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Order CRTC 2001-738
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Ottawa, 21 September 2001 |
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CRTC gives final approval to procedures for the revenue-based
contribution regime |
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Reference: 8638-C12-45/00 |
1. |
Following the release of Decision CRTC 2000-745, Changes to
the contribution regime, dated 30 November 2000,
industry-working groups were established to assist in the
implementation details of the changes to the contribution regime.
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2. |
The Process Working Group was mandated to develop guidelines and
procedures for the operation of the National Contribution Fund
established pursuant to Decision 2000-745 and the closure of the per
minute/per line contribution regime. In addition, the Process
Working Group's responsibilities included drafting a procedures
document to list the rules for both aspects of the working group's
mandate.
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3. |
In April 2001, the working group submitted its draft procedures
document for review by the CRTC Interconnection Steering Committee (CISC)
members and the members of the Contribution Collection Mechanism
Co-ordination Committee, which was struck to co-ordinate activities
to help implement Decision 2000-745. Given the need to put
procedures in place as quickly as possible, in Order CRTC 2001-338, Revenue-based
contribution regime interim procedures, dated
30 April 2001, the Commission granted interim approval to
the draft procedures document. However, at that time, the two
committees had not had the chance to review the document.
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4. |
Following the release of Order 2001-338, both committees reviewed
the interim document and submitted their proposed changes to the
Process Working Group.
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5. |
On 12 July 2001, the revised procedures document was tabled at a
joint meeting of the Co-ordination Committee and the CISC members.
At that meeting, the industry reached consensus on the procedures
document and filed the document with the Commission for
consideration. |
6. |
The Commission hereby approves, on a final basis, the attached Procedures
for operation of the revenue-based contribution regime document. |
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Secretary General |
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This document is available in alternative format upon request
and may also be examined at the following Internet site: http://www.crtc.gc.ca
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4 July 2001 |
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Procedures for operation of the revenue-based
contribution regime mandated by the CRTC pursuant to Decision
2000-745 dated 30 November 2000 |
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This document comprises the Procedures for the purposes of the
National Contribution Fund Administration Agreement dated
1 January 2001 (the "National CFA Agreement") between
Canadian Portable Contribution Consortium Inc. ("CPCC"),
of the first part, Progestic International Inc., in its capacity as
the administrator (the "CFA") of the National Contribution
Fund (the "NCF"), of the second part, each
telecommunications service provider ("TSP") as shall be
determined by the CRTC from time to time to be a Required
Contributor and which shall have become a party to the National CFA
Agreement through execution and delivery to the CFA of a Required
Contributor Accession Agreement in the manner provided in Section
10.14(a) of the National CFA Agreement, of the third part, and each
TSP as shall be determined by the CRTC from time to time to be an
Eligible Recipient and which shall have become a party to the
National CFA Agreement through execution and delivery to the CFA of
an Eligible Recipient Accession Agreement in the manner provided in
Section 10.14(b) of the National CFA Agreement, of the fourth part.
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Approved by the Board of Directors of Canadian Portable
Contribution
Consortium Inc.: 2001 |
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Approved by the CRTC: 2001 |
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ARTICLE ONE |
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GENERAL |
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1.1 The purpose of these Procedures is to
prescribe the rules for: |
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· the operation of the National Contribution Fund, established
by the CRTC pursuant to Decision CRTC 2000-745; and
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· the closure of the per-minute/per-line contribution regime
that operated until 31 December 2000 and provide a
reconciliation and settlement of the contribution for the first
quarter of 2001.
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1.2 The Procedures are the
"Procedures" referred to in the National CFA Agreement and
form part of the contractual obligations entered into by the
signatories of that contract. |
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1.3 These Procedures have been
established through a consultative process overseen by the CRTC. The
consensus reports of this consultative process have been filed with,
and approved by, the CRTC. Certain points on which a consensus could
not be achieved were filed with, and resolved by, the CRTC. |
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1.4 For administrative convenience, it
has been agreed that the CPCC has the power to amend these
Procedures from time to time subject to the approval of the CRTC.
Parties subject to these Procedures will be given adequate notice of
proposed changes through the distribution of the agenda and minutes
of directors meetings of the CPCC and by representation through one
or more directors of the CPCC. In addition, the CRTC may, from time
to time, amend the provisions of Appendix 1 to these Procedures and
references in these Procedures shall be taken to be references to
the then most recent version of Appendix 1 so issued by the CRTC. |
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1.5 Decision 2000-745 stated that the
Commission would perform certain tasks. For completeness, the tasks
undertaken by the CRTC have also been described in these Procedures. |
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1.6 Headings: The division of these
Procedures into Articles and Sections and the insertion of headings
are for convenience of reference only and shall not affect the
construction or interpretation of these Procedures. The terms
"hereof", "hereunder" and similar expressions
refer to these Procedures and not to any particular Article, Section
or other portion hereof and include any agreement supplemental
hereto. Unless something in the subject matter or context is
inconsistent therewith, references herein to Articles, Sections and
Appendices are to Articles and Sections of, and Appendices, to these
Procedures. |
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1.7 Extended meanings: In these
Procedures, words importing the singular number also include the
plural and vice versa; words importing any gender include all
genders and words importing persons include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations. |
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1.8 Accounting principles: Wherever in
these Procedures reference is made to a calculation to be made or an
action to be taken in accordance with generally accepted accounting
principles, such reference shall be deemed to be to the generally
accepted accounting principles from time to time approved by the
Canadian Institute of Chartered Accountants ("CICA"), or
any successor institute, applicable as at the date on which such
calculation or action is made or taken or required to be made or
taken in accordance with generally accepted accounting principles. |
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1.9 Interest calculations and payments:
Unless otherwise stated, wherever in these Procedures reference is
made to a rate of interest "per annum" or a similar
expression is used, such interest shall be calculated on the basis
of a calendar year of 365 days or 366 days, as the case may be, and
using the nominal rate method of calculation, and will not be
calculated using the effective rate method of calculation or on any
other basis that gives effect to the principle of deemed
reinvestment of interest. All late payment charges and interest to
be payable hereunder will be paid both before and after default
and/or judgement, if any, until payment thereof, and interest will
accrue on overdue interest, if any, compounded monthly. |
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1.10 Currency: All references to currency
herein are to the lawful money of Canada. |
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1.11 Action on business day: Whenever
pursuant to these Procedures an action is to be taken by a specific
date and such specific date is not a business day, such action shall
be taken on the first business day following such specific date.
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ARTICLE TWO |
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DEFINITIONS |
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2.1 Definitions |
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In these Procedures, unless something in the subject matter or
context is inconsistent therewith, the following terms shall have
the respective meanings ascribed to them in this Section 2.1: |
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"Auditor" means Ernst & Young LLP, or such
other firm of chartered accountants licensed to practise as public
accountants in each of the Provinces of Canada as may be appointed
by the Consortium from time to time as Auditor for purposes of the
National Contribution Fund and these Procedures.
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"Banded NAS" means a geographic area
(including a number of non-contiguous geographic areas) within the
Incumbent Local Exchange Carriers ("ILEC") operating
territory in which the CRTC has found the costs of providing
telephone exchange service to be reasonably homogenous for the
purpose of the distribution of the Territorial Central Sub-funds
and the National Contribution Fund and which the CRTC has
designated as a Band pursuant to Telecom Decision CRTC 97-18, as
varied or amended by the CRTC from time to time.
