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ARCHIVED -  Telecom Order CRTC 99-1204

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Telecom Order CRTC 99-1204

  Ottawa, 22 December 1999
  By letter dated 25 June 1999, EDS Systemhouse Inc. (EDS), the successor of SHL Systemhouse Co. (SHL) by amalgamation, filed an application on behalf of SHL. The application sought exemption from contribution charges for circuits used to provide dedicated and local service configurations to an EDS client, as well as certain circuits used by EDS for its own internal use.
  File No.: 8626-S29-02/99
  1. EDS' submission was filed in confidence with the Commission. Bell Canada (Bell) and BC TEL and TELUS Communications Inc. (jointly TELUS) were provided with abridged versions of the application.
  2. EDS submitted two affidavits dated 25 June 1999 and a letter from a private branch exchange (PBX) vendor. EDS submitted that a costly technical audit was not necessary given the nature of the network configurations and the company's proposed network changes. EDS requested that the effective date of its administrative exemptions be the date of installation. With respect to the other circuits and networks provided to a single customer of EDS, the company requested that an exemption be effective as of the date that SHL assumed control of the dedicated client networks.
  3. By letter dated 22 July 1999, Bell submitted comments on behalf of itself, Maritime Tel & Tel Limited, MTS Communications Inc. and NBTel Inc. (the companies). The companies reviewed the diagrams and circuit lists provided by EDS and noted that they appear to describe network configurations that would be classified as contribution exempt on the basis of the manner in which they are provisioned. In keeping with EDS' request for confidentiality, the companies provided their response in confidence to the Commission, EDS and TELUS; however, they indicated that they have no objection to the placement of their submission on the public record.
  4. With respect to evidentiary requirements, the companies noted that there appears to be unusual circumstances in this case which might preclude the requirement for a technical audit, assuming that alternate satisfactory evidence is provided. These include (a) the provision of partitioned networks that are dedicated to the use of a single customer (there are no other customers sharing the facilities) and (b) EDS' statement that it does not offer any services which would attract contribution charges. Therefore, the networks in question could not share facilities with services which attract contribution charges.
  5. The companies agreed that a technical audit is not necessarily required in this case; however, they indicated that the option of a follow-up technical audit should be available, if that should be appropriate at a later date. The companies noted EDS' statement that "… ongoing network changes are expected to eliminate the requirement for a contribution exemption application for these circuits by July, 1999". The companies did not agree with the conclusion that no exemption will be required after July 1999.
  6. In terms of appropriate alternate evidentiary requirements, the companies submitted that the provision of affidavits and the letter from the PBX vendor appear to be appropriate; the companies generally agreed, with one exception, that EDS has satisfied the alternate evidence requirements with respect to the configurations identified.
  7. With respect to the EDS Dedicated Administrative Data Network, the companies noted EDS' affirmation that the circuits for which the exemption is required are dedicated solely to EDS' use. The companies submitted that EDS should provide the appropriate affidavit affirming that the network, and specifically the circuits which require an exemption, is provisioned as dedicated solely for EDS' use.
  8. The companies agreed with EDS' request for an effective date for its administrative circuit exemption as of the date of installation. With respect to the other circuits and networks provided to a single customer of EDS, the companies noted that it has requested that an exemption be effective as of the date that SHL assumed control of the dedicated client networks. On the basis that EDS has confirmed that the networks were assumed as dedicated to one client and that they continue to be dedicated to one client's use, the companies agreed with the requested effective date. The companies also submitted that the networks that EDS control and maintain should be subject to the possibility of future random audits.
  9. By letter dated 6 August 1999, TELUS filed comments in confidence with the Commission, EDS and Bell. TELUS reviewed EDS' various circuit diagrams and configurations and considered that the circuits at issue are generally managed by EDS. TELUS stated that the X.25, Router and Voice networks are dedicated to one client, and are properly exempt from contribution charges.
  10. For the EDS Dedicated Administrative Data Network configuration, TELUS noted that the particulars related to the circuits involved are not described specifically in Affidavit #2, and submitted that EDS should provide a revised affidavit.
  11. TELUS considered that the evidence provided by EDS regarding the EDS Calgary Partitioned PBX Network configuration satisfies the applicable evidentiary requirements for this configuration.
  12. With reference to all other EDS-claimed internal administrative circuits, TELUS agreed that the company had met the evidentiary requirements for these circuits.
  13. TELUS submitted that EDS should file details with the Commission regarding the planned and/or completed network changes before any determination can be made regarding changes in contribution status and the continued eligibility and/or need for exemptions.
  14. TELUS agreed with EDS that the effective date for exemptions associated with administrative circuits should be the date of installation. With respect to the circuits provided to a single client, TELUS agreed with the requested effective date, as long as the circuits remain dedicated to EDS and the client's use.
  15. In response to requests for additional support, EDS provided a revised affidavit dated 11 August 1999. The circuits are provisioned as dedicated and used solely by the company's staff for internal administrative purposes.
  16. Based on the record of this proceeding, it would appear that EDS is not providing both switched voice and data. The Commission is not convinced that a technical audit is required in this instance. The Commission is of the view that the evidence filed by EDS meets the Commission's evidentiary requirements as set out in Applications for contribution exemptions, Telecom Decision CRTC 93-2, 1 April 1993.
  17. The Commission is of the view that the application should be approved effective the date of installation for the administrative circuits, and the date that SHL assumed control of the dedicated client networks for the remaining circuits, such that no contribution is payable.
  18. The Commission notes Bell's submission that the networks that EDS controls and maintains should be subject to ongoing control procedures and the possibility of future random audits. Normally, these are requirements that follow from a technical audit. Since no technical audit is required to support this application, the Commission is of the view that EDS should not be subject to these requirements.
  19. The Commission expects EDS to inform the Commission and the relevant telephone companies of any changes that would necessitate a follow-up technical audit.
  Secretary General
  This document is available in alternative format upon request and may also be viewed at the following Internet site: www.crtc.gc.ca
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