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Ottawa, 23 December 1998
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Telecom Order CRTC 98-1348
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By letter dated 21 August 1998, McCarthy Tétrault on behalf of Hongkong Telecom (Canada), the Canadian operating division of Hong Kong Telecommunications (Pacific) Limited (HKTel), applied for contribution exemption with respect to circuits used for administrative purposes and circuits used to provide access to the Internet.
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File No.: 8626-H7-02/98
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1.By letter dated 11 September 1998, Bell Canada (Bell) noted that with respect to its request for an administrative exemption, HKTel sought a continuation of its exemption after 1 January 1998, pursuant to the contribution regime which was revised in Telecom Order CRTC 97-590 dated 1 May 1997. Bell noted that the exemption was originally approved in Telecom Order CRTC 97-402 dated 27 March 1997 (Order 97-402). Bell stated that HKTel has provided an affidavit to support its exemption request. Bell stated that in its affidavit, HKTel affirmed that the administrative circuits "...have at all times been associated with standalone administrative locations or systems not directly connected to a service provider's interexchange network". Bell submitted that the affidavit appears to satisfy the evidentiary requirements for such exemptions. In light of the above, Bell agreed with the request for a continuation of HKTel's administrative exemption.
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2.Bell noted that HKTel requested an exemption for Internet data only use, retroactive to 1 January 1998. Bell understood that the circuits used to carry Internet data traffic terminate at a location where HKTel also has facilities in place to handle both voice and possibly other types of traffic which might attract contribution charges. Bell submitted that since HKTel controls the network configuration and the routing of traffic over these facilities, it is not possible for Bell to provide carrier verification of HKTel's configuration.
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3.Bell submitted that the current rules as set out in Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993, which treats Internet Service Providers (ISPs) as data service providers, be applied. Bell submitted that in the absence of any demonstrated special circumstances, a technical audit, together with an engineer's affidavit, would normally be provided to verify the foregoing. Further, Bell did not agree with HKTel's request that its Internet exemption be retroactive to 1 January 1998.
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4.Bell submitted that HKTel should be required to submit further evidence, such as a technical audit, to satisfy the evidentiary requirement with respect to its request for an exemption for Internet data use.
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5.By letter dated 28 September 1998, HKTel submitted that an exemption in respect of the administrative circuits should be granted effective the date of installation.
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6.With respect to the Internet access circuits, HKTel stated that a revised contribution exemption regime has now been provided by the Commission in Telecom Order CRTC 98-929 dated 17 September 1998 (Order 98-929). HKTel stated that in Order 98-929 Situation 1, paragraph 31, the Commission set out what HKTel submitted is the resolution to the treatment of HKTel's Internet access circuits.
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7.HKTel confirmed that it offers only exempt ISP services and that no other service provider offers Public Switched Telephone Network (PSTN) Voice or any other contribution-eligible telecommunications services from the same service location. Further, HKTel stated that it is agreeable to making available the no-charge, five-hour per-month, low-speed access account to Bell as contemplated in Order 98-929.
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8.Since the exemption under paragraph 31 of Order 98-929 is to be effective from the date of service installation, HKTel submitted that it is irrelevant that the Order has just been issued, since it clearly contemplates retroactive application. Accordingly, for the reasons contained in the original application and also by virtue of the reasons contained in Order 98-929, HKTel submitted that its application with respect to these circuits ought to be granted as requested.
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9.By letter dated 27 October 1998, Bell submitted that HKTel appears to offer services other than Internet services. However, Bell stated that it has conducted a further review of the service location where the Internet access services are provided. Bell stated that contrary to its previous submission on this matter, dated 11 September 1998, Bell now understood that HKTel's circuits used to carry Internet data traffic terminate at a different location from the location where HKTel offers voice and other data services that might attract contribution charges. In light of the above, Bell agreed with HKTel's request.
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10.The Commission notes that HKTel has provided an affidavit which meets its evidentiary requirements for an exemption for administrative circuits. Accordingly, the Commission is of the view that a continuation of HKTel's exemption should be approved (that was originally approved in Order 97-402) beyond 1 January 1998, such that no contribution is payable on the administrative circuits in question.
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11.The Commission notes that Bell has verified that the Internet access circuits used to carry Internet data traffic terminate at a different location from the location where HKTel offers equal access services and that it agreed with HKTel's request for exemption.
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12.Contrary to HKTel's submission, the Commission is of the view that Order
98-929 Situation 2 is the appropriate reference in this case. In Order 98-929 Situation 2, the Commission stated, among other things, that: "if an ISP offers PSTN Voice or other telecommunications services in addition to ISP services and no PSTN Voice or other contribution-eligible telecommunications services are offered by the ISP or any other service provider from the same service locations, the ISP is to register with the Commission, but no exemption application for contribution-exempt services is required....An affidavit is to be served on serving LEC(s) only....The exemption is effective the date of service installation."
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13.The Commission is of the view that the contribution exemption regime set out in Order 98-929 should apply to HKTel's application because Order 98-929 was issued prior to the completion of the record of the application. The Commission notes that Bell raised no objections. Furthermore, the Commission considers that the affidavit filed by HKTel satisfies the evidentiary requirements of Order 98-929 for contribution exemption.
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14.In light of the foregoing:
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(i) a continuation of HKTel's exemption (that was originally approved in Order
97-402) is approved beyond 1 January 1998, such that no contribution is payable on the administrative circuits in question; and
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(ii) the Commission finds that HKTel has satisfied the relevant contribution exemption evidentiary requirements with respect to the Internet circuits in question and no contribution is payable.
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Secretary General
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This document is available in alternative format upon request.
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