ARCHIVED - Order CRTC 2001-82

Order CRTC 2001-82

Ottawa, 31 January 2001

CRTC denies Primus/Distributel's request to rescind Orders CRTC 2000-37 and 2000-38

Reference: 8662-P11-01/00 and 8662-D11-01/00

The Commission denies Primus/Distributel's request to rescind Orders CRTC 2000-37 and 2000-38 and: (A) finds that it has the jurisdiction to issue Orders 2000-37  and 2000-38; (B) denies Primus/Distributel's request to direct Bell Canada to apply Item 24.4(d) of its General Tariff to alternate providers of long distance services' (APLDS) toll traffic which is terminated over extended area service (EAS) links and to collect unbilled charges in accordance with its Terms of Service; (C) finds that the interconnection agreement between the independent telephone companies (ITCs) and Bell Canada does not apply to the situations contemplated in Orders 2000-37  and 2000-38; (D) denies Primus' request to remove the 25% surcharge as a proxy for originating minutes in Hurontario's territory; (E) clarifies that contribution already paid by Primus and Distributel to Bell Canada is to be taken into account; (F) retains the 15% discount on line-side access; (G) clarifies that the ITC contribution charge is applicable for the EAS traffic in question; (H) provides the APLDS with three alternatives for reporting and billing; (I) finds that there is no requirement for Bell Canada to amend its tariff pages; and (J) provides an estimate of the applicants' contribution liability to the respondents pursuant to this order.

By letter dated 21 February 2000, Primus Telecommunications Canada Inc. (formerly London Telecom Network Inc.) filed an application pursuant to section 62 of the Telecommunications Act (the Act) and part VII of the CRTC Telecommunications Rules of Procedure requesting that the Commission rescind Order CRTC 2000-37, dated 21 January 2000.

Primus submitted that Order 2000-37 contains errors of jurisdiction, law and fact giving rise to substantial doubt as to the correctness of the decision. The respondents in this case are Hurontario Telephones Limited, the Ontario Telecommunications Association (OTA) and Bell Canada.

Order 2000-37 disposed of a competitive dispute between London Telecom and Hurontario with respect to the appropriate payment of contribution for the delivery of toll traffic over EAS links, pursuant to Regulatory framework for the independent telephone companies in Quebec and Ontario (except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), Telecom Decision CRTC 96-6, dated 7 August 1996.

In Order 2000-37, the Commission, among other things, found that: (a) by delivering toll traffic over EAS links between Hurontario and Bell Canada, London Telecom is required to pay contribution to Hurontario pursuant to the terms of Decision 96-6; and (b) the "flow through" provisions for collecting ITCs' contribution in Bell Canada General Tariff Item 24.4(d) do not apply to the delivery of toll traffic over EAS routes.

On the basis of its findings, the Commission ordered London Telecom, among other things, to pay to Hurontario contribution for the period 1 January 1997 to 21 October 1998.

By letter dated 21 February 2000, Distributel Communications Limited submitted virtually the same section 62 application with respect to Order CRTC 2000-38 dated 21 January 2000. The respondents in this case are La Compagnie de Téléphone de Warwick, the Société d'administration des tarifs d'accès des télécommunicateurs (SATAT) and Bell Canada.

Order 2000-38 concerned a competitive dispute between Distributel and Warwick with respect to the appropriate payment of contribution for the delivery of toll traffic over EAS links, pursuant to Decision 96-6.

Primus/Distributel (the applicants) requested that the Commission, among other things: (a) vacate the orders in Orders 2000-37 and 2000-38 which are directed against London Telecom and Distributel, respectively; and (b) direct Bell Canada to apply Item 24.4(d) of its General Tariff to alternate providers of long-distance services' (APLDS) toll traffic terminated over EAS links, and to collect unbilled charges in accordance with its Terms of Service.

In Guidelines for review and vary applications, Telecom Public Notice CRTC 98-6, dated 20 March 1998, the Commission stated:

.in order for the Commission to exercise its discretion pursuant to section 62 of the Act, applicants must demonstrate that there is substantial doubt as to the correctness of the original decision, for example due to:

(i) an error in law or in fact;

(ii) a fundamental change in the circumstances or facts since the decision;

(iii) a failure to consider a basic principle which had been raised in the original proceeding; or

(iv) a new principle which has arisen as a result of the decision.

The Commission finds that there are nine issues to consider, as set out below.

