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Telecom Circular CRTC 2005-8
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Ottawa, 23 June 2005 |
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Basic international telecommunications services (BITS) licensing
regime - Amendments
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Purpose of this Circular
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1.
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The purpose of this Circular is to provide
notification of amendments to the conditions of licence of Class A and
Class B basic international telecommunications service (BITS) providers,
as well as changes to the application (affidavit) forms and the length
of the term of BITS licences. |
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Background
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2.
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In Regulatory regime for the provision
of international telecommunications services, Telecom Decision
CRTC 98-17, 1 October
1998 (Decision 98-17),
the Commission established a licensing regime for BITS in which the
licensees were, by condition of licence, subject to various filing
requirements designed to enable the Commission to detect activities
that could be symptomatic of anti-competitive conduct. The Commission
subsequently amended certain filing requirements for Class A licensees
in Changes to reporting requirements of class A licensees, Order
CRTC 2001-4, 11 January
2001 (Order 2001-4), as
some of the reports were found to be of little benefit in detecting
anti-competitive conduct. |
3.
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In a letter dated 11 February 2005, the
Commission called for comments on a number of proposals to streamline
the licensing regime for BITS providers. The Commission proposed to
eliminate a number of filing requirements, given that in the six-year
period the licensing regime had been in place the Commission had not
received any complaints regarding anti-competitive conduct of BITS
providers. The Commission also noted that there had been a number of
complaints by BITS licensees concerning the administrative burden
flowing from the current filing requirements. In addition to proposing
reduced filing requirements, the Commission proposed streamlined
application (affidavit) forms and longer terms for BITS licences. |
4.
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Specifically, the Commission proposed for
both Class A and Class B BITS licensees to: |
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- amend the condition of licence number 1 to add the following
sentence: "The licensee shall file with the Commission, should it
become necessary to investigate whether or not the licensee is
engaging in practices having an anti-competitive effect in Canada, any
information that the Commission may deem necessary";
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- eliminate all other conditions of licence except those that (i)
require licensees to keep current any information filed with the
Commission in connection with their applications, and (ii) require
licensees to file information in such form as may be prescribed by
the Commission;
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- eliminate the information required in the application (affidavit)
form under sections 7 (corporate ownership), 8 (list of affiliates)
and 9 (list of agreements and arrangements);
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- change the information required under section 6 (contact person)
of the application (affidavit) form to reflect the requirements
established in Telecommunications industry data collection:
updating of CRTC registration lists, telecommunications fees,
Canadian contribution mechanism fund administration, international
licences and monitoring of the Canadian telecommunications industry,
Telecom Circular CRTC 2003-1,
11 December 2003 (Circular 2003-1),
regarding the designation of a Response Manager; and
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- increase the term of BITS licences to 10 years, which is the
maximum term allowed under section 16.3(4) of the
Telecommunications Act (the Act).
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Position of parties
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5.
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The Commission received comments from
Aliant Telecom Inc; AT&T Global Services Canada Co. (AT&T Canada); Bell
Canada; Call-Net Enterprises Inc.; Canadian Alliance of Publicly-Owned
Telecommunications Systems on behalf of Bruce Municipal Telephone
Systems, Prince Rupert City Telephones, Dryden Municipal Telephone
System, Kenora Municipal Telephone System and TBayTel; Canquest
Communications (Canada) Inc.; MTS Allstream Inc. (MTS Allstream); Primus
Telecommunications Canada Inc.; Rogers Communications Inc.;
Saskatchewan Telecommunications and TELUS Communications Inc. (TELUS).
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6.
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All parties supported the proposed
amendments, noting that the revised procedures and the reduction in the
scheduled reporting requirements would lessen the regulatory burden on
licensees while allowing the Commission to obtain the necessary
information to ensure that the terms and conditions of international
licences are met. |
7.
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AT&T Canada proposed that the condition of
licence requiring licensees to keep current the information contained in
the application filed with the Commission be amended to require all
licensees to keep current only the information which new applicants
would be required to provide in the streamlined application (affidavit)
forms. AT&T Canada noted that, without this change, existing licensees
would still be burdened with the additional reporting obligations for
the current term of their licence. |
8.
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TELUS submitted that the competitive nature
of the market for international toll services generated frequent changes
in ownership structures, affiliation, and agreements and arrangements.
In TELUS's view, continuing the obligation to file updated corporate
ownership, affiliation and agreement and arrangement information as
changes were made throughout the year represented an unnecessary burden
for licensees, given the limited use being made of the information. |
9.
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MTS Allstream noted that the proposed amendments
would eliminate the condition of licence relating to the reporting
and contribution requirements set out in Changes to the contribution
regime, Decision CRTC 2000-745,
30 November 2000, as amended by Changes to the annual contribution
reporting requirements, Telecom Decision 2002-35,
31 May 2002 (the contribution regime). MTS Allstream submitted
that, while the contribution regime would continue to apply to contribution-eligible
revenues of BITS licensees regardless of a specific condition of licence
to this effect, there was value in retaining this condition of licence
to alert all BITS licensees that they are subject to this regime.
MTS Allstream also submitted that any change to the term of the licences
should apply to both existing and new licences, so that the current
term of existing BITS licences would also be extended. |
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Commission's analysis and determinations
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Amendments to conditions of licence
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10.
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The Commission notes that Class A and Class
B BITS licensees are currently required, by condition of licence, to
annually file consolidated lists of agreements and arrangements, as well
as information regarding their corporate ownership structure and the
affiliates that provide basic telecommunication services. |
11.