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"Bundled services" shall have the meaning
ascribed thereto in Appendix 1.
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"Business Day" means any day of the week other
than Saturday, Sunday or other day on which banks operating in the
province where the office of the CFA administering this Agreement
shall be located from time to time are authorized by law to close.
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"Canadian Non-telecommunications Revenues"
shall have the meaning ascribed thereto in Appendix 1.
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"Canadian Telecommunications Services Revenues"
or "CTSR" shall have the meaning ascribed thereto
in Appendix 1.
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"CFA" means Progestic International Inc.,
including any replacement third-party administrator of the
National Contribution Fund appointed by the Consortium from time
to time and designated as such by the CRTC pursuant to the Telecommunications
Act (Canada).
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"CFA payment" means the amount payable to the
CFA out of the National Contribution Fund at any time for services
performed and expenses incurred by the CFA hereunder or pursuant
to the contract under which the CFA is appointed, as amended from
time to time, such amount to be determined as provided in such
contract or these Procedures.
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"Consortium" or "CPCC" means
Canadian Portable Contribution Consortium Inc., a corporation
incorporated under the provisions of the Canada Business
Corporations Act, established, inter alia, to
contract with, and oversee the administration of the National CFA
Agreement and these Procedures, by the CFA.
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"Consortium costs" means costs and expenses
incurred by the Consortium in fulfilling its mandate with respect
to the National CFA Agreement and these Procedures.
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"Contribution-Eligible Revenues" means, with
respect to each TSP, and in respect of each year, the
Contribution-Eligible Revenues of such TSP calculated in
accordance with Appendix 1.
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"CRTC" means the Canadian Radio-television and
Telecommunications Commission.
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"Decision 97-8" means Telecom Decision CRTC
97-8
dated 1 May 1997 and references in the Procedures to such decision
shall be deemed to include, as appropriate, such decision as
varied, amended, refined and/or supplemented by the CRTC in
proceedings, decision, orders or interpretations made or issued
thereafter and/or arising therefrom.
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"Decision 2000-745" means Decision CRTC
2000-745 dated 30 November 2000 and references in these
Procedures to such decision shall be deemed to include, as
appropriate, such decision as varied, amended, refined and/or
supplemented by the CRTC in proceedings, decisions, orders or
interpretations made or issued thereafter and/or arising therefrom.
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"Effective date" means 1 January 2001.
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"Eligible Recipient" means each TSP that has
been determined by the CRTC from time to time to be entitled to
receive payments from time to time out of the National
Contribution Fund.
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"Eligible Recipient Accession Agreement" means
a document by which a TSP that is an Eligible Recipient shall
become a party to the National CFA Agreement, such agreement to be
substantially in the form of Schedule "B" to the
National CFA Agreement.
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"Existing CFA Agreements" means (i) the eight
central funds administration agreements dated 31 December
1997, as amended, establishing Territorial Central Sub-funds in
the operating territories of the incumbent local exchange carriers
referred to in paragraph 2 of Decision 97-8; (ii) the Central Fund
Administration Agreement dated 1 July 1998, as amended,
establishing a Territorial Central Sub-fund in the operating
territory of TELUS Communications (Edmonton) Inc. pursuant to
Telecom Decision CRTC 98-6 dated 7 May 1998; and (iii) the
memorandum of understanding dated 1 January 2001 between the
Consortium, the CFA and each of Saskatchewan Telecommunications,
Québec-Téléphone and Télébec ltée, establishing a
Territorial Central Fund in the operating territories of each of
such companies, pursuant to paragraph 121 of Decision 2000-745.
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"Inter-carrier payments" shall have the
meaning ascribed thereto in Appendix 1.
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"Late Payment Charge" means, with respect to
any amount to which such a charge is applicable in accordance with
the provisions of these Procedures, a charge equal to one percent
(1%) per month (12.68% per annum) applied to the amount in
question commencing as from the due date of the relevant payment,
compounded monthly.
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"National Contribution Fund" or "NCF"
means the National Contribution Fund required to be created by the
CRTC pursuant to Decision 2000-745, and established by the
National CFA Agreement and these Procedures.
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"National Subsidy Requirement" or "NSR"
means, in respect of each year, that amount, as determined by the
CRTC from time to time, to be the total of the Total Subsidy
Requirements for all local exchange carrier territories in such
year.
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"Non-Canadian Revenues" shall have the meaning
ascribed thereto in Appendix 1.
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"Payment and Receipt Advice" means a notice in
writing from the CFA to each Required Contributor pursuant to
Section 5.3 of these Procedures.
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"Per-Minute Regime" means the per-minute and
per-circuit contribution regime established by the CRTC pursuant
to Decision 97-8 and in proceedings following thereafter and/or
arising therefrom and documented by the Existing CFA Agreements.
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"Required Contributor" means each TSP which
has been determined by the CRTC from time to time to be required
to contribute to the National Contribution Fund based upon such
TSP's Canadian Telecommunications Services Revenues.
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"Required Contributor Accession Agreement"
means a document by which a TSP that is a Required Contributor
shall become a party to the National CFA Agreement; such agreement
to be substantially in the form of Schedule "A" to the
National CFA Agreement.
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"Retail Internet Service" shall have the
meaning ascribed thereto in Appendix 1.
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"Retail Paging Service" shall have the meaning
ascribed thereto in Appendix 1.
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"Revenue Percentage Charge" means the
percentage charge from time to time established by the CRTC to be
applied to each Required Contributor's Canadian Telecommunications
Services Revenues less allowable deductions for purposes of
determining contribution payable by such Required Contributor to
the National Contribution Fund for purposes of the National CFA
Agreement and these Procedures.
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"Telecommunications Services Provider" or
"TSP" means a "telecommunications service
provider" as defined in the Telecommunications Act (Canada).
As outlined in Decision 2000-745 paragraph 88, Telecommunications
Service Providers, include ILECs, alternate provider of
long-distance services ("APLDS"), competitive local
exchange carriers ("CLECs"), resellers, wireless service
providers ("WSPs"), international licensees, satellite
service providers, Internet service providers (if a
telecommunications service is provided), payphone providers, data
and private line service providers.
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"Territorial Central Sub-funds" means the
central funds established pursuant to the Existing CFA Agreements.
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"Total Operating Revenues" shall have the
meaning ascribed thereto in Appendix 1.
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"Total Subsidy Requirement" or "TSR"
means, in respect of each year and each local exchange carrier
providing local exchange service in high-cost bands, the total of
the subsidy requirements of such local exchange carrier for such
year, determined in accordance with rules and Procedures of the
CRTC from time to time in effect.
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"TSP User Manual" means a document issued by the
CFA that describes the procedures for reporting and the
functionality of the Internet Website used to report revenue based
contribution information to the CFA.
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ARTICLE THREE |
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REPORTING AND VERIFICATION OF CANADIAN
TELECOMMUNICATIONS SERVICES REVENUES |
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3.1 Each TSP is required to file with the
CRTC on or before 31 March of each year (30 April 2001
with respect to year 2000 revenues) a calculation of Canadian
Telecommunications Services Revenues and further, the calculation of
the Contribution-Eligible Revenues based on the financial data of
the fiscal year ending in the immediate prior calendar year. The
format and definition of the report is included in Appendix 1 of
these Procedures along with detailed instructions for completion.
Each TSP reporting must complete an individual report and file a
separate report with supporting information for each related company
(as defined in the CICA Handbook Section 3840) that is also a TSP.
