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ARCHIVED - Decision CRTC 2000-74

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Decision CRTC 2000-74

Ottawa, 16 March 2000
Conditions of Call Originator Billing service for wireless service providers
Reference: 8648-C12-01/97
This decision establishes the general principles for setting the rates, terms and conditions of Call Originator Billing (COB) service.
The Commission concludes that COB is not in the nature of an essential service and companies will be permitted to introduce it based on a business case assessment. This decision also sets out additional matters which would be addressed in a proceeding to consider any application for a full-service COB offering.
COB is a billing and collection service which would be provided to wireless service providers (WSPs) by the former Stentor member companies (the companies). In Canada, wireless service is provided on the basis that the person receiving the call pays for it. COB would facilitate the offering of a service by WSPs to their customers in which those placing calls to a wireless customer would pay the wireless air-time usage charges. This service is generally referred to as Calling Party Pays (CPP).
A WSP customer subscribing to CPP is given two numbers, a regular wireless number and a 600 number which the WSP customer would give out when he/she wishes the calling party to pay for the call. A recording would inform callers to the 600 number that they have dialed a wireless number for which they will be responsible for the charges. The recording would state the per-minute charge and would give the caller an opportunity to cancel the call if he/she does not want to pay for the call.
1. COB market trials are currently being conducted by Bell Canada, Maritime Tel & Tel Limited (MTT), MTS Communications Inc. and NBTel Inc. BC TEL also conducted a market trial and decided, at the end of the trial period, not to proceed with a full-service offering.
2. In giving approval to the Bell market trial, the Commission stated that it would be appropriate to initiate a proceeding to examine the general principles in setting the rates, terms and conditions of COB service, given the number and complexity of the issues surrounding COB that have arisen in connection with the various applications for market trials.
3. Accordingly, the Commission issued Telecom Public Notice CRTC 97-23, Conditions of call originator billing service on 13 June 1997 seeking submissions and comments on the general principles in setting the rates, terms and conditions of COB service.
4. Submissions were received from the former Stentor Resource Centre Inc., Canada Payphone Corporation, Rogers Cantel Inc., now Rogers Wireless Inc. (Cantel), and Clearnet Communications Inc.
5. Comments on Stentor’s submission were filed by Clearnet, The Canadian Wireless Telecommunications Association (CWTA) and Cantel. Stentor filed reply comments.
COB as an essential service and the need for ubiquitous service
6. Clearnet submitted that COB is an essential/bottleneck interconnection service for WSPs because the underlying bottleneck elements necessary in providing a COB service can only be provided through the originating network. To that end, Clearnet submitted that the rates associated with the underlying components of COB service should be developed using a cost-based pricing methodology.
7. Clearnet further submitted that the underlying facilities and services utilized to provide the COB service offering must be available ubiquitously within the operating regions of the companies. Otherwise, the appeal of a COB service offering would be severely dampened because there would be an unwanted degree of complexity and confusion for a given wireless subscriber.
8. Cantel stated that the local access portion, essential to providing a COB service, is not a competitive service, but a monopoly bottleneck service. Therefore, Cantel submitted that the rates and charges should be cost justified.
9. Cantel also stated that a special access code (SAC) 600 non-geographic service must be supported by all the telephone companies across the country. Cantel submitted that, as a national carrier, in order to provide a service to its customers, it is necessary that either a consistent technology be employed by all the companies or, in the event that different technologies are employed, that all Cantel’s customers have access to the same service across the country.
10. CWTA submitted that, for COB to be successful, wireless subscribers must know that the service is ubiquitous across Canada. For this to occur, all of the companies must support the COB offerings of individual companies. CWTA recommended that the Commission direct all of the companies to recognize all 600 codes.
11. Stentor submitted that COB service is not an essential service. If offered by any of the companies, COB service would support a WSP’s own calling CPP where the intent is to shift the cost of wireless air time charges from the wireless subscriber to the call originator, as an alternative to the specific arrangements currently offered by a WSP to its subscribers. A COB service could be developed and offered by various service providers, not just the companies.
12. Stentor submitted that the companies are under no obligation to offer a full COB service. In Stentor’s view, COB service is a discretionary service that the companies could choose to provide based on a business case assessment. Stentor recognized that for any service based on SAC 600 access requiring national call origination functionality, the SAC 600 NXXs being used would have to be opened in all of the companies' local switches, as well as any other local service provider’s switches, so that SAC 600 calls can be routed correctly. However, this is not the same as requiring all of the companies to develop and support their own COB service.