A. Commission's jurisdiction to issue Orders 2000-37 and 2000-38

The applicants' position

The applicants submitted that the Commission does not have the jurisdiction to issue Orders 2000-37 and 2000-38. These orders require Primus' predecessor, London Telecom, and Distributel, respectively, both of which are resellers, to pay Carrier Access Tariff (CAT) charges to ITCs and to forward traffic information to them.

The applicants argued that resellers are not "telecommunications common carriers" under the Act and are therefore exempt from regulation.

The applicants submitted that any restrictions on the provision of domestic telecommunications services by resellers must be imposed indirectly, through the terms and conditions of the tariffs and agreements of the regulated carriers that provide telecommunications services to resellers. Orders 2000-37 and 2000-38 do not do so. Further, by seeking to directly regulate Primus/Distributel as Canadian carriers through the terms of Decision 96-6, rather than through Bell Canada's tariffs, the Commission exceeded its statutory jurisdiction. Primus/Distributel argued that there are no examples where the Commission has made a decision directly regulating resellers as was the case with Orders 2000-37 and 2000-38.

The applicants submitted that subsection 37(2) of the Act gives the Commission the authority to require an unregulated person to file information with the Commission but not with a third party, and does not give it the authority to impose terms and conditions on resellers.

The applicants suggested that there are legitimate ways to implement Decision 96-6. The Commission can direct Bell Canada and the ITCs to establish tariff provisions implementing Decision 96-6. These tariff provisions could provide for the registration of resellers that utilize Bell Canada's EAS links with ITCs and reporting of such traffic to the ITCs. According to Primus/Distributel, while the Commission will not be able to charge them retroactively for unpaid CAT charges, it can establish a tariff regime to implement Decision 96-6 on a going-forward basis.

The respondents' position

The respondents (Bell Canada, OTA, Hurontario, Warwick, and SATAT)argued that the Commission has the authority to direct resellers to make payment to the ITCs and to provide them with traffic information as it did in Orders 2000-37 and 2000-38. Section 24 of the Act allows the Commission to attach terms and conditions to the provision of services offered by Canadian carriers, which bind resellers in the event that they make use of the service.

The imposition of conditions may be pursuant to a decision or an order. Bell Canada and OTA noted that in Orders 2000-37 and 2000-38, as in Decision 96-6, the Commission imposed conditions on the provision of services by a Canadian carrier, which must be complied with before a reseller can make use of the service.

OTA argued that section 24 has to be read in conjunction with section 32, which enumerates the Commission's general powers. OTA suggested that the Commission is entitled under paragraph 32(g) to make any order against a reseller relating to telecommunications services of a Canadian carrier, which may include imposing conditions on the offering and provision of services by a Canadian carrier.

Bell Canada argued that the Commission has over the years issued many directions to unregulated parties. For example, in a letter decision issued on 5 March 1996, the Commission directed McGill University and Brock University, both of which had introduced shared tenant service arrangements in student residences, to provide reasonable access to tenants who wished to obtain services directly from Bell Canada. Another example is Bell Canada's Terms of Service, which contain provisions directing customers to do, or not to do, certain things in relation to the services and facilities provided by Bell Canada. Article 8, for example, prohibits customers from ".using Bell Canada's services or permitting them to be used so as to prevent a fair and proportionate use by others."

Bell Canada and OTA argued that subsection 37(2) of the Act provides the Commission with the necessary jurisdiction to give effect to the directions contained in the orders. Subsection 37(2) allows the Commission to request information from any person, including unregulated parties such as resellers. The requirement that resellers provide information to ITCs falls within the ambit of the Commission's powers.

Bell Canada argued that while it may have been possible for the Commission to have directed Bell Canada and other Canadian carriers to file tariffs implementing Decision 96-6, such a measure would have been costly and impractical.

Bell Canada suggested that vacating the orders would: (a) nullify the requirement that resellers reimburse the ITCs and allow resellers to profit from an intentional breach of Commission directions; (b) eliminate the requirement that resellers notify the ITCs on an on-going basis of all their access numbers thereby precluding the ITCs from blocking originating and terminating calls; and (c) transfer the responsibility for tracking and payment to Bell Canada.

Background

In 1994, the ITCs were brought under federal jurisdiction as a result of the Supreme Court of Canada's decision in Attorney-General of Quebec et al. v. Téléphone Guévremont Inc. On 7 August 1996, the Commission issued Decision 96-6, which established a new regulatory framework for the ITCs in Ontario and Quebec.

