ARCHIVED -  Telecom Order CRTC 98-928

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Telecom Order

Ottawa, 16 September 1998
Telecom Order CRTC 98-928
By letter dated 29 June 1998, ITNets Inc. (ITNets) provided a technical audit report and the accompanying engineer's affidavit in response to Telecom Order CRTC 98-559 dated 8 June 1998 (Order 98-559), wherein the Commission deferred approval of a contribution exemption application dated 4 December 1997 with respect to overseas private line circuits subject to the provision in 30 days of "a satisfactory independent technical audit, confirming that there is no leakage to the PSTN [public switched telephone network] on the transit portion of the [company's] network".
File No.: 8626-J9-01/97
1.In its original application, ITNets requested a contribution exemption with respect to overseas private line circuits provided by Teleglobe Canada Inc. (Teleglobe). ITNets described its service as a "fax-to-fax service over the Internet in overseas countries". ITNets noted that it does not use Bell Canada (Bell) local facilities to complete its fax calls and that all of the traffic sent through ITNets' network is originated overseas and terminated overseas.
2.By letter dated 22 July 1998, Bell stated that it has reviewed the technical audit report and the accompanying affidavit from ITNets, and noted that it confirms that traffic carried over a private line connection to Teleglobe appears to carry only transit traffic which does not originate or terminate in Canada. Bell stated that the auditor noted further that an ongoing control procedure has been instituted whereby ITNets tracks system changes to confirm that the use of this connection continues to comply with the requirements for a contribution exemption, and that all such changes are approved in writing by an officer of ITNets.
3.In light of the above, Bell agreed with the request for a contribution exemption with respect to the overseas access circuits to Teleglobe.
4.However, Bell also noted that the auditor has identified another circuit which connects the ITNets' hub location with another carrier for the purpose of terminating some of ITNets traffic to domestic as well as international locations. Bell stated that the other carrier, not ITNets, provides and is responsible for the circuit to carry ITNets' traffic. Bell assumed that the other carrier is subject to contribution charges at the ultimate terminating point, where appropriate, through the use of the other carrier's terminating facilities.
5.However, Bell also noted that when such traffic from overseas locations is destined for domestic locations, it would normally also attract contribution at the point where the traffic enters Canada. Bell stated that such contribution is normally assessed on an overseas access circuit from Teleglobe carrying the traffic to Canada. Bell stated that in this case, no such circuit is required since the traffic arrives in Canada over the Internet. Bell submitted that in such cases it would be appropriate to assess contribution on the access circuits between the reseller and the interexchange carrier, in the absence of an overseas access circuit as defined by the Commission and in the company's tariffs. Accordingly, Bell stated that it intended to provide a copy of this response to the other carrier and will initiate an application to address this issue with a review to redressing this inequity.
6.By letter dated 29 July 1998, Bell stated that subsequent to its submission of 22 July 1998, the Commission issued Telecom Order CRTC 98-740 dated 27 July 1998 (Order 98-740) in which it determined that Canada-U.S. circuits and overseas access circuits used to provide international joint-use data continue to be exempt from contribution charges. Bell noted that the circuit in question in the ITNets application involves the carriage of international joint-use data traffic, similar to the type of circuit which is exempt from contribution charges pursuant to Order 98-740. In light of this determination, Bell stated that it did not plan to initiate an application with respect to this matter at this time.
7.The Commission is of the view that ITNets has provided a satisfactory technical audit which meets the requirements of Order 98-559 and notes that Bell also agrees.
8.The Commission is of the view that Bell has correctly analyzed the situation with respect to cross-border circuits carrying joint-use data traffic pursuant to Order 98-740 and that no further action is required regarding this point.
9.In light of the foregoing:
(i)ITNets' application is approved effective the date of the application (4 December 1997); and
(ii)the configuration is subject to the possibility of future random audits, pursuant to the Commission's precedent.
Laura M. Talbot-Allan
Secretary General
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