The CRTC can request assistance from Industry Groups, the CFA and
CPCC to identify all TSPs who fit the requirement for reporting. |
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3.2 Each filing by a TSP with the CRTC
pursuant to Section 3.1 shall be accompanied by: |
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· a compliance statement to ensure the integrity of the
information filed. A TSP with audited financial statements is
required to have their external auditors attest to the accuracy of
the information filed. A TSP that does not have audited financial
statements can have an external auditor attest to the accuracy of
the information or the TSP can provide an affidavit, signed by an
officer of the company, attesting to the accuracy of the
information filed;
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· a copy of the TSP audited financial statements for the
immediate prior calendar year. For a TSP that does not have
audited financial statements, a copy of the financial statements
accompanied with an affidavit, signed by an officer of the
company, attesting to the accuracy of the financial statements
will be accepted; and
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· a detailed list of Inter-carrier payments and
Non-Contribution-Eligible Revenues.
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3.3 In addition to the financial data,
the local exchange carriers with network access services
("NAS") are to report estimated eligible NAS by band,
based on the actual NAS per band from December of the prior year. |
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3.4 Following review by the CRTC of
information provided pursuant to Sections 3.1, 3.2 and 3.3 by a TSP,
the CRTC shall, pursuant to Decision 2000-745, determine if a TSP is
a Required Contributor for the current calendar year for purposes of
the National CFA Agreement and these Procedures. In the event that
the CRTC determines that the TSP is a Required Contributor, the CRTC
will notify such TSP and the CFA that such TSP is a Required
Contributor for the year. |
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3.5 To the extent that a TSP becomes a
Required Contributor and has not previously executed and delivered
to the CFA a Required Contributor Accession Agreement, whereby such
Required Contributor shall become a party to the National CFA
Agreement, such Required Contributor shall execute and deliver to
the CFA such Required Contributor Accession Agreement within thirty
(30) days of such determination by the CRTC. |
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3.6 The CRTC will for 2001, pursuant to
Decision 2000-745, calculate the Revenue Percentage Charge
applicable to the current year based on the information provided in
Sections 3.1 and 3.3. The CRTC will advise the CFA and each TSP
identified as a Required Contributor of the Revenue Percentage
Charge as well as any subsequent revisions to the Revenue Percentage
Charge. In addition, the CRTC will provide to the CFA an estimate of
the contribution payable from each Required Contributor. |
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3.7 The CFA will implement the new
Revenue Percentage Charge in the next month following the
determination by the CRTC. The CFA will provide to each Required
Contributor contributing to the National Contribution Fund a
calculation of the adjustment to the amount paid by such Required
Contributor for the period from the beginning of the year to the
month immediately prior to the implementation of the new Revenue
Percentage Charge for the year. The adjustment calculations will be
completed by the CFA within sixty (60) days of the issuance by the
CRTC of the new Revenue Percentage Charge and issued to the Required
Contributors. The resulting contribution adjustment will be prorated
over the remaining months of the year. |
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3.8 Subsequent changes to the Revenue
Percentage Charge may be required due to either an under-funding or
over-funding of the National Contribution Fund. Pursuant to Decision
2000-745, these changes are to be corrected in the subsequent year's
calculation for the Revenue Percentage Charge. The CFA will report
to the CRTC, on a quarterly basis, the status of the National
Contribution Fund. If deemed necessary, the CRTC will provide
direction to the CFA in regard to the modification of the Revenue
Percentage Charge. All modifications to the Revenue Percentage
Charge, pursuant to this Section, will be processed as an adjustment
to the rate going forward and no retroactive changes will be made.
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ARTICLE FOUR
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REPORTING OBLIGATIONS OF REQUIRED CONTRIBUTORS |
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4.1 Reporting of Contribution-Eligible
Revenues and eligible NAS by Band is to be completed on a monthly
basis by all TSPs who have been identified as a Required Contributor
based on the schedule in Section 4.4. The reporting will be
completed through the CFA in accordance with the TSP User Manual.
Appendix 1 includes a sample of the reporting format with the
appropriate definitions and guidelines for completion as approved by
the CRTC for each section of the Report. |
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4.2 The monthly reporting shall be
submitted by each Required Contributor based on a consolidated basis
and/or reporting by each related company that is a TSP. Each
Required Contributor that reports on a consolidated basis must
advise the CRTC and the CFA of the reporting structure and shall
also provide the CFA supporting reports for each related company (as
defined in the CICA Handbook, Section 3840) that is also a TSP.
If the monthly reporting for the related companies is unduly
onerous, the TSP may file a request with the CRTC to reduce the
reporting requirements. |
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4.3 Each TSP shall provide to the CFA the
current contact information including the contact name, the
telephone number, fax number and email address for the responsible
person for the monthly reporting of contribution and will provide an
alternate contact who can act as a replacement. |
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4.4 Required Contributors will report to
the National Contribution Fund based on a reporting schedule to be
issued by the CFA before the 10th Business Day of January
of each year. The schedule will follow the pattern of: |
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Contributors reporting based on Section 4.1 |
28th day of the following month |
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Contribution payments from non-recipients |
+ 8 business days |
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CFA calculation on payments to recipients |
+ 4 business days |
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Net contribution payments from recipients |
+ 3 business days |
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Final distribution of funds to recipients |
+ 4 business days |
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For greater clarity, see the TSP User
Manual for a sample of the schedule that will be issued by the CFA
annually. |
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4.5 If an adjustment for a previous
reporting period in the current year is deemed necessary by a
Required Contributor, the Required Contributor will report the
adjustment on a separate monthly reporting form documented and
provided in Appendix 3 of the TSP User Manual. The CFA will
aggregate the adjustment with the current reporting period for
inclusion in the National Contribution Fund. No Late Payment Charges
or penalties will be assessed with the reporting of adjustments that
are either completed within six (6) months of the period being
adjusted or have an impact on the National Contribution Fund for the
month impacted of less than one percent (1%). In the event that the
adjustment is completed in a subsequent year, the payment will be
calculated at the rate that was in effect in the month that the
payment was due. Late Payment Charges are applied to any amounts in
default commencing as of the relevant due date and compounded
monthly. |
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4.6 All Eligible Recipients that operate
as local exchange carriers ("LEC") will report by telco
territory (being the operating territories referred to in the
Existing CFA Agreements), the number of eligible NAS by telco band
using the NAS reporting form and in accordance with the instructions
from the TSP User Manual. The TSP must provide to the CFA the LEC
approval to operate within each telco territory issued by the CRTC
before the CFA will process claims on the National Contribution
Fund. The NAS reporting will be completed according to the same
schedule as the monthly reporting of Contribution-Eligible Revenues
as specified in Section 4.4. |
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4.7 Payments to the National Contribution
Fund based on information received from the CFA will be transferred
to the CFA in accordance with the process in the TSP User Manual. |
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4.8 Security for payment obligations |
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(a) Recognizing that timely payment by Required Contributors to
the CFA of amounts payable by Required Contributors to the CFA
hereunder is essential to the orderly operation of the National
Contribution Fund, in the event a Required Contributor fails to
make payment to the CFA of the amount so required to be paid by
it, in full and on the relevant due date or within two (2)
business days thereafter (in this Section 4.8 called a
"Defaulting Contributor"), the CFA shall make all
reasonable efforts to advise such Defaulting Contributor of (i)
the fact that such Defaulting Contributor has failed to make
payment of an amount due to the CFA hereunder, and (ii) the amount
of the required payment. If, within five (5) business days of the
CFA having given the notice referred to in the immediately
preceding sentence to a Defaulting Contributor, such Defaulting
Contributor shall have failed to remit such amount to the CFA
(together with any applicable Late Payment Charges), such
Defaulting Contributor shall provide to the CFA, within the next
ten (10) business days, security for such Defaulting Contributor's
payment obligations to the CFA hereunder in accordance with these
Procedures. Security provided by a Defaulting Contributor pursuant
to this Section 4.8(a) shall remain in effect until such
Defaulting Contributor shall have paid, in full and on the
relevant due dates or within two (2) business days thereafter, all
amounts required to be paid by such Defaulting Contributor to the
CFA hereunder in respect of twelve (12) consecutive payment
periods following such failure to pay. In the event security
provided by a Defaulting Contributor to the CFA pursuant to this
Section 4.8(a) shall thereafter have been released and such
Defaulting Contributor shall again default in making due and
punctual payment of amounts due to the CFA hereunder, the
provisions of this Section 4.8(a) shall again be applicable in
respect of any subsequent failure on the part of such Defaulting
Contributor to make full and timely payment of amounts payable by
such Defaulting Contributor to the CFA hereunder.
