In Telecom Order CRTC 98-497, dated May 22, 1998, the CRTC permitted Bell to go ahead with its Internet Call Display, while generally creating a greater level of unbundling of the network elements used by Bell to offer the service. Internet Call Display allows a subscribing customer, when their line is busy because of dialing into their internet service, to receive notice of an incoming call by means of a “pop-up” window on through their internet connection. For InfoInterActive Inc. (“IIA”) to offer a competing service, Bell offered the ability to route Call Forward on Busy to a different number from that programmed for Call Forward – No Answer. Until this time, competitive providers of voice mail services had the ability to request a combined Call Forward on Busy/No Answer to route to a common number. By unbundling the Busy and No Answer routing, Bell has created more opportunities for competitors to develop creative enhancements to internet-based incoming call management. At the same time, IIA had sought the ability to provide their portfolio of services to Bell Canada’s Call Answer customers. The CRTC accepted Bell’s arguments which prevent subscribers to Bell Canada’s own voice mail service from trying out a competing internet call management service provider.

In another Order issued on June 8, Telecom Order CRTC 98-558 denied Bell’s request to aggregate digital tie trunk access for centrex into bundles of 24. The CRTC found that the rating principles used by Bell were inappropriate in that charges would be too high for digital trunk groups that did not require the full 24 circuits. At the same time, the CRTC indicated in its Order that it would be prepared to approve a tariff structure composed of two elements: a digital termination charge (in bundles of 24) and a per channel charge for the remaining cost elements. While the Commission agreed with some of the cost comparisons made by intervenors, it failed to fully assess whether the charge for the remaining cost elements is reasonable, Further, the Commission denied the request of the intervenors to more fully examine the basis of these charges.

These two Orders are indicating some of the thinking that the CRTC is having toward total services competition. On one hand, the CRTC is encouraging greater levels of unbundling to permit competitors to offer a similar portfolio of services. On the other hand, the Commission is not prepared to hand over the telcos customer base to service providers looking to easily skim off the cream. Consistent with its May 1, 1997 Local Competition Decisions, the CRTC seems to be looking for lasting, sustained competition.

In Telecom Order CRTC 98-486, dated May 19, 1998, the CRTC clarified the rules for transit traffic for Competitive Local Exchange Carriers (CLECs). In Decision 97-8 (May 1, 1997), the CRTC defined transit traffic as traffic received from one carrier and then switched to another. The Commission had left it to the Interconnection Steering Committees (CISC) to make recommendations on appropriate arrangements should be put in place. As a result of an impasse at the CISC level, the issue was sent to the CRTC and Order 98-486 was the outcome of the Commission’s deliberations.

Transit traffic had been viewed as an opportunity for CLECs to arbitrage Stentor switching and aggregation rates and thereby serve as a way to discipline the Stentor local access rates. Among the significant clarifications that emerged in Order 98-486 was a definition of “Bill-and-Keep” traffic to include only traffic which originates and terminates within the same exchange. Transit traffic is specifically excluded from this definition.

In addition, the competitive industry had proposed that long distance carriers should be able to interconnect with a transit CLEC in order to reduce their switching and aggregation charges. The CRTC ruled that the company whose customer either originates or receives the long distance call is entitled to receive the switching and aggregation charge. This portion of the ruling will detract from the cost advantages that integrated CLEC – Interexchange carriers, such as Sprint, may have expected.

With respect to transit as a means to expedite CLEC entry into a market, the CRTC also clarified that regardless of transit being used as the means of interconnection, each CLEC must enter into specific interconnection agreements with every other CLEC – in order to arrange the manner of exchanging traffic, whether directly or by transit. This will have the impact of adding layers of complexity to newer entrants and give and advantage to first players such as Metronet and the incumbents.

The 14 page order seems to continue to favour construction of facilities and direct connectivity between CLECs – although the CRTC has appeared to miss an opportunity to have arbitrage of rates serve to discipline the market place rather than regulation. By artificially distinguishing between sources of traffic, the CRTC is leaving itself open to difficult policing and more complex rate structures.

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.”

In an order issued January 26, 1998, the CRTC again sent a message to the Stentor companies that non-conformance to industry standards would be discouraged. In Telecom Order CRTC 98-40, the CRTC defined the CCS7 signaling message set that would permit open interconnection between local carriers and access to long distance carriers. Of greatest significance was the CRTC’s determination regarding the cost recovery for adapters to meet the standard interface.

Stentor had argued “that the costs should be borne by the service provider that benefits from the interface.”

To the contrary, the CRTC found “that where protocol conversion is required at a point of interconnection, the company that has to adapt to the common interface standard should be responsible for the costs. The Commission therefore finds that Stentor member companies must bear the costs of providing the calling name parameter to competitors at the point of interconnection in a format compatible with the GR-317 specification.”

In the past, Stentor had deployed non-standard implementations of signaling standards in order to speed products to market, leveraging its almost universal use of Nortel switches. Last summer, on August 5, 1997, in Telecom Order CRTC 97-1055, the CRTC found Stentor to have been sloppy in its notification process for defining terminal interface standards, thus providing Nortel with an advantage over Mitel in providing certain calling identification features.

The January 26, 1998 order continues in this theme – sending a consistent message that the CRTC expects to be followed in resolving interconnection issues.

With total competition in the telecommunications industry looming on the horizon, the CRTC has begun to demonstrate its commitment to its new role as a competition watchdog. In the past week, three orders have been released that may signify the arrival of a new regulatory sheriff in town. The orders cover three areas of the business and span the country, coast-to-coast.

On August 5, 1997, in Telecom Order CRTC 97-1055, the CRTC found that Stentor had been sloppy in its notification process for defining terminal interface standards, and this had provided Nortel with an advantage over Mitel in providing certain calling identification features. As a result, Stentor was ordered to waive related feature service charges for Mitel customers for 3 years, and the CRTC not only reminded the Stentor members to adhere strictly to the rules for network notification, but also registered the order with the Federal Court. This step means that any subsequent violation of the rules can make use of the court’s faster processes to seek relief and redress.

In Telecom Order CRTC 97-1070, (August 7, 1997) NB Tel was denied permission to include DID access in its Centrex service offering. NB Tel had been applying the $3.90 monthly charge per DID extension somewhat selectively, and when challenged by the PBX industry and potential future local competitors, had claimed that it would be administratively simpler to simply make DID a part of the basic service and raise rates across the board $1.35. The CRTC agreed with competitors that this would be inappropriate and ordered NB Tel to choose to either include the DID access in the base service but raise rates across the board $3.90, or charge customers uniformly. NB Tel was given 15 days to decide which option to employ.

One day later, on August 8, 1997, in Telecom Order CRTC 97-1078, the CRTC told BC Tel that it would not approve a capacity swap agreement with BC Tel Mobility because it would be anti-competitive and confer an advantage to BC Tel Mobility over its competitors such as Cantel and Clearnet. While BC TEL noted that the agreement was similar to an arrangement between Telus and Telus Mobility and approved by the Commission in Telecom Order CRTC 94-726 dated 27 June 1994, the CRTC stated, in effect, that times are different now, and such past practices would no longer be permitted.

In all, 3 decisions in 4 days that may signal a new CRTC approach to regulation in the competitive era. While the CRTC has lacked the jurisdiction to add a bite to its bark, on August 5, the Commission demonstrated that it is prepared to let the courts mete justice for violations. As Canada races toward total services competition for long distance, local and broadcast services, it appears that the sheriff is going to use the radar gun to keep the race a little bit more fair.