ARCHIVED -  Telecom Decision CRTC 99-18

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Telecom Decision CRTC 99-18

Ottawa, 1 December 1999

Customer definition and ownership of subscriber information in independent telephone companies' territories

File No.: 8622-C12-06/99

Summary

The Commission has concluded that independent telephone companies should adopt the same definition of "customer" that applies to areas served by major telephone companies.

The Commission has examined the ownership of subscriber data information in preparation for long distance competition in areas currently served by independent telephone companies. This decision notes that an incumbent long distance provider should have rights of ownership to its customers' long-distance profile information. Independent local service providers must provide information regarding their customers to incumbent toll carriers within 30 days of a request. When customer profiles are transferred, consumer privacy codes must be taken into consideration.

Background

1. On 13 January 1999, the Commission issued Telecom Public Notice CRTC 99-2, Customer definition and ownership of subscriber information in independent telephone companies' territories (PN 99-2).

2. During the proceeding leading to Telecom Decision CRTC 98-14, Regulatory framework – Ontario Northland Transportation Commission, 1 September 1998 (Decision 98-14), concerns arose as to the role and responsibilities of the long distance service provider in the designated serving territories of Northern Telephone Limited (Northern), Abitibi-Consolidated and Cochrane Public Utilities Commission (Cochrane). Each of these companies has interconnection agreements with Ontario Northland Transportation Commission (O.N. Tel).

3. In PN 99-2, the Commission noted the importance of having the definition of a "customer" in place before toll competition was implemented in O.N. Tel's territory, particularly given that it will be necessary to resolve questions relating to subscriber data ownership and end-customer service provider issues. The Commission also considered that a determination on these matters may have broad implications for other independent telephone companies who were not parties to the Decision 98-14 proceeding.

4. In PN 99-2, comments were solicited on the following issues:

a) the appropriateness of setting a uniform definition in the general tariffs of the independent telephone companies of what constitutes a customer;

b) the appropriateness of extending to the independent telephone companies the common definition of customer set out in Definition of customer, Telecom Decision CRTC 97-4 dated 26 February 1997 (Decision 97-4);

c) the ownership of customer data information; and

d) the appropriateness of approving a rate for the provision of toll customer data chargeable by the owner of that data.

5. In Decision 97-4, as modified by Telecom Order CRTC 97-1176 dated 27 August 1997 (Order 97-1176), the Commission determined the following definition of customer to be appropriate for the former Stentor-member companies:

"A person or legal entity, including a reseller or sharing group, that purchases telecommunications services from the company, and is liable to the company for those services."

6. The Commission directed that the following qualifications be included in the resale and sharing provisions of the former Stentor-member companies' tariffs:

"For greater certainty, a customer is deemed not to act as a reseller or sharing group if the telecommunications services that it purchases from the company are used only by a company and one or more affiliates (as defined in this tariff item with the substitution of "customer" for "company"); a company and its franchises or its authorized franchisees; or a co-operative organization and its associated member companies."

"For greater certainty, a government is deemed not to act as a reseller or sharing group if the telecommunications services that it purchases from the company are used only by departments, agencies, crown corporations or other entities:

a) declared by statute to be part of the government in question; or

b) with respect to the employees of which the government has the obligations of employer."

7. Parties to this proceeding include BC TEL, Bell Canada (Bell), Northwestel Inc. (Northwestel), the independent telephone companies [including the companies that are members of Association des Compagnies de Téléphone du Québec (ACTQ), Canadian Alliance of Publicly-Owned Telecommunications Systems (CAPTS) and Ontario Telephone Association (OTA), and CityTel (formerly Prince Rupert City Telephone), Northern, and O.N. Tel], Québec-Téléphone and Télébec ltée (Télébec). In this decision, reference to the Independents indicates the independent telephone companies, plus Northwestel, Québec-Téléphone and Télébec.

8. Comments were received from ACTQ, Bell, CAPTS, CityTel, Microcell Telecommunications Inc. (Microcell), Northern, Northwestel, O.N. Tel, OTA, Québec-Téléphone and Télébec.

Issues

a) Appropriateness of setting a uniform definition

9. All parties participating in the proceeding expressed their support for setting a uniform definition of what constitutes a customer for the Independents.

10. The Commission is of the view that no unique circumstances exist that would warrant setting different definitions of what constitutes a customer in the Independents' territories. In light of the overall agreement on this issue, the Commission considers that a uniform definition of what constitutes a customer for the Independents is both appropriate and desirable.

b) Appropriateness of adopting the Decision 97-4 definition

11. The parties in this proceeding similarly expressed almost unanimous support for extending the common definition of customer set out in Decision 97-4, as varied by Order 97-1176, to the Independents.

12. Bell, CityTel, Microcell, Northern, Northwestel, O.N. Tel, OTA, Québec-Téléphone and Télébec agreed that the Decision 97-4 definition (as varied) should be applied to the Independents.

