ARCHIVED -  Telecom Order CRTC 99-1155

Telecom Order CRTC 99-1155

Ottawa, 15 December 1999

Directory information service and local operator assistance service

File Nos.: Bell TNs 5908 and 6190; BC TEL TNs 3761 and 3823; TCI TNs 1024 and 1105; and TCEI TN 97

Summary

In this order the Commission grants final approval, with some modifications, to the applications of the companies for the provision of wholesale directory assistance and local operator assistance service to wireless service providers and competitive local exchange carriers.

Introduction

1. The Commission received applications from Bell Canada (Bell), BC TEL, TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI) (collectively, the incumbent local exchange carriers or ILECs) to offer wholesale directory assistance (DA) and operator assistance services to wireless service providers (WSPs) and/or competitive local exchange carriers (CLECs). In response to CLEC demand, some of the ILECs also proposed to introduce a call completion option to the wholesale DA service.

2. Directory information service (DIS) enables a WSP or CLEC to provide DA service to its own end-users by directing the end-users' DA requests to the ILEC's DA system. The WSP or CLEC must purchase lines (referred to as trunk-side connections) to route these requests to the ILEC's Traffic Operator Position System (TOPS) location. There, the requests will be processed by an operator and/or an automated response system.

3. Local operator assistance service (LOAS) will allow WSPs and CLECs to provide local operator assistance to their end-users who dial "0" (operator) to request assistance. The operator assistance may encompass the following call types: (a) requests for information (e.g. dialing instructions); (b) requests for WSP or CLEC contact numbers; and (c) busy line verification with/without interrupt where technically feasible.

4. The applications listed above were filed starting in December 1996, with the most recent being filed in February 1999. The Commission subsequently granted interim approval with some modifications. The Commission also established an interrogatory process followed by a round of supplementary comments.

5. Comments on some or all of the filings were received from DACo Telecommunications Inc. (DACo), CanopCo Inc. (CanopCo), Clearnet Communications Inc. (Clearnet), MetroNet Communication Group Inc., Rogers Cantel Inc. (Cantel), Vidéotron Télécom ltée, Microcell Telecommunications Inc. and Canadian Wireless Telecommunications Association (CWTA) (collectively, the parties).

Determinations

a Rates

6. Interveners contested the rating approach proposed by the ILECs. Parties submitted that the rates, or some of the rate elements, were excessive. Interveners submitted that the ILECs have an effective monopoly with respect to the provision of wholesale operator services and accordingly the provision of such services should be governed by the essential bottleneck pricing principle of Phase II causal cost plus a 25% mark-up. Clearnet and others questioned whether there were viable competitive alternatives to the ILECs' wholesale DA and operator services offerings, and cited the unresolved status of competitive alternatives to DIS, including mediated real-time access (MRTA), or electronic directory database access (EDDA), directory file service (DFS), and basic listing interchange file (BLIF). Subsequent to these comments, the Commission approved MRTA/EDDA on a final basis in Telecom Order CRTC 98-1264 dated 16 December 1998. It approved DFS on a final basis in Telecom Order CRTC 98-728 dated 23 July 1998 and granted interim approval to BLIF in Telecom Order CRTC 98-994 dated 9 October 1998.

7. Clearnet stated that the study period for the cost study should be seven years, as DIS and LOAS would be subject to similar if not identical market conditions as DFS.

8. Clearnet also submitted that the settlement rate charged by the Stentor companies to U.S. long distance companies for DA service of U.S. $0.35 or its equivalent of CDN $0.50 per call is a better indication of what the actual wholesale rate should be.

9. Interveners stated that alternatives available to WSPs would be foreclosed if ILECs locked customers into multi-year commitments. Clearnet noted that there are discrepancies between the companies, for example, TCI and TCEI did not offer a one-year contract option, whereas Bell and BC TEL did. Clearnet requested the Commission to direct these companies to provide for a one-year contract option.

