Big Three push for wireless and SMS service revenues to be excluded from CNAC funding

Rogers Communications Inc. and Telus Corp. are backing BCE Inc. in its dispute with the Canadian Numbering Administration Consortium (CNAC) over which revenues should be considered when calculating funding for the administrator. Bell lodged a Part 1 application with the CRTC on Jan. 30 seeking a declaration from the regulator that the terms "telecommunications services" and "telecommunications services revenues" in CNAC’s reporting worksheets do not apply to Bell Mobility's wireless data and short message service (SMS) services because these services are provided over internet protocol (IP) networks and not the Public Switched Telephone Network (PSTN) stated in the definitions. Rogers and Telus filed interventions on March 14 supporting Bell’s arguments that “telecommunications services” should be interpreted in the CNAC context to exclude non-voice traffic, such as data and SMS services. Quebecor Inc. disagreed. CNAC, regulated by the CRTC, oversees Canada's telecommunication numbering resources. It selects and funds the Canadian Numbering Administrator (CNA) and covers the Canadian portion of North American Numbering Plan Administration costs, which are funded by Canadian telecommunication service providers (TSPs). The term “telecommunications services” is used by TSPs to determine their annual contributions toward CNAC's operations. They are defined by the administrator’s Unanimous Shareholders Agreement (USA) as “services which are provided over the PSTN by eligible persons and which utilize numbering resources….” The USA also defines the PSTN as “the world-wide voice telecommunications network, or any portion thereof….” “When the definitions of telecommunications services and the PSTN are read together, telecommunications services can be defined as services that are provided over the world-wide voice telecommunications network and use numbering resources. This is in counter to telecommunications services that are provided over the Internet, which use IP addresses instead of numbering resources,” said Telus. The Vancouver-based telecom stated, “because data services are generally not provided over the PSTN and do not require the use of a numbering resource,” they should be excluded from the definition. “SMS is similarly excluded… because this service is generally not provided over the PSTN and uses the same telephone number as the underlying voice service to which it is tied, removing the need for a separate numbering resource for the SMS service,” added Telus. According to an intervention from CNAC, the administrator contacted CRTC staff to request clarification on whether data and SMS service revenues are included in the definition of telecommunications services used for CNAC funding purposes. The regulator concluded in a July 2023 staff opinion letter that these services are included. “Wireless service providers need to allocate and activate specific numbering resources to provide data service over a mobile wireless network. CRTC staff are therefore of the view that wireless data services, which use numbering resources, fall within the scope of ‘wireless telephony services’ and are therefore ‘telecommunication services,’” wrote the CRTC. “As such, data services provided over a mobile wireless network should be factored into total telecommunications services revenue for the purpose of calculating contributions to Canadian Numbering Administration.” Quebecor took aim at Bell, arguing, “Bell is (again) trying to evade its regulatory obligations and its interpretation of ‘telecommunications services’ serves as an excuse for not paying its full share.” The Montreal-based telecom agreed with the CRTC and CNAC’s interpretations. “Even if Bell's subscribers' wireless data services and SMS services ultimately pass through IP interconnections rather than the PSTN, to our knowledge, all TSPs are required to assign a telephone number to the end user so that they can use these services,” said Quebecor. “On its face, the requirement to use numbering resources justifies that data services and SMS services be included in the telecommunications services and be taken into account in the total revenues for the purposes of calculating contributions to the administration of Canadian numbering.” – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca with files from Jenna Cocullo at jcocullo@thewirereport.ca

Big Three push for wireless and SMS service revenues to be excluded from CNAC funding

News | April 5, 2024

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Big Three push for wireless and SMS service revenues to be excluded from CNAC funding

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