ARCHIVED - Order CRTC 2000-810

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Order CRTC 2000-810

Ottawa, 31 August 2000
Contribution exemption approved for interconnecting circuits
Reference: 8626-U6-01/00
The CRTC approves a contribution exemption for interconnecting circuits used by the University of British Columbia.

1.

By letter dated 25 April 2000, the University of British Columbia (UBC) applied for contribution exemption for certain public-switched telephone network (PSTN) interconnecting circuits.

2.

UBC stated that it provides long-distance services to students in residence and personnel located on campus by means of a private branch exchange (PBX) network. This network provides access via direct access lines (DALs) to a long-distance network operated by RSL COM Canada Inc., an alternative provider of long distance services. UBC stated that its PBX network also provides access to the PSTN via local exchange lines provisioned by TELUS Communications (B.C.) Inc.'s (TCBC). The PBX network is configured to prevent the TCBC access circuits from providing PSTN access to the DALs or the long-distance network operated by RSL. It is similarly configured to prevent egress from either the DALs or long-distance network of RSL to the PSTN via TCBC's access circuits. UBC submitted that this configuration ensures that there is no local connectivity between the PSTN operated by TCBC and the long-distance network operated by RSL.

3.

UBC submitted that, in these circumstances, the PSTN access lines provided by TCBC constitute interconnecting circuits pursuant to Item 24 of TCBC's General Tariff. However, UBC stated that these interconnecting circuits provide a local exchange telephone service and are not directly connected to the interexchange network operated by RSL. UBC submitted that for technical and operational reasons, it is very unlikely that the connections to the PSTN could be used significantly for joint-use interexchange services. In these circumstances, UBC submitted that it is entitled to a contribution exemption on the PSTN access lines in question, which it listed.

4.

UBC retained the services of a professional engineer to conduct an independent technical audit of the network in question. The engineer's report dated 20 October 1999 stated that:
a) the network is configured such that long-distance calls originated in the PSTN are not routed to the RSL DAL;
b) the network configuration meets the test for the exemption of the PSTN access circuits from contribution; and
c) the internal procedures established within UBC provide the necessary controls to ensure the continued compliance of the configuration with the conditions for exemption.

5.

By letter dated 19 May 2000, TCBC considered that the documentation provided by UBC in its contribution exemption application satisfies the evidentiary requirements established in previous Commission orders, and supports granting the application.

6.

Responding to Commission interrogatories by letter dated 22 June 2000, UBC stated that it first began using analog circuits for local PSTN access in 1987 when it switched from a Centrex-based local service to a PBX-based service. UBC said these initial circuits pre-date subscription to the RSL long-distance service by approximately seven years.

7.

UBC requested that the Commission make the contribution exemption effective retroactive to the date of installation of the circuits, or alternatively, from December 1994 when the DAL facility to RSL (formerly Westel Telecommunications Ltd.) was installed. UBC believed that there are special circumstances present in this case to justify an effective date that precedes the date of the application.

8.

When UBC changed its local telephone service from Centrex service to a University-owned and operated PBX system in 1987, analog circuits to the BC TEL central office were also installed to enable calls to and from the PSTN.

9.

UBC stated that with the exception of upgrades to this system to accommodate growth in the University, this 1987 system pre-dates Commission decisions permitting resale of long-distance facilities on a shared-use basis. UBC's PSTN access lines were converted to Megalink digital service in the latter half of 1994.

10.

When RSL established a DAL in December 1994 for use by students at the UBC campus, they received RSL's discount long distance service. UBC stated that the PSTN access lines provisioned by BC TEL and now TCBC have never been used by UBC in connection with this DAL facility, or in connection with RSL's discount long-distance service.

11.

Citing the independent auditor's report, UBC said its network is technically and operationally configured in a manner that does not support connectivity between RSL's network and the PSTN access lines provisioned by TCBC.

12.

UBC said it never used the PSTN access lines for resale purposes. It had always used these circuits for its own purposes and it had configured the RSL service in a manner that precluded connectivity with the PSTN. Furthermore, UBC stated that it did not consider that it was engaged in resale activity on a commercial basis, and it was not engaged in resale to persons not located on its physical premises. UBC stated that it was for this reason as well that it did not register with the Commission as a reseller until 25 April 2000 when it filed its application for a contribution exemption.

13.

Because of these circumstances, UBC stated that it did not initiate the technical audit process and exemption application until it was advised to do so by independent regulatory counsel.

14.

By letter dated 30 June 2000, TCBC considered that all contribution-eligible traffic carried by UBC prior to the establishment of RSL as the long-distance carrier would have been routed through TCBC's long-distance facilities. TCBC stated that UBC would not have had to pay additional contribution on its long-distance traffic prior to December 1994 since TCBC would have been carrying that traffic and its rates at that time would have included contribution.

15.

TCBC considered that based on the evidence provided, it is clear that UBC is in the business of reselling intra-exchange or local services to its faculty and student members. TCBC stated that interexchange services are provided by UBC through rebilling the long-distance services of an alternate long-distance service provider, in this case RSL. In this respect, TCBC stated that RSL would be responsible for paying applicable contribution charges. TCBC noted that UBC's application is similar to that addressed in Telecom Order CRTC 99-339, dated 9 April 1999, where the Commission granted a contribution exemption for the resale of interexchange services, effective the date of installation.

16.

TCBC therefore considered that, consistent with the above-cited order, it would be appropriate for the Commission to grant UBC's application for a contribution exemption, effective the date of installation (December 1994).

17.

The Commission is of the view that UBC has filed a satisfactory technical audit that meets the evidentiary requirement and provided special circumstances that support the date of installation as the effective date. The Commission also notes that TCBC agrees with UBC's application.

18.

The Commission approves UBC's application effective the date of installation such that no contribution is payable.
Secretary General
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