ARCHIVED - Order CRTC 2001-338

Order CRTC 2001-338

Ottawa, 30 April 2001

Revenue-based contribution regime interim Procedures

Reference: 8638-C12-45/00

The Commission approves on an interim basis the "Procedures for operation of the revenue-based contribution regime" document attached.

Following the issuance of Decision CRTC 2000-745, Changes to the contribution regime, dated 30 November 2000, five working groups were established to assist in the implementation details of the changes to the contribution regime. All parties in the proceeding leading to Decision 2000-745, and all telecommunications service providers (TSPs) known to the Commission, were invited to participate in the working groups. A Co-ordination Committee, chaired by Commission staff, was also created to co-ordinate the work to be done by the working groups.

The Process Working Group was charged with developing guidelines and procedures for the operation of the National Contribution Fund established pursuant to Decision 2000-745 and the closure of the per-minute/per-line contribution regime.

The Process Working Group has developed a procedures document, which it has submitted to the Co-ordination Committee and CRTC Interconnection Steering Committee (CISC) members for review. Typically, these Committees would review the document prior to it being considered for approval by the Commission. However, because of the time constraint and the need to have procedures in place as soon as possible for a successful transition to the new contribution regime, the Commission has approved, on an interim basis only, the attached document prior to its review by the Committees. The attached document essentially represents the document submitted to the Committees with some modifications by the Commission. The Commission has incorporated the latest reporting form and instructions as well as the reconciliation forms related to in Article 6, and has made some minor wording modifications. These changes are based only on a preliminary review of the document and do not indicate that the Commission considers that no additional changes would be appropriate.

Following the issuance of this order, the process in place for reviewing the attached document developed by the Process Working Group will continue as originally scheduled. That is, the document will be considered by the Co-ordination Committee and the CISC. The Commission encourages all parties with an interest in the matter to participate in the meeting of the Co-ordination Committee and CISC where this document will be reviewed. If a consensus is reached, the document, with any modifications agreed to by these Committees, will then be filed with the Commission for final approval. If there are any disputes about the document that cannot be resolved among the parties, they will be put forward to the Commission for resolution.

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca 

20 April 2001

Procedures for operation of the revenue-based contribution regime mandated by the CRTC pursuant to Decision 2000-745 dated 30 November 2000

This document comprises the Procedures for the purposes of the National Contribution Fund Administration Agreement dated 1 January 2001 (the "National CFA Agreement") between Canadian Portable Contribution Consortium Inc. (CPCC), of the first part, Progestic International Inc., in its capacity as the administrator (the "CFA") of the National Contribution Fund (the "NCF"), of the second part, each telecommunications service provider (TSP) as shall be determined by the CRTC from time to time to be a Required Contributor and which shall have become a party to the National CFA Agreement through execution and delivery to the CFA of a Required Contributor Accession Agreement in the manner provided in Section 10.14(a) of the National CFA Agreement, of the third part, and each TSP as shall be determined by the CRTC from time to time to be an Eligible Recipient and which shall have become a party to the National CFA Agreement through execution and delivery to the CFA of an Eligible Recipient Accession Agreement in the manner provided in Section 10.14(b) of the National CFA Agreement, of the fourth part.

Approved by the Board of Directors of Canadian Portable Contribution Consortium Inc.: 2001

Approved by the CRTC: 2001

ARTICLE ONE

GENERAL

1.1 The purpose of these Procedures is to prescribe the rules for:

· the operation of the National Contribution Fund, established by the CRTC pursuant to Decision CRTC 2000-745; and

· the closure of the per-minute/per-line contribution regime that operated until 31 December 2000 and provide a reconciliation and settlement of the contribution for the first quarter of 2001.

1.2 The Procedures are the "Procedures" referred to in the National CFA Agreement and form part of the contractual obligations entered into by the signatories of that contract.

1.3 These Procedures have been established through a consultative process overseen by the CRTC. The consensus reports of this consultative process have been filed with, and approved by, the CRTC. Certain points on which a consensus could not be achieved were filed with, and resolved by, the CRTC.

1.4 For administrative convenience, it has been agreed that the CPCC has the power to amend these Procedures from time to time with approval of the CRTC. Parties subject to these Procedures will be given adequate notice of proposed changes through the distribution of the agenda and minutes of directors meetings of the CPCC and by representation through one or more directors of the CPCC. In addition, companies will have the right of appeal to the CRTC if they are unable or unwilling to accept a particular amendment to these Procedures. In addition, the CRTC may, from time to time, amend the provisions of Appendix 1 to these Procedures and references in these Procedures shall be taken to be references to the then most recent version of Appendix 1 so issued by the CRTC.

1.5 Decision 2000-745 stated that the Commission would perform certain tasks. For completeness, the tasks undertaken by the CRTC have also been described in these Procedures.

1.6 Headings: The division of these Procedures into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of these Procedures. The terms "hereof", "hereunder" and similar expressions refer to these Procedures and not to any particular Article, Section or other portion hereof and include any agreement supplemental hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles, Sections and Appendices are to Articles and Sections of, and Appendices, to these Procedures.

1.7 Extended meanings: In these Procedures, words importing the singular number also include the plural and vice versa; words importing any gender include all genders and words importing persons include individuals, partnerships, associations, trusts, unincorporated organizations and corporations.

1.8 Accounting principles: Wherever in these Procedures reference is made to a calculation to be made or an action to be taken in accordance with generally accepted accounting principles, such reference shall be deemed to be to the generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants ("CICA"), or any successor institute, applicable as at the date on which such calculation or action is made or taken or required to be made or taken in accordance with generally accepted accounting principles.

1.9 Interest calculations and payments: Unless otherwise stated, wherever in these Procedures reference is made to a rate of interest "per annum" or a similar expression is used, such interest shall be calculated on the basis of a calendar year of 365 days or 366 days, as the case may be, and using the nominal rate method of calculation, and will not be calculated using the effective rate method of calculation or on any other basis that gives effect to the principle of deemed reinvestment of interest. All late payment charges and interest to be payable hereunder will be paid both before and after default and/or judgment, if any, until payment thereof, and interest will accrue on overdue interest, if any, compounded monthly.

1.10 Currency: All references to currency herein are to the lawful money of Canada.

1.11 Action on business day: Whenever pursuant to these Procedures an action is to be taken by a specific date and such specific date is not a business day, such action shall be taken on the first business day following such specific date.

