Letter
Ottawa, 11 February 2005
To: Distribution list Class A & B international licensees
Re: Basic international telecommunications services - proposed amendments to conditions of international licences
1. Commission staff is seeking comment from international telecommunications services licensees on its staff proposals to streamline the processes and adjust certain requirements relating to international telecommunications services licences in Canada. Adopting these proposals would result in amending or eliminating certain conditions of licence, modifying the affidavit (application) forms and extending the term of the licence, commencing January 2005.
Current licensing regime and reporting requirements
2. In Regulatory regime for the provision of international telecommunications services, Telecom Decision CRTC 98-17, 1 October 1998 (Decision 98-17), the Commission considered that a licensing regime for international telecommunications services was necessary in order to deal with instances of anti-competitive conduct. In order to detect distortions in traffic patterns that may be symptomatic of anti-competitive conduct, the Commission established conditions of licence requiring service providers to file information on the traffic they carry as well as on agreements and arrangements they enter into. The Commission determined that applicants for international licences would also submit basic contact information, information regarding the applicant's corporate ownership structure and information as to affiliates that provide basic telecommunications services.
3. Pursuant to several applications filed with the Commission under Part VII of the CRTC Telecommunications Rules of Procedure, the Commission issued Changes to reporting requirements of class A licensees, Order CRTC CRTC 2001-4, 11 January 2001. Parties to that proceeding agreed that the quarterly traffic reports of basic international minutes were not necessary and not accurate enough to detect anti-competitive conduct. Parties expressed the view that the Commission had other means to detect anti-competitive conduct. The Commission concluded that quarterly reports of basic international traffic would be of insignificant benefit in detecting anti-competitive behaviour and consequently, determined that class A licensees need not file quarterly reports on their basic international telecommunications services traffic. The Commission directed licensees to retain the quarterly data on basic international minutes until future reporting requirements were determined 15.
Staff review of the current licensing regime
4. Commission staff notes that in the six year period that the licensing regime has been in place, the Commission has not received any complaints regarding anti-competitive conduct in relation to the provision of international telecommunications services. The Commission has, however, received complaints from various international telecommunications services licensees regarding the conditions imposed on them, requiring them to update, on an annual basis, the information on corporate ownership, the list of affiliates and the list of agreements or arrangements. A copy of the current conditions of licence is attached for ease of reference.
5. In light of the above, staff invites parties to comment on the following proposals which would among other things replace the requirement to file information on a regular basis with the requirement to retain information and file it only when requested to do so.
(i) proposed amendments to conditions of licence for a class A licensee:
a. Staff proposes to add the following sentence to condition 1 regarding the prohibition to engage in anti-competitive conduct in relation to the provision of international telecommunications services: "The licensee shall file with the Commission, should it become necessary to investigate whether or not the licensee is engaging in practices having an anti-competitive effect in Canada, any information that the Commission may deem necessary."
b. Staff proposes to eliminate all other conditions of licence except condition 4 that requires licensees to keep current any information filed with the Commission in connection with their licence applications, and condition 7 that requires licensees to file information in such form as may be prescribed by the Commission. As a result, the requirement to file annual updates will be eliminated.
(ii) proposed amendments to conditions of licence for a class B licensee:
a. Staff proposes to add the following sentence to condition 1 regarding the prohibition to engage in anti-competitive conduct in relation to the provision of international telecommunications services: "The licensee shall file with the Commission, should it become necessary to investigate whether or not the licensee is engaging in practices having an anti-competitive effect in Canada, any information that the Commission may deem necessary."
b. Staff proposes to eliminate all other conditions of licence except condition 3 that requires licensees to keep current any information filed with the Commission in connection with their licence applications, and condition 6 that requires licensees to file information in such form as may be prescribed by the Commission. As a result, the requirement to file annual updates will be eliminated.
(iii) proposed changes to the affidavit (application) form for class A and B licensees:
a. Staff proposes to eliminate the requirement for licensees to file information with the Commission under sections 7 of the affidavit (corporate ownership), 8 (list of affiliates) and 9 (list of agreements and arrangements) of the affidavit.
b. Staff proposes to also change the information required under section 6 (contact person) to incorporate the requirements established at paragraph 4 in Telecommunications industry data collection: updating of CRTC registration lists, telecommunications fees, Canadian contribution mechanism fund administration, international licences and monitoring of the Canadian telecommunications industry, Telecom Circular CRTC 2003-1, 11 December 11 December 2003, regarding the designation of a Response Manager and the completion of a Reporting Entity Profile (REP) Form.
(iv) proposed changes to the licence term:
a. In the proceeding that led to Decision 98-17, some parties submitted that an international licence term of less than 10 years would jeopardize licensees' ability to raise capital on reasonable terms. In Decision 98-17, the Commission indicated that licences will be issued initially for a period of 5 years and that after gaining some experience with the regime, it would consider extending the term of international licences. Staff has reviewed this issue and proposes that the term of licence should be increased to 10 years, which is the maximum allowable by law.
Request for comments
6. Staff invites parties to comment on the above proposals within 30 days of the date of this letter.
Yours sincerely,
Steven Delaney
Director
Industry Analysis and Regulation
Attachment
Date modified: 2005-02-11
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