ARCHIVED - Telecom Commission Letter - 8661-Y1-200614520

Letter

Ottawa, 8 December 2006

File No. 8661-Y1-200614520

By E-MAIL

Mr. Simon Lockie
Vice President and General Counsel
Yak Communications (Canada) Inc.
300 Consilium Place, Suite 500
Toronto , Ontario
M1H 3G2
lockie@globalive.com

- and -

Mr. David Palmer
Director -Regulatory Matters
Bell Canada
110 O'Connor Street , 7th Floor
Ottawa , Ontario
K1P 1H1
Bell.regulatory@bell.ca

Dear Sirs:

Re:   YAK Part VII Application regarding Billing and Collection Service per Call Record Processing Charges

On 9 November 2006, the Commission received a Part VII application from Yak Communications (Canada) Inc. (Yak) with respect to a Billing and Collection Service processing rate charged by Bell Canada, Bell Aliant Regional Communications, Limited Partnership (Bell Aliant), MTS Allstream Inc. (MTS Allstream), Saskatchewan Telecommunications (SaskTel), and TELUS Communications Company (TCC) (incumbent local exchange carriers or ILECs).   The rate that is the subject of Yak's application is a Billing and Collection Service processing charge per account receivable billed to a customer (per call record processing charge).

Yak requested that the Commission (i) direct the ILECs to reduce the per call record processing charge on an interim basis to $0.01 per billing record (or such other interim amount as the Commission considered appropriate); (ii) direct the ILECs to file an updated cost study for this charge; (iii) make the ILECs' tariff for this rate interim pending the review of service costs; and (iv) approve a revised final rate based on the Commission's review of the updated cost studies.

Yak also suggested the review of two additional ILEC Billing and Collection Service processing charges.   These charges apply to accounts receivable purchased from an inter-exchange carrier when an account receivable is either returned prior to billing, or is returned or charged back to the IXC after billing (other processing charges).   Yak submitted that these other processing charges do not apply to the majority of call records.

By letter dated 24 November 2006, Bell Canada, Bell Aliant and SaskTel (the Companies) requested that the Commission suspend consideration of Yak's application until the completion of the proceeding begun by Telecom Public Notice CRTC 2006-14, Review of regulatory framework for wholesale services and definition of essential service , 9 November 2006 (Public Notice 2006-14).

The Companies submitted that it was questionable whether the Billing and Collection service was properly classified as a Category I Competitor Service.   The Companies also submitted that the central issue raised by Yak's application related to the appropriate charges for the Billing and Collection Service and that this issue had been subsumed by the Commission's inquiry into the appropriate pricing principles applicable to wholesale services being conducted as part of Public Notice 2006-14.

The Companies submitted further that suspending consideration of Yak's application would be consistent with the treatment set out in a Commission staff letter dated 9 November 2006 (9 November 2006 letter) regarding a Bell Canada application dated 27 September 2006 to review and vary portions of Part VII application by Rogers Telecom Holdings Inc. for certain relief of billed number screening charges , Telecom Decision CRTC 2006-24, 27 April 2006   (Decision 2006-24) (27 September 2006 review and vary application). In this regard, the Companies submitted that the approach taken in the 9 November 2006 letter to its 27 September 2006 review and vary application regarding the Billed Number Screening (BNS) service was based on the rationale that the issues raised by that application were within the scope of Public Notice 2006-14 and that it would be premature to consider Bell Canada's application until a decision was rendered in the proceeding begun by that Public Notice.

Finally, the Companies submitted that, if the Commission were to consider Yak's application at this time, they would request an extension to the comment period of 30 days from the date of that determination.

By letter dated 27 November 2006 , Yak submitted in reply that its application raised the issue of the appropriate rates for a Competitor Service under existing rules and classification.   Yak submitted that it was appropriate to apply existing rules until such time as those rules were changed and submitted that to do otherwise would result in an unfair delay to competitors and consumers, given that the Commission's decision in the proceeding begun by Public Notice 2006-14 was anticipated in 2008.   Yak also submitted that its application differed from Bell Canada's 27 September 2006 review and vary application in that Yak was not requesting the reclassification of the Competitor Service in question from Category I to Category II.   Finally, Yak disagreed with the Companies' proposal to extend the comment period.

Commission staff notes that Bell Canada's 27 September 2006 review and vary application requested that its BNS service be reclassified from a Category I to a Category II Competitor Service and that rates be revised accordingly.   Commission staff notes further that Bell Canada's application did not request a review and variance of the Commission's determinations in Decision 2006-24 with respect to the Phase II service costs of its BNS service and that Bell Canada's proposed rate changes for this service therefore reflected changes to its mark-up consistent with Bell Canada's proposed reclassification of its BNS service a Category II Competitor Service.

In contrast, Yak's application requests that the ILECs' per call record processing charge be reviewed and reduced based on updated cost studies for that rate.   Commission staff notes that the cost studies on which these rates were approved have not been reviewed for almost ten years and considers that the rate may no longer reflect service costs.   With respect to Bell Canada 's submission that Yak's request to review Bell Canada 's per call record processing charge had been subsumed by the proceeding begun by Public Notice 2006-14 , Commission staff notes that that proceeding does not contemplate the review of updated costs for specific services.

Accordingly, Commission staff is of the view that it is appropriate to proceed with Yak's application to review, under existing rules and service classification, the per call record processing charge that is the subject of Yak's application.

With respect to the Companies' submission that the Billing and Collection Service may not be properly classified as a Category I Competitor Service, Commission staff notes that a major issue in the proceeding begun by Public Notice 2006-14 is which current wholesale services would fall within any new definition of essential service and that, therefore, the Companies' submission is more appropriately considered in that proceeding.

With respect to Yak's suggested review of the other processing charges, Commission staff notes Yak's submission that these rates do not apply to the majority of call records and, in light of this, considers it would not be appropriate to review these rates at this time.

The Companies, MTS Allstream and TCC may file comments with respect to Yak's application, serving a copy on Yak and the other ILECs, by 20 December 2006 .   Any party that may have filed comments may file additional comments by this date. Yak may file comments in reply, serving a copy on ILECs, by 8 January 2007 .  

Yours truly,

'Original signed by P. Godin'

Paul Godin
A/Director General
Competition, Costing and Tariffs
Telecommunications

c.c:    MTS Allstream - iworkstation@mtsallstream.com
          TCC - Regulatory.affairs@telus.com