ARTICLE TWO

DEFINITIONS

2.1 Definitions

In these Procedures, unless something in the subject matter or context is inconsistent therewith, the following terms shall have the respective meanings ascribed to them in this Section 2.1:

ARTICLE THREE

ANNUAL REPORTING AND VERIFICATION OF CANADIAN TELECOMMUNICATIONS SERVICES REVENUES

3.1 Each TSP is required to file with the CRTC on or before 31 March of each year (30 April 2001 with respect to year 2000 revenues) a calculation of Canadian Telecommunications Services Revenues and further, the calculation of the Contribution-Eligible Revenues based on the audited financial data of the fiscal year ending in the immediate prior calendar year. The format and definition of the report is included in Appendix 1 of these Procedures along with detailed instructions for completion. TSPs reporting must complete an individual report and file the financial records for each related company (as defined in the CICA Handbook Section 3840). The CRTC can request assistance from Industry Groups, the CFA and CPCC to identify all TSPs who fit the requirement for reporting.

3.2 Each filing by a TSP with the CRTC pursuant to section 3.1 shall be accompanied by:

· for those TSPs with Contribution-Eligible Revenues above $10 million, or any other amount determined, from time to time, by the CRTC, in the fiscal year ending in the immediate prior calendar year, the requirement is for verification by external Auditors based on the process identified in Section 7;

· for those TSPs with Contribution-Eligible Revenues below $10 million, or any other amount determined, from time to time, by the CRTC, or no audited financial statements in the fiscal year ending in the immediate prior calendar year, the requirement is for either the external Auditors to provide an attestation of the accuracy of the filed information or an affidavit signed by an officer of the company attesting to the accuracy of the information based on Section 7 of these Procedures;

· a copy of such TSPs audited financial statements for the previous fiscal year ending in the immediate prior calendar year; and

· a list of inter-carrier payments and Non-Contribution-Eligible Revenues.

3.3 In addition to the financial data, the local exchange carriers with network access services (NAS) are to report estimated NAS by band, based on the actual NAS per band from December of the prior year.

3.4 Following review by the CRTC of information provided in Sections 3.1, 3.2 and 3.3 by a TSP, the CRTC shall, pursuant to Decision 2000-745, determine if a TSP is a Required Contributor for the current calendar year for purposes of the National CFA Agreement and these Procedures. In the event that the CRTC determines that the TSP is a Required Contributor, the CRTC will notify such TSP and the CFA that such TSP is a Required Contributor for the year.

3.5 To the extent that a TSP becomes a Required Contributor and has not previously executed and delivered to the CFA a Required Contributor Accession Agreement, whereby such Required Contributor shall become a party to the National CFA Agreement, such Required Contributor shall execute and deliver to the CFA such Required Contributor Accession Agreement within thirty (30) days of such determination by the CRTC.

3.6 The CRTC will for 2001, pursuant to Decision 2000-745, calculate the Revenue Percentage Charge applicable to the current year based on the information provided in Sections 3.1 and 3.3. The CRTC will advise the CFA and each TSP identified as a Required Contributor of the Revenue Percentage Charge as well as any subsequent revisions to the Revenue Percentage Charge. As well, the CRTC will provide to the CFA an estimate of the contribution payable from each TSP.

3.7 The CFA will implement the new Revenue Percentage Charge in the next month following the determination by the CRTC. The CFA will provide to each TSP contributing to the National Contribution Fund a calculation of the adjustment to the amount paid by such TSP for the period from the beginning of the year to the month immediately prior to the implementation of the new Revenue Percentage Charge for the year. The adjustment calculations will be completed by the CFA within sixty (60) days of the issuance by the CRTC of the new Revenue Percentage Charge and issued to the TSPs. The TSPs will have an additional thirty (30) days to provide payment to the CFA.

3.8 Subsequent changes to the Revenue Percentage Charge may be required due to either an under-funding or over-funding of the National Contribution Fund. Pursuant to Decision 2000-745, these changes are to be corrected in the subsequent year's calculation for the Revenue Percentage Charge. The CFA will report, on a quarterly basis, the status of the National Contribution Fund in regard to either under-funded during the quarter, based on the expenses and subsidies payable compared to contribution revenues received or has excess funds greater than 10% of the funds collected during the quarter. The CRTC will then provide direction to the CFA in regard to the modification of the Revenue Percentage Charge, if required. All modifications to the Revenue Percentage Charge will be processed as an adjustment to the rate going forward and no retroactive changes will be made.

ARTICLE FOUR

MONTHLY REPORTING OBLIGATIONS OF REQUIRED CONTRIBUTORS

4.1 Reporting of Contribution-Eligible Revenues and NAS by Band is to be completed on a monthly basis by all TSPs who have been identified as a Required Contributor based on the schedule in Section 4.4. The reporting will be completed through the CFA based on the form provided in Appendix 1 and in accordance with the NCF User Instruction Guide that accompanies these Procedures. Appendix 1 includes a sample of the reporting format with the appropriate definitions and guidelines for completion as approved by the CRTC for each section of the Report.

4.2 The monthly reporting is submitted by each contributing TSP based on a consolidated basis and/or reporting by each related company which is a TSP. TSPs that report on a consolidated basis must provide to the CFA supporting reports for each related company (as defined in the CICA Handbook, Section 3840) that is a TSP. If the monthly reporting for the related companies is onerous, the TSP may file a request with the CRTC to reduce the reporting requirements.

4.3 Each TSP shall provide to the CFA the current contact information including the contact name, the telephone number, fax number and email address for the responsible person for the monthly reporting of contribution and will provide an alternate contact who can act as a replacement.

4.4 Required Contributors will report to the National Contribution Fund based on a reporting schedule to be issued by the CFA before the 10^th business day of January of each year. The schedule will follow the pattern of:

For greater clarity, see the NCF User Information Guide for a sample of the schedule that will be issued by the CFA annually.

4.5 If an adjustment for a previous reporting period in the current year is deemed necessary by a Required Contributor, the Required Contributor will report the adjustment on a separate monthly reporting form as identified in Appendix 1 or as documented in the NCF User Information Guide. The CFA will aggregate the adjustment with the current reporting period for inclusion in the National Contribution Fund. No late payment charges or penalties will be assessed with the reporting of adjustments that are either completed within six (6) months of the period being adjusted or have a impact on the National Contribution Fund for the month impacted of less than one percent (1%). In the event that the adjustment is completed in a subsequent year, the payment will be calculated at the rate that was in effect in the month that the payment was due. Late payment charges are applied to any amounts in default commencing as of the relevant due date and compounded monthly.

4.6 All Required Contributors that operate as local exchange carriers ("LEC") will report by telco territory (being the operating territories referred to in the Existing CFA Agreements), the number of NAS by telco band using the NAS reporting form in Appendix 2, and in accordance with the instructions from the NCF User Information Guide. The TSP must provide to the CFA the LEC approval to operate within each telco territory issued by the CRTC before the CFA will process claims on the National Contribution Fund. The NAS reporting will be completed according to the same schedule as the monthly reporting of Contribution-Eligible Revenues as specified in Section 4.4.

