ARCHIVED - Telecom - Commission Letter - 8638-C12-45/00 - Re: Request forClarification

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Our file: 8638-C12-45/00

Ottawa, 5 March 2001


Mr. Peter Classon
Canadian Satellite Communications Inc. (Cancom)
50 Burnhamthorpe Road West
10th Floor
Mississauga, Ontario
L5B 3C2

Dear Mr. Classon:

Re: Request for Clarification

This letter is a preliminary response to your letter dated 15 January 2001 where you requested clarification regarding various issues with respect to in Decision CRTC 2000-745.

In Decision 2000-745, the Commission decided that all telecommunications service providers should contribute to a national fund to subsidize primary exchange residential services as provided for in section 46.5 of the Act which states:

"The Commission may require any telecommunications service provider to contribute, subject to any conditions that the Commission may set, to a fund to support continuing access by Canadians to basic telecommunications services."

Telecommunications services are defined in sections 2 and 23 of the Act as follows:

""telecommunications service'' means a service provided by means of telecommunications facilities and includes the provision in whole or in part of telecommunications facilities and any related equipment, whether by sale, lease or otherwise;.

23. For the purposes of this Part and Part IV, "telecommunications service'' has the same meaning as in section 2 and includes any service that is incidental to the business of providing telecommunications services."

Telecommunications service providers are defined in section 2 of the Act as follows:

"telecommunications service provider'' means a person who provides basic telecommunications services, including by exempt transmission apparatus.

The requirement to contribute to the fund hinges on a person being a telecommunications service provider. In Decision 2000-745, the Commission decided that all telecommunications service providers should pay the contribution requirement and capture a broad base of services.

Therefore, based on the information provided in your letter, it appears that Cancom is providing basic telecommunications services (based on the definition of "telecommunications services" in section 2 of the Act) and meets the definition as a telecommunications service provider.

With respect to your questions of clarification, industry working groups have been created to assist in implementation details of the new contribution regime. These working groups have developed, among other things, proposed definitions of terms used in Decision 2000-745 and an approach to deal with bundled revenues. These industry proposals have recently been filed with the Commission for consideration. The proposed definitions provide clarifications with respect to Non-Telecommunications revenues, Non-Canadian revenues and bundled revenues. The information provided by these definitions should allow you to determine whether the various services provided by your company such as Direct-to-Home broadcasting services and the related uplink programming are contribution or non-contribution eligible revenues.

Based upon the assessment that Cancom is a telecommunications service provider, Paragraph 128 of the decision requires that Cancom file the relevant revenue information by 15 January 2001. Commission staff is of the view that the information coming out of the industry working groups should allow you to make appropriate assumptions in order to comply with the reporting requirements. Clearly identify the amounts of the disputed items on the reporting form so they can be analyzed individually. The reporting form can be found on the CRTC website at:

With regards to your question regarding affiliates and related companies, the definition of related companies is that used by the accounting profession and can be found in Section 3840 of the CICA Handbook.

Please contact the undersigned if you have any further questions.

Yours sincerely,

Original signed by

Scott Hutton
Director, Efficiency and Expenditure Analysis
(819) 997-4573

c.c.: Mario Bertrand, CRTC (819) 997-4576
Tammy Carruthers, CRTC (819) 994-9988

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