13. O.N. Tel noted that this definition would not vary regardless of the nature of the service provider and would minimize opportunities to circumvent regulatory rules, especially with respect to aggregation and contribution issues. Télébec noted the importance of having uniformity when trying to account for discounts on toll traffic aggregation.

14. Northwestel agreed with the adoption of the definition. However, Northwestel discovered that some current long-term relationships/ agreements with customers would not conform to the definition. Northwestel requested a transitional period of no less than one year following the release of this decision to enable its relationships with customers to conform to the new definition.

15. ACTQ proposed its own definition of customer to be applied in the case of independent local exchange carriers (LECs) operating in a non-competitive environment. It added that for services offered in a deregulated environment (such as services offered by a reseller), there is no need for the term "customer" to be defined and included in the General tariff.

16. In reply, Bell noted that ACTQ companies are no longer operating in a non-competitive environment. As a result of Telecom Decision CRTC 96-6, Regulatory framework for the independent telephone companies in Quebec and Ontario (except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), 7 August 1996, resellers and interexchange carriers (IXCs) have been allowed to compete in the territories of ACTQ companies and other independent LECs. Bell added that ACTQ companies are not operating in a deregulated environment. Bell noted that, while it is not necessary to define the term "customer" with respect to a service which is not tariffed, it is nevertheless essential that a "customer" of an Independent be properly defined with respect to tariffed services, even where such tariffed services are provided to resellers.

17. Based on the record of this proceeding, the Commission is of the view that no unique circumstances exist to use a different definition of customer for the Independents than what exists for the former Sentor-member companies.

18. The Commission also notes that as national customers may have a presence in the Independents' territories, it is important to ensure that a customer is treated in a manner which is consistent with treatment in the former Stentor-member companies' territories. Using a common definition of customer across Canada would alleviate any inconsistencies and possible misunderstandings. Therefore, the Commission extends the definition of customer from Decision 97-4, as varied by Order 97-1176, to the Independents. The Commission considers Northwestel's request reasonable and grants it a one-year implementation period from the date of this decision to allow its relationships or agreements to be changed or expire, so the customers will fall within the new definition.

c) Ownership of toll customer data

19. Several parties stated that long distance service providers own or are entitled to access customer data with respect to long distance services provided.

20. Bell submitted that any carrier which is the service provider of a particular telecommunications service should be entitled to access customer information which is directly related to the provision of that service, including any information which results from billing and collection functions.

21. Bell noted that both the local and long distance service providers would be entitled to basic customer information, such as the customer's name, billing address, and pre-subscribed working telephone number. However, access to the toll profile would belong exclusively to the toll service provider as it constitutes competitively sensitive information.

22. Bell and O.N. Tel characterized the arrangement they have in certain independent territories as one where the independent LEC carries out billing and collection for toll services on behalf of Bell or O.N. Tel, and they pay the LEC for this service in the carrier access tariff (CAT) charges. They submitted that the incumbent LECs have been acting as agents for their toll service provision, and that Bell and O.N. Tel have a right to the customer data information relating specifically to the provision of toll services. In Bell's view, the toll profile information is proprietary to the long distance service provider, and should not be made available to the incumbent LECs or any other service provider. O.N. Tel added that once returned to the toll providers, the information should be deleted from LEC records.

23. CAPTS disagreed with O.N. Tel's submission that the LEC was the agent of the long distance service providers. CAPTS submitted that separating and deleting toll information in the manner requested by O.N. Tel would not be reasonable or efficient for the LEC, and that there is no customer information entitlement as a result of being the toll provider.

24. CAPTS argued that any compensation arrangements between the LEC and IXC relate to ongoing commitments in such areas as the provision of applicable network facilities, billing and collection, and administering customer accounts. CAPTS added that providing customer information to the incumbent toll provider would create a barrier to effective competition in the long distance markets of the independent telephone companies.

25. In reply, Bell noted that theCAPTS members' CAT, approved by the Commission, states that its member subscribers are toll customers of Bell and that the CAPTS members carry out toll billing and collection functions on behalf of the toll carriers.

26. O.N. Tel stated that it is the default and only carrier for toll customers and, as such, it owns all the related toll customer data. O.N. Tel added that LECs possess toll customer data because they perform billing and collection functions for O.N. Tel for which they have already been compensated. O.N. Tel added that IXCs having information about their customers will in no way create a barrier to long distance competition and that effective competition has resulted in numerous markets throughout Canada where the incumbent toll provider was in possession of customer-specific information.

27. The Commission recognizes that a unique relationship has historically existed between the various telecommunications providers in the Independents' territories. The Commission notes that O.N. Tel serves as the incumbent toll carrier for the local exchanges served by Cochrane, Abitibi-Consolidated, Northern, some Bell local exchanges and its own local exchanges. The Commission also notes that it determined in Decision 98-14 that O.N. Tel is the long distance service provider to subscribers in its serving territory.

28. Consistent with this determination, the Commission considers that subscribers in O.N. Tel's operating territory are the toll customers of O.N. Tel.