4.7 Payments to the National Contribution Fund based on information received from the CFA will be transferred to the CFA in accordance with the process in the NCF User Information Guide.

4.8 Security for payment obligations

(a) Recognizing that timely payment by Required Contributors to the CFA of amounts payable by Required Contributors to the CFA hereunder is essential to the orderly operation of the National Contribution Fund, in the event a Required Contributor fails to make payment to the CFA of the amount so required to be paid by it, in full and on the relevant due date or within two (2) business days thereafter (in this Section 4.8 called a "Defaulting Contributor"), the CFA shall make all reasonable efforts to advise such Defaulting Contributor of (i) the fact that such Defaulting Contributor has failed to make payment of an amount due to the CFA hereunder, and (ii) the amount of the required payment. If, within five (5) business days of the CFA having given the notice referred to in the immediately preceding sentence to a Defaulting Contributor, such Defaulting Contributor shall have failed to remit such amount to the CFA (together with any applicable late payment charges), such Defaulting Contributor shall provide to the CFA, within the next ten (10) business days, security for such Defaulting Contributor's payment obligations to the CFA hereunder in accordance with these Procedures. Security provided by a Defaulting Contributor pursuant to this Section 4.8(a) shall remain in effect until such Defaulting Contributor shall have paid, in full and on the relevant due dates or within two (2) business days thereafter, all amounts required to be paid by such Defaulting Contributor to the CFA hereunder in respect of twelve (12) consecutive payment periods following such failure to pay. In the event security provided by a Defaulting Contributor to the CFA pursuant to this Section 4.8(a) shall thereafter have been released and such Defaulting Contributor shall again default in making due and punctual payment of amounts due to the CFA hereunder, the provisions of this Section 4.8(a) shall again be applicable in respect of any subsequent failure on the part of such Defaulting Contributor to make full and timely payment of amounts payable by such Defaulting Contributor to the CFA hereunder.

(b) Security required of a Defaulting Contributor hereunder shall consist of readily realizable security, such as a deposit of cash or marketable securities, an irrevocable letter of credit or letter of guarantee issued by a Canadian chartered bank, an irrevocable performance bond issued by a Canadian issuer of performance bonds, or such other form of readily realizable security as may be satisfactory to the CFA, acting reasonably. The Credit (a "Credit") shall be in form and substance satisfactory to the CFA and shall name the CFA, for and on behalf of the National Contribution Fund, as beneficiary. The Credit provided by a Defaulting Contributor hereunder shall be in a principal amount equal to the sum of the net amounts to become payable by such Required Contributor to the CFA in accordance with these Procedures in respect of the most recent three (3) payment periods preceding the due date of the payment that gave rise to the obligation of such Defaulting Contributor to provide security hereunder (or three times the net amount payable by such Defaulting Contributor in respect of the payment period preceding the due date of the payment that gave rise to the obligation of such Defaulting Contributor to provide security hereunder in the case of a Defaulting Contributor, which shall not have been at such time a Required Contributor hereunder for at least three payment periods, as the case may be), as determined in good faith by the CFA. Partial drawings under any such Credit shall be permitted. Such Credit shall entitle the CFA, for and on behalf of the National Contribution Fund, to draw against the Credit, or to demand payment by the issuer of the Credit, as the case may be, for any amount payable by such Defaulting Contributor to the CFA pursuant to these Procedures, up to the undrawn principal amount of the Credit. The CFA shall be entitled to draw upon the Credit, in the case of a Credit issued by a third party, upon provision of a written statement of the CFA, addressed to the issuer of the Credit, as to non-payment of the corresponding amounts pursuant to the provisions of these Procedures by the Defaulting Contributor on whose behalf the Credit was issued, without any requirement that the CFA pursue or exhaust any remedies or recourses it may have against such Defaulting Contributor before being entitled to require payment under such Credit. Despite the foregoing, the CFA may not call for payment under any such Credit until the relevant amount, if in respect of contribution payable by such Defaulting Contributor to the CFA hereunder, has been overdue for not less than two (2) business days following the relevant due date. Promptly following the making of any such drawing or demand for payment under any such Credit, the CFA shall advise the Defaulting Contributor and the CRTC of the making of such drawing or demand for payment. Each Defaulting Contributor from whom a Credit is required pursuant to the provisions of these Procedures shall cause the Credit, or a replacement thereof satisfactory in form and in substance to the CFA, acting reasonably, to be maintained in force for so long as required by this Section 4.8.

(c) A Defaulting Contributor required to provide a Credit hereunder shall arrange for an increase in the undrawn principal amount of the Credit provided by it or issued on its behalf hereunder in the event that the undrawn principal amount payable under any such Credit shall, at any time, be less than eighty-five percent (85%) of the sum of the net amounts payable by such Defaulting Contributor to the CFA in respect of the then most recent three (3) payment periods pursuant to these Procedures, as notified to such Defaulting Contributor by the CFA. Any such increase shall be for an amount sufficient to ensure that the undrawn principal amount of the Credit respecting such Defaulting Contributor's obligations hereunder shall not be less than the sum of the net amounts payable by such Defaulting Contributor to the CFA in respect of the then most recent three (3) payment periods. Each Defaulting Contributor shall cause the undrawn principal amount of any Credit provided by it or issued on its behalf hereunder to be so increased, or to otherwise post readily realizable security for performance of its obligations hereunder in form and substance satisfactory to the CFA, acting reasonably, within ten (10) business days of the undrawn principal amount of such Credit ceasing to be equal to at least eighty-five percent (85%) of the sum of the net amounts payable by such Defaulting Contributor to the CFA in respect of the then most recent three (3) payment periods pursuant to these Procedures. For the avoidance of doubt, in the event the CFA shall make a drawing or a demand for payment under a Credit in accordance with the provisions of these Procedures and, following the drawing or the payment by the financial institution or other party which issued such Credit, the then remaining undrawn balance of such Credit shall be less than the sum of the net amounts payable by the Defaulting Contributor on whose behalf the Credit has been issued to the CFA in respect of the then most recent three (3) payment periods, such Defaulting Contributor shall cause the undrawn principal amount of such Credit to be increased in accordance with this Section 4.8.

(d) In the event that the undrawn principal amount payable under any Credit issued on account of a Defaulting Contributor at any time shall be greater than the sum of the net amounts payable by such Defaulting Contributor to the CFA in respect of the then most recent three (3) payment periods pursuant to these Procedures, as notified to such Defaulting Contributor by the CFA in accordance with these Procedures, the Defaulting Contributor on whose behalf such Credit has been issued shall be entitled to request the CFA to consent, and the CFA shall consent, to the reduction in the undrawn principal amount payable under such Credit, such that the undrawn principal amount of the Credit respecting such Defaulting Contributor's obligations hereunder shall be not more than the sum of the net amounts payable by such Defaulting Contributor to the CFA in respect of the then most recent three (3) payment periods.