In Decision 96-6, the Commission required the incumbent carriers to permit interexchange carriers and resellers to compete in the territories of the ITCs, subject to conditions, including the requirement to pay contribution, specified in the decision in order to mitigate the financial impact on the ITCs. For example, resellers would, as of 1 January 1997, be able to use Bell Canada's Centrex service to originate or terminate traffic in the ITCs' territories. The relevant part of Decision 96-6, at page 52, reads as follows:

The Commission is of the view that to the extent possible, competition should be expanded. There is a concern, however, with the financial impact on the independent companies. EAS can be used to bypass contribution payable to the independents both by long distance competitors who take advantage of EAS where the EAS link involves a Bell exchange and by local "one-hoppers". In Decision 92-12, the Commission did not allow long distance competitors to use Bell switches to originate traffic in the territories of parties who were not in the proceeding that led to that Decision. Competing long distance carriers were required to negotiate with the independents if they made use of Bell's EAS arrangements.

The Commission's authority to issue the directions, quoted above, was based on section 24 of the Act, and section 32(g) provides an alternate basis.

However, it is to be noted that subsection 37(2) does not allow the Commission to issue directions requiring resellers to provide traffic information to the ITCs. Subsection 37(2) deals only with information to be submitted to the Commission, not to third parties.

Section 24 reads as follows:

The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission. [Emphasis added]

Given the word "or" in section 24, conditions may be found in the tariffs that are approved by the Commission, or may be imposed by the Commission through an order or other form of decision.

Where conditions are imposed via tariffs approved by the Commission, a reseller or other person making use of the service offered by the Canadian carrier is bound by the terms and conditions of the tariff. Similarly, terms and conditions imposed in an order bind a reseller or other person making use of the service (to which the conditions attach) offered by the Canadian carrier.

Primus and Distributel have been leasing Bell Canada Centrex services and have received the included EAS circuits for no additional charge; the resale of Bell Canada's Centrex services includes EAS service functionality. Primus/Distributel have been using the EAS circuits to route long-distance traffic into the territory of an ITC. The outgoing EAS route
from the ITC to Bell Canada has been provided by the ITC. Both Bell Canada and the ITC designed and implemented the EAS route.

The directions in Decision 96-6, quoted above, are to be understood as attaching conditions to the provision of telecommunications services by a Canadian carrier, Bell Canada, under section 24 of the Act. It is Bell Canada's service that allows resellers to provide service into (and out of) the ITC territory. Thus, as a condition of Bell Canada providing Centrex service with EAS functionality into and out of an ITC's territory, resellers that make use of the service must register with the ITC, provide traffic statistics and pay contribution to it. Such conditions were imposed because the Commission found that the provision of resale of service with EAS functionality could have a detrimental impact on the ITC.

These provisions in Decision 96-6 do not amount to regulation of resellers. The Act provides for comprehensive and detailed regulation of Canadian carriers. For example, carriers are prohibited from providing telecommunications services without prior Commission approval of their tariffs (which include their rates), all rates must be just and reasonable, and carriers must not unjustly discriminate in the provision of telecommunications services or the charging of rates for them. In addition, limitations of liability and certain inter-carrier agreements require Commission approval and carriers must comply with Canadian ownership and control rules. Decision 96-6 did not impose any of these types of obligations on resellers. Rather, as conditions of their making use of carrier services, they must provide certain information and pay contribution.

The applicants themselves suggested that an obligation to pay contribution to ITCs can be imposed via tariffs. Thus, their argument relates to the form in which the requirement was imposed, rather than to the substance of the requirement.

It should be noted that the applicants submitted that there are no examples of the Commission making an order directly regulating resellers (as was, in their submission, the case with Orders 2000-37 and 2000-38). As noted above, the Commission is not regulating resellers. Moreover, the validity of the orders is totally independent of whether or not the Commission has acted before in a similar way.

In any event, there are other instances, including those provided by Bell Canada, where the Commission has imposed conditions (that appear to be direct orders) addressed to parties that are not Canadian carriers. In such cases, as in the present case, the directions must be understood as conditions attaching to the provision of a telecommunications service by Canadian carriers. Another example is provided by Order CRTC 2000-500, dated 31 May 2000, where the Commission noted that a directive set out in Local competition, Telecom Decision CRTC 97-8, dated 1 May 1997, applies to resellers.

The directions in Decision 96-6 were, in the alternative, made pursuant to paragraph 32(g) of the Act. Paragraph 32(g), which gives the Commission broad, general powers to carry out its mandate, reads as follows:

The Commission may, for the purpose of this Part,

(g) in the absence of any applicable provisions in this Part, determine any matter and make any order relating to the rates, tariffs or telecommunications services of Canadian carriers.

