Search

ARCHIVED -  Telecom Order CRTC 98-740

This page has been archived on the Web

Information identified as archived on the Web is for reference, research or recordkeeping purposes. Archived Decisions, Notices and Orders (DNOs) remain in effect except to the extent they are amended or reversed by the Commission, a court, or the government. The text of archived information has not been altered or updated after the date of archiving. Changes to DNOs are published as “dashes” to the original DNO number. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats by contacting us.

Archived

This page has been archived on the Web.

Telecom Order

Ottawa, 27 July 1998
Telecom Order CRTC 98-740
This Order concerns a dispute by ACC Long Distance Inc. (ACC), AT&T Canada Long Distance Services Company (AT&T Canada LDS) and Rogers Network Services (RNS) regarding compliance with Telecom Order CRTC 97-590 (Order 97-590), 1 May 1997, of tariff pages issued by Bell Canada (Bell), Island Telecom Inc. (formerly known as The Island Telephone Company Limited) (Island Tel), Maritime Tel & Tel Limited (MT&T) and MTS Communications Inc. (MTS), concerning the elimination of the contribution exemption status for international joint-use data circuits.
File No.: 8692-A4-01/98
1.In Scope of IX Contribution Paying Services, Telecom Public Notice CRTC 96-19, 23 May 1996 (PN 96-19), the Commission initiated a proceeding to examine the issues relating to broadening the base of interexchange (IX) contribution paying services.
2.By letter dated 7 October 1996, Stentor Resource Centre Inc. (Stentor) sought, among other things, clarification from the Commission regarding the procedural context within which the Commission intended to consider the issue of elimination of contribution on international circuits, i.e., Canada-United States and Overseas circuits. Commission staff provided clarification by letter dated 18 October 1996.
3.On 1 May 1997, the Commission issued Order 97-590, which, among other things, removed contribution exemptions, effective 1 January 1998, for (1) line-side connections used by alternate providers of long distance services (APLDS) for internal administrative use and directly connected to a service provider's IX network and (2) line-side connections to the public switched telephone network (PSTN) that are used to connect to IX data networks.
4.By letters dated 19 December 1997, ACC, AT&T Canada LDS, and RNS requested that the Commission direct Bell, Island Tel, MT&T, and MTS to revise their tariff pages issued on 1 December 1997 pursuant to Order 97-590. ACC, AT&T Canada LDS and RNS requested the revision on the basis that the tariff pages incorrectly eliminated contribution exemption status for international joint-use data circuits, contrary to Order 97-590.
5.By Commission staff letter dated 27 January 1998, a process was established whereby parties to the proceedings initiated by PN 96-19 and by Implementation of Price Cap Regulation, 1997 Contribution Charges and Related Issues, Telecom Public Notice CRTC 97-11, 25 March 1997 (PN 97-11), could file comments and ACC, AT&T Canada LDS and RNS could file reply comments regarding the disputed telephone companies' tariffs.
6.Call-Net Enterprises Inc. (Call-Net) and fONOROLA Inc. (fONOROLA) filed comments on 2 February 1998 and 11 February 1998, respectively. Stentor, on behalf of BC TEL, Bell, Island Tel, MT&T, MTS, The New Brunswick Telephone Company, Limited (now called NBTel Inc.), NewTel Communications Inc. and TELUS Communications Inc., (the telephone companies) filed comments on 11 February 1998, addressing the submissions of AT&T Canada LDS, ACC, Call-Net and RNS. On 18 February 1998, AT&T Canada LDS and RNS filed reply comments and Stentor filed comments addressing fONOROLA's comments.
7.AT&T Canada LDS, supported by ACC, Call-Net, fONOROLA and RNS (collectively, AT&T et al.), complained that Bell, Island Tel, MT&T and MTS filed tariffs which incorrectly eliminated contribution exemption status for international joint-use data circuits. AT&T Canada LDS based its assertion on the content of Commission staff and Stentor letters issued during the proceeding leading to Order 97-590 as well as directives in that same Order.
8.AT&T Canada LDS stated that Stentor wrote to the Commission on 7 October 1996, seeking clarification on whether issues pertaining to international contribution would be considered in the proceeding which led to Order 97-590. AT&T Canada LDS stated that the Commission responded to Stentor's request on 18 October 1996, making it quite clear that international issues would not be considered in the proceeding. AT&T Canada LDS submitted that, in Order 97-590, the Commission reminded parties of its position regarding the exclusion of international issues from the proceeding.
9.Further, AT&T Canada LDS argued that, in relying on the Commission letter of 18 October 1996, parties did not comment on whether international data circuits should be contribution eligible and that, in the proceeding initiated by PN 97-11, parties assumed that contribution would not be levied on international data circuits.