ARTICLE FIVE

RESPONSIBLITIES OF THE CFA

5.1 The CFA is responsible for the operation of the National Contribution Fund under the administration of the CPCC. In particular the CFA:

· receives all contribution reporting and payments to the National Contribution Fund;

· calculates and manages all the disbursements from the National Contribution Fund;

· is responsible for all banking functions related to the National Contribution Fund; and

· is responsible for maintaining the NCF User Information Guide and for ensuring all updates to the guide are distributed to all TSPs that either contribute or receive funds from the National Contribution Fund.

5.2 In accordance with Sections 3.1, 3.2 and 3.4, the CFA is responsible to maintain accurate records of all Required Contributors in any particular year, and ensure that monthly reporting and payment to the National Contribution Fund is completed by each Required Contributor. The CFA will provide monthly a report to the CRTC and the CPCC in regard to Required Contributors not reporting monthly as required in Section 3.1. The CFA will notify a Required Contributor, in writing, that has not reported or submitted payment to the National Contribution Fund for two consecutive months. If no response is received within ten (10) business days of the written correspondence and if a three (3) consecutive month reporting is missed, the CFA will identify the delinquent Required Contributor to the CRTC for further action, without affecting, however, the obligation of such delinquent Required Contributor to provide security to the CFA, in accordance with the provisions of Section 4.8 or the right of the CFA to realize upon security so provided.

5.3 Upon receiving the monthly contribution reports in accordance with Section 3.1 from the TSP that are Required Contributors, the CFA will provide a Payment and Receipt Advice [Report] to each such TSP identifying the amount required for payment to the National Contribution Fund and the expected payment date. The payment will be transferred to the CFA based on the procedures set forth in the NCF User Information Guide in accordance with the schedule specified in Section 4.4.

5.4 The CFA is authorized to deduct from the National Contribution Fund the CFA Payment as and when the CFA Payment is payable to the CFA. The CFA will also, from time to time, pay the Consortium Costs to the Consortium from the National Contribution Fund upon receipt by the CFA of certificate from an officer of the Consortium stating the amount and nature of the Consortium Costs in respect of the period specified in such certificate.

5.5 For the year 2001, the funds remaining in the National Contribution Fund will be distributed to Territorial Central Sub-funds based on the following percentages which were defined in Decision 2000-745:

Percentage of total monthly revenue collected

British Columbia

24.0135

Alberta

21.9639

Saskatchewan

4.9964

Manitoba

3.5791

Ontario/Quebec (Bell)

25.9712

Télébec

2.8653

Québec-Téléphone

3.2834

New Brunswick

2.8857

Nova Scotia

6.5667

Prince Edward Island

0.8667

Newfoundland

3.0081

Total

100

5.6 For 2001, before distribution to the local exchange carriers in each territory, the CFA will distribute to Northwestel the monthly amounts as prescribed in Decision 2000-746 from the Territorial Central Sub-funds. The Territorial Central Sub-funds for SaskTel, Télébec and Québec-Téléphone will be excluded from the distribution for Northwestel. The monthly deductions are listed below:

2001
($M)

Monthly
($)

Newfoundland

0.572

47,634

Nova Scotia

1.023

85,263

Prince Edward Island

0.140

11,647

New Brunswick

0.548

45,692

Ontario/Quebec

4.420

368,376

Manitoba

0.618

51,516

Alberta

3.652

304,317

British Columbia

4.127

343,888

Total

15.100

1,258,333

5.7 For 2001, the remaining funds in each of the Territorial Central Sub-funds will then be apportioned by average NAS and by band and distributed to the local exchange carriers eligible for subsidy, using the formula prescribed by the CRTC in Decision 97-8 and subsequent procedures. With regard to the SaskTel, Télébec and Québec-Téléphone Territorial Central Sub-funds, the entire amount remaining will be paid respectively to SaskTel, Télébec and Québec-Téléphone.

5.8 As set out in the schedule in Section 4.4, the CFA will report to the Eligible Recipients from each of the Territorial Central Sub-funds the amount of their net payment to or from the fund. The Eligible Recipients who are net payers to the fund as Required Contributors will transmit to the National Contribution Fund the net payment amount as reported by the CFA three (3) days after receiving the CFA report (CFA 2) based on the payment procedures set forth in the NCF User Information Guide.

5.9 On or before the prescribed date in Section 4.4, the CFA will distribute the remaining funds in the National Contribution Fund to the Eligible Recipients in accordance with the payment procedures set forth in the NCF User Information Guide. In the event that all funds have not been received from the TSPs, the CFA will rerun the process to include only the funds that have been received. TSPs that have not provided the contributions as required on the date specified will be assessed late payment charges and a rerun penalty of $2,000 to be applied against the TSPs not so providing. No payments to a TSP will be processed until such time as all previous amounts outstanding and all late payment charges and penalties assessed have been cleared. As with other contributors, the process described in Section 5.2 will be followed to identify deficient TSPs to the CRTC and the CPCC.

5.10 Late payments to the NCF will be subject to late payment charges applied to any amounts in default commencing on the relevant due date and compounded monthly. Late payment charges received by the CFA will be processed through the NCF in the month that the charges are received.

5.11 The CFA will hold all information received by it, pursuant to these Procedures, in confidence, in accordance with the provisions of Section 10.06 of the National CFA Agreement. Notwithstanding this, the CFA will report on a total basis for the entire National Contribution Fund:

· the total of the revenues and deductions from revenues prescribed by the CRTC on the CRTC's draft input form;

· total contribution into the NCF;

· expenses of the NCF;

· total disbursements to Northwestel; and

· total disbursements of contribution from the NCF, to the CPCC, and to the Eligible Recipients that participate in the NCF.

The CFA may also report to the CRTC, in confidence, any information requested by the CRTC.

5.12 Notwithstanding section 5.11 above, the CFA, on its own initiative, may report any information to the CRTC in confidence:

· to report any apparent discrepancy in the information reported to it; and

· to report any situation where information has not been reported that might reasonably be expected to have been reported.

5.13 The CFA will, on its own initiative, request from the CPCC clarification of issues related to the overall operation of the NCF and including:

· for the purposes of clarifying the correct operation of the NCF; and

· to report any apparent discrepancy in the operation of the NCF.

