ARCHIVED - Order CRTC 2001-492

Order CRTC 2001-492

Ottawa, 27 June 2001

CRTC approves a contribution exemption for Excel administrative lines

Reference: 8626-E10-01/01

The CRTC approves a contribution exemption for administrative lines provided to Excel Telecommunications (Canada) Inc. by Bell Canada.

On 12 April 2001, the Commission received an affidavit dated 28 March 2001 from Excel Telecommunications (Canada) Inc. with respect to a request for a contribution exemption back to December 1999 for services used solely for administrative purposes. Excel affirmed that the services in question are used solely by Excel staff for the purpose of making and receiving administrative calls.

By letter dated 7 May 2001, Bell Canada noted that contribution exemptions formed part of the per-minute/per-circuit contribution regime, which was replaced by a revenue-based contribution regime on 1 January 2001, pursuant to Decision CRTC 2000-745, Changes to the contribution regime, dated 30 November 2000. Bell Canada submitted that although Excel may have qualified for an exemption from the payment of contributions before 1 January 2001 pursuant to the per-minute/per-circuit contribution regime, that regime has now ended. Further, Bell Canada stated that the requirement to submit exemption applications is now ended, and the processing of all exemptions granted by the Commission, through the Central Fund Administrator (CFA), has been completed.

Notwithstanding the above, Bell Canada stated that it has reviewed its records with respect to the services identified in the affidavit provided by Excel and can confirm that these services appear to be associated with stand-alone systems that Excel uses for administrative purposes. The first installation of the services in question occurred in December 1999 as indicated in the Excel affidavit.

Bell Canada stated that, in light of the discontinuation of the per-minute/per-circuit contribution regime, the CFA has finalized its contribution records for the years 1999 and 2000. Bell Canada stated that there is no process in place to provide for retroactive credits. Bell Canada submitted that since the exemption regime has been discontinued and so much time has passed since the Excel services were first installed, it is no longer appropriate to provide the exemption. Bell Canada submitted that Excel had ample opportunity to seek its exemption when it first began receiving invoices for the contribution payments, but neglected to do so. Accordingly, Bell Canada submitted that the Excel request should be rejected.

However, should the Commission decide that the requested exemption should be granted, Bell Canada requested that the Commission provide direction to the CFA with respect to the requirement to reopen and adjust its records to allow for the exemption.

By letter dated 16 May 2001, Excel maintained that the Commission should grant exemption for the circuits in question. Excel stated that the amount in question is $45,393. Excel stated that it did not object that the CFA be provided with Commission directions with respect to the reopening and adjustments of its records. However, Excel submitted that Bell Canada should make the necessary arrangements to have such reimbursement effected. Excel stated that it would be agreeable to deduct the amount in question from contribution payments that will be payable by Excel in 2001 to the CFA under the new contribution regime.

Retroactive exemption

In Telecom Public Notice CRTC 95-26, Effective date of contribution exemptions, dated 12 June 1995, the Commission stated that ".[It] will generally grant contribution exemptions for administrative circuits effective the date of installation." The Commission notes that, in the per-minute/per-circuit contribution regime, it has consistently granted exemptions from contribution for administrative circuits even when applications are received well after the installation date. Accordingly, the Commission approves Excel's application, effective the date of installation, such that no contribution is payable on the circuits in question in 1999, 2000 and 2001. However, as noted by the parties' comments, reimbursements of the contribution overpayment resulting from the retroactive exemption is complicated by the transition to the new revenue-based contribution collection regime.

Reimbursement

The Commission notes that exemptions of this nature have been discontinued under the conditions set out in Decision 2000-745. In addition, any contribution payments collected by Bell Canada for the period 1 January 2001 to March 2001 will be part of the reconciliation process that bridges the two contribution regimes.

Under the procedures of the per-minute regime, previous months' adjustments could be processed for up to 15 months. This period has however been shortened in light of the move to the new contribution regime. The current expectation is that the processing of all adjustments to 2000 data will be completed by the CFA by 28 June 2001.

Each party to this proceeding proposed its own disbursement plan:

· Bell Canada proposed that the Commission direct the CFA to reopen and adjust its records to allow for the exemption; and

· Excel, while not opposing Bell Canada's approach, suggested that the CFA deduct the amount in question from amounts owed under the new contribution regime.

The Commission notes that both Bell Canada's and Excel's proposed reimbursement plans would involve a burdensome process whereby the Commission would direct the CFA to reopen and adjust the subsidy distribution process. This adjustment would result in a reduction of the subsidy per network access services for all local exchange carriers by only fractions of a cent. Based on the minimal impact of the reduction in contribution and the fact that Bell Canada received the overwhelming proportion of such contribution, the Commission is of the view that it would be far more efficient for Bell Canada to directly reimburse Excel for the contribution charges related to the exempt service for 1999 and 2000. Excel will be expected to recover the remaining charges (i.e., for the year 2001) through the reconciliation procedures pursuant to Decision 2000-745.

In light of the foregoing, the Commission:

i) grants exemption to Excel's application for the period 1999, 2000 and 2001 for the administrative circuits in question effective the date of installation such that no contribution is payable;

ii) directs Excel to provide a report within seven days of the date of this order to Bell Canada, the CFA and the Commission showing the breakdown of the contribution already paid in each of the years 1999, 2000 and 2001;

iii) directs Bell Canada to refund to Excel the amounts for 1999 and 2000; and

iv) finds that any amount paid by Excel in 2001 will become part of the reconciliation process set up to adjust the revenue-based payments required for that period.

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