10. The ILECs noted that the settlement rate charged by the Stentor-member companies for U.S. long distance DA service is an accounting rate based on principles of revenue settlement. Therefore, a comparison between the wholesale DA rates currently charged to U.S. carriers and the same rates proposed for Canadian telecommunications service providers is not appropriate.

11. The ILECs submitted that the proposed rates recover causal costs. The ILECs stated that the proposed rates also recognize existing and potential alternatives available to WSPs and CLECs.

12. The ILECs stated, among other things, that any study period longer than five years would be inappropriate, especially with the advent of local competition, rapidly changing market conditions, and rapidly evolving information technologies. That evolution could prompt modifications to the DIS and LOAS services much sooner than could be appropriately reflected by a seven-year study period.

13. The Commission notes its finding in Local competition, Telecom Decision CRTC 97-8, dated 1 May 1997, that DA and operator services are not essential services. Thus, the cost plus 25% mark-up rule is not mandatory in this case.

14. The Commission notes that the setting of tariffs for services and the establishment of settlement rates employ different principles. In setting tariffed rates for a service, the Commission generally has regard to the causal costs of the service. Settlement rates are filed as part of intercarrier agreements. These agreements usually involve principles such as proportional return traffic arrangements, no payment for balanced traffic, bill and keep arrangements and a settlement rate for traffic over and above the balanced level. The Commission does not consider it appropriate to rely on U.S. settlement rates for rate setting purposes.

15. The Commission notes that the ILECs have filed economic studies showing that the rates are compensatory and that the mark-ups are not excessive. The Commission considers that the ILECs have positioned the rates to recognize existing and potential alternatives available to WSPs and CLECs, as well as to recover causal costs. The Commission is of the view that it is appropriate to offer more favourable rates to customers who select long-term contracts that reflect cost savings. As well, EDDA, DFS and BLIF services have been approved by the Commission for competitors to access for the provision of their own directory assistance services. The Commission also notes that, as the telephone operator labour costs constitute the majority of the costs of DIS and LOAS, the use of a longer study period would not yield any significant changes in costs.

16. The Commission considers that the rates, terms and conditions are sufficiently similar among the companies, and that it is not necessary to establish identical terms. The Commission is of the view that it is not necessary to require TCI and TCEI to offer a one-year contract option in addition to their two- and three-year contract options. The Commission also finds that the regional cost differences (mainly operator costs) evidenced by the record are reasonable in this case.

17. In conclusion, the Commission is of the view that the proposed rates are just and reasonable.

B Withdrawal of line-side access

18. The ILECs proposed to discontinue the current routing arrangements (referred to as line-side connections) for DA and operator calls by CLECs and WSPs. Specifically, the ILECs proposed, in conjunction with the introduction of the proposed services, that they be allowed to discontinue line-side access by WSPs and CLECs to the ILECs' 411 (regular local directory assistance service), 1-HOME NPA-555-1212 directory assistance (long distance directory assistance) and operator services 60 days following the effective date of approval, with the exception of Bell who proposed to discontinue 411 line-side access by WSPs only. The ILECs stated that WSPs and CLECs would be given the option currently used by interexchange carriers (IXCs) of routing their DA calls trunk-side to the operator services platform and paying the tariffed rates.

19. The Commission did not grant interim approval to the discontinuance of line-side access to DA and operator services. The Commission required the continuing provision of monthlyline-side access arrangements to the ILECs' retail DA and operator services so that WSPs and CLECs could continue to access these services pending the emergence of a competitive operator services environment.

20. DIS and LOAS require the use of trunk-side connections between the ILEC's TOPS switch and the WSP or CLEC point of interconnection. The ILECs have proposed that line-side access to the retail DA and operator services by WSPs and CLECs be discontinued as this access arrangement results in a subsidization of the operations of the WSPs and CLECs by the ILECs.

21. Interveners stated that the ILECs had not substantiated that the current long distance DA service is uneconomic and that 411 line-side access results in a subsidization of WSP operations. CWTA and Clearnet submitted that there has been no change in either the regulatory regime or the interconnection arrangements between WSPs and the ILECs that would warrant the withdrawal of the line-side access to local directory assistance. CanopCo submitted that, should line-side access be discontinued, the Commission should institute a one-year phase out period to allow service providers adequate time to make other arrangements.

