ARCHIVED -  Telecom Order CRTC 98-785

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Telecom Order

Ottawa, 13 August 1998
Telecom Order CRTC 98-785
On 17 October 1997, under Tariff Notice (TN) 3710, BC TEL filed proposed tariff revisions for the introduction of Provincial 9-1-1 Service. In BC TEL - Introduction of Provincial 9-1-1 Service, Telecom Public Notice CRTC 97-39, dated 24 November 1997, the Commission initiated a proceeding to consider TN 3710. Comments were received from Call-Net Enterprises Inc. (Call-Net), Canadian Wireless Telecommunications Association, AT&T Canada Long Distance Services Company, E-Comm Emergency Communications for Southwest British Columbia (E-Comm), The B.C. Old Age Pensioners' Organization et al. and a number of Regional Districts (RDs).
File No.: Tariff Notice 3710
1.BC TEL's application consists of:
(a) the proposed rates per telephone number for the Provincial 9-1-1 Service;
(b) the implementation plan with the proposed conditions for migrating existing 9-1-1 service to the proposed service;
(c) a proposal to buy back the terminal equipment previously purchased by the RDs for their current 9-1-1 service but which would not be required under the new proposed service;
(d) a proposed Call Answer Levy (CAL) billing and collection charge which provides the local government the option of having BC TEL bill and collect a charge from subscribers to pay for the RD's cost of running the Call Answer Centre (CAC); and
(e) an agreement between the RD and BC TEL setting out the terms and conditions for the operation of the proposed Provincial 9-1-1 Service.
2.BC TEL proposed de-averaged rates, with the lowest rates in the high density areas such as the lower mainland (i.e. Vancouver and surroundings) and the highest in the more sparsely populated interior and northern areas. The proposed rates vary from a low of $0.18 to a maximum of $0.60 per month per telephone number.
3.The proposed rates would apply to Exchange, Coin Telephone, Microlink, Megalink and Digital Exchange Services. For Wireless Service Providers (WSPs), rates would apply to each connection (DS-0) to the public switched telephone network (PSTN) equipped for outward local calling. The proposed tariff also would give RDs the choice of paying the entire charge with respect to all their residents directly to BC TEL or having BC TEL collect the fee from each subscriber.
4.The company proposed to roll out the service to areas currently served by 9-1-1 and unserved areas over a three-year period. The company also proposed to give RDs served by existing 9-1-1 services the option of converting to the new rate structure either on the effective date of this tariff, or when the RD actually subscribes to the new service. Existing 9-1-1 services would be grandfathered with no new installations, moves, additions or changes allowed during this three-year period.
5.In order to encourage migration to the new service, BC TEL offered to buy back existing 9-1-1 specific terminal equipment, provided that:
(a) the equipment was originally purchased from BC TEL;
(b) it cannot be used for purposes other than 9-1-1;
(c) the equipment was made obsolete by the introduction of the Provincial 9-1-1 Service;
(d) the buy-back is based on the date of billing for the commencement of Provincial 9-1-1 service to that RD; and
(e) the buy-back is based on the remaining undepreciated value over a 10-year life from the purchase date.
6.The company also proposed to collect a CAL on behalf of the municipality for handling 9-1-1 calls. The tariff does not include the CAL but does include a proposed charge of $0.07 per telephone number for the billing and collection of the CAL. BC TEL's proposed tariff states that the company will not undertake this service if the municipality is paying the 9-1-1 charge on behalf of all its residents. BC TEL did not submit an agreement for the CAL billing and collection service.
7.RDs in the low rate areas supported the proposed rate structure while RDs in the areas that would be subject to the higher rates opposed it. The latter argued that the rates should be company-wide given that the proposed service is company-wide.
8.The Commission notes that BC TEL did not provide supporting information at the regional level to justify the different rate levels. All information provided was at a company wide level. BC TEL submitted that its proposed regional rate structure is appropriate because it correctly takes into account both the shared common costs for the new 9-1-1 platform and the specific costs of providing service to each particular region. The company submitted that this rate structure would ensure a fair allocation of cost recovery while at the same time being affordable to all areas of British Columbia, including those in currently unserved areas which would be able to receive the benefit of 9-1-1 service. Additionally, having a regional rate structure, in the company's view, would mitigate cross-subsidization between urban and rural areas.
9.The Commission is not persuaded that it should depart from the use of company-wide averaging for the purposes of rating the proposed 9-1-1 service.
10.In response to a Commission interrogatory, BC TEL indicated that a $0.25 rate per telephone number applied to all RDs would provide the same revenue as the proposed regional rate structure. Consistent with the approach taken in other Stentor territories with respect to province-wide 9-1-1, the Commission considers that a uniform rate structure through out the serving territory of the company would be appropriate.
