CRTC REVENUE-BASED CONTRIBUTION REGIME - REPORTING INSTRUCTIONS

Table of Contents

-1- Introduction

-2- Annual Filing Requirements

-3- Related Companies

-4- Compliance Statement

-5- Monthly Filing Requirements

-6- Completing the Forms

-7- Annual Reporting Form - (Excel)

-8- Inter-carrier Payments Form - (Excel)

-9- Non-contribution-eligible revenue Form - (Excel)

-1- Introduction

On 30 November 2000, the Commission issued Decision CRTC 2000-745 (the Decision), introducing major changes to the Canadian contribution regime. In the Decision, the Commission decided that it would introduce a national contribution collection mechanism based upon revenues from all telecommunications service providers (TSPs), who meet the minimum threshold of $10 million in Canadian Telecommunications Services Revenues (CTSR), and replaced the per-minute mechanism effective 1 January 2001. Contribution serves to subsidize the high cost of residential local telephone service in rural and remote areas. The revenue charge is set annually and is based upon the contribution-eligible revenues of the previous year. Monthly remittances based upon the previous month’s actual revenues will be made to the Central Fund Administrator (CFA) and distributed to those TSPs serving high cost serving areas as determined by the CRTC. Refer to the Decision 2000-745 and CRTC Orders 2001-220 and 2001-221 for further clarification.

-2- Annual Filing Requirements

Paragraph 103 of the Decision requires that all telecommunications service providers are now required to report to the Commission, each 31 March, their contribution-eligible revenues based upon the financial statements of the fiscal year ending within the immediate prior calendar year. The reporting form referred to in paragraph 102 of the Decision is attached. The following supporting documentation must be provided: (i) the relevant financial statements, (ii) the associated audit report or affidavit, as applicable (see below), (iii) a list of the inter-carrier payment deductions claimed, broken down by supplier, services purchased and the associated expense (see inter-carrier payment deduction form attached) and (iv) details of all non-contribution-eligible revenues (see attached form). This information may be filed in confidence to the Commission. A list of all filers will be available on the CRTC Website at http://www.crtc.gc.ca . The annual percent revenue charge will be determined following the receipt of the annual filing requirements. The interim 2001 revenue charge is 4.5%.

Companies making monthly or annual filings on behalf of a group of related companies, that are TSPs, are also required to file separate reports with supporting information for each company that is a TSP. When filing your annual reporting form, a list of all related companies that are TSPs is required, whether or not the companies file separately or as a group. Please note that the minimum threshold of $10 million in CTSR applies to the group of related companies that are TSPs. The definition of related companies can be found in the Section 3840 of the Handbook of the Canadian Institute of Chartered Accountants.

-4- Compliance Statements

If the TSP, or group of related companies that are TSPs, has over $10 million in contribution-eligible revenues, a compliance statement completed by the company’s external auditors, as outlined in the process guidelines (see CRTC Website at http://www.crtc.gc.ca ), must be filed attesting to the accuracy of the annual filing and revenue report. Those companies that do not have audited financial statements, or non-related companies with $10 million or less of annual contribution-eligible revenues, can either have their external auditors attest to the accuracy of the information or provide an affidavit signed by an officer of the company attesting to the accuracy of the information.

-5- Monthly Filing Requirements

TSPs that meet the minimum revenue threshold, and therefore must pay contribution on their contribution-eligible revenues, are required to file and remit monthly to the Central Fund Administrator (CFA). The CFA is currently Progestic International Inc. If a company is making one remittance for a related group of companies that are TSPs, the financial information must be reported separately for each company. The process guidelines will provide further information regarding audit and filing requirements. The monthly report will require the same information as the annual reporting form subject to the following two exceptions. The details of inter-carrier payments and non-contribution-eligible revenues and the list of related companies are not required to be filed on a monthly basis. However, if the list of related companies changes at any time, the new information (the name of a newly related company, or the fact that a company is no longer related) must be communicated to the Commission immediately. The CRTC will be providing a list of TSPs who are required to remit contribution as well as an estimate of expected contribution to be received on a monthly basis to the CFA. The CFA will monitor the compliance with the monthly reporting requirements of the TSPs.

-6- Completing the Forms

Annually, on 31 March, each TSP is required to file the Annual Reporting Form, the supporting documentation as detailed above, the Inter-carrier Payment Form (if applicable) and the Non-contribution-eligible revenues form (if applicable). As well, a list of all related companies who are TSPs must be completed. This requirement applies whether or not the TSP meets the minimum threshold of $10 million in CTSR.

Area A: Company Identification

Enter the legal name of the entity as well as the normal operating name of the TSP. Provide the names of any related companies that are TSPs. A list may be attached, if required.

Area B: Contact Information

Enter the name of the person completing the form. This should be the person who the Commission would be able to contact with any questions. Please provide the contact numbers and email address.

Area C: Reporting Year Information for Annual Filings (Note 2)

The reporting year for the annual filings is the calendar year, which ended immediately prior to the report being filed at 31 March. The fiscal year information is your company’s fiscal year, which ended in the reporting year. For example, for the reporting form to be filed by 31 March 2002, the reporting year would be 2001 and you would provide the fiscal year information that ends in the calendar year 2001.

