ARCHIVED - Order CRTC 2001-745

Order CRTC 2001-745

Ottawa, 28 September 2001

CRTC denies TCI and TCBC proposals to modify transit services

Reference: TCI Tariff notice 319 and TCBC Tariff notice 4118

TELUS Communications Inc. (TCI) and TELUS Communications (B.C.) Inc. (TCBC) [collectively "the companies"] proposed to incorporate additional wording in their tariffs to clarify the application of service charges when providing additional trunks at the request of a competitive local exchange carrier (CLEC). Specifically, the proposed wording states that the service charges apply to both the initial trunk set-up and subsequent rearrangements to the trunk.

In addition, TCBC proposed to add service charge rates to its Toll Transit Service (TTS), noting that it had inadvertently failed to include a reference to the appropriate service charge rates regarding TTS in the relevant tariff. TCBC noted that the proposed revision would align the service charges for TTS with those for Local Transit Service (LTS), which were granted interim approval in Telecom Order CRTC 99-241, dated 15 March 1999.

Microcell Telecommunications Inc. filed comments questioning the need for the new wording in view of the fact that the tariff items referred to in TCI's tariff notice 319 and TCBC's tariff notice 4118 already contain a reference to a "trunk activation or change". Microcell submitted that if the companies provided additional information about the interpretative issue that prompted tariff amendments by the companies, interested parties would be in a better position to comment.

Call-Net Enterprises Inc., AT&T Canada Inc., AXXENT Corp., C1.com Inc., GT Group Telecom Services Corp. (collectively, the competitors) filed comments on 22 December 2000, asking the Commission to deny TCI TN 319 and TCBC TN 4118. The competitors submitted that the companies were proposing to enlarge the circumstances under which they could levy service charges when a CLEC orders local transit and toll transit trunks.

The competitors argued that considerably less effort is needed to activate additional capacity on existing trunks than in setting them up. They submitted that increasing the capacity of an existing trunk does not warrant a charge equivalent to the cost of setting up a trunk group for the first time. The competitors submitted that the approval of this tariff would impose a much higher per-order cost on CLECs. This would increase the optimal size of orders, and force the CLECs to unnecessarily hold surplus capacity in their networks.

In reply, the companies noted that the proposed wording was intended to show clearly that every time a request is received for LTS and TTS, they will apply the service charges. Therefore, each time a CLEC asks the company to make subsequent rearrangements, a new service order will be required and both the order processing charge and the trunk activation or change charge would apply.

The companies further submitted that the cost study that was originally filed to support these tariff notices included in the forecast assumptions the application of these service charge rates for every request from a CLEC for transit services. The companies submitted that approval of TCI TN 319 and TCBC TN 4118 would not impose any additional or unwarranted costs on CLECs.

The Commission finds that the proposed wording clarification is redundant.

In response to an interrogatory, the companies submitted that the additional service charges proposed by TCBC are intended to compensate the company for costs incurred to process service orders placed by CLECs to either add new trunks or make changes to an existing toll transit trunk group. As these CLEC orders relate to the trunks between the CLECs and TCBC, they are separate and distinct from the service orders received from the interexchange carriers (IXCs) to which the service charges per inward order and per change apply, according to the currently approved tariff.

The Commission considers that the additional service charges proposed by TCBC for TTS would have CLECs compensate the company for services that IXCs already pay for under the currently approved tariff.

In response to another interrogatory asking TCI to provide its views on adopting a rate structure for TTS that is consistent with that approved for the other telephone companies, TCI noted that it does not own the software that is required to measure outbound toll calls from the CLEC switch. TCI submitted that it cannot assess switching and aggregation to the appropriate IXCs, but that CLECs can.

The Commission considers that some of the confusion expressed by the competitors about the application of service charges for transit services could be the result of the different tariff structures for TTS tariff that apply in Alberta and British Columbia, respectively. On originating toll traffic transiting to an IXC, TCI's tariff provides that a monthly rate applies to the CLEC for each trunk used to deliver that traffic. By contrast, the other incumbent telephone companies' switching and aggregation charges apply to the interexchange service provider for the same function.

The Commission notes that seven of eight telephone companies opted to implement TTS so that the service would be transparent to IXCs. The Commission considers that it would be desirable for the former TCI to adopt a rate structure for TTS that is consistent with that of the other ILECs.

TCI and TCBC filed their applications to revise tariff item 215 and tariff item 209 of their respective Carrier Access Tariffs on 1 December 2000.

In light of the foregoing, the above-noted applications are denied. The Commission further directs TCI to show cause within 30 days of the date of this order as to why, in Alberta, it should not provide and tariff TTS in a manner that is consistent with the other incumbent telephone companies in Canada.

Secretary General