10.AT&T Canada LDS requested that the Commission review the tariff pages of all of the telephone companies that were filed on 1 December 1997 pursuant to Order 97-590. AT&T Canada LDS further requested that, in the instances where a particular telephone company has altered its tariff pages in a manner which eliminates the contribution exemption status of international joint-use data circuits, the Commission should direct the telephone company to file revised tariff pages which reinstate and clarify that international joint-use data circuits are exempt from contribution pursuant to the Commission's contribution rules.
11.AT&T Canada LDS submitted that if, however, the Commission wishes to make these circuits contribution eligible, the following concerns would have to be addressed: (1) further process would be required since parties did not comment on this issue in the proceeding leading to Order 97-590; (2) existing contribution rates would need to be recalculated for all the telephone companies' operating territories as minutes associated with these circuits were not included in the development of the current contribution rates in the proceeding initiated by PN 97-11; and (3) it is unclear how a contribution rate for this type of traffic would be derived given that traffic over these facilities is packet-based, i.e., not measured in minutes.
12.ACC, Call-Net, fONOROLA and RNS, in support of AT&T Canada LDS's position, submitted that Order 97-590 did not modify the exemption for joint-use international data circuits and that the Commission should direct the telephone companies, as appropriate, to file new revised tariff pages that properly reflect the Commission's determination in Order 97-590.
13.Stentor submitted that the Commission should deny the request of AT&T Canada LDS, ACC, Call-Net and fONOROLA.
14.Stentor stated that, in its 7 October 1996 letter, it sought clarification as to whether the elimination of contribution on international circuits was within the scope of the proceeding initiated by PN 96-19. Stentor noted that its correspondence did not address any other aspect of the international contribution mechanism in the PN 96-19 proceeding. Stentor submitted that AT&T et al. have misinterpreted the Commission's letter of 18 October 1996, responding to Stentor's request, to mean that any aspect of IX contribution associated with international traffic was beyond the scope of the proceeding initiated by PN 96-19. Further, Stentor submitted that the very purpose of the proceeding initiated by PN 96-19 was to examine the implications of expanding the base of contribution-eligible services, and, therefore, AT&T et al.'s interpretation is directly contradictory to that expressed purpose.
15.Stentor noted 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 (Decision 92-12), contribution was assessed on international circuits on the same basis as it was assessed on domestic PSTN access circuits. Stentor submitted that there is no reason why this fundamental principle should apply differently for switched data services under the expanded base of IX contribution established in Order 97-590 than it did for switched voice services in Decision 92-12. Further, Stentor submitted that in Order 97-590, the Commission did not determine that a different principle should be applied to international data services than is applied to international voice services.
16.Stentor noted that, in Decision 92-12, the Commission determined that specific types of traffic are contribution eligible on the basis of the type of service provided, independent of the types of circuits used in the provisioning of these services. Stentor submitted that the IX contribution exemptions established in Decision 92-12 reflect this service specific nature of the exemption regime.
17.In Stentor's view, Order 97-590 varied Commission policy to reflect IX contribution-eligibility of switched data services. Because of the service-specific, and not circuit specific nature of contribution exemption criteria, Stentor submitted that such a policy change necessarily reflects changes to the IX contribution exemptions for all types of circuits which carry switched data services, whether line-side connections or international circuits. Stentor noted that, since the issuance of Decision 92-12, there have been no rulings from the Commission, which would alter this policy of equivalent exemptions for line-side connections and international circuits. Therefore, Stentor submitted, that the extension of IX contribution to switched data services in Order 97-590 must necessarily be interpreted to apply to international circuits as it is seen reasonably to apply to domestic line-side circuits.
18.Stentor disagreed with AT&T Canada LDS's assertion that parties assumed contribution would not be levied on international data circuits in the PN 97-11 proceeding. Stentor pointed to a Commission interrogatory in which Stentor stated that the telephone companies provided their estimates of APLDS' additional minutes associated with line-side data, based upon counts of prevailing contribution-exempt circuits, including international circuits.