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(b) Security required of a Defaulting Contributor hereunder
shall consist of readily realizable security, such as a deposit of
cash or marketable securities, an irrevocable letter of credit or
letter of guarantee issued by a Canadian chartered bank, an
irrevocable performance bond issued by a Canadian issuer of
performance bonds, or such other form of readily realizable
security as may be satisfactory to the CFA, acting reasonably (a
"Credit"). The Credit shall be in form and substance
satisfactory to the CFA and shall name the CFA, for and on behalf
of the National Contribution Fund, as beneficiary. The Credit
provided by a Defaulting Contributor hereunder shall be in a
principal amount equal to the sum of the net amounts to become
payable by such Required Contributor to the CFA in accordance with
these Procedures in respect of the most recent three (3) payment
periods preceding the due date of the payment that gave rise to
the obligation of such Defaulting Contributor to provide security
hereunder (or three times the net amount payable by such
Defaulting Contributor in respect of the payment period preceding
the due date of the payment that gave rise to the obligation of
such Defaulting Contributor to provide security hereunder in the
case of a Defaulting Contributor, which shall not have been at
such time a Required Contributor hereunder for at least three
payment periods, as the case may be), as determined in good faith
by the CFA. Partial drawings under any such Credit shall be
permitted. Such Credit shall entitle the CFA, for and on behalf of
the National Contribution Fund, to draw against the Credit, or to
demand payment by the issuer of the Credit, as the case may be,
for any amount payable by such Defaulting Contributor to the CFA
pursuant to these Procedures, up to the undrawn principal amount
of the Credit. The CFA shall be entitled to draw upon the Credit,
in the case of a Credit issued by a third party, upon provision of
a written statement of the CFA, addressed to the issuer of the
Credit, as to non-payment of the corresponding amounts pursuant to
the provisions of these Procedures by the Defaulting Contributor
on whose behalf the Credit was issued, without any requirement
that the CFA pursue or exhaust any remedies or recourses it may
have against such Defaulting Contributor before being entitled to
require payment under such Credit. Despite the foregoing, the CFA
may not call for payment under any such Credit until the relevant
amount, if in respect of contribution payable by such Defaulting
Contributor to the CFA hereunder, has been overdue for not less
than two (2) business days following the relevant due date.
Promptly following the making of any such drawing or demand for
payment under any such Credit, the CFA shall advise the Defaulting
Contributor and the CRTC of the making of such drawing or demand
for payment. Each Defaulting Contributor from whom a Credit is
required pursuant to the provisions of these Procedures shall
cause the Credit, or a replacement thereof satisfactory in form
and in substance to the CFA, acting reasonably, to be maintained
in force for so long as required by this Section 4.8.
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(c) A Defaulting Contributor required to provide a Credit
hereunder shall arrange for an increase in the undrawn principal
amount of the Credit provided by it or issued on its behalf
hereunder in the event that the undrawn principal amount payable
under any such Credit shall, at any time, be less than eighty-five
percent (85%) of the sum of the net amounts payable by such
Defaulting Contributor to the CFA in respect of the then most
recent three (3) payment periods pursuant to these Procedures, as
notified to such Defaulting Contributor by the CFA. Any such
increase shall be for an amount sufficient to ensure that the
undrawn principal amount of the Credit respecting such Defaulting
Contributor's obligations hereunder shall not be less than the sum
of the net amounts payable by such Defaulting Contributor to the
CFA in respect of the then most recent three (3) payment periods.
Each Defaulting Contributor shall cause the undrawn principal
amount of any Credit provided by it or issued on its behalf
hereunder to be so increased, or to otherwise post readily
realizable security for performance of its obligations hereunder
in form and substance satisfactory to the CFA, acting reasonably,
within ten (10) business days of the undrawn principal amount of
such Credit ceasing to be equal to at least eighty-five percent
(85%) of the sum of the net amounts payable by such Defaulting
Contributor to the CFA in respect of the then most recent three
(3) payment periods pursuant to these Procedures. For the
avoidance of doubt, in the event the CFA shall make a drawing or a
demand for payment under a Credit in accordance with the
provisions of these Procedures and, following the drawing or the
payment by the financial institution or other party which issued
such Credit, the then remaining undrawn balance of such Credit
shall be less than the sum of the net amounts payable by the
Defaulting Contributor on whose behalf the Credit has been issued
to the CFA in respect of the then most recent three (3) payment
periods, such Defaulting Contributor shall cause the undrawn
principal amount of such Credit to be increased in accordance with
this Section 4.8.
|
|
(d) In the event that the undrawn principal amount payable
under any Credit issued on account of a Defaulting Contributor at
any time shall be greater than the sum of the net amounts payable
by such Defaulting Contributor to the CFA in respect of the then
most recent three (3) payment periods pursuant to these
Procedures, as notified to such Defaulting Contributor by the CFA
in accordance with these Procedures, the Defaulting Contributor on
whose behalf such Credit has been issued shall be entitled to
request the CFA to consent, and the CFA shall consent, to the
reduction in the undrawn principal amount payable under such
Credit, such that the undrawn principal amount of the Credit
respecting such Defaulting Contributor's obligations hereunder
shall be not more than the sum of the net amounts payable by such
Defaulting Contributor to the CFA in respect of the then most
recent three (3) payment periods.