11.The Commission is of the view that the mark-up proposed by BC TEL is excessive considering the nature of the proposed service. In the circumstances, the Commission is of the view that a rate of $0.23 per telephone number would reflect a mark-up more consistent with previously approved rates for 9-1-1 service for other Stentor companies.
12.E-Comm submitted that because under BC TEL's proposal WSPs would not be required to pay on a per wireless number basis, wireline users would be subsidizing wireless users. E-Comm also claimed that there was now a growing volume of 9-1-1 calls originating from wireless users and that these calls are more costly to handle. BC TEL did not respond to these comments.
13.The Commission notes that BC TEL's proposed method of charging WSPs is consistent with the approach accepted by the Commission for other Stentor companies' province-wide 9-1-1 services. This approach is based on the premise that the service to a wireless customer is of less value than that to a land-line customer because of the unavailability of Automatic Location Identification (ALI) to identify the location of a wireless 9-1-1 caller.
14.The Commission further notes, however, that recent rate changes over a broad range of local exchange services have reflected less emphasis on the value of service rating principle, and more on moving rates closer to costs. Given this, the Commission is of the view that it would be appropriate to re-examine the basis on which the Stentor companies charge WSPs for 9-1-1 service.
15.The Commission notes that, consistent with the approach taken by other Stentor companies, BC TEL proposed a lower rate for Centrex lines. For the same reasons as given in paragraph 14 with respect to WSPs, the Commission is of the view that it would be appropriate to re-examine the basis on which the Stentor companies establish 9-1-1 service rates for Centrex lines.
16.The Commission intends to initiate a proceeding to re-examine the basis for establishing rates applicable to WSPs and Centrex customers.
17.Call-Net requested that the Commission remove the restriction on moves and re-arrangements for the existing service as the roll-out period coincides with the roll-out of local competition. The Greater Vancouver Regional District (GVRD) objected to this restriction submitting that it would prevent them from continuing normal operations.
18.Fraser Valley Regional District (FVRD) and District of Hope requested that the grandfathering period be longer in order to be able to make a more reasonable and informed choice about whether equipment should be sold back to BC TEL.
19.BC TEL submitted that its proposed three-year grandfathering period would allow RDs sufficient time to prepare for migration to the new service, and constituted an appropriate incentive for early migration. BC TEL further submitted that it would not be feasible to maintain the existing systems beyond three years due to equipment obsolescence.
20.In response to the concern expressed about the restriction on moves and re-arrangements, BC TEL stated that it is prepared to amend its tariff to accommodate routine adds or changes that are required for the day-to-day operation of the existing 9-1-1 systems.
21.The Commission finds the proposed implementation plan to be appropriate, including the modification agreed to by BC TEL whereby it would permit routine moves, additions or changes.
22.Call-Net submitted that BC TEL had made a profit when it originally sold the 9-1-1 related terminal equipment and that the buy-back cost will now be borne again by subscribers. Call-Net also claimed that BC TEL had not justified the choice of a 10-year life for the terminal equipment. BC TEL submitted that the buy-back program would provide reasonable compensation for the remaining costs of obsolete terminal equipment originally purchased from the company, while accommodating the budget constraints of the RDs.
23.The Commission is of the view that the time allowed for the buy-back and the terms and conditions are appropriate. The Commission also finds that an estimate of a useful life of 10 years is appropriate given the rapid obsolescence of modern terminal equipment.
24.E-Comm stated that the charge of $0.07 for administering the CAL was excessive, as BC TEL would only collect the CAL where it was also collecting the 9-1-1 charge from the subscriber (as distinct from the RD). E-Comm submitted that in these circumstances, the incremental costs upon which the proposed rates were based were too high.
25.The Commission notes that the proposed CAL billing and collection charge of $0.07 is consistent with the charges approved for other Stentor companies. Given that the billing and collection of the CAL is an optional feature and, in effect competitive, the Commission considers that the proposed mark-up is appropriate. In the circumstances, the Commission considers the proposed CAL billing and collection charge to be appropriate.
26.As stated previously, BC TEL did not file an agreement for the billing and collection charge as part of this application. In an interrogatory response, the company stated that it recognized that such agreements are subject to Commission approval and that it would be filing the agreement for approval following consultation with the relevant RDs. Absent approval of such an agreement, BC TEL may not offer the billing and collection service.