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The Commission considers that these
detailed annual reporting requirements should no longer be required,
given the absence of complaints over the last six years regarding
anti-competitive conduct in relation to the provision of BITS and the
administrative burden associated with such obligations. |
12.
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The Commission notes that with the
elimination of annual filing requirements the Commission would still
retain the ability to respond to any complaints or problems that may
arise. Under the Commission's proposed approach, licensees would
continue to be subject to the current condition of licence prohibiting
them from engaging "in anti-competitive conduct in relation to the
provision of international services", where anti-competitive conduct is
defined as including "entering into or continuing to participate in an
agreement or an arrangement that has or is likely to have the effect of
preventing or lessening competition unduly in Canada, or otherwise
providing telecommunications services in a manner that has or is likely
to have an effect of preventing or lessening competition unduly in
Canada". The Commission considers that this prohibition, coupled with
the proposed general requirement that licensees file any information
that the Commission may deem necessary in an investigation concerning
anti-competitive conduct in Canada, provides the necessary safeguards to
address anti-competitive concerns. |
13.
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In light of the above, the Commission
deletes the conditions of licence relating to the annual reporting
requirements and amends condition of licence number 1 to include the
general requirement that licensees file with the Commission any
information that the Commission may deem necessary to pursue any
investigation into alleged anti-competitive activities. |
14.
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The Commission agrees that there is merit
in retaining the condition of licence relating to the obligations
under the contribution regime as a means of alerting all BITS licensees
that they are subject to this regime. Accordingly, the Commission
retains this condition of licence. Similarly, BITS licensees are currently
required to file information through the annual telecommunications
industry data collection process set out in Circular 2003-1,
as amended in Telecommunications industry data collection: updating
of CRTC registration lists, telecommunications fees, Canadian revenue-based
contribution regime, international licences and monitoring of the
Canadian telecommunications industry, Telecom Circular CRTC 2005-4,
9 February 2005 (Circular 2005-4). Accordingly,
the Commission, as a reminder to all BITS licensees, includes
a reference to this requirement in the existing condition of licence
that requires licensees to file any required information in such form
as may be prescribed by the Commission. |
15.
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The Commission notes that, following Order
2001-4, Class A licensees
were required by condition of licence to retain all data pertaining
to basic international traffic until notified by the Commission. The
Commission eliminates this condition of licence considering the limited
use the Commission has made, or would likely make, of this information.
The Commission notes that as a result of this amendment Class A and
Class B licensees are now subject to the same conditions of licence. |
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Application (affidavit) forms
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16.
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Consistent with the above streamlined
approach, the Commission eliminates the sections in the application
(affidavit) form requiring information on corporate ownership (section
7), affiliates (section 8) and agreements and arrangements (section 9).
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17.
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Furthermore, in order to reflect the approach
taken in the telecommunications industry data collection process
set out in Circular 2003-1, as amended in Circular 2005-4,
the Commission amends section 6 (contact person) of the application
(affidavit) form in order to require information on the applicant's
designated Response Manager. |
18.
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Presently, Class A and Class B licensees
are required by condition of licence to keep current any information
filed with the Commission in connection with their licence application
and to file particulars of any change to such information within 30 days
of the licensees becoming aware of the change in question. The
Commission considers that it is important that the information provided
in the application form be kept current, however, the Commission agrees
that existing licensees should be required to keep current only the
information which new applicants would be required to provide in the
streamlined application (affidavit) forms. Accordingly, the Commission
amends the condition of licence to this effect. |
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Term of BITS licences
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19.
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The Commission considers that it is
appropriate to streamline the licensing process by extending the term of
BITS licences to the 10-year maximum allowed under
section 16.3(4) of the Act. Accordingly, effective as of the date of
this Circular, all new licences will generally be issued for a term of
up to 10 years, expiring on the 30 June immediately preceding the
10-year maximum allowed under the Act. |
20.
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The Commission also considers that any
changes to the terms of licences should be applied to both existing and
new licences. In Circular 2003-1, the Commission extended the five-year
anniversary-based licences of existing licensees to a common expiration
date of 30 June in order to harmonize the data collection and reporting
processes with the licence renewal process. Thus, taking into
consideration the 10-year maximum term allowed under the Act and the
fact that extensions have been made to the original five-year term of
existing licensees, the Commission extends the term of all existing
licences for a period of four years from the date of expiration
determined in Circular 2003-1. For example, a licence that was to expire
on 30 March 2004 and was subsequently extended to 30 June 2004, pursuant
to Circular 2003-1, will now expire on 30 June 2008. |
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Conclusion
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21.
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In light of the above, pursuant to section
16.3(3) of the Act, the Commission hereby amends the conditions
of licence for Class A and Class B BITS licences, effective as of the
date of this Circular. The conditions of licence for Class A and Class B
licensees are set out in the appendix to this Circular. |
22.
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The Commission also amends the application
(affidavit) forms for the issuance or renewal of Class A and Class B
BITS licences, effective as of the date of this Circular. The amended
forms are available on the Commission's website at
http://www.crtc.gc.ca/eng/public/8190.htm. |
23.
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The Commission also extends all existing
Class A and Class B BITS licences for a period of four years, effective
as of the date of this Circular. |
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Secretary General |
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This document is available in alternative
format upon request, and may also be examined in PDF
format or in HTML at the following Internet site: http://www.crtc.gc.ca
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