ARCHIVED -  Telecom Order CRTC 99-859

Telecom Order

Ottawa, 3 September 1999

Telecom Order CRTC 99-859

By letter dated 14 January 1999, the law firm of Heenan Blaikie, acting on behalf of Telecom Media International Italy-Canada Inc. (Telecom Media), applied for exemption from contribution charges with respect to services provided by Sprint Canada Inc. (Sprint Canada) (cross-border circuits). Telecom Media attached an affidavit dated 9 November 1998.

File No.: 8626-T19-03/99

1.By letter dated 10 February 1999, Bell Canada (Bell) sought further clarification with respect to the type of facilities and requested a revised affidavit to identify the circuits in question.

2.By letter dated 2 March 1999, Telecom Media provided a revised affidavit dated 26 February 1999, which: (1) confirmed that it offers only data services; (2) confirmed that the facilities in question are Canada-U.S. circuits provided by Sprint Canada; and (3) identified the account number of the circuits in question. Telecom Media stated that it resells mainly frame relay data services. Telecom Media stated that the circuits in question are private dedicated lines, which are not connected to any interexchange network or to the Public Switched Telephone Network.

3.By letter dated 9 March 1999, Bell identified two other matters: (1) Telecom Media's statement that the Canada-U.S. circuits "are not connected to any interexchange or to the Public Switched Telephone Network" [emphasis added]; and (2) in the revised affidavit, Telecom Media's statement that some of the Canada-U.S. circuits were installed on 17 December 1997, while others were installed on 22 June 1998.

4.With respect to the first matter, Bell stated that it is unclear what is meant by Telecom Media's use of the word "interexchange". Bell submitted that a Canada-U.S. circuit is an interexchange circuit by definition.

5.With respect to the second matter, Bell noted that the Telecom Media application was submitted on 14 January 1999, over a year after the first of these circuits were installed. Bell also noted that the original affidavit is dated 9 November 1998.

6.Bell stated that in Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26 dated 12 June 1995 (PN 95-26), the Commission determined that: "...effective immediately, contribution exemptions will generally be granted effective the later of the date of the application or the date of installation, absent special circumstances."

7.Given the extensive period of time from the date of installation of the first circuits and the date of Telecom Media's original application, Bell submitted that the approval of an effective date for a contribution exemption to correspond with the date circuits were first installed would not appear to be appropriate. Bell noted that Telecom Media has not identified any special circumstances that might support the approval of an effective date prior to the date of application or the date that its original affidavit was executed.

8.In light of the above, Bell agreed with the requested exemption on a prima facie basis, effective either the date of application, or the date the original affidavit was executed since it preceded the application by only two months.

9.However, Bell submitted that such approval should be subject to the requirement that Telecom Media provides further clarification of the intended use of the term "interexchange" and explains how such clarification satisfies the evidentiary requirements associated with the type of exemption requested.

10.By letter dated 23 March 1999, Telecom Media provided a revised affidavit and submitted that the effective date should be the date of installation.

11.With respect to special circumstances, Telecom Media submitted that Sprint Canada: (1) made no mention of the necessity of paying contribution during negotiations for the circuits; (2) did not invoice contribution; (3) led Telecom Media to understand that no contribution would be imposed upon provision of data on private dedicated lines; (4) only in October 1998 mentioned contribution charges and commenced invoicing; and (5) induced Telecom Media into believing that no exemption request was required. Telecom Media stated that it would have filed an exemption application on a timely basis if it had been made aware of the requirement.

12.By letter dated 28 May 1999, Bell stated that, based on the clarification provided by Telecom Media, it reviewed the affidavit and noted that it appeared to satisfy the evidentiary requirements for such exemptions and agreed with the requested exemption.

13.By letter dated 9 June 1999, Call-Net Enterprises Inc. (Call-Net) submitted that due to the special circumstances associated with this case, Telecom Media's request that the effective date should be the date of installation should be granted.

14.Call-Net noted that Sprint Canada was the owner of the cross-border facilities in question and as such, was responsible and did report and pay contribution for the circuits to the applicable incumbent local exchange carrier since the date of their installation. Call-Net stated that unfortunately, Sprint Canada did not initially charge contribution to Telecom Media. However, Call-Net noted that the Data Services Agreement, executed between Telecom Media and Sprint Canada on 28 November 1997, incorporates Sprint Canada's Data Services Terms and Conditions (the Terms and Conditions).

15.Call-Net stated that the Terms and Conditions explicitly place the onus on Telecom Media to establish its entitlement to a contribution exemption and make Telecom Media liable for any applicable contribution charges, including those which may be retroactively applied. Call-Net submitted nonetheless that, without contribution being billed, and considering the expectation that data circuits would not attract contribution, it might be understandable that Telecom Media mistakenly believed that contribution was not owing on these circuits. Call-Net submitted that although this does not remove Telecom Media's strict legal obligation to pay the contribution charges, it does constitute special circumstances that would allow the Commission to retroactively grant Telecom Media an exemption order.

16.The Commission finds that Telecom Media's revised affidavit meets the evidentiary requirement for a contribution exemption.

17.After careful consideration of the various submissions made on the record of this proceeding, the Commission is of the view that, special circumstances do not exist which would justify granting an effective date as the date of installation. The Commission notes that this is not the first time that Telecom Media has applied for a contribution exemption. The Commission considers that Telecom Media ought to have known the rules for contribution exemption as set out by the Commission in PN 95-26 and subsequent Orders.

18.The Commission finds that the effective date should be the date of application (in this case, the date of the affidavit dated 9 November 1998).

19.In light of the foregoing, Telecom Media's application is approved effective the date of application (9 November 1998).

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