27.Several RDs objected to the fact that a general agreement was part of the tariff filing and proposed instead that all references to the agreement be removed from the tariff. These RDs submitted that individualised agreement should be negotiated with each RD. The Regional District of Bulkley-Nechako (RDBN) questioned the Commission's assertion of jurisdiction over matters in the agreement for which RDs are responsible and submitted that, in any event, RDs should not be party to the agreement as they are not the customers of the 9-1-1 service.
28.Consistent with the approach approved for other Stentor companies, the Commission considers that the issues identified in the agreement are sufficiently common to warrant a standard agreement approach. The Commission also considers it desirable that the terms and conditions should be consistent throughout BC TEL's territory. The Commission disagrees with the RDBN's submission that the agreement should not be with the RD. In the Commission's view, the participation of RDs is fundamental to the proper operation of the 9-1-1 service, and that it is important that both BC TEL and RDs have a clear understanding of what their respective rights and obligations are in this matter. Accordingly, the Commission considers it appropriate that the provision of 9-1-1 service to subscribers located in the territory of a particular RD be contingent on that RD executing the 9-1-1 agreement.
29.With respect to the issue of the Commission's jurisdiction to approve the standard agreement, the Commission notes that the RDBN failed to provide detailed argument to support its submission. The Commission is not persuaded that it lacks jurisdiction to rule on this matter.
30.RDBN claimed that the terms of the agreement go beyond what the provincial Municipal Act allows and that the agreement would not be binding on a RD because the RD is not providing consideration.
31.The Commission notes that RDBN was the only RD to submit that the provincial Municipal Act prevented RDs from implementing the obligations set out in the agreement. The Commission also notes that RDBN failed to identify precisely which provisions of the Municipal Act prevented it from implementing the agreement. The Commission is not persuaded, based on the record of this proceeding, that the provincial Municipal Act would prevent the RDs, including RDBN, from executing the agreement.
32.Given, among other things, the obligations to be assumed by RDs pursuant to the agreement, the Commission disagrees with RDBN's submission that RDs are not providing consideration.
33.Call-Net submitted that section 4.1 of the agreement should provide that where a competitive local exchange carrier (CLEC) is providing an end-customer with local telephone service, the CLEC may obtain 9-1-1 service as an unbundled component from BC TEL. Call-Net also requested that, because it will be required to give BC TEL its customer count, the agreement include a term that only the Carrier Services Group of BC TEL may carry out the billing and collection functions in order to protect its customer count from the rest of the company.
34.In its response, BC TEL submitted that the agreement is similar to that approved for Bell Canada and TELUS Communications Inc. (TCI) in their 9-1-1 filings. With regard to the impact on CLECs, BC TEL stated that Stentor on behalf of BC TEL and other Stentor companies had filed and received interim approval for a CLEC/ILEC (incumbent local exchange carrier) 9-1-1 Interconnection Agreement (the Interconnection Agreement). BC TEL submitted that the proposed agreement is fully compatible and consistent with the Interconnection Agreement. BC TEL further submitted that the Interconnection agreement addresses the issues identified by Call-Net.
35.In response to Call Net's concern about BC TEL billing a CLEC's customer for 9-1-1, BC TEL stated that it would bill the CLEC directly. Further, BC TEL stated in an interrogatory response that where the RD chooses to be billed directly for the 9-1-1 service, BC TEL's bill would include the charge for the CLEC customers as well as its own. In the Commission's view BC TEL has adequately addressed this issue.
36.The Commission notes that the other issues raised by Call-Net have also been raised in the proceeding to consider the final terms and conditions of the Interconnection Agreement. The Commission intends to address these issues in that proceeding.
37.With respect to the submissions of several RDs that they are not in a position to accept the agreement because they do not control emergency services, the Commission considers that, consistent with the approach adopted with respect to other Stentor companies, it is open to RDs to make the necessary arrangements with the various emergency services to ensure their participation. The Commission considers that RDs are best placed to enter into such agreements, and that such measures will facilitate the provision of a more effective 9-1-1 system. Accordingly, the Commission finds that the requirement in Section 5.5a) that RDs be responsible for ensuring the involvement of emergency services, is appropriate.
38.RDBN was of the view that BC TEL should provide the ALI database (including gathering all the necessary information) as it was too onerous for RDBN, and that BC TEL should provide the Primary Public Safety Answering Point or CAC as well.
39.With respect to RDBN's submission, the Commission is of the view that it would not be appropriate to direct BC TEL to be responsible for gathering the ALI information and providing the CAC. The Commission notes that the RDs are responsible for making the association of the name and address with an Emergency Service Zone (ESZ). The Commission is of the view that RDs are in the best position to make the required links of address to an ESZ and to provide the CAC service.