22. The ILECs submitted that the current line-side arrangements result in situations where WSP end-customers accessing DA are not assessed a charge for every call. The line-side arrangement does not allow the ILEC to distinguish between its retail customer and a CLEC or WSP end-customer. BC TEL submitted that its retail tariff for DA service is compensatory only when considered within the isolated context of each call which is actually billed. BC TEL submitted that it does not charge for numbers not found or calls where customers ask for other information. BC TEL further submitted that the majority of calls placed to a BC TEL operator do not attract a charge of any kind. Bell, TCI and TCEI expressed similar views as BC TEL.

23. Bell noted that the availability of trunk-side interconnection for the exchange of traffic with WSPs maintains their status as interconnecting carriers and that, continued WSP line-side access to DA is no longer appropriate. Bell further stated that trunk-side access to DA was previously not available to WSPs.

24. The Commission considers that the costs of handling calls by a WSP's (or a CLEC's) end-customers that are received by the ILECs over line-side connections are not fully recovered under the existing ILEC retail tariffs. The Commission considers that CLECs and WSPs should not be subsidized by the general body of subscribers or ILEC shareholders for access to the ILEC retail DA and operator services offerings. The Commission notes that WSPs and CLECs are potential providers of alternative DA and operator services. As noted in the previous section, the building blocks for competitive DA (EDDA, BLIF or DFS) are now available to competitors.

25. The Commission considers the competitive operator services environment is sufficiently developed that the existing line-side access arrangements for WSPs and CLECs to the ILECs' retail DA and operator services can be discontinued. To allow WSPs and CLECs the necessary time to migrate their traffic to the wholesale tariffs or to alternative offerings, approval of this portion of the tariff filings (i.e., discontinuance of line-side access) will be effective 90 days following the date of the order.

26. The Commission notes that TCI, TCEI and BC TEL have given WSPs and CLECs the option of routing their DA calls trunk-side to the company's operator services platform and paying the tariffed rate in the carrier access tariff. As noted earlier, Bell will continue to accept 1-NPA-555-1212 calls on a line-side basis by WSPs.

C Limitations of liability

27. As per the interim disposition, the Commission considers that Clause 9.1 of the proposed inter-carrier agreements overly limits liability and directs that it be amended so that the limitation of liability is as set out in the telephone companies' Terms of service, as amended from time to time.

D DIS – Call completion

28. BC TEL, TCI and TCEI proposed to offer directory information service call completion (DISCC) as an optional feature with DIS. If the end-user accepts call completion, the ILEC would return the call to the originating WSP or CLEC end office for call termination.

29. Clearnet submitted that the proposal to route DISCC traffic back to the WSP would impose unwarranted and unnecessary inefficiencies and costs on WSPs. Clearnet submitted that there is no apparent rationale as to why the ILEC could not simply route the call to the appropriate subtending end office according to the central office routing information for the retrieved directory listing.

30. Clearnet also submitted that, as wholesale DISCC would not be routed in a manner similar to the ILEC's retail call completion services, this would appear to constitute unjust discrimination contrary to section 27(2) of the Telecommunications Act.

31. Clearnet submitted that the absolute magnitude of the DISCC usage charge is excessive. Clearnet submitted that the ILECs have provided very little information to justify the proposed rates. Clearnet provided figures to show that a call termination component could be readily derived from existing tariffs and traffic usage assumptions and would be no greater than $0.002 per DIS call attempt. Clearnet submitted that a suitable cost-based rate structure is required for DISCC.

32. BC TEL submitted that alternative solutions exist in the market which enable WSPs to provide call completion to their end-customers. BC TEL submitted that the proposed rate has been positioned to recover associated costs as well as to be competitive with such existing alternatives. TCI and TCEI submitted that there are incremental costs associated with the proposed call completion service. TCI and TCEI cited costs for changes to the billing system software and maintenance of the data tables to track the number of call attempts. TCI and TCEI also submitted that the call completion rate has been set appropriately based on market conditions, and is well below the retail rate of $0.35.

