ARCHIVED - Telecom Decision CRTC 2002-59

Telecom Decision CRTC 2002-59

Ottawa, 24 September 2002

National contribution fund - designation of administrator

Reference: 8340-C53-0873/00

In this decision, the Commission designates Welch Fund Administration Services Inc. (Welch) as administrator of the national contribution fund. The Commission also approves the agreement between Welch and the Canadian Portable Contribution Consortium Inc. relating to the administration of the national contribution fund, effective 1 January 2003.

The application

1.

On 29 August 2002, the Canadian Portable Contribution Consortium Inc. (CPCC) filed an application, pursuant to subsection 46.5(2) of the Telecommunications Act (the Act), requesting that the Commission designate Welch Fund Administration Services Inc. (Welch) as administrator of the national contribution fund (the fund).

2.

The CPCC also filed, for Commission approval, an agreement with Welch relating to the administration of the fund (the agreement), effective 1 January 2003.

3.

The CPCC filed the agreement in confidence pursuant to subsection 39(1) of the Act, claiming that public disclosure could adversely affect the ability of the CPCC to negotiate, in the future, the most favourable terms for the provision of services by an administrator. The CPCC also requested that the application letter be held in confidence pending the release of the Commission's decision to allow sufficient time to provide written notice to the current administrator, Progestic International Inc. (Progestic), of the appointment of a new administrator.

Background

4.

Pursuant to subsection 46.5(1) of the Act, the Commission requires telecommunications service providers to contribute to a fund to support continuing access by Canadians to basic telecommunications services. The Commission must designate a person to administer that fund pursuant to subsection 46.5(2). Subsection 46.5(3) provides that the Commission may regulate the manner in which the administrator administers the fund and the rates charged by the administrator.

5.

In Changes to the contribution regime, Decision CRTC 2000-745, 30 November 2000 (Decision 2000-745), the Commission introduced major changes to the Canadian telecommunications contribution regime, including a new national contribution collection mechanism. In that decision, the Commission also stated that an independent administrator would continue to be responsible for the collection and distribution of contribution revenue.

6.

The Commission designated Progestic as administrator of the fund in Appointment of third party national fund administrator and agreement relating to the performance of the functions of the administrator of the national contribution fund, Decision CRTC 2001-779, 21 December 2001. In that decision, the Commission also approved the agreement between the CPCC and Progestic relating to the administration of the fund, effective 1 January 2002 to 31 December 2004.

7.

Progestic entered into the agreement with the understanding that the CPCC intended to issue a request for proposals for the administrator position during 2002. Should Progestic not emerge as the successful bidder, section 6.01 of the agreement provided the CPCC with the ability to terminate the agreement as of 31 December 2002 by notice in writing to Progestic no later than 30 September 2002.

8.

In May 2002, the CPCC sought proposals from entities wishing to act as administrator of the fund. Welch, a single-purpose company formed by Welch & Company LLP, Chartered Accountants, was the successful bidder in this process.

9.

At a CPCC board meeting held on 29 August 2002, Welch was appointed administrator of the fund as of 1 January 2003, subject to Commission approval.

Commission determination

10.

The Commission finds that the appointment of Welch by the CPCC as the independent administrator of the fund is appropriate.

11.

The Commission has reviewed the agreement between the CPCC and Welch and, finds that the terms and conditions relating to the manner in which Welch will administer the fund are in accordance with Decision 2000-745 and that the rates charged by Welch for administering the fund are appropriate in the circumstances.

12.

Accordingly, the Commission:

a) designates Welch as administrator of the fund; and

b) approves the agreement between the CPCC and Welch effective 1 January 2003.

13.

The Commission notes that the application letter has been placed on the public record as of the date of this decision.

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