ARCHIVED -  Telecom Order CRTC 99-339

Telecom Order

Ottawa, 9 April 1999

Telecom Order CRTC 99-339

By letter dated 5 November 1998, Fraser Milner, Barristers & Solicitors, on behalf of Shared Technologies of Canada Inc. (STOC), sought an exemption from contribution charges with respect to local private line data facilities provided by Bell Canada (Bell). In support of its application, STOC provided an affidavit dated 22 October 1998 affirming that the facilities are used exclusively to provide local services. STOC, in its covering letter, stated that it understood that Bell would be prepared to agree to an effective date of the date of service installation.

File No.: 8626-S30-01/98

1.By letter dated 30 November 1998, Bell stated that it had reviewed the affidavit and noted that it appears to be satisfactory with the following exceptions: (a) there is no reference to the specific services or accounts that are the subject of the exemption request; a list of billing telephone numbers included in the affidavit would be useful for it to clearly identify the services in question; and (b) Paragraph 4 of the affidavit refers to "happening" rather than "hopping".

2.Bell noted STOC's statement in its covering letter that it is in the business of reselling interexchange (IX) or local services. Bell stated that IX services are provided by rebilling the long distance services of an alternate long distance service provider. In this respect, Bell stated that STOC's affidavit, at paragraph 3, affirms that the alternate long distance service provider already pays applicable contribution charges. Further, Bell noted STOC's statement that the current application is therefore, "housekeeping" in nature, in light of the fact that STOC now resells a broader range of local services from that which was the subject of its former contribution exemption application (Telecom Order CRTC 96-730 dated 5 July 1996).

3.Bell stated that, in light of STOC's confirmation that it still only resells local services to provide local services and that all resale of IX services is accomplished by rebilling the long distance services of other service providers, it agreed, in principle, with the requested exemption, effective the date of Telecom Order CRTC 97-590 dated 1 May 1997 (Order 97-590). However, Bell submitted that, prior to approving the STOC application, the Commission should require that STOC provide a revised affidavit addressing the two deficiencies noted above.

4.By letter dated 11 January 1999, STOC provided a revised affidavit dated 22 December 1998, which corrected the typographic error in paragraph 4 and identified the Megalink services as the local services resold by STOC, the subject of the present application.

5.STOC considered it to be neither necessary nor appropriate to include a list of specific resold local Megalink services or accounts in this affidavit, as the affidavit and application apply to all such local services acquired by STOC from Bell. STOC submitted that it would be inappropriate to limit the Commission's exemption Order to particular services or accounts as this would require STOC to make further costly exemption applications whenever additional local Megalink services were acquired for resale. STOC submitted that performing a complete scan of all STOC accounts for resold Megalink services would be excessively onerous. STOC provided a partial listing of resale accounts, which include local Megalink services.

6.By letter dated 20 January 1999, Bell stated that it had reviewed the revised affidavit and noted that it appeared to satisfy the evidentiary requirement for the type of exemption requested.

7.Bell stated that STOC, in its covering letter, also provided a partial list of its accounts which it claims include some of the services which are the subject of its contribution exemption request. Bell stated that it has reviewed its records and can verify that this partial list of services appears to include some of the Megalink services which are the subject of STOC's exemption request.

8.Bell also noted that STOC has applied for an exemption with respect to local interconnecting circuits, such as local Megalink services, in order to provide a resold local service. Bell noted STOC's affirmation that all IX traffic from these local circuits is not carried over facilities provided by STOC, but is apparently routed to a third party IX carrier for termination. Bell noted STOC's claim that this third party carrier already pays applicable contribution charges associated with such traffic. Accordingly, Bell submitted that, should the Commission grant STOC's request, such exemption will apply to all such local services resold using this configuration on a going-forward basis. Bell submitted that this is consistent with the current contribution exemption regime.

9.Bell noted that the current practice when resellers add additional circuits to a configuration that has already been granted a contribution exemption is for the reseller to provide a simple attestation form, the format of which can be supplied by Bell, with each new service request. Bell stated that upon receipt of the attestation, it considers the additional circuits to be exempt under the Commission's prior contribution exemption Order and no application to the Commission is required.

10.Bell submitted that this process can also be employed, in this case, for the other contribution exempt services which may currently be in place but which may not have been identified in STOC's application. However, Bell submitted that should STOC require an exemption for a different purpose or for a different configuration, STOC would be required to seek a new contribution exemption with respect to such different configuration or arrangement.

11.In light of STOC's latest submission, Bell agreed, on a prima facie basis, with the requested exemption.

12.The Commission is of the view that STOC's revised affidavit meets the evidentiary requirements for the local private line data services in question, and notes that Bell also agreed.

13.In its letter of 5 November 1998, STOC submitted that the effective date should be the date of service installation. In its letter dated 30 November 1998, Bell suggested that the effective date be the date of Order 97-590. With reference to Order 97-590, paragraph 91 (c), the Commission understands that Bell is referring to 1 January 1998, the date upon which line-side connections to the Public Switched Telephone Network that are used to connect to IX data networks became contribution-eligible.

14.The Commission notes that STOC has stated that all resale of IX services is accomplished by rebilling the long distance services of other service providers (that are already paying contribution). Accordingly, the Commission is of the view that STOC should not be required to pay any contribution on the circuits in question, as double contribution would be collected. Accordingly, the Commission is of the view that the effective date should be the date of installation such that no contribution is payable.

15.The Commission notes in cases where applicants merely wish to add circuits to exempt configurations, they are required to simply provide an attestation form to Bell to support exemption for these additional circuits. However, the Commission agrees with Bell that if applicants wish to modify either the circuits configuration or the use to which the exempt circuits are made, they would need to file and obtain approval of a new contribution exemption application, absent which the circuits would be subject to contribution.

16.In light of the foregoing, STOC's application is approved for the circuits in question effective the date of installation such that no contribution is payable.

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Secretary General