5.14 For 2002, in accordance with Decision 2000-745, paragraph 119, payments out of the National Contribution Fund to Eligible Recipients by the CFA will be governed by the decision of the CRTC in the proceeding initiated by Public Notice CRTC 2000-27, and the new banding structure and subsidy requirements for high-cost serving areas will apply.

ARTICLE SIX

ADJUSTMENTS TO THE FUND OR REVENUE PERCENTAGE CHARGE

6.1 For 2001, the transition occurs between the Per-Minute Regime and Revenue Percentage Charge process as described above. This transition, due to the timing of Decision 2000-745, requires an adjustment of payments made for the period January to March 2001, which are being completed based on the Per-Minute Regime. Also required is an orderly closure of the Per-Minute Regime in terms of processing information for the year 2000 and the final audit of all information required by the Existing CFA Agreements. The following processes were developed and agreed upon as consensus items through the contribution collection mechanism (CCM) subgroups.

6.2 Adjustment: For the period January to March 2001, payments by TSPs to the Contribution Fund is based on the Per-Minute Regime, however the Revenue Percentage Charge Regime is effective on 1 January 2001. This requires a calculation of the adjustment between the two contribution processes to ensure all TSPs effectively make payment to the National Contribution Fund based on the Revenue Percentage Charge Regime. The adjustment process developed is described below and the appropriate reporting forms are contained in Appendix 4 of this document.

6.3 Reconciliation data:

· LEC responsibility: LECs that have collected and reported contribution from IXCs, resellers, rebillers, or wireless companies or any other TSP during the period of 1 January 2001 to 31 March 2001 will complete a reconciliation with each of the TSPs to determine the amount of contribution which has been billed and collected.

· TSPs responsibility: In order to complete an orderly and timely reconciliation the TSPs that have paid contribution through a LEC during the period of 1 January 2001 and 31 March 2001 are responsible to assist the LECs in completing the reconciliation.

· Jointly, the LECs and TSPs will file with the CFA a reconciliation report as to the amount of contribution billed and collected that has been reported into the contribution fund for the period 1 January 2001 through 31 March 2001 using form CFA 2 (see Appendix 4). Both the relevant LEC and the relevant TSP are required to sign the reconciliation report before filing with the CFA.

· To assist the CFA in the reconciliation, the LECs will prepare form CFA1 (see Appendix 4) to reconcile to the amount of contribution reported for each of January, February and March 2001.

6.3.1 Revenue Percentage Charge Calculations: For the period 1 January 2001 to 31 March 2001, all TSPs designated as Required Contributors to the National Contribution Fund under the new Revenue Percentage Charge Regime will complete and submit to the CFA the Revenue Reporting form for the period January through March 2001. This form will be completed in accordance with these Procedures as stated in Articles 4 and 5 above.

6.3.2 CFA responsibility: The CFA will obtain all the CFA1 and CFA2 reporting forms identified in Section 6.3 and the revenue reporting forms identified in Section 6.3.1 from all TSPs and produce a reconciliation of the amount each TSP either owes the NCF or is owed from the NCF. This information will be reviewed and audited by the Auditor for completeness and accuracy:

· Once completed, the CFA will report to each TSP the net amount, that is either owed by the TSP to the NCF, or the amount that the NCF owes the TSP for the period 1 January through 31 March 2001. The TSP will have twenty (20) business days to dispute the amount reported by the CFA; any such dispute to be communicated in writing to the CFA within such period; and

· Once all disputes are resolved, the CFA will prorate the amounts of payments to and from the NCF until the end of the year as per the clarification from the CRTC as of 3 March 2001.

6.3.3 Schedule of events: The following schedule of events has been established:

· 15 June 2001 -LECs and TSPs to file with the CFA jointly prepared statements of contribution payments made by each TSP during the period January through March 2001 - Section 6.3 above;

· 30 June 2001 - TSPs identified as Required Contributors, as per the Revenue Percentage Charge procedures, will submit the revenue reporting forms to the CFA - Section 6.3 above;

· 31 July 2001 -CFA to complete the calculation of the adjustments required for each TSP and have the Auditor review the results. CFA to issue to all TSPs an adjustment statement detailing the amounts owed or to be received;

· 28 August 2001 - All disputes of CFA information from the TSPs to be identified;

· 11 September 2001 - Finalize all adjustments with completion of disputes and issue statements to each TSP;

· 15 September 2001 - 1^st adjustment payments to the NCF due from TSPs; and

· 18 September 2001 - 1^st adjustment payment from the NCF to the TSPs.

Adjustment payments to and from the fund will follow the same schedule for October, November and December 2001

ARTICLE SEVEN

AUDIT REQUIREMENTS

7.1 The audit requirements set forth in this Article have been developed through the consensus report process referred to in Section 1.3. The CRTC has directed that each TSP or group of related TSPs with over $10 million, or any other amount determined, from time to time, by the CRTC, of annual Contribution-Eligible Revenues file an audit report, by its external Auditors, with its annual filing on or before 31 March (30 April 2001 with respect to year 2000 revenues), for the fiscal year ending in the immediate prior calendar year. Those TSPs that do not have audited financial statements or non-related individual TSPs with $10 million or less of annual Contribution-Eligible Revenues may provide an affidavit signed by an officer of the company attesting to the accuracy of the information, in lieu of providing an audit report.

7.2 In addition, each TSP shall file an audit report with the Auditor (i.e. the Auditor of the National Contribution Fund), for the immediate prior calendar year, as part of the audit of the National Contribution Fund. The requirement for this audit will be contained in the National CFA Agreement. These audit reports should be based on either Section 5805 or Section 9100 of the Handbook of the Canadian Institute of Chartered Accountants.

7.3 For the filing with the CRTC on or before 31 March of each year subsequent to 2001 or 30 April 2001 with respect to year 2000 revenues, the following rules apply with regard to the audit report or affidavit.

7.3.1 The audit report, or affidavit, should be on a non-consolidated basis, but can be on a consolidated basis. If the audit report is on a consolidated basis, it must be accompanied by an individual report for each TSP subject to the contribution regime established by the CRTC in Decision 2000-745.

7.3.2 Each TSP will file a report on or before 31 March (30 April 2001 with respect to year 2000 revenues) showing the total Contribution-Eligible Revenue for its fiscal year ending in the immediate prior calendar year, in the same format as that used for the filing of this information on a monthly basis.

7.3.3 Each TSP claiming a subsidy for eligible NAS will file a report on or before 31 March showing the total eligible NAS by band for each month of the fiscal year ending in the immediate prior calendar year, in the same format as that used for the filing of this information on a monthly basis.

7.3.4 With the exception of those TSPs that do not have audited financial statements or non-related individual TSPs with $10 million or less of Contribution-Eligible Revenues, each TSP shall file an audit report by its external Auditor.