13. The Commission notes that competitive wireless markets have successfully developed in Canada without CPP. Moreover, there is no persuasive evidence that cellular penetration will be increased with the introduction of CPP. The Commission believes it is unnecessary to require that CPP be made an option available for pricing of wireline to wireless calls. It concludes that COB is not in the nature of an essential service and that the companies should be permitted to implement COB based on a business case assessment.
14. If a company decides to offer COB based on a business case assessment, the Commission does not consider it appropriate, at this time, to require that all other service providers support the offering.
15. In the Commission’s view, such support would need industry-wide consultation, including the involvement of competitive local exchange carriers (CLECs), which did not participate in this proceeding.
Point of interconnection issues
16. Clearnet submitted that the appropriate routing methodology for COB traffic is generally a function of the geographic or non-geographic nature of the destination CPP number. For CPP calls associated with geographic numbers, traffic should be routed per the existing Numbering Plan Area (NPA)-NXX-based routing mechanisms. With respect to the transport of non-geographic traffic, Clearnet asserted that the incumbent local exchange carriers (ILECs) should be mandated to provide non-geographic routing whereby the non-geographic traffic is either routed to the closest point of interconnection (POI) or to a single POI at the discretion of the WSP. Support for both non-geographic routing mechanisms is required to ensure the ubiquitous availability of a given COB service offering throughout the operating territories of the companies.
17. CWTA recommended that the Commission order the companies to route non-geographic calls to the closest POI between the wireless carrier and company relative to the origin of the call. Upon receiving the call on its network, the wireless carrier would determine the location of the mobile terminal and route the call appropriately over its network. In CWTA’s view, this process would minimize the switching and trunking requirements of both the companies and the wireless carriers as traffic would utilize the points of interconnection that exist for all other types of calls.
18. Cantel stated that there is no technical or operational reason for requiring a dedicated SAC 600 NXX in each of the companies’ operating territories. Such a requirement would lead to the early exhaust of the numbers and add significant cost due to the enormous expense associated with opening each SAC NXX (as much as $133,500 per NXX).
19. Cantel submitted that traffic should be routed to the closest POI relative to the point of origination within the networks of the Stentor companies so as to derive the full benefit of non-geographic numbering. Routing to a single POI would result in WSPs bearing unnecessary long distance charges. Neither NBTel, which uses SAC 600 technology, nor BC TEL, which used an Advanced Intelligent Network technology, imposed such a restriction during their trials.
20. The companies submitted that the call routing schemes currently being employed for the COB market trials could be made more flexible to accommodate the routing of calls to either a single POI associated with a WSP's network, or alternatively, to the closest POI associated with a WSP's network. The companies considered that the determination of the actual routing scheme employed should be the subject of discussions between any company developing and offering a COB service and the particular WSP(s) involved. Stentor further submitted that, given COB is a competitive service offering, flexibility is required for network routing arrangements in order to meet various potential configurations, not just those proposed by the intervenors in their comments. These too must be addressed if and when any of the companies chooses to develop a full-service COB offering.
21. The Commission is of the view that, if a full-service COB offering is developed, the network should be utilized in the most efficient manner. The Commission finds that calls routed to the WSPs through the nearest POI would achieve this objective.
Charges associated with COB
22. Several parties raised concerns regarding the nature and magnitude of the charges associated with the market trials of COB service.
23. The intent of this proceeding was not to examine specific rates and charges. They will be examined when a company files an application for a full-service COB offering.
24. However, given that COB is not in the nature of an essential service, the Commission does not consider it appropriate to require that rates be set at costs plus a 25% mark-up. Accordingly, rates may be set at costs plus a reasonable mark-up.
Use of accounts receivable management agreement
25. Clearnet submitted that charges for billing and collection services required for a COB service should be consistent with the charges for similar functionality as set forth in Telecom Decision CRTC 97-6, Unbundled rates to provide equal access, dated 10 April 1997. In Clearnet’s view, the companies should be mandated to provide this billing and collection capability for COB. According to Cantel, there is no need to mandate a similar billing and collection capability for non-dominant service providers such as CLECs and WSPs. However, if a given non-dominant service provider elects to provide a billing and collection capability for one COB service provider, it must provide the equivalent billing and collection service arrangement for any other COB service provider on a non-discriminatory basis.