The directions set out in Decision 96-6 were issued because the Commission was concerned "with the financial impact on the independent companies" if EAS were used to bypass contribution payable to the ITCs.

The directions relate to the ITCs' rates because the Commission could only ensure that those rates (including contribution rates) were just and reasonable, as required by the Act, by including these directions. The directions relate to telecommunications services, provision of Centrex services with EAS functionality included, offered by a Canadian carrier.

London Telecom, now Primus, was an active participant in the proceeding which led to Decision 96-6. Hurontario/Warwick reminded London Telecom/Distributel several times of the requirements imposed in Decision 96-6, but the latter did not follow the terms of this decision, later alleging that it was Bell Canada's General Tariff Item 24.4(d) that regulated their relationship with the ITCs.

After a full public process, in January 2000, the Commission issued Orders 2000-37 and 2000-38 with a view to enforcing Decision 96-6, including the requirement that the ITCs receive contribution payments.

In the present proceeding, the applicants have challenged two aspects to the orders, namely: (a) the direction that they provide traffic information to ITCs; and (b) the direction that they make payment to ITCs. The applicants have the onus in this review and vary proceeding of showing that there is substantial doubt as to the correctness of the two orders, by reason of the errors in jurisdiction, law, and fact that they have alleged.

The applicants took the benefit of Decision 96-6 and have not sought to delete or vary the directions, noted in Decision 96-6. In the process leading to Order 2000-38, Distributel stated that there was no question of it asking for a review and variance of Decision 96-6. Instead, in this proceeding, the applicants argued that there were more appropriate ways to implement Decision 96-6. Further, as detailed under issues F and G, the applicants sought to take advantage of parts of Decision 96-6 where the Commission mandated a 15% discount for line-side connections, and directed the payment of contribution amounts and not the full CAT.

Commission determination

The Commission's authority to issue the orders is pursuant to section 51 of the Act. It issued them in order to enforce the directions in Decision 96-6, which established a regulatory framework for the ITCs operating in Ontario and Quebec. Enforcement orders are contemplated in section 51, which reads as follows:

The Commission may order a person, at or within any time and subject to any conditions that it determines, to do anything the person is required to do under this Act or any special Act, and may forbid a person to do anything that the person is prohibited from doing under this Act or any special Act.

The Commission notes that the term "person" is broadly defined in the English language version of section 2 of the Act and encompasses resellers. Further, the term "quiconque" in the French language version of section 51 is equally broad and similarly captures the resellers. In this case, what the orders required the resellers to do was comply with the directions set out in Decision 96-6.

Given the above, the Commission considers that Orders 2000-37 and 2000-38, enforcing the directions set out in Decision 96-6, are valid, pursuant to section 51 of the Act, and that the applicants have not discharged the burden of showing substantial doubt as to the correctness of the orders by reason of errors of jurisdiction or law.

B. Applicability of Bell Canada's tariff to EAS traffic

The applicants' position

According to the applicants, the Commission erred in concluding that the flow-through provisions in Bell Canada's General Tariff Item 24.4(d) do not apply to toll traffic terminated in ITCs' territories using Bell Canada's EAS arrangements with the ITCs. Bell Canada Tariff Item 24.4(d) provides as follows:

(1) for each minute of traffic originating from or terminating in the territory of an ITC on behalf of an Alternate Provider of Long Distance Services (APLDS), a charge equal to the ITC's per-minute CAT charges applies, less $.0121, the amount representing the Company's average per minute contribution charge for line-side access arrangements.

(2) For each bill issued to an APLDS under this item, a monthly rate as specified in Item G-220(a)(1) of the Company's Special Facilities Tariff applies.

EXCEPTION: The charges specified in (d)(1) and (d)(2) above do not apply, when a specific agreement exists between the APLDS and the ITC which specifies that the CAT charges are paid directly by the APLDS to the ITC.

Primus/London Telecom asserted that it treated all of the traffic flowing into these Centrex facilities that it leased from Bell Canada from outside the local calling area as interexchange traffic, on which contribution was paid.

Where Bell Canada's local calling area included part of the operating territory of an ITC, the call was completed by Bell Canada using its EAS connection with the ITC.

Thus, Primus/London Telecom argued that it was subject to the terms and conditions set forth in Bell Canada's tariffs, including the terms of General Tariff Item 24 governing resale and sharing of Bell Canada's services,
the Terms of Service and the particular items of Bell Canada's tariffs applicable to the Centrex and Megaroute services to which it subscribed.