7.3.5 This audit report will be prepared in accordance with Generally Accepted Auditing Standards as defined by the Canadian Institute of Chartered Accountants. The Auditor will give his opinion on whether the annual report of Contribution-Eligible Revenues and, where applicable NAS by band, are presented fairly in accordance with the definitions approved by the CRTC for the preparation of these reports. Where a reporting TSP is incorporated in a country other than Canada, the audit should be conducted in accordance with the applicable auditing standards of that country.

7.3.6 TSPs that are permitted to file an affidavit instead of an audit report will file an affidavit signed by an officer of the company attesting to the fact that the information filed has been presented fairly in accordance with the definitions approved by the CRTC for the preparation of these reports.

7.3.7 A copy of the audit report, or affidavit, will be filed with the CRTC on or before 31 March (30 April with respect to year 2000 revenues).

7.3.8 A sample of the audit report is contained in Appendix 2 of these Procedures. A sample of the form of affidavit is contained in Appendix 3 of these Procedures.

7.4 The following rules will apply with regard to the audit report or affidavit, to be filed with the Auditor of the National Contribution Fund.

7.4.1 This audit report, or affidavit, must be on a non-consolidated basis by each TSP that reports contribution to the National Contribution Fund.

7.4.2 Each TSP shall file a report on or before the approved date showing the total Contribution-Eligible Revenues for its fiscal year ending in the immediate prior calendar year, in the same format as that used for the filing of this information on a monthly basis.

7.4.3 Each TSP claiming a subsidy for eligible NAS will file on or before the approved date showing the total eligible NAS by band for each month of the fiscal year ending in the immediate prior calendar year, in the same format as that used for the filing of this information on a monthly basis.

7.4.4 With the exception of those TSPs that do not have audited financial statements or non-related individual TSPs with $10 million or less of Contribution-Eligible Revenues, each TSP shall file an audit report by its external Auditor.

7.4.5 The audit report will be prepared in accordance with Generally Accepted Auditing Standards as defined by the Canadian Institute of Chartered Accountants. The Auditor will give his opinion on whether the annual report of Contribution-Eligible Revenues and, where applicable NAS by band, are presented fairly in accordance with the definitions approved by the CRTC for the preparation of these reports. Where a reporting TSP is incorporated in a country other than Canada, the audit should be conducted in accordance with the applicable auditing standards of that country.

7.4.6 The TSPs which are permitted to file an affidavit instead of an audit report will file an affidavit signed by an officer of the company attesting to the fact that the information filed has been presented fairly in accordance with the definitions approved by the CRTC for the preparation of these reports.

7.4.7 A copy of the audit report, or affidavit, will be filed with the Auditor of the National Contribution Fund and with the CRTC on or before the approved date.

7.4.8 The approved date for the filing of this audit report, or affidavit, has been set at 90 days after the final reporting period for the year being reviewed.

7.4.9 A sample of the audit report has been included in Appendix 2 of these Procedures. A sample of the form of affidavit is contained in Appendix 3 of these Procedures.

ARTICLE EIGHT

CLOSURE OF THE PER-MINUTE REGIME TO REVENUE-BASED REGIME RELATED TO 2001

8.1 Version 3 Processing: The completion of all processing of 2000 data under the Per-Minute Regime will be completed by 28 June 2001 with final payouts by 15 July 2001.

8.2 Audits: Audits required by the Existing CFA Agreement will be completed for:

· 5805 Audits: Would be required by all LECs as per the Existing CFA Agreements. The 5805 would be delayed to incorporate the Version 3 processing date and would be submitted by the LECs 90 days after the final Version 3 submissions or by 27 October 2001; and

· 5900 Audits: Would only be completed by all ILECs or significant CLECs reporting to the fund. As identified by the CFA, this would impact 3 companies, 2 ILECs and 1 CLEC that would be required to submit the 5900 Audits. The CFA will contact and inform the applicable LECs of the requirement for the audit.

Appendix 1

CRTC REVENUE-BASED CONTRIBUTION REGIME -
ANNUAL REPORTING FORM

Table of contents

-1- Introduction

-2- Annual filing requirements

-3- Related companies

-4- Compliance statement

-5- Monthly filing requirements

-6- Completing the forms

-7- Annual reporting form

-8- Inter-carrier payments form

-1- Introduction

On 30 November 2000, the Commission issued Decision CRTC 2000-745 introducing major changes to the Canadian contribution regime. In the decision, the Commission decided that it would introduce a national contribution collection mechanism based upon revenues from all telecommunications service providers (TSPs), who meet the minimum threshold of $10 million in Canadian Telecommunications Services Revenues (CTSR), and replaced the per-minute mechanism effective 1 January 2001. Contribution serves to subsidize the high cost of residential local telephone service in rural and remote areas. The revenue charge is set annually and is based upon the Contribution-Eligible Revenues of the previous year. Monthly remittances based upon the previous month's actual revenues will be made to the Central Fund Administrator (CFA) and distributed to those TSPs serving high-cost serving areas as determined by the CRTC. Refer to Decision 2000-745 and Orders CRTC 2001-220 and 2001-221 for further clarification.

-2- Annual filing requirements

Paragraph 103 of the decision requires that all TSPs are now required to report to the Commission, each 31 March, their Contribution-Eligible Revenues based upon the financial statements of the fiscal year ending within the immediate prior calendar year. The reporting form referred to in paragraph 102 of the decision is attached. The following supporting documentation must be provided: (i) the relevant financial statements; (ii) the associated audit report or affidavit, as applicable (see below); (iii) a list of the inter-carrier payment deductions claimed, broken down by supplier, services purchased and the associated expense (see inter-carrier payment deduction form attached); and (iv) details of all Non-Contribution-Eligible Revenues (see attached form). This information may be filed in confidence with the Commission. A list of all filers will be available on the CRTC website at www.crtc.gc.ca. The annual percent revenue charge will be determined following the receipt of the annual filing requirements. The interim 2001 revenue charge is 4.5%.

-3- Related companies (Note 1)

Companies making monthly or annual filings on behalf of a group of related companies that are TSPs are also required to file separate reports with supporting information for each company that is a TSP. When filing your annual reporting form, a list of all related companies that are TSPs is required, whether or not the companies file separately or as a group. Please note that the minimum threshold of $10 million in CTSR applies to the group of related companies that are TSPs. The definition of related companies can be found in Section 3840 of the Handbook of the Canadian Institute of Chartered Accountants.