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ARTICLE FIVE
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RESPONSIBLITIES OF THE CFA
|
|
5.1 The CFA is responsible for the
operation of the National Contribution Fund under the administration
of the CPCC. In particular the CFA: |
|
· receives all contribution reporting and payments to the
National Contribution Fund;
|
|
· calculates and manages all the disbursements from the
National Contribution Fund;
|
|
· is responsible for all banking functions related to the
National Contribution Fund; and
|
|
· is responsible for maintaining the TSP User Manual and for
ensuring all updates to the guide are distributed to all TSPs that
either contribute or receive funds from the National Contribution
Fund.
|
|
5.2 In accordance with Sections 4.1, 4.2
and 4.4, the CFA is responsible to maintain accurate records of all
Required Contributors in any particular year, and ensure that
monthly reporting and payment to the National Contribution Fund is
completed by each Required Contributor. The CFA will provide monthly
a report to the CRTC and the CPCC in regard to Required Contributors
not reporting monthly as required in Section 4.1. Upon the
occurrence of a Required Contributor not reporting monthly, the CFA
will proceed, with the direction of the CPCC, in accordance with
Section 11.01 of the National CFA Agreement. This process will not
affect, however, the obligation of such delinquent Required
Contributor to provide security to the CFA, in accordance with the
provisions of Section 4.8 or the right of the CFA to realize upon
security so provided. |
|
5.3 Upon receiving the monthly
contribution reports in accordance with Section 3.1 from the
Required Contributors, the CFA will provide a Payment and Receipt
Advice to each such Required Contributors identifying the amount
required for payment to the National Contribution Fund and the
expected payment date. The payment will be transferred to the CFA
based on the procedures set forth in the TSP User Manual in
accordance with the schedule specified in Section 4.4. |
|
5.4 The CFA is authorized to deduct from
the National Contribution Fund the CFA Payment as and when the CFA
Payment is payable to the CFA. The CFA will also, from time to time,
pay the Consortium Costs to the Consortium from the National
Contribution Fund upon receipt by the CFA of certificate from an
officer of the Consortium stating the amount and nature of the
Consortium Costs in respect of the period specified in such
certificate. |
|
5.5 For the year 2001, the funds
remaining in the National Contribution Fund will be distributed to
Territorial Central Sub-funds based on percentages established by
the CRTC. |
|
5.6 For 2001, before distribution to the
local exchange carriers in each territory, the CFA will distribute
to Northwestel the monthly amounts as prescribed in Decision
2000-746 from the Territorial Central Sub-funds. The Territorial
Central Sub-funds for SaskTel, Télébec and Québec-Téléphone
will be excluded from the distribution for Northwestel. The monthly
deductions are listed below: |
|
|
2001
($M)
|
Monthly
($)
|
|
Newfoundland |
0.572
|
47,634 |
|
Nova Scotia |
1.023
|
85,263 |
|
Prince Edward Island |
0.140
|
11,647 |
|
New Brunswick |
0.548
|
45,692 |
|
Ontario/Quebec |
4.420
|
368,376 |
|
Manitoba |
0.618
|
51,516 |
|
Alberta |
3.652
|
304,317 |
|
British Columbia
|
4.127
|
343,888 |
|
Total |
15.100
|
1,258,333 |
|
5.7 For 2001, the remaining funds in each
of the Territorial Central Sub-funds will then be apportioned by
average NAS and by band and distributed to the local exchange
carriers eligible for subsidy, using the formula prescribed by the
CRTC in Decision 97-8 and subsequent procedures. With regard to the
SaskTel, Télébec and Québec-Téléphone Territorial Central
Sub-funds, the entire amount remaining will be paid respectively to
SaskTel, Télébec and Québec-Téléphone.
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5.8 As set out in the schedule in Section
4.4, the CFA will report to the Eligible Recipients from each of the
Territorial Central Sub-funds the amount of their net payment to or
from the fund. The Eligible Recipients who are net payers to the
fund as Required Contributors will transmit to the National
Contribution Fund the net payment amount as reported by the CFA
three (3) days after receiving the CFA report (CFA 2) based on the
payment procedures set forth in the TSP User Manual. |
|
5.9 On or before the prescribed date in
Section 4.4, the CFA will distribute the remaining funds in the
National Contribution Fund to the Eligible Recipients in accordance
with the payment procedures set forth in the TSP User Manual. In the
event that all funds have not been received from the Required
Contributors, the CFA will rerun the process to include only the
funds that have been received. Required Contributors that have not
provided the contributions as required on the date specified will be
assessed Late Payment Charges and a rerun penalty of $2,000 to be
applied against the Required Contributors not so providing. No
payments to an Eligible Recipient will be processed until such time
as all previous amounts outstanding and all Late Payment Charges and
penalties assessed have been cleared. As with other contributors,
the process described in Section 5.2 will be followed to identify
deficient Required Contributors to the CRTC and the CPCC. |
|
5.10 Late payments to the NCF will be
subject to Late Payment Charges applied to any amounts in default
commencing on the relevant due date and compounded monthly. Late
payment charges received by the CFA will be processed through the
NCF in the month that the charges are received. |
|
5.11 The CFA will hold all information
received by it, pursuant to these Procedures, in confidence, in
accordance with the provisions of Section 10.06 of the National CFA
Agreement. Notwithstanding this, the CFA will report on a total
basis for the entire National Contribution Fund: |
|
· the total of the revenues and deductions from revenues
prescribed by the CRTC on the Reporting Form For The Calculation
Of The Contribution-Eligible Revenues;
|
|
· total contribution into the NCF;
|
|
· expenses of the NCF (includes CFA service fee,
administrative expenses, audits, contracts, and CPCC expenses);
|
|
· total disbursements to Northwestel; and
|
|
· total disbursements of contribution from the NCF and to the
Eligible Recipients that participate in the NCF.
|
|
The CFA may also report to the CRTC, in confidence, any
information requested by the CRTC.
|
|
5.12 Notwithstanding Section 5.11 above,
the CFA, on its own initiative, may report information to the CRTC
in confidence: |
|
· to report any apparent discrepancy in the information
reported to it; and
|
|
· to report any situation where information has not been
reported that might reasonably be expected to have been reported.
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5.13 The CFA will, on its own initiative,
request from the CPCC clarification of issues related to the overall
operation of the NCF and including: |
|
· for the purpose of clarifying the correct operation of the
NCF; and
|
|
· to report any apparent discrepancy in the operation of the
NCF.
|
|
5.14 For 2002, in accordance with
Decision 2000-745, paragraph 119, payments out of the National
Contribution Fund to Eligible Recipients by the CFA will be governed
by the new banding structure and subsidy requirements methodology
for high-cost serving areas established by the CRTC in Restructured
bands, revised loop rates and related issues, Decision CRTC 2001-238, dated 27 April 2001. |
|
ARTICLE SIX
|
|
ADJUSTMENTS TO THE FUND OR
REVENUE PERCENTAGE CHARGE
|
|
6.1 For 2001, the transition occurs
between the Per-Minute Regime and Revenue Percentage Charge process
as described above. This transition, due to the timing of Decision 2000-745, requires an adjustment of payments made for the period
1 January 2001 to 31 March 2001, which are being completed
based on the Per-Minute Regime. In addition, there is a requirement
for an orderly closure of the Per-Minute Regime in terms of
processing information for the year 2000 and the final audit of all
information required by the Existing CFA Agreements. The following
processes were developed and agreed upon as consensus items through
the contribution collection mechanism ("CCM") subgroups. |
|
6.2 Adjustment: For the traffic period 1
January 2001 to 31 March 2001, payments by TSPs to the National
Contribution Fund are based on the Per-Minute Regime, however the
Revenue-Based Contribution Regime is effective on 1 January
2001. This requires a calculation of the adjustment between the two
contribution processes to ensure all Required Contributors
effectively make the appropriate payment to the National
Contribution Fund based on the Revenue-Based Contribution Regime.