40.Various intervenors submitted that the obligation for the RD to provide geographic data as set out in section 5.5c) is too onerous. The Commission considers that the RDs are best placed to ensure the provision of such information. To the extent they do not control information such as the naming of streets, the Commission considers that it would be reasonable for them to enter into arrangements to obtain such information. Therefore, the Commission is of the view that no change to section 5.5c) is required.
41.FVRD submitted that section 7, relating to confidential information, is too comprehensive and needs to be negotiated. FVRD submitted that 9-1-1 service is transparent and that "some of the information from BC TEL should be available to the public". FVRD also expressed a concern with the control of the 9-1-1 database, submitting that it will be a proprietary asset of BC TEL and noting that in other provinces the database is not available for commercial use.
42.BC TEL submitted that the proposed contract does not raise any new issues regarding "ownership" and "confidentiality" and that these issues have been dealt with in previous filings for 9-1-1 service.
43.The Commission notes that the confidentiality provisions in BC TEL's draft agreement are consistent with those in the TCI agreement. While the obligations imposed on the RDs to protect customer information are comprehensive, the Commission considers that they are appropriate, particularly given the importance of the subject matter.
44.FVRD objected to the requirement to inform BC TEL immediately of all geographic changes, claiming it did not have control over the naming of streets.
45.FVRD also submitted that because it does not have control over police and ambulance services, it can not give the required minimum of 90 days notice of an intended change in borders of the serving areas of ESZs. GVRD also objected to this requirement stating that the 90-day requirement for any changes to the ESZs is too restrictive, but that it would be prepared to accept a 90-day requirement on a "best efforts" basis.
46.In light of the concerns expressed by certain intervenors, the Commission considers that the notice period should be subject to mutual agreement, and that the 90-day requirement should be deleted.
47.RDBN submitted that the reference to "quality standards generally accepted in North American" is unreasonably vague and should be clarified. BC TEL submitted that the standards referred to in the agreement are those commonly accepted by the North American telecommunications industry and are available on the National Emergency Number Association (NENA) web site ( The Commission considers that this provision should be amended to include a reference to the standards on the NENA web site as an example of the quality standards for RDs.
48.The Commission agrees with RDs that the absence of a limitation of liability provision in favour of RDs is inappropriate. The Commission notes that BC TEL's limitation of liability in the agreement reflects the limitation of liability found in the company's terms of service. The Commission is of the view that the liability of the RDs should be the same as those applicable to BC TEL.
49.FVRD submitted that provincial legislation does not allow RDs to sign a contract longer than five years. BC TEL noted in an interrogatory response that it would be willing to reduce the term of the agreement to ensure that RDs may execute it for a term which is consistent with provincial legislation.
50.The Commission finds that in principle a 10-year term is appropriate. The Commission notes that a 10-year term reduces the risk for the company. However, given that there would appear to be some doubt as to whether RDs can legally sign a 10-year agreement, the Commission directs the company to consult with RDs on this issue and, if necessary, to file for approval a revised agreement providing for a different term.
51.Pending disposition of the rating principles applicable to WSPs and Centrex customers to be considered in a separate proceeding, TN 3710 and the associated agreement are approved on an interim basis with the following changes: a
uniform rate of $0.23 per telephone number ($0.08 per Centrex number).
52.Routine changes are to be allowed with respect to the existing 9-1-1 service for a period of three years.
53.BC TEL is directed to amend the agreement as follows:
(a) Amend section 5.5d) by removing the requirement to inform BC TEL immediately of all geographic changes;
(b) Amend section 5.5e) by removing the requirement to provide 90 days' written notice of intended ESZ changes and by substituting a requirement to provide such changes on such notice as is mutually agreed by the parties;
(c) Amend section 9 to include reference to the standards on the NENA website; and
(d) Amend section 12 by inserting the following language with respect to RDs' limitation of liability:
(i) Section 12.2: Except with regard to physical injuries, death, or damage to property occasioned by its negligence, the Regional District's liability for negligence is limited to $20.
(ii) Section 12.3: The Regional District and BC TEL shall, during the term of this Agreement, maintain sufficient insurance to cover their respective obligations under this Agreement and shall provide evidence of same to the other party or, if either the Regional District or BC TEL is self-insured, provide to the other party evidence that is satisfactory to that party that the Regional District and/or BC TEL, as the case may be, is and will be, at all relevant times, in a position to face successfully its monetary obligations stemming.
54.BC TEL is directed to file with the Commission for information, serving a copy on interested parties, the text of the agreement as modified above, within 30 days of this Order.
Laura M. Talbot-Allan
Secretary General
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