-4- Compliance statement

If the TSP, or group of related companies that are TSPs, has over $10 million in Contribution-Eligible Revenues, a compliance statement completed by the company's external Auditors, as outlined in the process guidelines (see CRTC website at www.crtc.gc.ca), must be filed attesting to the accuracy of the annual filing and revenue report. Those companies that do not have audited financial statements, or non-related companies with $10 million or less of annual Contribution-Eligible Revenues, can either have their external Auditors attest to the accuracy of the information or provide an affidavit signed by an officer of the company attesting to the accuracy of the information.

-5- Monthly filing requirements

TSPs that meet the minimum revenue threshold, and therefore must pay contribution on their Contribution-Eligible Revenues, are required to file and remit monthly to the Central Fund Administrator (CFA). The CFA is currently Progestic International Inc. If a company is making one remittance for a related group of companies that are TSPs, the financial information must be reported separately for each company. The process guidelines will provide further information regarding audit and filing requirements. The monthly report will require the same information as the annual reporting form subject to the following two exceptions. The details of inter-carrier payments and Non-Contribution-Eligible Revenues and the list of related companies are not required to be filed on a monthly basis. However, if the list of related companies changes at any time, the new information (the name of a newly related company, or the fact that a company is no longer related) must be communicated to the Commission immediately. The CRTC will be providing a list of TSPs who are required to remit contribution as well as an estimate of expected contribution to be received on a monthly basis to the CFA. The CFA will monitor the compliance with the monthly reporting requirements of the TSPs.

-6- Completing the forms

Annually, on 31 March, each TSP is required to file the Annual Reporting Form, the supporting documentation as detailed above, the Inter-Carrier Payment Form (if applicable) and the Non-Contribution-Eligible Revenues Form (if applicable). As well, a list of all related companies who are TSPs must be completed. This requirement applies whether or not the TSP meets the minimum threshold of $10 million in CTSR.

Area A: Company identification

Enter the legal name of the entity as well as the normal operating name of the TSP. Provide the names of any related companies that are TSPs. A list may be attached, if required.

Area B: Contact information

Enter the name of the person completing the form. This should be the person whom the Commission would be able to contact with any questions. Please provide the contact numbers and email address.

Area C: Reporting year information for annual filings (Note 2)

The reporting year for the annual filings is the calendar year, which ended immediately prior to the report being filed at 31 March. The fiscal year information is your company's fiscal year, which ended in the reporting year. For example, for the reporting form to be filed by 31 March 2002, the reporting year would be 2001 and you would provide the fiscal year information that ends in the calendar year 2001.

Area D: Calculation of Contribution-Eligible Revenues

The revenue information required in this section is based upon Decision 2000-745 and further clarifications provided in Orders 2001-220 and 2001-221, both dated 15 March 2001.

Note 3: Order 2001-220 contains the definitions of Total Operating Revenues, Non-Canadian Revenues, Canadian Telecommunications Services Revenues (CTSR), Contribution Payments Received, Retail Internet Service Revenues, Retail Paging Services Revenues. In addition, that order contains the procedure for calculating the contribution-eligible and Non-Contribution-Eligible Revenues from bundles. Order 2001-221 contains the definitions of Canadian Non-telecommunications Revenues, Terminal Equipment Revenues and Bundles. For clarification of Line D.1.B., refer to the definition of Total Operating Revenues.

Note 4: Inter-carrier payments are defined in Order 2001-220. The total allowable inter-carrier payments should be reported in Line D.6. In accordance with paragraph 102 of the decision, this deduction must be supported by a list of suppliers, services purchased and the associated expense. The INTER-CARRIER PAYMENTS FORM is attached.

Note 5: Bundled revenues - The term bundling generally refers to a situation where one rate covers a number of products and/or services. If a bundle includes contribution-eligible and Non-Contribution-Eligible Revenues, the bundling rules apply as per Orders 2001-220 and 2001-221. To ensure that revenues are appropriately recorded to respect the minimum threshold, revenues associated with bundles should be reported as per the three situations outlined below:

(i) Contribution-eligible and Non-Contribution-Eligible Revenues in a bundle

(a) If the bundle contains Contribution-Eligible Revenues and Non-Contribution-Eligible Revenues from "Retail Internet Services", "Retail Paging Services" and/or "Terminal Equipment", enter the amount of revenues eliminated from bundles that are non-contribution-eligible in Line D.10. This amount eliminated from bundles as Non-Contribution-Eligible Revenues is not to be included in any other line in the form as a deduction.

(b) If the bundle contains Contribution-Eligible Revenues and Non-Contribution-Eligible Revenues that would normally be reported in Lines D.2 and/or D.3, enter the amount of revenues eliminated from bundles that are Non-Contribution-Eligible in Lines D.2 or D.3 as applicable. If the bundle includes Contribution-Eligible and Non-Contribution-Eligible Revenues that would normally be reported in D.2, D.3, D.7, D.8 and/or D.9 and the Non-Contribution-Eligible Revenues cannot be separated, you may report all revenues from the Non-Contribution-Eligible Revenues in Line D.10. For greater clarification, Non-Contribution-Eligible Revenues that would normally be reported in Lines D.7, D.8 and/or D.9 cannot be reported in Lines D.2 and/or D.3.

(ii) Bundle of Non-Contribution-Eligible Revenues only - If the bundle includes only Non-Contribution-Eligible Revenues, the revenues should be prorated in a similar manner as set out in Order 2001-220, to the appropriate section on the form. For example, if the bundle contains only "Retail Internet Services" and "Terminal Equipment Revenues", the revenues would be prorated and reported in Lines D.7 and D.9 respectively. If the bundle contains only "Canadian Non-telecommunications Revenues" and "Retail Internet Services Revenues", the revenues would be prorated and reported in Lines D.3 and D.7 respectively. If the bundle includes Non-Contribution-Eligible Revenues that would normally be reported in D.2 or D.3 with Non-Contribution-Eligible Revenues from D.7, D.8 and/or D.9 and the Non-Contribution-Eligible Revenues cannot be separated, you may report all revenues from the Non-Contribution-Eligible Revenues in Line D.10. For greater clarification, Non-Contribution-Eligible Revenues that would normally be reported in Lines D.7, D.8 and/or D.9 cannot be reported in Lines D.2 and/or D.3.

(iii) Contribution-Eligible Revenues represent less than 5% of the bundle - If the bundle contains Non-Contribution-Eligible Revenues that would be reported in Lines D.2 or D.3 and Contribution-Eligible Revenues representing less than 5%, enter the revenues from the entire bundle in Lines D.2 or D.3 as applicable (including the immaterial portion of Contribution-Eligible Revenues). If the bundle contains Non-Contribution-Eligible Revenues that would be reported in Lines D.7, D.8 or D.9 and Contribution-Eligible Revenues representing less than 5%, enter the revenues from the entire bundle in Lines D.7, D.8 or D.9 as applicable (including the immaterial portion of Contribution-Eligible Revenues). If the bundle contains more than one Non-Contribution-Eligible service, the revenues should be prorated between the Non-Contribution-Eligible Revenues in a similar manner as outlined in Order 2001-220. If the revenues cannot be separated, all of the Non-Contribution-Eligible Revenues can be put in Line D.10. If the total of the Contribution-Eligible Revenues and the Non-Contribution-Eligible Revenues that would normally be reported in Lines D.7, D.8 and/or D.9 represents less than 5% of the bundle, you may report the total revenues from the bundle in Line D.2 or D.3 as applicable.

