Ottawa, 2 May 2001
Director, Regulatory Matters Bell Canada
President ERORS Inc.
60 Rosenfeld Crescent
Re: Interpretation - Billing of local channels
ERORS Inc., in a letter dated 22 November 2000, sought the involvement of the CRTC to settle a billing dispute with Bell Canada regarding the interpretation of the general tariffs (GT) for the billing of local channels associated with two-point interexchange Class A signal channels. ERORS was acting on behalf of the City of Vaughan, Ontario.
Position of Parties
ERORS submitted that Bell Canada's current method of billing for associated local channels on interexchange signal channels does not meet with the wording or intention of the General Tariff.
ERORS noted that Item 3750.4(b)(1) states that the monthly charge or rental for these local channels is based on the actual distance from the rate centre/wire centre to the customer location, using the rate of $4.50 per 400 metres as identified in Item 950.3(a)(1)c. ERORS submitted that Item 3750.4(b)(1) does not state that a minimum charge applies to each local channel associated with the interexchange channel.
ERORS also submitted that the minimum monthly charge of $18 referred to in Item 950.3(a)(1)c relates to any one Class A or B signal channel. ERORS argued that a Class A signal channel, whether two-point local, multipoint local, two-point interexchange or multipoint interexchange, is still one Class A signal channel. ERORS argued that the total charges for the loops should be combined to meet the billing requirement.
Bell Canada replied that the interpretation by ERORS ignored the technical and tariff distinctiveness of the local and interexchange components of an interexchange channel. Bell Canada submitted that "ERORS has taken the position that an interexchange channel is a single circuit, regardless of the number and configuration of the local channel components at each end of the interexchange channel. As a result, Bell Canada cannot charge separately for each local channel." According to Bell Canada, the tariff makes a clear distinction between local and interexchange channels: Item 950 deals with local channels, while Item 3750 deals with interexchange channels. Item 950.3(a)(1)c sets out a distance rate for each individual channel, as well as a minimum monthly charge for each individual local channel.
Bell Canada indicated that Item 3750 does not specifically mention a minimum charge for each local component of an interexchange channel. However, this is irrelevant as Item 3750 includes a reference to Item 950, which indicates the minimum charge for each local component.
Bell Canada also submitted that the rationale for establishing the minimum monthly charge is to recognize that each local channel has certain fixed costs, which exist even if only a short distance is covered. Bell Canada indicated that by lumping all of the IX channel components together and denying the use of a minimum monthly charge for each local channel, ERORS is ignoring the fixed costs of the distinct local channel. There is a significant technical, cost and tariff difference between four local channels of 400 metres and one local channel of 1600 metres. This, according to Bell Canada, is recognized by the minimum monthly charge.
ERORS, in further arguments, submitted that Bell Canada is attempting to draw a relationship between the engineering of circuits and the correct billing of circuits. According to ERORS, Bell Canada's practice has led to numerous incorrect billing methods, since there is no relationship between how a circuit is built and how it is billed.
ERORS further raised the issue of multipoint local circuits. ERORS submitted that the minimum should apply once to all the local-channel components of a multipoint circuit and, by analogy, to the entire interexchange point-to-point channel.
Bell Canada, in reply, indicated that for multipoint local circuits, it is not the length of each leg of the circuit that is considered for billing purposes, but rather, the combined multipoint distance. Bell Canada pointed to Item 950.2(a)(2)a, which states that the "total chargeable distance is the combination of distances connecting all service points that produce the lowest charge". Bell Canada stated that a local channel consisting of five customer service points at a billable distance from each other of one 400-metre billing unit each would not be subject to a bill minimum as that local channel consists in total of the minimum four units.
The Commission considers Bell Canada's interpretation to be in accordance with its tariff, as the three components of a point-to-point interexchange facility are all rated separately: a local channel in one city, an interexchange channel, and a local channel in the other city. Accordingly, the Commission concludes that the minimum charge of $18 should apply for the local channel at each end of a simple point-to-point interexchange circuit.
The Commission also agrees with Bell Canada's rating practice for a multipoint local circuit; i.e., the minimum is to be applied to the total facility in one city, regardless of whether there are two or more customer service points in that city. The Commission, however, considers that Item 950.2(a)(2)a, which states that the "total chargeable distance is the combination of distances connecting all service points that produce the lowest charge", may on its own lead to confusion. Bell Canada is to issue revised tariff pages to clarify Item 950.2(a)(2)a with additional wording to indicate that the initial 400-metre distance rental applies only once for the combined local channel in a city.