29. The Commission notes that Bell has historically been the incumbent toll carrier in the territories of the independent telephone companies in Ontario and Quebec except in the territories of O.N. Tel, Northern, Cochrane, Abitibi-Consolidated, Le Téléphone de St-Éphrem Inc. (St-Éphrem), La Compagnie de Téléphone de St-Victor (St-Victor) and portions of Sogetel inc.'s (Sogetel) territory. Similarly, Québec-Téléphone has been the toll carrier for St-Victor and St-Éphrem and is the largest toll provider in Sogetel's territory. Therefore, the Commission considers that, unless a different toll carrier is selected by the subscriber, the subscribers in the independent telephone companies' territories served by Bell and Québec-Téléphone are toll customers of Bell and Québec-Téléphone respectively.

30. The Commission notes that in the areas other than their own local exchanges, O.N. Tel and Bell have not performed customer service and billing collection functions for toll customers. Rather, for customer and administrative convenience, these functions have been performed by the respective independent telephone companies for O.N. Tel and Bell. As such, only the former have access to toll customer information. The Commission considers that the independent telephone companies possess toll customer information by virtue of their historical relationship with the incumbent toll providers.

31. Furthermore, with regard to CAPTS' position that providing toll customer information to the incumbent toll provider would create a barrier to effective competition, the Commission notes that in Telecom Decision CRTC 92-12, Competition in the provision of public long distance voice telephone services and related resale and sharing issues, 12 June 1992 (Decision 92-12), the Commission directed the incumbent carriers, as LECs, to provide new entrants with customer information reports on customers who move, add or change (local) service. However, the Commission considered that retention of toll customer profile information by incumbent carriers would not create barriers to competition.

32. The Commission notes that an integrated carrier (one that provides local and toll services) would be in exclusive possession of the customer's toll profile. In the Commission's view, billing and collection agreements are administrative arrangements which do not determine ownership of the information. Accordingly, a Commission order to the independent telephone companies to provide toll customer information to the incumbent toll provider for its use would create a situation in such independents' territories that would be similar to the situation in the former Stentor-member companies' market when Decision 92-12 was rendered. Since toll competition has developed in the former Stentor-member companies' territories, the Commission finds CAPTS' position unwarranted.

33. The Commission considers that consistent with the competitive environment created by the Commission in Decision 92-12, the incumbent toll provider should have exclusive rights of ownership to the information contained in its customer's toll profile information (TPI) including long distance calling patterns. The TPI includes the destination number, duration of call, time of day and whether the call is dialed direct or operator assisted.

34. The independent telephone companies should surrender, in machine-readable format where available, the current interexchange customer information. It should include the basic customer information such as the customer's name, billing address, and pre-subscribed working telephone numbers and all other current information contained in a subscriber's customer information report as described in Bell's Access services tariff for interconnection with interexchange carriers (IXCs), Item 200, and the TPI, to the incumbent toll provider no later than 30 days from the request. Once surrendered, upon request by the incumbent toll provider, the independent telephone companies should delete the TPI from their records.

35. The Commission also notes that Bell's Access services tariff for interconnection with interexchange carriers (IXCs), Item 200(e) provides that to protect subscriber privacy, the recipient of information will not engage in telemarketing when subscriber-requested privacy is indicated by the privacy code listed in Item 9(d). The Commission considers that a similar provision should be included with respect to the transfer of customer information.

36. The Commission considers that the terms and conditions of future transfer of new customer information between the independent telephone company and the incumbent toll carrier are best negotiated between the parties. The Commission hereby directs the parties to file a report following such negotiations no later than 60 days from the request of transfer of new customer information.

d) Rates for the provision of toll customer data

37. Several parties submitted that a rate could be charged for the provision of basic customer information. Bell and Télébec both stated that the Independents could have a tariff provision like that of Bell's Item 200, which allows the supply of customer information reports.

38. ACTQ, CAPTS, CityTel and Microcell were of the view that the telephone companies providing the information should be allowed to recover their costs or charge fees for the provision of information.

39. In reply, O.N. Tel submitted that it should not be required to pay the LECs to retrieve the information because the LECs have already been compensated by O.N. Tel for costs associated with the provision of its toll customer information through settlement rates or the direct toll component of the CAT.

40. Since the costs of gathering and processing basic customer information and TPI are already included in the CAT, the Commission determines that no additional rate be charged for the incumbent toll provider to receive access to such information.

Conclusion

41. The Commission directs the Independents to issue revised tariff pages reflecting the changes noted above, within 30 days of the date of this decision.

42. With respect to the transfer of such information, the Commission directs that a provision be included similar to Bell's Access services tariff for interconnection with interexchange carriers (IXCs), Item 200(e) which provides that to protect subscriber privacy, the recipient of information will not engage in telemarketing when subscriber-requested privacy is indicated by the privacy code listed in Item 9(d).

Secretary General

This document is available in alternative format upon request and may also be viewed at the following Internet site:

http://www.crtc.gc.ca

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