All deductions for Non-Contribution-Eligible Revenues must be itemized by type of service and associated revenues (see NON-CONTRIBUTION-ELIGIBLE REVENUES FORM attached).

Note 6: Contribution-Eligible Revenues from package discounts - In accordance with Order 2001-221, if two or more services are offered in a package where the Contribution-Eligible Revenues are discounted and the Non-Contribution-Eligible Revenues are higher than the stand-alone price, the difference between the price charged for the non-contribution-eligible service and the stand-alone price is contribution-eligible. Report this excess in Line D.12.

CRTC REVENUE-BASED CONTRIBUTION REGIME -
REPORTING FORM FOR THE CALCULATION OF THE CONTRIBUTION-ELIGIBLE REVENUES

CRTC REVENUE-BASED CONTRIBUTION REGIME - ANNUAL REPORTING INTER-CARRIER PAYMENTS FORM

Provide the following details of the inter-carrier payment deduction claimed on Line D.6 of the Annual Reporting Form. Add additional forms as required.

Note: Not required to be filed monthly with the CFA.

CRTC REVENUE-BASED CONTRIBUTION REGIME - ANNUAL REPORTING NON-CONTRIBUTION-ELIGIBLE REVENUES REPORTING FORM

Provide details of Non-Canadian Revenues on Line D.2, Canadian Non-Telecommunications Revenues claimed on Line D.3 and Non-Contribution-Eligible Revenues removed from bundles claimed on Line D.10 of the Annual Reporting Form.

Note: Not required to be filed monthly with the CFA

Signature _______________

Date __________________

Appendix 2

SAMPLES OF AUDIT REPORTS

Sample 1 - Audit report required for 31 March annual filing with the CRTC.

AUDITOR'S REPORT ON SCHEDULE OF CONTRIBUTION-ELIGIBLE REVENUE

To the Board of Directors of

Client Limited:

At the request of Client Limited, I have audited the reporting for the calculation of the contribution-eligible revenues for the year ended Month, Day, Year. This financial information is the responsibility of the management of Client Limited. My responsibility is to express an opinion on this financial information based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial information is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial information. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial information.

In my opinion, this schedule presents fairly, in all material respects, the Contribution-Eligible Revenues of Client Limited for the year ended Month, Day, Year in accordance with Decision CRTC 2000-745 and related orders.

City

(signed)

Date

CHARTERED ACCOUNTANT

Appendix 2

SAMPLES OF AUDIT REPORTS

Sample 2 - Example of Audit Report required for filing with National Contribution Fund Auditor annually.

AUDITORS' REPORT ON THE CENTRAL FUNDS ADMINISTRATION LOCAL EXCHANGE CARRIER INPUT REPORTS

To the Board of Directors of

XYZ Company

We have audited the attached Schedules of XYZ Company for the year ended 31 December 2001 calculated in accordance with the National Central Funds Administration Agreement. This financial information is the responsibility of the management of XYZ Company. Our responsibility is to express an opinion on this financial information based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial information is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial information. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial information.

In our opinion, the attached Schedules present fairly, in all material respects, the Network Access Services counts and the Contribution-Eligible Revenues for XYZ Company for the year ended 31 December 2001 in accordance with the definitions described in Note 1 to the financial information and the National Central Funds Administration Agreement.

City

(Signature)

Date

Chartered accountants

Note:

The definitions described in note 1 would be based on definitions to be provided by the the Revenue Consistency Group and approved by the CRTC.

Appendix 3

FORM OF AFFIDAVIT

IN THE MATTER OF REPORTING OF CONTRIBUTION-ELIGIBLE
REVENUES FOR THE PURPOSES OF CALCULATING CONTRIBUTION
UNDER DECISION CRTC 2000-745

AFFIDAVIT

I, _________________________________(individual's name), OF THE _____________________________(City/Town, etc.) OF _________________________ MAKE OATH AND SAY AS FOLLOWS:

1. I have personal knowledge of the matters hereinafter deposed to except where stated to be based on information and belief and where so stated I verily believe the same to be true.

2. As of the date of this Affidavit, I am __________________(corporate title) of the telecommunications service provider _______________________ (provide legal name of corporation), a company that carries on business as _______________________(where applicable).

3. Attached as Exhibit(s) "X" to this my affidavit is the Annual Reporting Form, and supporting financial information and reports, of _______________________ (legal name of telecommunications service provider) filed with the Commission in accordance with its obligations pursuant to Decision CRTC 2000-745, Changes to the contribution regime, 30 November 2000, (Decision 2000-745).

4. The Annual Reporting Form and supporting financial information and reports, attached as Exhibit(s) "X", are in compliance with the determinations, procedures and guidelines of the Canadian Radio-television and Telecommunications Commission ("CRTC") as set out in Decision 2000-745, Orders CRTC 2001-220 and 2001-221, the CRTC Revenue-Based Contribution Regime Reporting Instructions and any other subsequent procedures or directions issued or approved by the CRTC from time to time.

5. The information contained in Exhibit(s) "X" is accurate and true.

SWORN BEFORE ME )

at the City of ______________ )

in the Province of __________ )

this ____ day of ___________ 2001. )

________________________ )
(signature of affiant)

_______________________ )
a Commissioner, etc. )

PROCI-8A

Appendix 4

Adjustment - 1^st Quarter 2001 Reconciliation

LEC SUMMARY OF RECONCILIATION OF CONTRIBUTION REPORTED
ON MINUTE OF USE REPORTED ON A MONTHLY BASIS

Report for the month of:

Reported

Date: ______________________

Contact __________________

Note: This form of to be used by LECs to summarize the amount of contribution collected from each TSP indicated. One form required for each of January, February and March.

A) Total contribution reported to the CFA this period :

Appendix 4

Phase 1 -- 1^st Quarter 2001 Reconciliation

Rec CFA 2-IXCs, WSPs, resellers & LECs

RECONCILIATION OF CONTRIBUTION REPORTED ON MINUTE OF USE REPORTED ON A MONTHLY BASIS

Report for TSP:

Reported

Date: ______________________

Contact ___________________