19.In response to fONOROLA's submission, Stentor stated that the Commission staff letter of 18 October 1996 was issued after the filing of evidence, on 22 July 1996, and issuance of interrogatories, on 12 August 1996, which gave parties ample opportunity to present their own views as well as to ask interrogatories on the subject of contribution payments for data services on international circuits. Stentor submitted that the telephone companies have consistently maintained the view that the portion of Order 97-590, which approved the expansion of the base of contribution-eligible services to include switched data services, can only reasonably be interpreted to apply to all contribution-eligible circuit types used in the provision of these services, and not just line-side connections.
20.In reply, AT&T Canada LDS pointed out that Decision 92-12 listed separately the four types of circuits, i.e., line-side, trunk-side, overseas and crossborder, as being eligible for a contribution exemption. Based on the wording of Order 97-590, the elimination of one type of circuit's eligibility for a contribution exemption, i.e., line-side, cannot be interpreted to include the elimination of contribution on another type of circuit or circuits, i.e., overseas access and crossborder circuits.
21.AT&T Canada LDS also submitted that, according to the Carrier Access Tariff, a line-side access means any connecting arrangement provided by the company to an interexchange carrier (IXC) over which PSTN dial tone is delivered or access to the company's Advantage Toll-free is provided to the IXC, by means of an interconnecting circuit, enabling the IXC to access or egress the PSTN.
22.Based on the explicit enumeration of the types of circuits eligible for a contribution exemption in Decision 92-12 and the definition of a line-side access, AT&T Canada LDS submitted that Stentor's interpretation that line-side circuits include international data circuits is unreasonable and is entirely inconsistent with past regulatory decisions.
23.AT&T Canada LDS stated that, while it does not dispute that contribution is payable on international switched data circuits, its major concern is that the wording in the telephone companies' tariff pages implies the elimination of the contribution exemption on all joint-use data facilities, and, in particular, AT&T Canada LDS's frame-relay service, for which it was granted an exemption in Telecom Order CRTC 96-830, 2 August 1996. AT&T Canada LDS submitted that, although its international frame-relay service carries joint-use data traffic, it does not carry traffic which originates or terminates on the PSTN and, therefore, is not contribution eligible.
24.AT&T Canada LDS submitted that the impact of the elimination of an exemption for international joint-use data circuits would involve millions of dollars of extra contribution payments, as the impact of its company alone could exceed one billion minutes on an annual basis by year end. AT&T Canada LDS noted that these minutes, along with the telephone companies' Pospac, Datapac, and Hyperstream minutes have not been incorporated in the calculations of interim 1998 contribution rates. If these minutes had been included, AT&T Canada LDS submitted that the net result would have been a significantly reduced rate of contribution to account for the massive amounts of additional assumed minutes.
25.The Commission notes that the letter of 18 October 1996 was in response to a specific request by Stentor as to the procedural context within which the Commission intended to consider the issue of elimination of contribution on international circuits. Given this, the Commission disagrees with AT&T et al. that the letter excluded all issues relating to contribution on international circuits from the scope of the proceeding leading to Order 97-590.
26.With respect to whether the tariff pages issued by Bell, Island Tel, MT&T and MTS comply with Order 97-590, the Commission notes that, in the case of data circuits, the wording of Order 97-590 was expressly limited to line-side connections and that such connections would be subject to contribution, effective 1 January 1998.
27.The Commission further notes that in Decision 92-12, the Commission distinguished, for purposes of contribution exemptions, between line-side connections and international data circuits. Given this distinction and given the specific wording in Order 97-590, the Commission considers that Order 97-590 did not alter the existing contribution exemption status of international joint-use data circuits.
28.With respect to the 1998 contribution rates, the Commission is satisfied that the minute estimates used to set these rates reflect the intent of Order 97-590.
29.In light of the foregoing, the Commission hereby orders Bell, Island Tel, MT&T, and MTS and, to the extent that any of the other Stentor owned telephone companies have issued tariffs that eliminate contribution exemptions for international joint-use data circuits:
(a) to issue revised tariffs, effective 1 January 1998, reinstating the exemption status for international joint-use data circuits; and
(b) to make the appropriate billing adjustments, retroactive to 1 January 1998, for contribution levied on these circuits.
Laura M. Talbot-Allan
Secretary General
This document is available in alternative format upon request.
Date modified: