ARCHIVED -  Telecom Public Notice CRTC 99-6

Telecom Public Notice

Ottawa, 1 March 1999

Telecom Public Notice CRTC 99-6

REVIEW OF CONTRIBUTION COLLECTION MECHANISM AND RELATED ISSUES

File No.: 8695-C12-06/99

SUMMARY

In this Public Notice, the Commission is initiating a proceeding to review the current contribution collection mechanism and to examine alternative collection mechanisms. The scope of this proceeding is set out in Part II of this Public Notice and the procedures are set out in Part III.

I INTRODUCTION

1.In Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992, the Commission established a mechanism, applicable in the serving territories of BC TEL, Bell Canada, Island Telecom Inc., Maritime Tel & Tel Limited, NBTel Inc. and NewTel Communications Inc., whereby competitors in the long distance market must contribute towards the subsidization of residence local services. Since that time, the Commission has made, through various decisions, a number of changes to the contribution regime. In addition, the Commission has extended the regime to the territories of other federally regulated carriers such as MTS Communications Inc., TELUS Communications Inc. and the independent telephone companies. The Commission has determined, in principle, that a similar contribution regime should apply to the territories of Northwestel Inc. and O.N. Tel.

2.On 17 September 1998, AT&T Canada Long Distance Services Company, Call-Net Enterprises Inc., ACC TelEnterprises Ltd. and London Telecom Network Inc. (AT&T et al.) filed an application requesting that (1) the Commission find that a revenue-based contribution collection mechanism is in the public interest and should be implemented effective 1 January 2000; and (2) the Commission initiate a proceeding no later than November 1998 in order to implement this mechanism.

3.In the application, AT&T et al. stated that, among other things, telecommunications networks are no longer easily separable into intra-exchange and inter-exchange segments, the use of packet-switched network technology has grown, and data and voice traffic over Internet protocol networks is increasing. AT&T et al. claimed that the current contribution collection mechanism is no longer efficient or sustainable in a converged network environment where packets, not minutes, are the main output. AT&T et al. requested that the Commission adopt and implement a forward-looking revenue-based mechanism. AT&T et al. stated that such a mechanism would limit market distortions, stimulate service innovation and be sufficiently flexible to respond to ongoing changes in the telecommunications industry.

4.By letter dated 21 December 1998, the Commission denied AT&T et al.'s 17 September 1998 application. In light of the significant policy implications of approving this application, the Commission was of the view that it would be inappropriate and unreasonable, based on AT&T et al.'s application alone, to approve a revenue-based collection mechanism effective 1 January 2000 and to initiate an implementation proceeding immediately.

5.In its letter of 21 December 1998, the Commission stated that it would be appropriate to review aspects of the current contribution regime in greater detail to determine if changes are required. Accordingly, the Commission stated that it would initiate two proceedings in early 1999 to (1) determine what changes, if any, should be made to the current contribution collection mechanism, and (2) review the frozen contribution rate policy.

6.On 2 February 1999, the Commission issued Proceeding to Review Frozen Contribution Rate Policy, Telecom Public Notice CRTC 99-5 (PN 99-5). The proceeding initiated by PN 99-5 will focus on, among other things, whether the policy to freeze contribution rates established in Local Competition, Telecom Decision CRTC 97-8, 1 May 1997, should be lifted during the price cap period.

7.In this Public Notice, the Commission is initiating a proceeding to review the contribution collection mechanism and to examine alternative collection mechanisms. The scope of this proceeding is set out in Part II of this Public Notice.

8.The Commission notes that there are several issues in the proceeding initiated by Service to High-Cost Serving Areas, Telecom Public Notice CRTC 97-42, 18 December 1997 (PN 97-42), that may impact the proposals of parties. As noted in Part III of this Public Notice, parties will be provided an opportunity to revise their submissions, if necessary, in response to the determinations made in the proceeding initiated by PN 97-42.

9.Parties that are directly affected by the current contribution regime, as well as those parties that may be affected by either a revised or new regime, are encouraged to file submissions.

II SCOPE OF PROCEEDING

10.Parties' views are sought on whether reform or replacement of the current contribution collection mechanism is required and, if so, what changes should be made. In particular, the Commission seeks parties' views on the impacts that technological, market and other developments may have on the requirement for, and the ability to identify, switched long distance minute information for contribution purposes.