26. Cantel submitted that the companies should be required to negotiate a settlement agreement with the WSPs that would take into account the unique nature of the COB service, recognize WSPs as co-carriers, and involve a simple rate structure that proposes an "all in" rate based on a per-call methodology. Cantel argued that the application of an accounts receivable management (ARM) agreement to the provision of COB service for WSPs is not justified. Cantel said the relationship between a company and the WSP in a COB context should be recognized as a co-carrier relationship. With a co-carrier arrangement, the terms, conditions and rates of a settlement agreement would be negotiated to the satisfaction of both parties.
27. Stentor noted that the nature of any full-service COB, if offered by any of the companies, would be that of a service which would support the recording of call details, and the invoicing of a company's end-users for applicable charges on behalf of a WSP. Revenue would then be remitted by the company to the WSP. This would be similar to the functionalities and processes currently in place within the companies to support arrangements for 900/976 service providers, for which the Commission has already determined that the use of an ARM agreement is appropriate.
28. Stentor reiterated that the use of an ARM agreement in conjunction with COB service truly reflects the nature of the service provided and is appropriate. Specific details of an ARM agreement for a full COB service are, in Stentor’s view, beyond the scope of this proceeding and would be best addressed if and when any of the companies chooses to develop a full-service COB offering.
29. As noted in paragraph 13, the Commission does not consider COB to be in the nature of an essential service. Accordingly, the Commission finds that mandated rates are not appropriate. Further, unless a WSP becomes a CLEC, the relationship between a company and a WSP is not a co-carrier relationship. As Stentor suggested, it is in the nature of the type of relationship existing between incumbent telephone companies and 900 service providers. In these circumstances, the Commission considers that an ARM agreement is the appropriate mechanism to carry out the billing and collection functions on behalf of the WSPs.
Undue competitive advantage allegations
30. Clearnet recommended that detailed operational and technical specifications associated with any full-service COB offering be disclosed six months in advance of the service. Clearnet submitted that this action would mitigate against potentially anti-competitive effects of the companies' COB market trial activities.
31. Stentor took exception to Clearnet’s allegation that the companies would act in an anti-competitive manner. According to Stentor, the companies developed and made available their respective COB market trial services at the same terms and conditions to all WSPs. At no time was any preferential treatment bestowed by the companies on their wireless affiliates.
32. With regard to Clearnet's specific recommendation, in Stentor’s view, disclosure of such information is not warranted. It is clear that the WSPs have varying ideas and requirements with regard to the functions that should be included in any full COB service. Stentor suggested that a WSP seeking certain functionalities and arrangements should approach potential service providers with its specific requirements, rather than attempt to use arrangements configured for another WSP or petition the Commission to have the second WSPs' arrangements altered to meet its own desires. With this approach, any WSP ready to move forward with a CPP service would have the ability to implement arrangements to accommodate its specific service requirements and, at the same time, would not be constrained by plans and requirements of other WSPs.
33. The Commission finds no evidence of any undue competitive advantage for the companies’ wireless affiliates during the market trials. Consequently there is no need for advance disclosure of the detailed operational and technical specifications associated with any full-service COB offering.
Other issues
34. The record of this proceeding did not address the issue of whether wireline to wireless termination rates, as determined by the wireless companies, should be subject to the Commission’s prior approval.
35. The issue of the nature of the notification given to a calling party making a call to a wireless subscriber that has chosen the CPP option was also not addressed in this proceeding. Further, the treatment of calls through message relay centres also was not addressed.
36. Canada Payphone Corporation (CPC) submitted that it is essential that COB service should incorporate free call blocking so that customers can restrict access to COB from their telephone lines. In CPC’s view, all COB services should be required to include such a provision. This issue was not addressed by any other party.
37. The Commission finds that, if any company files a full-service COB offering consistent with the principles set out in this decision, it will be necessary for the related proceeding to address:
  • the matter of notification;
  • the treatment of message relay centre calls;
  • whether the wireless termination rates should be subject to prior approval; and
  • the matter of free call blocking.
Secretary General
This document is available in alternate format upon request and may also be viewed at the following Internet site: http://www.crtc.gc.ca.
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