In Telecom Order CRTC 98-28, dated January 23, 1998, the CRTC confirmed that long distance providers which use the internet as a backbone are still required to register and have to pay “contribution” on their traffic.
ShadowTel had argued that its innovative voice long distance service, using a data service backbone based on frame relay and internet, should be exempt from paying the subsidy toward affordable local rates known as Contribution. “[T]he Commission considers that ShadowTel is providing public switched interexchange voice services, albeit over the Internet and that, consistent with Order 97-590, ShadowTel is clearly required to register as a reseller and pay contribution.”
In Order 97-590, the Commission stated that, for the time being, internet data services do not yet attract contribution, but voice services using the Internet would not qualify for an exemption.
Telecom Order CRTC 98-28, reaffirms the position and clarifies the differentiation between Internet Service Providers and long distance using internet protocol: “The Commission notes that while they ride on the same Internet protocol, the services offered by ISPs are very different from the services provided by ShadowTel.”