The applicants stated that the provision in General Tariff Item 24.4(d) was worded broadly enough to encompass Bell Canada's rebilling Centrex resellers for line-side connections terminating in ITC territories. The applicants submitted that no distinction is made between line-side or trunk-side connections, or between EAS or toll services. It was on this understanding that London Telecom stated that it believed that Bell Canada would bill it for ITC contribution.

Primus/London Telecom argued that Decision 96-6 dealt with calls originating from an ITC's territory and not with calls terminating in the ITC's territory. According to it, resellers were not required to register with the ITCs nor were they required to provide traffic information to them for billing purposes.

The respondents' position

Bell Canada stated that Item 24.4(d) of its General Tariff is to be interpreted as follows: it will charge a reseller an amount equal to the ITC's per-minute CAT charge, as adjusted for line-side access and direct connection charges, for each minute of traffic originating from or terminating in the territory of an ITC.

Bell Canada stated that EAS is a local service, which enables customers to make calls from neighbouring local exchanges without paying toll charges. Contribution, which is what the flow-through provision is designed to address, is a charge applicable to the provision of long-distance service. Bell Canada stated that its filing letter associated with Tariff Notice 5894, dated 13 December 1996, shows that the flow-through tariff was not intended to apply to the resale of EAS service.

Bell Canada stated that Primus and other resellers were operating in the territories of the ITCs and should have reported the minutes to them for billing purposes. Resale using EAS links into the territories of the ITCs is subject to payment of the ITC's contribution rate and therefore would constitute operating in that territory. The respondents noted that the appropriate mechanism to be used for EAS traffic into the ITC's territory, as outlined in Decision 96-6, would be for the resellers to report the applicable traffic to the ITCs and to pay the relevant CAT charges.

OTA submitted that Item 24.4(d) of Bell Canada's General Tariff does not apply to the resale of Bell Canada's EAS service because:

a) Item 24.4(d) addresses contribution charges. EAS is a local service to which no contribution applies. It could not have been intended that Item 24.4(d) would apply to the resale of Bell Canada's EAS service;

b) if Primus' position on the applicability of Item 24.4(d) is correct, the Commission approved a tariff that is contrary to Decision 96-6; and

c) absent the combined use by Primus of Bell Canada's Centrex service and EAS links within the operating areas of the ITCs, Primus would be required to pay the applicable CAT to the ITCs in respect of toll traffic of customers originating or terminating in the operating territories of the ITCs. As such, Primus cannot pretend that Item 24.4(d) applies to the resale of Bell Canada's EAS service.

Commission determination

The regime instituted by Item 24.4(d) is quite different from the regime instituted via Decision 96-6. Item 24.4(d) does not contemplate the reseller registering with the ITC, providing traffic statistics to the ITC or paying contribution to the ITC. If Item 24.4(d) applies to the situation at hand, then the regime created by Decision 96-6 would be rendered meaningless.

Decision 96-6 provides that resellers are required to pay contribution to the ITCs. Decision 96-6 does not say that resellers are only required to pay contribution on traffic originating in the territory of an ITC, as alleged by Primus.

Bell Canada General Tariff Item 24.4(d) creates a different regime than does Decision 96-6 and does not say that Decision 96-6 ceases to apply. Bell Canada Tariff Item 24.4(d) was designed to deal with and cover the resale of toll services (such as Bell Canada's Vnet service) into and out of the territory of an ITC. A more specific regime was created via Decision 96-6 in order to deal with the resale of telecommunications service with EAS functionality into and out of the ITC's territory.

The Commission concludes that the provisions of Item 24.4 (d) do not apply in this case; rather, the more specific directions in Decision 96-6 apply, and the applicants have not shown that the orders should be varied on this account.

C. Applicability of interconnection agreement between ITCs and Bell Canada

The applicants' position

The applicants argued that the interconnection agreement that was concluded between Bell Canada and the ITCs requires Bell Canada to collect contribution charges associated with toll traffic terminated using EAS and to remit those payments to the ITCs.

Specifically, the applicants argued that section 8.2 of the interconnection agreement provides that "Bell agrees to pay all rates and charges under or in connection with this agreement in accordance with the Independents Rates and settlement compensation approved by the Regulator(s)."

The term "Independents Rate" is defined in section 1 of the agreement as "the rate and/or tariff (including the Ontario Telephone Association Carrier Access Tariff) approved for the Independent, as amended by its regulator from time to time". The applicants argued that even in the absence of this provision, Bell Canada would be required to comply with the terms and conditions of the CAT for the ITCs.