Area D: Calculation of Contribution-Eligible Revenues

The revenue information required in this section is based upon Decision 2000-745 and further clarifications provided in Orders CRTC 2001-220 and 2001-221, both dated 15 March 2001.

Note 3: Order 2001-220 contains the definitions of Total Operating Revenues, Non-Canadian Revenues, Canadian Telecommunications Services Revenues (CTSR), Contribution Payments Received, Retail Internet Service Revenues, Retail Paging services Revenues. In addition, that Order contains the procedure for calculating the contribution-eligible and non-contribution eligible revenues from bundles. Order 2001-221 contains the definitions of Canadian Non-telecommunications Revenues, Terminal Equipment Revenues and Bundles. For clarification of Line D.1.B., refer to the definition of Total Operating Revenues.

Note 4: Inter-carrier payments are defined in Order 2001-220. The total allowable inter-carrier payments should be reported in D.6. In accordance with Paragraph 102 of the Decision, this deduction must be supported by a list of suppliers, services purchased and the associated expense. The INTER-CARRIER PAYMENTS FORM is attached.

Note 5: Bundled Revenues - The term bundling generally refers to a situation where one rate covers a number of products and/or services. If a bundle includes contribution-eligible and non-contribution eligible revenues, the bundling rules apply as per Orders CRTC 2001-220 and -221. To ensure that revenues are appropriately recorded to respect the minimum threshold, revenues associated with bundles should be reported as per the three situations outlined below:

If the bundle contains contribution-eligible revenues and non-contribution-eligible revenues from "Retail Internet Services", "Retail Paging Services" and/or "Terminal Equipment", enter the amount of revenues eliminated from bundles that are non-contribution-eligible in Line D.10. This amount eliminated from bundles as non-contribution-eligible revenues is not to be included in any other line in the form as a deduction.

If the bundle contains contribution-eligible revenues and non-contribution-eligible revenues that would normally be reported in Lines D.2 and/or D.3, enter the amount of revenues eliminated from bundles that are non-contribution-eligible in Lines D.2 or D.3 as applicable. If the bundle includes contribution-eligible and non-contribution-eligible revenues that would normally be reported in D.2, D.3, D.7, D.8 and/or D.9 and the non-contribution-eligible revenues cannot be separated, you may report all revenues from the non-contribution-eligible revenues in Line D.10. For greater clarification, non-contribution-eligible revenues that would normally be reported in Lines D.7, D.8 and/or D.9 cannot be reported in Lines D.2 and/or D.3.

Bundle of non-contribution-eligible revenues only - If the bundle includes only non-contribution-eligible revenues, the revenues should be prorated in a similar manner as set out in Order 2001-220, to the appropriate section on the form. For example, if the bundle contains only "Retail Internet Services" and "Terminal Equipment Revenues", the revenues would be prorated and reported in Lines D.7 and D.9 respectively. If the bundle contains only "Canadian Non-Telecommunications Revenues" and "Retail Internet Services Revenues", the revenues would be prorated and reported in Lines D.3 and D.7 respectively. If the bundle includes non-contribution-eligible revenues that would normally be reported in D.2 or D.3 with non-contribution-eligible revenues from D.7, D.8 and/or D.9 and the non-contribution-eligible revenues cannot be separated, you may report all revenues from the non-contribution-eligible revenues in Line D.10. For greater clarification, non-contribution-eligible revenues that would normally be reported in Lines D.7, D.8 and/or D.9 cannot be reported in Lines D.2 and/or D.3

Contribution-eligible revenues represent less than 5% of the bundle – If the bundle contains non-contribution-eligible revenues that would be reported in Lines D.2 or D.3 and contribution-eligible revenues representing less than 5%, enter the revenues from the entire bundle in Lines D.2 or D.3 as applicable (including the immaterial portion of contribution-eligible revenues). If the bundle contains non-contribution-eligible revenues that would be reported in Lines D.7, D.8 or D.9 and contribution-eligible revenues representing less than 5%, enter the revenues from the entire bundle in Lines D.7, D.8 or D.9 as applicable (including the immaterial portion of contribution-eligible revenues). If the bundle contains more than one non-contribution-eligible service, the revenues should be prorated between the non-contribution-eligible revenues in a similar manner as outlined in Order 2001-220. If the revenues cannot be separated, all of the non-contribution-eligible revenues can be put in Line D.10. If the total of the contribution-eligible revenues and the non-contribution-eligible revenues that would normally be reported in Lines D.7, D.8 and/or D.9 represents less than 5% of the bundle, you may report the total revenues from the bundle in Line D.2 or D.3 as applicable.

Note 6: Contribution-Eligible Revenues from Package Discounts – In accordance with Order 2001-221, if two or more services are offered in a package where the contribution-eligible revenues are discounted and the non-contribution-eligible revenues are higher than the stand alone price, the difference between the price charged for the non-contribution-eligible service and the stand alone price is contribution-eligible. Report this excess in Line D.12.

Date Modified: 2002-02-08