The adjustment process developed is described below and the
appropriate reporting form is contained in Appendix 4 of this
document. |
|
6.3 Reconciliation data : |
|
· LEC responsibility: LECs that have invoiced, collected and
reported contribution from IXCs, resellers, rebillers, or wireless
companies or any other TSP for traffic during the period of
1 January 2001 to 31 March 2001 will complete a
reconciliation with each of the TSPs to determine the amount of
contribution which has been invoiced and collected.
|
|
· TSPs responsibility: In order to complete an orderly and
timely reconciliation the TSPs that have received invoices for
contribution from a LEC for the traffic period of 1 January
2001 and 31 March 2001 are responsible to assist the LECs in
completing the reconciliation.
|
|
· Jointly, the LECs and TSPs will file with the CFA a
reconciliation report as to the amount of contribution invoiced by
the LEC and amount of contribution paid by the TSP for each
calendar month for the traffic period 1 January 2001 through
31 March 2001 using form CFA 1 (see Appendix 4). Both the
relevant LEC and the relevant TSP are required to sign the
reconciliation report before filing with the CFA. Contribution
amounts for the 1 January 2001 through 31 March 2001 traffic
period that are received by the LEC after 31 May 2001 will,
provided that the TSP has complied with the revenue reporting
requirements, be returned by the LEC to the TSP consistent with,
to the degree possible, the schedule by which the CFA will be
issuing adjustments (see below). Such amounts will not be included
in the amounts reported in form CFA 1. The LEC will ascertain the
TSP's compliance with the revenue reporting requirements through a
request to the CFA.
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· To assist in the reconciliation, the LECs will assemble, for
each TSP, per-transaction information (i.e., per invoice and per
receipt) relating to contribution invoiced for the traffic period
1 January 2001 to 31 March 2001 and the amounts received, as well
as any other information (e.g. exemptions, credits, billing
adjustments, etc.) that would be used to determine the reconciled
amounts. TSPs are encouraged to assemble similar information to
assist in the reconciliation.
|
|
6.3.1 Revenue Percentage Charge
Calculations: For the period 1 January 2001 to 31 March
2001, all TSPs designated as Required Contributors to the National
Contribution Fund under the new Revenue-Based Contribution Regime
will complete and submit to the CFA the Revenue Reporting form for
the period 1 January 2001 through 31 March 2001. This form will
be completed in accordance with these Procedures as stated in
Articles 4 and 5 above. |
|
6.3.2 CFA responsibility: The CFA will
obtain all the CFA 1 reporting forms identified in Section 6.3 and
the revenue reporting forms identified in Section 6.3.1 from all
TSPs and produce a reconciliation of the amount each TSP either owes
the NCF or is owed from the NCF. This information will be reviewed
and audited by the Auditor for completeness and accuracy: |
|
· Once completed, the CFA will report to each TSP the net
amount that is either owed by the TSP to the NCF, or the amount
that the NCF owes the TSP for the period 1 January 2001
through 31 March 2001. The TSP will have twenty (20) business
days to dispute the amount reported by the CFA; any such dispute
to be communicated in writing to the CFA within such period; and
|
|
· Once all disputes are resolved, the CFA will prorate the
amount of payments to and from the NCF until the end of the year
as per the clarification from the CRTC as of 2 March 2001.
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|
6.3.3 Schedule of events: The following
schedule of events has been established: |
|
· 30 June 2001 - LECs and TSPs to file with the CFA
jointly prepared statements of contribution payments made by each
TSP during the period 1 January 2001 through 31 March 2001
- Section 6.3 above. If a reconciliation between a LEC and a TSP
has not been accomplished by this date, once reconciled, and
provided that the TSP has complied with the revenue reporting
requirements, contribution amounts will be returned by the LEC to
the TSP consistent with, to the degree possible, the schedule by
which the CFA will be issuing adjustments (see below). Such
amounts will not be included in the amounts reported in form CFA
1. The LEC will ascertain the TSP's compliance with the revenue
reporting requirements through a request to the CFA;
|
|
· 30 June 2001 - TSPs identified as Required Contributors
and Eligible Recipients, as per the Revenue Percentage Charge
procedures, will submit the revenue and Network Access Service
counts reporting forms for the months of January, February and
March, 2001 to the CFA - Section 6.3.1 above;
|
|
· 31 July 2001 - CFA to complete the calculation
of the adjustments required for each TSP and have the Auditor
review the results. CFA to issue to all TSPs an adjustment
statement detailing the amounts owed or to be received;
|
|
· 28 August 2001 - All disputes of CFA information from
the TSPs to be identified;
|
|
· 11 September 2001 - Finalize all adjustments with
completion of disputes and issue statements to each TSP;
|
|
· 15 September 2001 - 1st adjustment
payments to the NCF due from TSPs; and
|
|
· 18 September 2001 - 1st adjustment payment
from the NCF to the TSPs.
|
|
Adjustment payments to and from the National Contribution Fund
will follow the same schedule for October, November and December
2001.
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ARTICLE SEVEN
|
|
COMPLIANCE STATEMENTS and AUDIT REQUIREMENTS
|
|
7.1 Compliance statements and audit
requirements set forth in this Article have been developed through
the consensus report process referred to in Section 1.3. There are
two potential obligations for a TSP under the Revenue-Based
Contribution Regime. Although both will require either a compliance
statement or audit requirement, there are distinct rules for each. |
|
a) Obligation 1 with the CRTC for the annual filing-
|
|
TSPs with audited financial statements are to submit audit
reports to the CRTC, with the annual filing, on or before March
31. TSPs that do not have audited financial statements are
required to provide an affidavit, signed by an officer of the
company, attesting to the accuracy of the information (including
NAS information). The details for this filing requirement are
found in Section 7.2;
|
|
b) Obligation 2 with the Auditor (i.e., auditor of the National
Contribution Fund) for the audit of the National Contribution
Fund-
|
|
i) Required Contributors with $10 million or more of annual
Contribution-Eligible Revenues are to submit audit reports to
the Auditor in accordance with the National CFA Agreement.
Required Contributors with less than $10 million of
Contribution-Eligible Revenues may provide an affidavit, signed
by an officer of the company, attesting to the accuracy of the
information.
|
|
ii) Eligible Recipients are to submit to the Auditor an
auditor's opinion or affidavit on NAS reports.
|
|
The details for the filing requirement with the Auditor are
found in Section 7.3.
|
|
Audit reports will be prepared in accordance with Generally
Accepted Auditing Standards as defined by the Canadian Institute
of Chartered Accountants by an external auditor and based on
either Section 5805 or 9100 of the Handbook of the Canadian
Institute of Chartered Accountants. Where a reporting TSP is
incorporated in a country other than Canada, the audit should be
conducted in accordance with the applicable auditing standards of
that country.
