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Ottawa, 12 May 1998
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Telecom Order CRTC 98-461
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By letter dated 16 January 1998, MetroNet Communications Group Inc. (MetroNet) applied for exemption from contribution charges for dedicated cross-border circuits. MetroNet stated that the circuit is used for a virtual private data network which does not connect to MetroNet's voice network or to the public switched telephone network. MetroNet requested an effective date of 2 January 1998 and stated that a technical audit would be filed with the Commission within 45 days of its letter.
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File No.: 8626-M15-01/98
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1. By letter dated 16 March 1998, MetroNet filed a technical audit, which indicated that the requested exemption is for a DS-3 circuit between Vancouver, British Columbia and Seattle, Washington.
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2. By letter dated 30 March 1998, BC TEL stated that MetroNet's technical audit indicated that: (1) the DS-3 circuit used to provide the virtual private data network is separate from any circuits used to carry MetroNet's switched voice traffic; (2) the private virtual circuits on the virtual private data network in question are dedicated to individual customers; (3) MetroNet's customers are not resellers of telecommunications services; and (4) control procedures are in place to ensure that the network configuration observed at the time of the audit remains in place. Given the foregoing, BC TEL submitted that MetroNet's configuration appeared to meet the requirements for an exemption from contribution.
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3. BC TEL stated that in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 (PN 95-26), the Commission noted that "once a competitor has provided the required evidence, it has done all that it is required to do and should generally be entitled to an exemption from the date of the application forward." BC TEL noted that while MetroNet made its application on 16 January 1998, the required evidence was provided on 16 March 1998. BC TEL submitted that it is not clear that approval of MetroNet's application should be effective either the date of the application or the date requested by MetroNet.
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4. By letter dated 7 April 1998, MetroNet submitted that BC TEL had misinterpreted the Commission's findings in PN 95-26. MetroNet submitted that the conclusion reached in PN 95-26 was that "contribution exemptions will generally be granted effective the later of the date of the application or the date of installation, absent special circumstances." Thus MetroNet submitted that BC TEL's assertion that the date on which MetroNet filed its technical audit is the appropriate effective date for any exemption that may be granted is clearly inconsistent with PN 95-26.
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5. Furthermore, MetroNet submitted that in Telecom Orders CRTC 96-273 dated 27 March 1996 (re TSB International Inc.) and 97-750 dated 4 June 1997 (re E.D.S. of Canada Ltd.), dealing with circuits provisioned as a result of acquisitions, the Commission found it appropriate to grant contribution exemptions retroactively to the date on which the acquisitions occurred. MetroNet submitted that the circumstances surrounding the current application are identical and, therefore, requested that its application receive similar treatment.
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6. MetroNet submitted that the circuit in question was integrated into MetroNet's network as a result of its acquisition of e>connect Inc. which went into receivership. In its application, MetroNet stated that as a result of the administrative burden associated with the acquisition, it was not possible for MetroNet to file its exemption application on the date the circuit was installed, but that it was committed to rectifying this problem on a going-forward basis. MetroNet requested that, based on these circumstances and given the Commission's past practice of granting exemptions effective the date of acquisition, the Commission approve the application effective the date the circuit was installed, i.e. 2 January 1998.
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7. The Commission is of the view that MetroNet has filed a technical audit which meets the Commission's evidentiary requirements. With respect to the effective date, the Commission notes that, in the past, it has accepted the fact that applicants cannot always file a technical audit on, or near, the date of application for various reasons. The Commission also agrees with MetroNet that the Commission has previously granted exemptions to applicants effective the date of acquisition of circuits from other companies. The Commission further notes that the interval between the date of assumption of control over the circuit (2 January 1998) and the date of application (16 January 1998) is very small. In the circumstances, the Commission is of the view that an effective date of 2 January 1998 would be appropriate.
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8. In light of the foregoing, MetroNet's application is approved effective 2 January 1998.
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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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