ARCHIVED - Order CRTC 2000-538

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Order CRTC 2000-538

Ottawa, 14 June 2000
Compensation for toll-free calls payable to competitive payphone service providers
Reference: 8650-C66-01/99
This order directs all interexchange carriers (IXCs) to compensate competitive pay telephone service providers who provide access to the IXC's toll-free services. It also sets a default compensation of $0.25 per call and directs competitive local exchange carriers to provide sufficient billing information to a payphone service provider so that it can bill the IXCs.
Relief requested for per-call usage fee


The Canadian Payphone Association (CPA), represents competitive pay telephone service providers (CPTSPs). On 3 December 1999, the CPA filed a Part VII application pursuant to the CRTC Telecommunications Rules of Procedures requesting that the Commission deliver, on an expedited basis, a number of determinations in respect of a per-call usage fee for toll-free calls made from competitors' pay telephones.


Per-call compensation refers to an amount paid to a payphone service provider for calls made from its payphone to access a long distance carrier by dialing a toll-free number such as 800 service. The amount of compensation to be collected is billed to the IXC and not to the person making the call.


The CPA requested expedited relief from all IXCs (including those of incumbent telcos) whose networks can be accessed from a CPTSP's payphone. The association is seeking:
a)     an order that access to CPTSP payphones by IXCs is conditional on IXCs entering into an agreement with CPTSPs for compensation in respect of all toll-free calls made using the facilities of such IXCs from the CPTSP payphones;
b)     an order that, where an IXC and a CPTSP have not entered into an agreement respecting per-call compensation, it be set at $0.25 per call;

c)     an order that incumbent local exchange carriers (ILECs) and CLECs be required to provide CPTSPs with sufficient billing information for toll-free calls originating from CPTSP telephones to enable them to invoice IXCs for compensation; and
d)     an order directing all IXCs, ILECs and CLECs to show cause why the requested relief should not be implemented within the times sought.


Telecom Decision CRTC 98-8, Local pay telephone competition, noted that a per-call compensation regime is appropriate. It stated that ILECs could file tariffs for its implementation. With respect to unregulated pay telephone service providers, the Commission considered it appropriate that they negotiate rates with IXCs. The CPA stated that all IXCs, including the incumbent telcos', have remained completely unwilling to negotiate compensation, and will not pay per-call compensation without a Commission order to that effect.


The Commission is of the view that the direction, in its 24 December 1999 letter to the CPA, to file a copy of the letter and its application on all IXCs, ILECs and CLECs, ensured that all parties who could potentially be affected by the CPA's request were aware of it. This, in fact, satisfies the CPA's request with respect to a show cause order.
Telcos support compensation regime


TELUS Communications Inc., Bell Canada, Bell Intrigna Inc., Vidéotron Communications inc., MTS Communications Inc. and NewTel Communications Inc. (representing Maritime Tel & Tel Limited, Island Telecom Inc. and NBTel Inc.) provided comments. All parties supported the principle that all payphone providers should be entitled to receive compensation for toll-free calls placed from their pay telephones to an IXC toll-free service.


The companies indicated that they are willing to negotiate compensation.

  • NewTel indicated its intention to file tariffs for compensation per call and competitive pay telephone tracking reports during April 2000;
  • TELUS referred to current tariff application Tariff Notice (TN) 174 to provide billing information of toll-free calls, which is awaiting Commission approval. TELUS agreed to provide billing information for these calls, in the form of a monthly report to the CPA. This report would provide the number of completed calls per toll-free service provider, by originating pay telephone access line number (of the CPA members) to enable the CPA to send a single invoice to each toll-free service provider;
  • Bell Canada referred to its tariff application (TN 6413) to provide CPTSPs with the information they require to provide each IXC that they bill, including Bell Canada, with the equivalent billing detail that the Bell Canada payphone group will be using to bill IXCs;
  • MTS has filed TN 383 for compensation per call, also at a rate of $0.25 per call. MTS added that the CPA should advise its members that within Manitoba, each CPTSP or its agent should contact an MTS carrier service representative when it wishes to commence discussions; and

  • Vidéotron indicated that as a CLEC, it doesn't offer telephone service to public payphone providers. Consequently, its decision not to respond to the CPA's invitation to negotiate compensation shouldn't be construed as unwillingness on its part to negotiate compensation.


In reply to the comments, the CPA acknowledged that none opposed the compensation regime. The CPA submitted that the issue is therefore not whether compensation should be allowed, but how it should be implemented.


The CPA submitted that the appropriate target for per-call compensation for toll-free calls should be the IXC over whose facilities the traffic is carried, including the incumbent telcos who provide long distance services. Where there are resellers who are offering the toll-free service, the IXC that provides the underlying transmission facilities can enter into the necessary arrangements for compensation of any payments it is required to make to CPTSPs for toll-free calls. The CPA noted that no IXC has intervened in this process to object to the principle proposed by the association.


The CPA requested that when payphone competition is permitted in the territories of the independent telephone companies, the Commission should include a right of per-call compensation for CPTSPs at the time it permits such competition, rather than conducting a separate proceeding.


The CPA submitted in its reply comments that there is a potential implementation issue which requires clarification from the Commission. This issue is that an ILEC may take the position that it is only prepared to provide tracking report services to individual CPTSPs and that the CPA may not act collectively on behalf of two or more members. Interventions filed in the pending tracking report services proceeding (TELUS TNs 4020 and 174) noted that the proposed price for the service may be cost prohibitive for the smaller CPTSPs. Regardless of the outcome of any specific filing, the CPA submitted that it should be authorized to represent any member that provides it with the written authority to obtain the tracking information on its behalf.