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7.2 In paragraph 104 of Decision 2000-745, the CRTC has directed that each TSP file an audit report,
by its external auditors, with its annual filing on or before
31 March (30 April 2001 with respect to year 2000
revenues), for the fiscal year ending in the immediate prior
calendar year. TSPs that do not have audited financial statements
must provide an affidavit signed by an officer of the company
attesting to the accuracy of the information, in lieu of providing
an audit report. The audit report or affidavit is required by the
CRTC to ensure the integrity of the contribution amounts reported
and the use of such information to determine which companies will be
required to pay contribution and calculate the annual Revenue
Percentage Charge for each year. The following rules apply with
regard to the audit report or affidavit for the CRTC. |
|
7.2.1 This audit report, or affidavit, is
to be on a non-consolidated basis, but a related group of TSPs may
file on a consolidated basis. If the audit report is on a
consolidated basis, it must be accompanied by an individual report
for each TSP subject to the contribution regime established by the
CRTC in Decision 2000-745. |
|
7.2.2 Each TSP will file a report on or
before 31 March (30 April 2001 with respect to year 2000
revenues) showing the total Contribution-Eligible Revenue for its
fiscal year ending in the immediate prior calendar year, in the
format that is contained in these procedures or changed by the CRTC
from time-to-time. |
|
7.2.3 Each TSP claiming a subsidy for
eligible NAS will file a report on or before 31 March showing
the total eligible NAS by band for each month of the fiscal year
ending in the immediate prior calendar year, in the same format as
that used for the filing of this information on a monthly basis. |
|
7.2.4 The auditor will give his opinion
on whether the annual report of Contribution-Eligible Revenues and,
where applicable, NAS by band are presented fairly in accordance
with the definitions approved by the CRTC for the preparation of
these reports. |
|
7.2.5 As indicated in Decision 2000-745,
TSPs that are permitted to file an affidavit instead of an audit
report will file an affidavit signed by an officer of the company
attesting to the fact that the information filed has been presented
fairly in accordance with the definitions approved by the CRTC for
the preparation of these reports. |
|
7.2.6 A copy of the audit report, or
affidavit, will be filed with the CRTC each year on or before 31
March (30 April with respect to year 2000 revenues). |
|
7.2.7 A sample of the audit report is
contained in Appendix 2 - Sample 1 of these Procedures. A sample
of the form of affidavit is contained in Appendix 3 of these
Procedures. |
|
7.3 In accordance with the National CFA
Agreement, Required Contributors, TSPs with $10 million or more of
annual Contribution-Eligible Revenues, are required to file an audit
report with the Auditor attesting to the accuracy of the monthly
contribution reports submitted to the CFA during the immediate prior
calendar year. In addition, Eligible Recipients are required to file
an opinion from an external auditor attesting that the NAS reported
to the CFA are presented in accordance with the definitions approved
by the CRTC for the preparation of these reports. Required
Contributors that are non-related individual TSPs with less than
$10 million of annual Contribution-Eligible Revenues may
provide an affidavit signed by an officer of the company attesting
to the accuracy of the information, in lieu of providing an audit
report. The audit report or affidavit
is required by the Auditor to perform its annual audit on the
National Contribution Fund. The following rules apply to the audit
report or affidavit for the Auditor. |
|
7.3.1 This audit report, or affidavit,
must be on a non-consolidated basis by each Required Contributor and
Eligible Recipient. |
|
7.3.2 Each Required Contributor shall
file a report on or before the approved date showing the total
Contribution-Eligible Revenues for the immediate prior calendar
year, in the same format as that used for the filing of this
information on a monthly basis. |
|
7.3.3 Each Eligible Recipient shall file
a report on or before the approved date showing the total eligible
NAS by band for each month of the immediate prior calendar year, in
the same format as that used for the filing of this information on a
monthly basis. |
|
7.3.4 TSPs that are permitted to file an
affidavit instead of an audit report will file an affidavit signed
by an officer of the company attesting to the fact that the
information filed has been presented fairly in accordance with the
definitions approved by the CRTC for the preparation of these
reports. |
|
7.3.5 A copy of the audit report and
opinion on NAS reports or affidavit will be filed with the Auditor
and with the CRTC on or before the approved date. |
|
7.3.6 The approved date for the filing of
the audit report or affidavit has been set at 90 days after the
final reporting period for the year being reviewed. |
|
7.3.7 A sample of the audit report has
been included in Appendix 2 - Sample 2 of these Procedures. A
sample of the form of affidavit is contained in Appendix 3 of these
Procedures.
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ARTICLE EIGHT
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CLOSURE OF THE PER-MINUTE REGIME TO
REVENUE-BASED REGIME RELATED TO 2001 |
|
8.1 Version 3 Processing: The completion
of all processing of 2000 data under the Per-Minute Regime will be
completed by 28 June 2001 with final payouts by
15 July 2001. |
|
8.2 Audits: Audits required by the
Existing CFA Agreement will be completed for: |
|
· 5805 Audits: Would be required by all LECs as per the
Existing CFA Agreements. The 5805 would be delayed to incorporate
the Version 3 processing date and would be submitted by the
LECs 90 days after the final Version 3 submissions or by
27 October 2001, whichever date is earlier; and
|
|
· 5900 Audits: Would only be completed by all ILECs or
significant CLECs reporting to the fund. As identified by the CFA,
this would impact 3 companies, i.e. 2 ILECs and 1 CLEC that
would be required to submit the 5900 Audits. The CFA will
contact and inform the applicable LECs of the requirement for the
audit.
|
|
Appendix 1 |
|
CRTC REVENUE-BASED CONTRIBUTION REGIME -
REPORTING FORM |
|
Table of contents
|
|
|
-1- Introduction |
|
|
-2- Annual filing requirements |
|
|
-3- Related companies |
|
|
-4- Compliance statement |
|
|
-5- Monthly filing requirements |
|
|
-6- Completing the forms |
|
|
-7- Reporting form |
|
|
-8- Inter-carrier payments form |
|
|
-9- Non-contribution-eligible revenues
reporting form |
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-1- Introduction |
|
On 30 November 2000, the Commission issued Decision CRTC 2000-745
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 Decision 2000-745,
Orders CRTC 2001-220, 2001-221 and
2001-288 for further
clarification.
|
|
-2- Annual filing requirements
|
|
Paragraph 103 of Decision 2000-745 requires that all TSPs 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 with 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%.
|
|
-3- Related companies (Note 1)
|
|
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 Section 3840 of the Handbook of the Canadian
Institute of Chartered Accountants.
|
|
-4- Compliance statement
|
|
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.
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-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 CRTC 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 remitted on a monthly basis
to the CFA. The CFA will monitor the compliance with the monthly
reporting requirements of the TSPs.
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-6- Completing the forms
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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.
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Area A: Company identification
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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.
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Area B: Contact information
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Enter the name of the person completing the form. This should be
the person whom the Commission would be able to contact with any
questions. Please provide the contact numbers and email address.
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Area C: Reporting year information for annual filings (Note 2)
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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.
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Area D: Calculation of Contribution-Eligible Revenues
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The revenue information required in this section is based upon
Decision 2000-745 and further clarifications provided in Orders
2001-220 and 2001-221, both dated 15 March 2001.
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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.
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Note 4: Inter-carrier payments are defined in Order 2001-220.
The total allowable inter-carrier payments should be reported in
Line 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.
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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 Revenues and Non-Contribution-Eligible
Revenues, the bundling rules apply as per Orders 2001-220 and
2001-221. 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:
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(i) Contribution-eligible
and Non-Contribution-Eligible Revenues in a bundle |
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(a) 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.
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(b) 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.
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(ii) 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. |
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(iii)
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. |
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All deductions for Non-Contribution-Eligible Revenues must be
itemized by type of service and associated revenues (see
NON-CONTRIBUTION-ELIGIBLE REVENUES FORM attached).
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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.