According to the applicants, these provisions require Bell Canada to collect contribution charges associated with toll traffic terminated using EAS and to remit those payments to the ITCs. Bell Canada's resale tariff should have been amended following Decision 96-6 in order to permit Bell Canada to recover these charges from resellers on the ITC's behalf.

Bell Canada's position

Bell Canada submitted that it entered into an interconnection agreement with the ITCs. However, attachment 2 (from which Primus/Distributel were quoting in their submissions) never formed part of the interconnection agreement.

The interconnection agreement was only intended to describe the means by which ITCs would be protected from the possible non-payment of appropriate CAT charges, with respect to toll traffic terminated over Bell Canada's toll network. As for the remainder of the interconnection agreement, Bell Canada argued that it does not extend to EAS traffic.

Bell Canada also stated that when OTA and the Association des compagnies de téléphone du Québec interconnection agreements were executed in 1993, the CATs were applicable only to toll traffic, which was defined as excluding EAS service. Bell Canada noted also that in 1993 the provincial regulators did not permit EAS resale in the territories of the ITCs. This became permitted only when the Commission permitted EAS resellers to operate in the territories of ITCs in Quebec and Ontario, via Decision 96-6.

Commission determination

Bell Canada has interconnection agreements with the ITCs that connect to Bell Canada for toll interconnection. Its agreement with OTA members was approved by Telecom Order CRTC 93-1089, dated 20 December 1993.

The Commission notes that the resale of telecommunications service with EAS functionality was only permitted when Decision 96-6 spoke to the issue, and that the provincial regulators in 1993 did not allow EAS resale into and from the territories of the ITCs.

Thus, the CATs addressed in these agreements were applicable only to toll traffic, which excluded EAS service. Further, the Commission is of the view that EAS service should not be read into the interconnection agreement, since in permitting EAS service into and from the ITCs' territories, Decision 96-6 created a specific regime under which the resale of EAS traffic would be permitted. Nor does the interconnection agreement serve to mitigate (or replace) the obligations that Primus/Distributel had under Decision 96-6. Accordingly, the applicants have not shown that Orders 2000-37 and 2000-38 should be varied on this point.

D. Estimation of Primus' originating minutes

During the dispute period (1997 and part of 1998), Primus originated long-distance traffic in Hurontario territory. In the proceeding leading to Order 2000-37, Hurontario had submitted that a reasonable estimate for the originating traffic in question would be 25% of the estimate for terminating traffic.

In Order 2000-37, the Commission accepted Primus' estimate of terminating traffic. With respect to originating traffic, in the absence of any evidence from Primus, the Commission accepted Hurontario's suggestion, and ordered Primus to pay the 25% surcharge (as a proxy amount).

In this proceeding, Primus submitted that the 25% surcharge on London Telecom's estimate of terminating traffic in Hurontario's territory imposed in Order 2000-37 has no basis in fact and is inflated. Primus stated that London Telecom was never asked by the Commission to provide an estimate of originating minutes. In response to a Commission interrogatory in this proceeding, Primus provided an estimate for originating minutes in Hurontario territory.

In the dispute proceeding leading to Order 2000-37, Hurontario provided its estimate of originating minutes. London Telecom could have provided its own estimate in reply comments in that proceeding but chose not to do so.

The Commission notes that Primus missed a second opportunity to provide evidence; in its review and vary application, it raised the issue of the 25% surcharge, but provided no evidence. Moreover, it did not show how Hurontario's estimate could be considered inflated. Only when the Commission asked an interrogatory did it provide its estimate.

The Commission notes that under Decision 96-6, Primus was and has been under an obligation to provide this information to Hurontario since the beginning of the regime instituted in Decision 96-6, 1 January 1997. It has failed to do so.

The Commission notes that Primus is an experienced participant in Commission proceedings, and it is up to Primus to make its case. There is no requirement for the Commission to help a party make its case.

The Commission considers the finality of its decisions to be important. Parties should provide evidence to the Commission at the first opportunity.

In light of the foregoing, the Commission considers that Primus has not discharged the onus of showing that the order should be varied on this point, and denies Primus' request to adjust the 25% surcharge in Order 2000-37.

E. Contribution already paid by Primus and Distributel to Bell Canada

Primus submitted that the Commission failed to consider contribution already paid for the traffic in question. Primus submitted that these amounts should be offset from any additional contribution payments made on this traffic by London Telecom.

