ARCHIVED -  Telecom Order CRTC 98-886

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Telecom Order

Ottawa, 3 September 1998
Telecom Order CRTC 98-886
By letter dated 1 May 1998, Call-Net Enterprises Inc. (Call-Net), on behalf of Sprint Canada Inc. (Sprint Canada), submitted an application requesting a contribution exemption with respect to circuits which are used and provisioned as dedicated Canada-United States (U.S.) facilities for five end-customers of Sprint Canada.
File No.: 8626-S2-04/98
1.In support of its application, Sprint Canada filed affidavits from each of its end-customers affirming that the cross-border private lines in question are dedicated solely to each end-customer's use. Sprint Canada requested that the contribution exemption be effective the date of installation of the circuits.
2.By letter dated 13 May 1998, Stentor Resource Centre Inc. (Stentor) submitted comments on behalf of Bell Canada (Bell) and TELUS Communications Inc. (TCI) (collectively, the companies).
3.Stentor noted that four of the Canada-U.S. private line circuits which are the subject of Sprint Canada's application appear to originate in Bell territory, while the fifth Canada-U.S. private line circuit appears to originate in the territory of TCI.
4.Stentor stated that it has reviewed the affidavits and noted that they appear to satisfy the Commission's evidentiary requirements with respect to such exemptions. Accordingly, Stentor stated that the companies agree with the requested exemptions. With respect to Sprint Canada's request that the contribution exemptions be effective the date of installation, Stentor noted that the Commission provided guidelines regarding the effective dates of contribution exemptions in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 (PN 95-26). Stentor noted that in PN 95-26, the Commission stated that "contribution exemptions will generally be granted effective the later of the date of application or the date of installation, absent special circumstances". Stentor noted that Sprint Canada has not suggested, in its application, that any special circumstances exist. In light of this, the companies submitted that, should the Commission approve Sprint Canada's application, the effective date should be the date of application which is consistent with the guidelines established in PN 95-26.
5.By letter dated 14 May 1998, Call-Net again requested that the Commission grant the exemptions effective the date of installation of the circuits. Call-Net stated that as the Commission is well aware, in the past, Call-Net and Sprint Canada have urged the Commission to allow Sprint Canada to reference an umbrella exemption order in respect of all existing and future cross-border dedicated customers, precisely because of the administrative costs and inconvenience, and the competitive risk, of filing an exemption application on the public record every time Sprint Canada signs on a new customer. Call-Net stated that although the Commission has rejected this proposal, it is impractical for Call-Net to submit an application on an ad-hoc, per-customer basis. Call-Net stated that instead, what it decided to do is to file a single application for several customers at random, approximately every three months.
Call-Net submitted that this avoids the administrative hassles and costs of individual applications and enables Call-Net to ensure that all required supporting documentation is in place.
6.Call-Net submitted that the need for administrative efficiency and orderly processing of customer activation and the attendant contribution exemptions constitute special circumstances in this particular case. Call-Net stated that as a result, in any batch of exemption applications the installation dates for some customers would predate others. Call-Net submitted that the customers all merit exemptions nonetheless, and each exemption should be granted effective the date of installation, in consideration of the special circumstances cited above.
7.The Commission notes that Call-Net's application raises two issues: (1) disposition of the applications for the circuit groups identified in Sprint Canada's application including whether the date of installation should be the effective date; and (2) the appropriateness of Sprint Canada's proposal to file applications every three months.
8.The Commission notes that, the date of Call-Net's application is 1 May 1998, while the dates of affidavit execution are: (1) FORE Systems 23 December 1997 (4-month delay from date of application); (2) Toronto Dominion Bank 30 May 1997 (11-month delay); (3) Magna International Inc. 10 March 1998 (2-month delay); (4) Lakeside Packers 23 December 1997 (4-month delay); and (5) PACCAR Inc. 24 February 1998 (2-month delay).
9.With respect to the first issue, Call-Net has requested approval of the various circuit groups effective the date of installation. The Commission notes that in PN 95-26, it stated that "contribution exemptions will generally be granted effective the later of the date of application or the date of installation, absent special circumstances". In practice, the Commission has, in many cases, allowed the exemption to be effective the date of affidavit execution rather than the date of the covering letter formally requesting a contribution exemption when the date of affidavit execution precedes the date of the letter, and there is no significant difference between the two.
10.The Commission continues to be of the view that it would generally not be appropriate to make the date of installation the effective date in order to encourage the timely execution of affidavits. Further, the Commission is not persuaded that administrative burden constitutes special circumstances.
11.In the current application, consistent with previous practice, the Commission is of the view that it would be appropriate to grant approval effective the date of execution of the affidavits for four of the circuit groups. The Commission notes the dates of affidavit execution are generally within two to four months of the date of application. However, there is one exception, that of Toronto Dominion Bank which is 11 months earlier than the date of application. In this case, the Commission is of the view that Call-Net has not acted in a timely manner and that the effective date should be the date of application.
12.With respect to the second issue, the Commission considers that it would be reasonable to relieve Call-Net of the burden of filing individual applications as each customer is signed up. After reviewing the evidence in this case, the Commission finds it appropriate that
Call-Net file a single application every 120 days covering a number of customers provided the single application is filed within 120 days of the date of execution of the affidavits of the customers.
13.In light of the foregoing, the Commission orders that:
(i) in the future, Call-Net may file a single application every 120 days covering a number of customers provided the single application is filed within 120 days of the date of execution of the affidavits of the customers in question;
(ii) the application for the following circuit groups is approved effective the dates of affidavit execution: FORE Systems 23 December 1997; Magna International Inc. 10 March 1998; Lakeside Packers 23 December 1997; PACCAR Inc. 24 February 1998; and
(iii) the application for the circuits for the Toronto Dominion Bank is approved effective the date of the application (1 May 1998).
Laura M. Talbot-Allan
Secretary General
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