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CRTC REVENUE-BASED CONTRIBUTION REGIME -
REPORTING FORM FOR THE CALCULATION OF
THE CONTRIBUTION-ELIGIBLE REVENUES |
Area A: Company identification |
A.1 |
Legal name of entity |
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A.2 |
Name under which the telecommunications service provider (TSP)
carries on business |
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A.3 |
List of related TSPs (provide separate list if required) (Note
1) |
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Area B: Contact information |
B.1 |
Person who completed this form |
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B.2 |
Title of position |
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B.3 |
Telephone number |
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B.4 |
Fax number |
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B.5 |
Email address |
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Area C: Reporting year information - Attach copy of relevant
financial statements |
C.1 |
Reporting year (Note 2) |
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C.2 |
Fiscal year end |
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Area D: Calculation of Contribution-Eligible Revenues (Note 3) |
D.1.A |
Total Operating Revenues reported in financial statements |
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D.1.B |
Add deductions from revenues |
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D.1 |
Total Operating Revenues for contribution purposes |
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LESS |
D.2 |
Non-Canadian Revenues |
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D.3 |
Canadian Non-telecommunications Revenues
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D.4 |
Canadian Telecommunications Services Revenues
(D.1-D.2-D.3) |
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LESS |
D.5 |
Contributions payments received |
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D.6 |
Inter-carrier payments (Note 4) |
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D.7 |
Retail Internet Service Revenues |
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D.8 |
Retail Paging Service Revenues |
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D.9 |
Terminal Equipment Revenues |
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D.10 |
Non-Contribution-Eligible Revenues eliminated from those bundles
to which both contribution-eligible and non-eligible revenue are
attributed (Note 5) |
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D.11 |
Subtotal D.5+D.6+D.7+D.8+D.9+D.10 |
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ADD |
D.12 |
Contribution-Eligible Revenues on package discounts (Note 6) |
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D.13 |
Contribution-Eligible Revenues D.4-D.11+D.12 |
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CRTC REVENUE-BASED CONTRIBUTION REGIME - ANNUAL
REPORTING |
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INTER-CARRIER PAYMENTS FORM
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Provide the following details of the inter-carrier payment
deduction claimed on Line D.6 of the Annual Reporting Form. Add
additional forms as required. |
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Note: Not required to be filed monthly with the CFA. |
Supplier |
Services purchased |
Expense |
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Total |
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CRTC REVENUE-BASED CONTRIBUTION REGIME - ANNUAL
REPORTING |
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NON-CONTRIBUTION-ELIGIBLE REVENUES REPORTING FORM
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Provide details of Non-Canadian Revenues on Line D.2, Canadian
Non-Telecommunications Revenues claimed on Line D.3 and
Non-Contribution-Eligible Revenues removed from bundles claimed on
Line D.10 of the Annual Reporting Form.
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Note: Not required to be filed monthly with the CFA |
Line number |
Type of service/Product |
Associated revenues |
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Total |
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Signature ______________________
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Date ________________________ |
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Appendix 2 |
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SAMPLES OF AUDIT REPORTS |
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Sample 1 - Audit report required for 31 March annual
filing with the CRTC.
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AUDITOR'S REPORT ON SCHEDULE OF
CONTRIBUTION-ELIGIBLE REVENUE
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To the Board of Directors of |
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Client Limited:
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At the request of Client Limited, I have audited
the reporting for the calculation of the contribution-eligible
revenues for the year ended Month, Day, Year. This financial
information is the responsibility of the management of Client
Limited. My responsibility is to express an opinion on this
financial information based on my audit.
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I conducted my audit in accordance with Canadian generally
accepted auditing standards. Those standards require that I plan and
perform an audit to obtain reasonable assurance whether the
financial information is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial information. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation
of the financial information.
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In my opinion, this schedule presents fairly, in all material
respects, the Contribution-Eligible Revenues of Client Limited
for the year ended Month, Day, Year in accordance with Decision CRTC
2000-745 and related orders.
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City |
(signed) |
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Date |
CHARTERED ACCOUNTANT |
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Appendix 2 |
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SAMPLES OF AUDIT REPORTS |
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Sample 2 - Example
of Audit Report required for filing with National Contribution Fund
Auditor annually. |
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AUDITORS' REPORT ON THE CENTRAL FUNDS
ADMINISTRATION INPUT REPORTS |
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To the Board of Directors of |
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XYZ Company |
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We have audited the attached Schedules of XYZ Company for the
year ended 31 December 2001 calculated in accordance with the
National Central Funds Administration Agreement. This financial
information is the responsibility of the management of XYZ Company.
Our responsibility is to express an opinion on this financial
information based on our audit.
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We conducted our audit in accordance with Canadian generally
accepted auditing standards. Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the
financial information is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial information. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation
of the financial information.
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In our opinion, the attached Schedules present fairly, in all
material respects, the Contribution-Eligible Revenues [and the
Network Access Services counts] for XYZ Company for the year ended
31 December 2001 in accordance with the definitions described
in the CRTC Decision 2000-745, Changes to the contribution regime,
and related orders therein, and the National Central Funds
Administration Agreement.
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City |
(Signature) |
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Date
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Chartered accountants |
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Appendix 3 |
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FORM OF AFFIDAVIT |
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IN THE MATTER OF REPORTING OF
CONTRIBUTION-ELIGIBLE
REVENUES FOR THE PURPOSES OF CALCULATING CONTRIBUTION
UNDER DECISION CRTC 2000-745 |
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AFFIDAVIT |
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I, _________________________________(individual's name), OF
THE _____________________________(City/Town, etc.) OF
_________________________ MAKE OATH AND SAY AS FOLLOWS: |
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1. I have personal knowledge of the matters hereinafter deposed
to except where stated to be based on information and belief and
where so stated I verily believe the same to be true. |
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2. As of the date of this Affidavit, I am __________________(corporate
title) of the telecommunications service provider
_______________________ (provide legal name of corporation),
a company that carries on business as _______________________(where
applicable). |
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3. Attached as Exhibit(s) "X" to this my affidavit is
the Annual Reporting Form, and supporting financial information and
reports, of _______________________ (legal name of
telecommunications service provider) filed with the Commission
in accordance with its obligations pursuant to Decision CRTC 2000-745, Changes to the contribution regime, 30 November
2000, (Decision 2000-745). |
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4. The Annual Reporting Form and supporting financial information
and reports, attached as Exhibit(s) "X", are in compliance
with the determinations, procedures and guidelines of the Canadian
Radio-television and Telecommunications Commission ("CRTC")
as set out in Decision 2000-745, Orders CRTC
2001-220 and 2001-221,
the CRTC Revenue-Based Contribution Regime Reporting Instructions
and any other subsequent procedures or directions issued or approved
by the CRTC from time to time. |
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5. The information contained in Exhibit(s) "X" is
accurate and true. |
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SWORN BEFORE ME ) |
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at the City of ______________ ) |
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in the Province of __________ ) |
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this ____ day of ___________ 2001. ) |
________________________ )
(signature of affiant) |
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_______________________ )
a Commissioner, etc. ) |
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PROCI-8A |
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Appendix 4 |
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Phase 1 -- 1st Quarter 2001
Reconciliation |
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Rec CFA 1-IXCs, WSPs, resellers & LECs |
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RECONCILIATION OF CONTRIBUTION REPORTED ON MINUTE
OF USE
REPORTED ON A MONTHLY BASIS |
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LEC: |
TSP:
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Note: This form requires LEC and TSP agreement on amounts.
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Traffic period |
Contribution invoiced by LEC to TSP and reported
by LEC to CFA
($) |
Contribution paid by TSP to LEC
($)
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January 1 - January 31 |
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February 1 - February 28 |
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March 1 - March 31 |
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Authorized approvals
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LEC
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TSP
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Name:
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Name:
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Position:
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Position:
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Telephone:
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Telephone:
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Signature:
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Signature:
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Date:
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Date:
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Date Modified: 2001-09-21
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