33. BC TEL stated that the DISCC option, as configured and proposed, does not include a call termination component. DISCC offers WSPs the capability to provide their customers with the option of having their DA calls automatically terminated at the directory numbers for which their customers had sought directory assistance. BC TEL submitted that call completion is designed to be a convenience for the benefit of end-customers, to save them the trouble of having to hang up and dial the requested directory numbers themselves. BC TEL submitted that DISCC does not alter the current call termination routing arrangements. Such routing arrangements would, therefore, remain no less efficient than they are today without DISCC. TCI and TCEI expressed similar views.

34. TCEI added that, with competition now in the local exchange services market and the availability of local number portability (LNP), long term routing of the DA-retrieved number may not be by the end office NXX code but rather by location routing number. TCEI submitted that, since CLECs and WSPs are obliged to perform the LNP query dip and subsequent routing, the DIS traffic generated by the DISCC option must be routed back to the originating CLEC or WSP network to ensure the call will be completed properly.

35. The Commission considers that the DISCC service is an optional add-on to the basic wholesale DIS offering. As described by BC TEL, TCI and TCEI, the call completion option is a convenience to end-customers, and does not change the routing arrangements required to terminate a call. It simply allows the end-customer the convenience of not having to hang up to complete the call. The ILECs submitted that considerable additional cost would be associated with the termination of DISCC via the ILEC network. The ILEC would be required to put in place additional facilities and would have to manage additional processes including switch translations, local versus toll call determination, LNP query dips, and billing. These activities and facilities have not been included in the cost of providing DISCC and therefore, the call completion price would have to be increased to reflect these costs were the DISCC calls to be terminated via the ILEC network.

36. The Commission further notes that it should be the responsibility of the WSP to route the call to the appropriate network rather than the ILEC's responsibility for routing the call from its TOPS position.

37. In light of the above, the Commission considers that Clearnet's argument concerning unjust discrimination is without merit. The Commission further finds the proposed rates just and reasonable.

Other matters

A Year 2000 event liability waiver

38. Clearnet noted that TCI and TCEI (hereafter TCI/TCEI) have introduced a "Year 2000 event liability waiver" as clause 9.4 in the associated inter-carrier agreements.

39. Clearnet expressed its concern with respect to the presence of such a liability waiver in the context of a proposed agreement between telecommunications carriers. Clearnet submitted that the Commission should instruct TCI/TCEI to remove the proposed Year 2000 event liability waiver in its entirety.

40. In response, TCI/TCEI stated that, precisely because TCI/TCEI is aware of the Year 2000 problem and its possible consequences, it has proposed to limit its liability in the event that its customer, TCI/TCEI or third parties experience Year 2000 events which interrupt operator services.

41. In the Commission's view, inclusion of article 9.4 in the inter-carrier agreement would be inappropriate. The Terms of service limit TCI/TCEI's liability except in the case of negligence on the part of the telephone company. Further, except in cases where negligence results in physical injury, death or damage to the customer's property, the damages are limited to the greater of $20 and three times the service charge refunds. In the Commission's view, this regime continues to be appropriate. Accordingly, the Commission denies inclusion of the Year 2000 event liability waiver clause in the agreements.

B LOAS – Busy Line Verification/Busy Line Interrupt

42. Clearnet requested that the Commission direct TCI/TCEI to offer Busy Line Verification (BLV) and Busy Line Interrupt (BLI) as part of their LOAS offerings. Clearnet noted that the LOAS offerings of BC TEL and Bell provide for a BLV/BLI capability.

43. TCI/TCEI have subsequently determined that it is appropriate to include such a service as part of their LOAS offering. However, they noted that in addition to the CLEC or WSP requiring an overlay network, proper testing will be required before implementation of the BLV/BLI capability.

44. The Commission directs TCI/TCEI to offer BLV and BLI as part of their LOAS offerings, and to report in 60 days as to the testing and implementation of BLV/BLI.

