590 on 1 January 1998, such exemptions for ISPs will require a demonstration that only Internet services are being provided over line-side connections, as other forms of data services provided over line-side connections will no longer be exempt from contribution as of that date.
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7. By letter dated 31 October 1997, ACC acknowledged that its Internet service, previously offered by Internet Canada, is now offered by ACC NetMedia. ACC stated that ACC NetMedia is in the process of replacing analog circuits with PRIs [Primary Rate Interfaces] and the application dated 5 August 1997 provided a comprehensive listing of all circuits as of that time. ACC noted that generally it is in the process of replacing Centrex circuits with PRIs while maintaining the same pilot number.
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8. ACC considered that, given that the company has provided a signed affidavit attesting to the fact that the circuits are for the sole use of ACC NetMedia, a data-only ISP, and that Stentor has acknowledged that the circuits terminate on modems (with the exception of one out of service circuit), Stentor has essentially verified the company's argument that the evidentiary requirements have been met.
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9. ACC requested that, in the event the respondents challenge the application, the Commission grant interim approval on those lines where the service utilized precludes voice access such as Bell's ISP Link Service. ACC stated that as noted in Bell's Tariffs (General Tariff Item 4695.1), ISP Link Service provides an integrated access arrangement to connect incoming data calls from modems to an ISP's equipment. ACC stated that the service is specifically configured for incoming calling only for use by ISPs. ACC requested that in the event that the Commission considers a technical audit necessary: (1) it be required only on those circuits not utilizing Bell's ISP Link Service; and (2) it be provided interim approval for Bell's ISP Link Service.
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10. By letter dated 19 November 1997, Stentor disagreed with ACC's conclusion that Stentor has "essentially verified" ACC's configuration. Stentor stated that the companies do not control the network configuration and cannot verify that any lines, which may currently terminate on modems, are used only to carry Internet data traffic.
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11. Further, Stentor noted ACC's allegation that should an audit be required, Bell's ISP Link Service need not be part of the review since this service "is specifically configured for incoming calling only for use by Internet Service Providers". In response, Stentor noted that Bell's service is not configured for use as described by ACC. Rather, Stentor stated that the service is defined in Bell's tariff for such use, but it is not designed to preclude any use, including the transmission of other data or of voice traffic. Accordingly, Stentor stated that such services should be included for review as part of a technical audit.
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12. Stentor noted that ACC also concluded that because the facilities terminate on modems, "the circuits preclude voice usage and as such the evidentiary requirements for an exemption have been met." Stentor disagreed with ACC's assumption and noted that the circuits could carry voice or data traffic and that ACC could alter the use of the circuits at any time such that they could be converted to carry voice or other traffic.
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13. Stentor submitted that in the absence of any revised contribution exemption regime for ISPs which may be determined pursuant to the proceeding associated with Telecom Public Notice CRTC 97-37 dated 3 November 1997, the current rules as set out in Decision 93-2, which treat ISPs as data service providers, be applied. Stentor stated that these rules require that where a reseller provides both data and voice services from the same location, evidence must be provided to confirm that the voice and data traffic are carried on separate networks. Stentor submitted that in this case, a technical audit, together with an engineer's affidavit, must be provided to verify the foregoing. Stentor submitted that as well, information should be provided to demonstrate that adequate internal control procedures have been instituted by ACC to ensure that the facilities in question are and will continue to be restricted for the purpose only of carrying data traffic.
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14. Stentor also noted that in Order 97-590, the Commission determined that, effective 1 January 1998, jointly-used data networks which are interconnected to the public switched telephone network will be assessed contribution. Stentor noted however, that the Commission has also determined that networks used only to carry Internet data traffic will continue to be exempt from the requirement to pay contribution. In light of this, Stentor also submitted that it would be appropriate that the technical audit address the matter of whether the network will only be used for Internet data traffic to determine if the configuration would also qualify for a contribution exemption after 1 January 1998.
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15. The Commission is of the view that there are three issues.
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16. The first issue is whether a technical audit is required.
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17. The Commission stated in Order 96-1003 that "... if Internet Canada is amalgamated with ACC, a technical audit would be required to verify the usage and separation of voice and data traffic by ACC at sites which cannot be verified by the relevant carrier."
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18. The Commission agrees with Stentor's submission that since the facilities in question terminate at locations where ACC also has facilities in place to handle both data and voice traffic and since ACC controls the routing of traffic over such facilities, it is not possible for the companies to provide carrier verification of ACC's configuration.
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19. Based on the above, ACC is directed to perform a technical audit within 60 days of the date of Order to confirm that the network carries only pure Internet traffic, and not voice and other data traffic.
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20. The second issue is whether the audit should cover all circuits.
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21. The Commission agrees with Stentor's submission that ISP Link Services should be included for review as part of a technical audit. Based on the above, the Commission is of the view that all the interconnecting circuits in question should be covered in the audit.
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22. The third issue is whether the application should be given interim approval.
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23. The Commission notes that the circuits in question were approved for contribution exemption in Order 96-1003 when under the control of Internet Canada. ACC's current application covers the same routes with the circuit technology being changed from analog to digital and with the circuits being transferred to the control of ACC. The Commission is of the view that it would be appropriate to grant interim approval for all the circuits in question, and that final approval be subject to the filing of an acceptable technical audit.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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