Bell Canada did not dispute that it has collected some contribution. However, Bell Canada stated that it had been unable to reimburse Primus/Distributel for these charges because it had not received confirmation from Hurontario and Warwick that the charges owed to them by Primus/Distributel have been paid.

The Commission issued no explicit instructions on this issue in Orders 2000-37 and 2000-38. The Commission finds that the contribution already paid by Primus and Distributel to Bell Canada should be taken into account. Accordingly, the Commission clarifies Orders 2000-37 and 2000-38 and directs Hurontario and Warwick to net out the amount already paid to Bell Canada when settling outstanding payments with Primus and Distributel, respectively.

F. 15% Discount on line-side access

The applicants submitted that the 15% discount for line-side access arrangements which was ordered in Decision 96-6 remains in effect in the territories of the ITCs. Primus submitted that any change in the application of the 15% discount in the territories of the ITCs could only be made prospectively following an appropriate process with notice to all interested parties.

Bell Canada submitted that the 15% discount for line-side access should be eliminated for resellers operating in the territories of the ITCs, similar to that which was done in Bell Canada territory in Telecom Order CRTC 96-1607 dated
23 December 1996. OTA and SATAT agreed with Bell Canada that this 15% discount is no longer appropriate.

The Commission confirms that, pursuant to Decision 96-6, there is a 15% discount on the contribution for line-side access on connections from Bell Canada territory to the ITCs' territories.

The Commission notes that the current per-minute regime will only be in effect for one more year in the ITCs' territories pursuant to Changes to the contribution regime, Decision CRTC 2000-745, dated 30 November 2000. In the circumstances, the Commission considers that the current 15% discount should remain in effect in the territory of the ITCs for the balance of 2001. As noted in Order CRTC 2000-1159, dated 19 December 2000, the Commission is seeking input on a new regulatory framework for the small ITCs to be effective on 1 January 2002.

G. Contribution vs. CAT

The Commission notes that Orders 2000-37 and 2000-38 refer generally to contribution charges. Bell Canada, in its evidence, referred to CAT charges and Primus, in its evidence, referred to contribution charges. The Commission sought to clarify this issue and requested parties to provide their opinion on whether the contribution rate or CAT rate would apply to the traffic in question.

Primus submitted that given its network architecture, only the contribution charge should apply to the traffic in question. Primus stated that the use of feature group A or line-side connections has never warranted the application of switching and aggregation charges such as the direct connection charge. Primus submitted that it follows that the switching and aggregation entrenched in the ITC CAT should not apply.

Primus noted that the respondents omitted to refer to the most relevant passage of Decision 96-6 which states:

Primus submitted that it is clear from this passage that the Commission never intended that the full CAT would apply to line-side access arrangements.

Furthermore, Primus submitted that direct connection charges have never been applied to line-side connections (including Centrex connections) in the territories of the incumbent telephone companies under Commission jurisdiction including Bell Canada territory. Primus submitted that clearly this has not incented APLDS to stop utilizing trunk-side direct or toll tandem connection arrangements.

Primus stated that Centrex resellers or other resellers who utilize line-side interconnection arrangements subscribe to local exchange service furnished by Bell Canada, which includes EAS to ITCs' territories. Therefore, they are already paying tariffed rates for use of the local exchange network to originate or terminate their traffic, including termination in any ITC exchanges that have EAS with Bell Canada's exchange. If users of EAS links were also required to pay the ITCs' direct toll charges, they would end up paying twice for the same service.

The respondents submitted that CAT charges and not contribution must be paid. They submitted that if it were otherwise, there would be an incentive for companies to terminate calls using EAS links, all of which would cause hardship to the ITCs.

The respondents submitted that were the Commission to accede to the view that the lower contribution rate is the appropriate rate to apply to this traffic, it is likely that other carriers, including Bell Canada, would move to routing their customers' traffic to and from the ITCs' territory via EAS links to save the direct toll component of the OTA members' CAT rate. OTA and SATAT submitted that the impact on their member companies would be profoundly negative, resulting in either a higher CAT rate to account for reduced CAT revenues or higher local rate increases.

Bell Canada noted that the Commission in permitting EAS resale in ITC territories in Decision 96-6 did so on the basis that the resellers of EAS not be differentiated from resellers of long-distance services. Resellers of long distance pay the full CAT rate, not only the contribution component, when terminating or originating traffic in an independent exchange.