11.Where parties submit that the existing contribution collection mechanism should be replaced, the Commission seeks their proposals for an appropriate alternative mechanism (such as revenue-based, end-user or other mechanism). In their proposals, parties should address the following issues:

(i) what are the most appropriate criteria for the development of a contribution mechanism (e.g., efficiency of administration, sustainability, competitive equity) and how does the proposed mechanism meet these criteria;

(ii) how should the total subsidy requirement to be recovered from any new contribution mechanism, be defined and calculated;

(iii) what types of services (e.g., long distance, local) should be subject to contribution, what criteria should be used to identify those services, and on what basis should those services contribute (uniform or otherwise) towards the subsidy requirement;

(iv) what types of service providers should be required to contribute towards the subsidy requirement and what criteria should be used for determining liability;

(v) whether a uniform collection charge/rate should be applied nationally or whether the charge/rate should vary by each incumbent telephone company's serving territory or on some other basis and what an appropriate charge/rate should be;

(vi) what impact would there be, if any, on the applicable regulatory regime (i.e., price caps or rate of return) of the incumbent telephone companies subject to federal regulation;

(vii) what impact would there be, if any, on the role of the Central Fund Administrator or other fund administrator, including the remittance of contribution, distribution of funds and any associated administrative procedures; and

(viii) any other issues relevant to this proceeding.

III PROCEDURE

12.Parties wishing to participate fully in this proceeding must notify the Commission of their intention to do so by writing to Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 30 April 1999. Parties are to indicate in the notice their Internet email address, if available. If parties do not have access to the Internet, they are to indicate in their notice whether they wish to receive disk versions of hard copy filings. The Commission will issue a complete list of parties and their mailing addresses (including Internet email addresses if available), identifying those parties who wish to receive disk versions.

13.Parties may file submissions regarding the issues identified in this Public Notice, serving copies on all other parties, by 7 June 1999.

14.Parties may address interrogatories to any party that has filed a submission. Any such interrogatories must be filed with the Commission and served on the party or parties in question by 12 July 1999.

15.Parties may file updates to their submissions, in response to the determinations made in the proceeding initiated by PN 97-42, with the Commission, serving copies on all parties, by 16 August 1999.

16.Responses to interrogatories addressed pursuant to paragraph 14 are to be filed with the Commission, serving copies on all parties, by 16 August 1999.

17.Requests by parties for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on the party or parties in question by 23 August 1999.

18.Written responses to requests for further responses to interrogatories and for public disclosure must be filed with the Commission and served on the party or parties making the request by 30 August 1999.

19.The Commission will issue a determination with respect to requests for disclosure and for further responses as soon as possible, and intends to direct that any information to be provided pursuant to that determination be filed with the Commission and served on all parties to the proceeding by 22 September 1999.

20.Parties may address supplemental interrogatories to any party that has filed responses to interrogatories addressed pursuant to paragraph 14 or an update to its submission pursuant to paragraph 15. Any such interrogatories must be filed with the Commission and served on the party or parties in question by 8 October 1999.

21.Responses to supplemental interrogatories addressed pursuant to paragraph 20 are to be filed with the Commission, serving copies on all parties, by 8 November 1999.

22.Requests by parties for further responses to their supplemental interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on the party or parties in question by 15 November 1999.

23.Written responses to requests for further responses to supplemental interrogatories and for public disclosure must be filed with the Commission and served on the party or parties making the request by 22 November 1999.

24.The Commission will issue a determination with respect to requests for disclosure and for further responses as soon as possible, and intends to direct that any information to be provided pursuant to that determination be filed with the Commission and served on all parties to the proceeding by 15 December 1999.

25.All parties may file comments, serving copies on all other parties, by 28 January 2000.

26.All parties may file replies to any comments, serving copies on all parties who filed comments, by 28 February 2000.

27.The record of this proceeding may be examined, or will be made available promptly upon request, at the CRTC offices at the following addresses:

Central Building
Les Terrasses de la Chaudière 1 Promenade du Portage
Room G-5
Hull, Quebec

Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia

Place Montréal Trust
1800 McGill College Avenue
Suite 1920
Montréal, Quebec

55 St. Clair Avenue East
Suite 624
Toronto, Ontario

275 Portage Avenue
Suite 1810
Winnipeg, Manitoba

530-580 Hornby Street
Vancouver, British Columbia

28.Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date.

29.In addition to hard copy filings, parties are encouraged to file with the Commission electronic versions of their submissions in accordance with the Commission's Interim Telecom Guidelines for the Handling of Machine-Readable Files, dated 30 November 1995. The Commission's Internet email address for electronically filed documents is public.telecom@crtc. gc.ca. Electronically filed documents can be accessed at the Commission's Internet site at http://www.crtc.gc.ca.

Secretary General

This document is available in alternative format upon request.