The CPA submitted that aggregation could provide individual CPTSPs with potentially significant cost savings that could be passed through directly in the form of lower rates to consumers of their services. This would help keep the pay telephone industry competitive.


Bell Canada submitted in its 3 April 2000 letter that the CPA's 21 March 2000 reply raises issues which are new and not part of the record of the current application since they pertain to the implementation of the service proposed in TN 6413, namely, the agent or clearing house issue.
Conditional access to competitive payphones


In Decision 98-8 (paragraphs 56 and 101(d)), the Commission mandated that CPTSPs permit access to all long distance providers connected to the underlying local exchange network. In other words, if a CPTSP permits its payphone customers to make long distance calls, callers should be able to access the long distance provider (connected to the local service provider's network) of their choice.


Incumbent telcos have either filed or will be filing tariffs to implement a per-call compensation regime. For example, on 22 October 1999, Telecom Order CRTC 99-1017 approved Bell Canada's TN 6285 which introduced a per-call usage fee of $0.25 to IXCs for toll-free access at the company's public and semi-public pay telephones. That order also directed Bell Canada to file a tariff to provide to CPTSPs billing information for toll-free calls originating from those CPTSPs' pay telephones connected to Bell Canada's network. The Commission also directed that Bell Canada's charge-per-call tariff would not become effective until the date of the approval of the above-mentioned proposal.


All parties to this proceeding have expressed a willingness to negotiate compensation. As a direct result of negotiations undertaken by the CPA with Bell Canada and TELUS, it has been agreed that the $0.25 rate per completed call should apply to all toll-free calls made from CPTSP terminals connecting to those telcos' access services. MTS has filed TN 383 on 14 January 2000 for a $0.25 per-call compensation rate. The Commission is of the view that all IXCs must compensate CPTSPs in respect of all toll-free calls made using the facilities of the IXC from the CPTSP payphone. The Commission has not permitted ILECs to begin collecting compensation for the use of their own pay telephone equipment to access IXC toll-free services until they provide a tracking service for the CPTSPs. The remaining piece of the puzzle is the CLEC. The Commission mandated access to all IXC networks that have equal access connections to the CPTSP's underlying LEC. In the Commission's view, it is imperative that if it mandates access, then it should ensure that CPTSPs will be able to bill all relevant IXCs. The Commission considers that the best method to achieve this result is to also mandate all CLECs who provide access service to pay telephone service providers to make the necessary tracking data available.


The Commission therefore directs CLECs, as a condition of providing service, pursuant to Section 24 of the Telecommunications Act, to provide the requested tracking information. CLECs do not file tariffs for this type of service, so this requirement must be included in any agreement/contract entered into between CLECs and CPTSPs.


However, the Commission continues to hold the view that the most appropriate means to establish a compensation per-call regime for toll-free calls would be for the various marketplace participants to negotiate agreements.


In reply, the CPA submitted that its members believe that the $0.25 per-call compensation rate approved for Bell Canada and proposed for TELUS and MTS is a reasonable rate and should be approved by the Commission as a default rate. The CPA commented that no parties took issue with the proposed rate or the concept of a default rate if negotiations among affected parties did not establish a rate.


NewTel submitted that such compensation to the CPA members should be no greater than the rate that the incumbent telephone companies will receive at their payphones for access to IXC toll-free services.


The Commission considers that a default rate of $0.25 will ensure a minimum level of compensation while still permitting parties to negotiate alternative structures if these are appropriate in any given business context.


The Commission denies the CPA's request that a compensation per-call regime be automatically established in the territories of the independents. Rather, the Commission will initiate a show cause proceeding when it establishes frameworks for local competition.


The Commission notes that the CPA raised the agency issue in its reply comments. Bell Canada has taken exception to this and argued that the CPA is attempting to introduce a new request and new issues that are beyond the scope of the CPA's Part VII application. According to Bell Canada, the issues in question pertain to the implementation of the service proposed in TN 6413.


The Commission notes that, by raising the agency issue for the first time in reply comments, the CPA denied parties the opportunity to comment on it. Accordingly, the Commission is of the view that the issue is outside the scope of this Part VII application. Rather, the issue will be dealt with in the proceeding dealing with the TELUS, Bell Canada and MTS tariff filings.
Summary of recommendations


In view of the above, the Commission:
a)    directs that all IXCs, pursuant to Section 24 of the Act, must compensate the CPTSPs who provide toll-free access to the IXC's network;

b)    directs CLECs, as a condition of offering service pursuant to Section 24 of the Act, who provide access service to the CPTSPs, to provide sufficient billing information so that CPTSPs can bill the IXCs. This requirement must be included in any agreement/contract entered into between CLECs and CPTSPs;

c)    sets a default rate of $0.25 in cases where companies cannot negotiate a mutually acceptable rate. The collection of the compensation rate should commence, in the absence of any alternatively negotiated rate,
for all CPTSPs in a given ILEC territory on the date of final approval of the ILEC's tariff to provide tracking report services;

d)    finds that the CPA's request requiring all IXCs, ILECs and CLECs to show cause why the relief sought should not apply to them has been satisfied;
e)    finds that the agency issue is outside the scope of this proceeding and will be addressed at a later date; and
f)    finds that instead of automatically extending the compensation per-call regime to the independents' territory, it will initiate a show cause proceeding when the Commission establishes frameworks for local competition.
Secretary General
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