ARCHIVED -  Telecom Order CRTC 99-319

Telecom Order

Ottawa, 6 April 1999

Telecom Order CRTC 99-319

By letter dated 15 January 1999, MetroNet Communications Group Inc. (MetroNet) sought clarification from the Commission with respect to contribution exemptions associated with services provided to Internet Service Providers (ISPs).

File No.: 8695-C12-02/97

1.MetroNet stated that it has been assuming existing service contracts between ISPs and Bell Canada (Bell) and then rebilling those services to the ISPs. MetroNet submitted that the ISPs in question qualify for automatic contribution exemptions pursuant to Telecom Order CRTC 98-929 dated 17 September 1998 (Order 98-929) on the basis that these ISPs offer only contribution-exempt ISP services. MetroNet sought confirmation that where it assumes the contract of an ISP that is eligible for an automatic contribution exemption, such circuits should remain exempt when rebilled by MetroNet.

2.By letter dated 26 January 1999, Bell stated that it agreed with MetroNet's position that such circuits should remain contribution exempt. However, Bell noted that when MetroNet assumed ownership of the circuits in question, Bell had no means to confirm how MetroNet would use the circuits. For example, Bell submitted that the circuits could be assumed for MetroNet's own use as part of its services or could be associated with MetroNet's purchase of part or all of the business of an ISP. Accordingly, Bell submitted that there may be cases where contribution might be payable or where a contribution exemption application might be required from MetroNet.

3.In light of the above, Bell submitted that when the ownership of such ISP circuits transfers to a carrier or reseller, such as MetroNet, confirmation of the continued exemption of such circuits is required.

4.Bell submitted that it is apparent that the scenario encountered by MetroNet in the present case was not contemplated by the regime established in Order 98-929. Bell submitted that an appropriate solution is required to ensure that MetroNet is not assessed contribution on circuits which should be contribution exempt, while at the same time providing satisfactory evidence to assure Bell and the Commission that the circuits continue to be eligible for such exemption under the new arrangement.

5.In this respect, Bell recommended that the Commission determine that in cases where contribution-exempt circuits are assumed by a carrier or reseller and continue to be configured to be exempt from contribution, no contribution exemption application is required. However, Bell submitted that in the absence of a contribution exemption application, the carrier or reseller should provide a standard attestation to Bell to confirm the contribution exemption status of the circuits. Bell submitted that such attestation would state that the circuits are not used by the carrier or reseller to provide services to end-customers, but are used by an ISP to provide service to its customers and that the ISP is already exempt from contribution pursuant to Order 98-929. Bell noted that a similar process is used today, pursuant to Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993, when circuits are added or deleted to a configuration that has already been granted a contribution exemption by the Commission.

6.The Commission is of the view that Bell's recommendations above are appropriate as they are consistent with the intention in Order 98-929 that the contribution exemption regime for ISPs should be as simple as possible.

7.In light of the foregoing, the Commission directs that:

(1) in cases where contribution-exempt circuits are assumed by a carrier or reseller and continue to be configured in the same manner as that which previously allowed them to qualify for the contribution exemption, no contribution exemption application is required;

(2) the carrier or reseller must provide a standard attestation to Bell to confirm that there has been no change to the configuration; and

(3) such attestation must state that the circuits are not used by the carrier or reseller to provide services to end-customers, but are used by an ISP to provide service to its customers and that the ISP is already exempt from contribution.

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Secretary General