The Commission agrees with Primus that, as contemplated in the passage quoted above from Decision 96-6, the Commission did not intend that the full CAT would apply to line-side access arrangements. The resellers' Centrex network involves line-side access, in the present case, and direct connection charges have not been applied to line-side connections.

Accordingly, the Commission clarifies Orders 2000-37 and 2000-38 and confirms that the contribution charge is applicable for the EAS traffic in question.

H. Reporting and billing re per-minute collection mechanism

The Commission notes that the issue of reporting and billing must be determined in this proceeding. The Commission requested the parties to provide: (a) a description of all possible methods to measure the traffic in question between APLDS and ITCs; and (b) each company's recommended solution (taking into account the fact that the Commission was then reviewing the contribution collection regime). The Commission notes that the regime has now changed from a per-minute to a percent revenue charge effective 1 January 2001 pursuant to Decision 2000-745, but that the per-minute mechanism will still be required for the year 2001 in ITC territories during the transition period.

The parties presented four options: (a) reseller to measure and report using its own records; (b) reseller or Bell Canada to report Station Message Detail Recording (SMDR) data; (c) reseller to install dedicated trunks; and (d) implement changes to the Bell Canada network (GR-317 or feature group D).

Distributel, OTA, and SATAT submitted that if APLDS were to be the source of data, they would need to be subject to external verification.

Since the per-minute mechanism will only be used in the ITCs' territory for one more year, 2001, the Commission considers that the best measurement system is one that is least onerous on all parties.

The Commission finds that option four is not acceptable since it would involve substantial cost, and technical/managerial and network reconfigurations for Bell Canada, and therefore would not meet the Commission's objective described above. The Commission also finds that option three (reseller to install dedicated trunks) is impractical and inefficient for the resellers.

The Commission notes that Bell Canada and Primus/Distributel consider that option two (reseller to measure minutes using SMDR data) would be workable, and that this option complies with Decision 96-6. The Commission directs the resellers, as a first alternative, to measure minutes using SMDR data from the applicable Centrex switch and report such minutes directly to the ITC.

However, as a second alternative, should the resellers not wish to use the SMDR data, then the Commission directs them to select option one (resellers to measure minutes using their own records) and report minutes directly to the ITC. Distributel assumed that most switch-based APLDS would be able to capture call records that contained sufficient data items for determining which calls utilized EAS links to or from the various ITCs, and for tallying total minutes by ITC. Distributel submitted that only Bell Canada would have the information necessary to compile a complete list of the APLDS that use Bell Canada EAS links to originate or terminate traffic in the territories of the ITCs. Again, this option complies with Decision 96-6.

Finally, as a third alternative, should the resellers consider that neither option one nor two above is acceptable, then the Commission directs them to block the traffic in question into and out of the ITC territory as Primus has already done, as described in Order 2000-37.

If the resellers select option one or two above, then they are directed to meet the relevant ITC and Bell Canada personnel within 30 days of the date of this order to negotiate mutually agreeable audit procedures based on the suggestions submitted in this process.

I. New tariff pages

Primus submitted that the implementation of any of the proposed approaches to traffic measurement will require changes to the tariffs of Bell Canada and the ITCs in order to make them applicable to resellers. Furthermore, in order to ensure competitive equity, the methodology ultimately adopted will have to apply equally to all resellers using EAS links, not just Primus and Distributel.

Bell Canada noted that the Commission's directions, as set out in Decision 96-6, clearly addressed these issues. Decision 96-6 specified a simple administrative approach to remedy the bypass opportunity inherent in the use of local EAS links to terminate traffic in ITC territory and also addressed in detail the applicability of the ITC CATs. The only tariff changes which might be appropriate would be to provide additional clarity so as to minimize gaming opportunities based on intentional misinterpretation or to bolster the authority of the ITCs to take action against those parties which continue to ignore the Commission's directions.

The Commission finds that its directions, as set out in Decision 96-6 and the orders, and clarified in the present order, clearly address the issues in question: the APLDS must register with, provide traffic statistics to, and pay the appropriate contribution to the ITC to which it delivers traffic. Accordingly, there is no requirement for Bell Canada to amend its tariffs.

J. The Commission's estimate of the applicants' contribution liability to the respondents pursuant to this order

Based on the evidence filed in the proceeding leading to Orders 2000-37 and 2000-38, and on the clarifications contained in this order, the Commission estimates that Primus will have to pay approximately $35K to Hurontario for the period January 1997 to September 1998. Distributel will have to pay about $24K to Warwick for the period September 1997 to April 1999, and a further amount for the subsequent period, since it has not blocked traffic.

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