C IXC and WSP access to DIS and LOAS

45. DACo submitted that IXCs and WSPs should have been included as customers for DIS and LOAS. Clearnet submitted that (Bell's) LOAS should be made available to WSPs.

46. The ILECs have generally stated that they are amenable to extending the provision of DIS and LOAS to all potential customers, where economically feasible. Bell stated that it would provide access to its services should the new market entrants request these services.

47. The Commission is of the view that it would be appropriate for DIS and LOAS services to be available to IXCs and WSPs, in addition to CLECs. Accordingly, the Commission directs the ILECs to amend their tariff pages to allow WSPs and IXCs access to DIS and LOAS on the same terms and conditions as CLECs.

D Third-party service provider (or non-carrier) access to DIS and LOAS

48. CanopCo stated that it is in the process of entering the operator services market in Canada as a third-party service provider which will provide operator services to carriers. CanopCo opposed the restriction of both DIS and LOAS to CLECs and WSPs. CanopCo stated that this restriction limits competition, discriminates against companies like CanopCo, and does not comply with the policy objectives of the Telecommunications Act. CanopCo noted that the Commission has generally permitted resale of the telephone companies' services in accordance with the resale and sharing tariff.

49. BC TEL and Bell submitted that telecommunications service providers may direct their operator service and DA traffic to the operator service provider of their choice. They submitted that there are significant precedents for the restrictions on access to directory-related services. For example, DFS, EDDA and BLIF are all limited with respect to which types of entities may be provided with the service. Bell and BC TEL also noted that there is no restriction on the resale and sharing of DIS and LOAS in their respective proposed tariffs.

50. The Commission notes that, as part of their DIS and LOAS services, the ILECs will provide:

• on an optional basis, a Daily usage file containing the records of calls generated by end-users including date, time, calling and requested numbers (if available); or

• as part of the basic DIS and LOAS, the Extended Bellcore AMA Format (EBAF) information detailing call records generated by end-users including time, date, calling and requested numbers (if available) on a monthly basis at no additional charge.

51. The availability of the Daily usage file and the EBAF file gives DIS characteristics similar to DFS, EDDA and BLIF. In particular, the use of electronic transfer of a data file containing directory-related information gave rise to the Commission's imposition of restrictions on access to DFS, EDDA and BLIF. It was necessary to balance concerns related to subscriber privacy if unrestricted access was provided to directory-related information in electronic form, versus the benefits of competition in directory-related areas.

52. The Commission considers that the information provided as part of DIS and LOAS, even in electronic form, is not particularly useful for directory-related applications. Thus, provision of the information in electronic form would pose a minimal threat to privacy. The Commission is also of the view that the information being provided is necessary for billing and collection purposes, so as to allow for efficient billing and dispute resolution.

53. In light of the above, the Commission considers that third-party access to DIS and LOAS does not give rise to serious privacy concerns. However, with respect to LOAS, the Commission has concerns about whether there are appropriate safeguards in place to ensure that 0- emergency calls placed through third parties (i.e. non-carriers) would ultimately be routed to the appropriate public service answering position. The Commission notes that efforts are underway in the context of the CRTC Interconnection Steering Committee to address the issues regarding routing of 0- emergency calls.

54. Accordingly, the Commission is of the view that it would be appropriate to grant third-party access to DIS at this time. However, in light of concerns related to the handling of emergency calls, the Commission does not consider third-party access to LOAS appropriate at this time. The Commission would be willing to consider the issue of third-party access to LOAS once concerns related to 0- emergency routing have been resolved. Accordingly, the Commission directs the ILECs to amend their tariff pages to allow third-party access to DIS.

E Emergency calls in rural areas where no 9-1-1 exists

55. Cantel submitted that when one of its subscribers dials 9-1-1 in areas where there is no 9-1-1 service, Cantel routes the call to the local operator for handling. Cantel noted that this is the only way it can ensure its subscribers receive assistance in emergency situations. Cantel submitted that BC TEL should continue to allow line-side 0- calling from Cantel and other WSPs in these circumstances.

