ARCHIVED - Order CRTC 2001-138

Order CRTC 2001-138

Ottawa, 14 February 2001

CRTC approves a contribution exemption for Primus transit traffic

Reference: 8626-P11-04/00

The CRTC approves a contribution exemption for transit traffic on circuits provided to Primus by Aliant.

By letter dated 21 September 2000, Primus Telecommunications Canada Inc. issued a letter entitled Request for informal mediation in a contribution billing dispute with Aliant Telecommunications Inc. In this letter, Primus requested that Commission staff assist Aliant Telecom Inc. and Primus (the parties) in resolving a dispute with respect to contribution owed by Primus for interexchange transit traffic and interexchange originating/terminating traffic switched through Aliant's Halifax Nova Scotia Centrex Hub.

By letter dated 24 October 2000, Aliant provided its comments. While concerned with certain aspects of Primus' submission, Aliant accepted Primus' suggestion to enlist Commission staff to assist in mediating this dispute.

On 16 November 2000, Commission staff initiated a conference call with the parties, setting out a plan for settling the dispute (the settlement plan). As a result of the call, Aliant and Primus agreed: (1) to negotiate to reconfigure the Primus network to allow Maritime Tel & Tel Limited to measure the Halifax Centrex transit traffic on a going-forward basis; (2) that Primus would file an exemption application for prospective and retroactive transit traffic; (3) to negotiate a settlement of the amount of contribution owing on a retroactive basis; and (4) to provide Commission staff with estimates of contribution billing in dispute.

By letter dated 21 December 2000, pursuant to the settlement plan item (2) noted above, Primus submitted an application for contribution exemption with respect to the transit traffic in question. Primus requested that the exemption be effective 1 July 1997, and remain in effect until 1 March 2001, or until such time that the contribution collection mechanism is scheduled to change. As detailed below, Primus submitted that this exemption is supported by special circumstances.

Primus stated that it operates an interexchange network using leased Centrex systems in Aliant territory. Primus stated that the interexchange transit traffic in question has been assessed per-minute contribution each time it transits through Halifax Centrex systems, even though contribution has already been applied at both the originating and terminating ends of all contribution-eligible circuits. Primus submitted that this over-billing has led to the double or triple billing of contribution each time traffic transits through a Centrex system in Aliant territory.

Primus noted that Aliant is unable to differentiate between transit traffic and Halifax originating/terminating traffic, such that all traffic in the Halifax Centrex was considered contribution-eligible traffic, notwithstanding the fact that contribution has already been paid on the originating and terminating ends for the transit traffic in question.

Primus stated that pursuant to the settlement plan: (1) both parties have compared traffic reports; (2) concluded that they are similar enough to identify past transit traffic; and (3) the parties have come to an agreement on: (a) the future measuring of Primus' transit traffic and (b) a system to establish the quantification of historical transit traffic dating back to 1 July 1997 along with the corresponding contribution amounts.

Primus submitted that there are special circumstances, namely, the inability for Aliant to measure transit traffic, and the limited utility of reconfiguring Primus' network in light of the forthcoming change in the contribution collection mechanism. Primus submitted that Aliant has agreed that a technical audit, or the like, need not accompany the application.

Primus submitted that, given the imminent adoption of a new contribution collection mechanism, it need not reconfigure its network to accommodate current and future transit traffic via separate trunks. Primus stated that the implementation of the new revenue-based mechanism will negate the need to separately measure this transit traffic by splitting trunks, since revenues rather than minutes will determine the contribution to be paid. As such, Primus proposed that carrier verification of the transit traffic in question be considered the most suitable method to verify the transiting agreements in this situation.

By letter dated 8 January 2001, Aliant confirmed that: (1) it reached an agreement with Primus with respect to the appropriate amount of contribution owing for the period prior to 12 November 2000; and (2) the requirement for it to measure minutes for contribution purposes will cease effective 31 March 2001 pursuant to Changes to the contribution regime, Decision CRTC 2000-745, dated 30 November 2000.

Based on the current configuration of the Primus network, Aliant stated that it is still unable to accurately differentiate minutes for calls which transit through the Halifax Centrex Hub from those that originate/terminate at that Hub. However, Aliant submitted that requiring Primus to reconfigure its network for a period of three months (until 31 March 2001) does not seem appropriate.

Aliant stated that it is confident that a bilateral review of each of Aliant and Primus' minute records will determine with a reasonable degree of accuracy which of the minutes are considered transit and therefore excluded from the contribution assessment calculation. Aliant agreed that this is the most effective methodology for verifying the transit traffic in the period from 12 November 2000 up to and including 31 March 2001.

Aliant noted that the Commission stated in Effective date of contribution exemptions, Telecom Public Notice CRTC 95-26, dated 12 June 1995, that contribution exemptions would generally be granted effective the date of application or the date of installation, absent special circumstances. Aliant stated that in light of the confusion associated with the Primus configuration, it agreed that special circumstances are present in this case.

Aliant submitted that it would be appropriate for the Commission to grant Primus' application for a retroactive contribution exemption between 1 July 1997 and 12 November 2000, as well as on a prospective basis from 12 November 2000 until 31 March 2001, subject to the requirement that Primus forward payment for the contribution amounts that have been negotiated between the parties (i.e., for Halifax originating/terminating traffic).

The Commission notes that Primus and Aliant have completed three of the four items in the settlement plan. The parties did not complete item (4): "to provide Commission staff with the estimates of contribution billing in dispute." The Commission finds that since the parties were able to negotiate a settlement, this information will now not be required. Accordingly, the Commission is of the view that the parties have essentially carried out the settlement plan.

The Commission notes that the appropriate evidence to support a prospective exemption, following a network reconfiguration by Primus, would be either a technical audit by an independent engineer or carrier verification. However, both parties submitted that a reconfiguration would not be appropriate since, pursuant to Decision 2000-745, the per-minute regime would only be in place until 31 March 2001.

The Commission is of the view that: (1) a reconfiguration would be onerous and costly for Primus, and (2) would only be required for the short period noted above. The Commission notes that both parties are comfortable using carrier verification for prospective exemption (a bilateral review of each other's minute records to determine transit minutes in the period from 12 November 2000 up to and including 31 March 2001).

In light of the foregoing, the Commission approves the exemption on a prospective basis from 12 November 2000 up to 31 March 2001 or until such time that the contribution collection mechanism changes in Aliant territory. In this context, the Commission notes that in its 21 December 2000 letter, as noted above, Primus asked that the exemption remain in effect until 1 March 2001, or until the contribution mechanism is scheduled to change. It is apparent that Primus meant to ask for 31 March 2001, and this date is the appropriate one in the circumstances.

The Commission is of the view that, pursuant to PN 95-26, there are special circumstances in this case that support a retroactive exemption: (1) Aliant's billing method led to double or triple billing of contribution each time interexchange traffic transited through the Halifax Centrex Hub; and (2) Aliant has never been able to differentiate the transit traffic from other traffic. The Commission notes that both companies, after comparing records, were able to agree on the estimate of retroactive transit minutes that should be exempt.

In light of the foregoing, the Commission approves the retroactive exemption from 1 July 1997 up to 12 November 2000.

In summary, the Commission approves Primus' application for retroactive and prospective exemption for the transit traffic in question for the period 1 July 1997 up to 31 March 2001, or until such time that the contribution collection mechanism changes in Aliant territory. The Commission also directs Primus to forward forthwith to Aliant the contribution amounts to which the parties have agreed.

Secretary General

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