56. BC TEL submitted that it is irresponsible of Cantel to translate their end-user 9-1-1 calls into 0- calls and to route them to BC TEL's operators, and that routing 9-1-1 calls to a BC TEL operator is an inappropriate use of the 0- service. BC TEL proposed that Cantel should translate any 9-1-1 dialed call into the appropriate seven to 10 digit emergency number of the public service agency closest to their cell site to ensure optimum emergency response.

57. The Commission considers that it is Cantel's responsibility to ensure the proper routing of its 9-1-1 calls. However, the Commission also sees merit in the routing arrangements employed by Cantel provided that the ILECs are reasonably compensated for such traffic directed to their networks. Accordingly, the Commission initiates a process as detailed below to determine whether the ILECs should provide this service in rural areas and under what rates, terms and conditions.

F DIS – Clearnet deficiency request – U.S. long distance DA settlement rate

58. As noted earlier, Clearnet suggested that the DA services provided to U.S. long distance service providers and the DA services provided to Canadian telecommunications service providers are equivalent. Clearnet submitted that the Commission should direct BC TEL, Bell and TCI to provide material and comprehensive answers to the questions described in interrogatories BCTEL(Clearnet)21May98-4 WOS, Bell(Clearnet)21May98-4 WOS and TCI(Clearnet)22July98-5 WOS. Clearnet noted that the ILECs refused to provide any clarification with respect to the nature and history of the DA settlement rate in response to those interrogatories.

59. The Commission considers that Bell, BC TEL and TCI have provided satisfactory answers. The Commission also considers that the level of detailed information on this subject requested by Clearnet is not relevant to this proceeding. Clearnet's request for further responses is denied.

G DIS – Provision of address information

60. TCI and TCEI have defined DIS to include quoting the desired telephone number and/or address information if found in the company's directory database.

61. The Commission notes that it has not disposed of the directory-related issues identified in TELUS Communications Inc. and TELUS Communications (Edmonton) Inc. – Revisions to directory assistance services, Telecom Public Notice CRTC 98-23, dated 9 September 1998 (PN 98-23).

62. In light of the foregoing, the Commission defers consideration on a final basis of the description of DIS in the tariffs and associated agreements of TCI and TCEI for the provision of DIS service.

Conclusions

63. In light of the foregoing, the Commission orders that:

a) Bell TNs 5908/A and 6190/A; BC TEL TNs 3761/A and 3823; TCI TNs 1024 and 1105; and TCEI TN 97 are granted final approval with the changes noted below.

b) The ILECs may discontinue line-side routing arrangements for DA and operator calls as proposed in their applications and discussed in this order within 90 days from the date of its release.

c) Clause 9.1 of the agreement is to be amended such that the limitation of liability is as set out in the Terms of service, as amended from time to time.

d) Clause 9.4 of the inter-carrier agreement dealing with Year 2000 event liability waiver is to be deleted by TCI and TCEI.

e) The ILECs are to amend their tariffs as needed to allow access to DIS by WSPs, IXCs and third parties and to allow access to LOAS by WSPs and IXCs.

f) TCI and TCEI are to amend their tariffs to offer BLV and BLI as part of LOAS, and to file a report within 60 days regarding testing and implementation.

g) The ILECs are to issue forthwith revised tariff pages and amended agreements to reflect the above.

h) The definition of DIS for the TCI and TCEI tariffs and associated agreements remains with interim approval pending the disposition of the PN 98-23 proceeding.

65. The Commission also establishes the following procedure with respect to the routing of emergency calls in rural areas where no 9-1-1 exists:

a) The ILECs are to file within 30 days, serving a copy on the parties, their comments and a proposed tariff including rates, terms and conditions for the routing of 0- emergency calls from carriers in rural areas where there is no 9-1-1 service.

b) Parties may file comments by 24 January 2000, serving a copy on the ILECs.

c) ILECs may file reply comments by 3 February 2000, serving a copy on the parties who filed comments.

d) All material to be filed or served by a specific date must be received and not merely sent, by the date indicated.

Secretary General

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