TELUS Application For Interim Iristel Rate - ABRIDGED

BEFORE THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TELUS COMMUNICATIONS INC.
APPLICATION TO CURTAIL TRAFFIC STIMULATION ACTIVITIES

INVOLVING IRISTEL NUMBERS
ABRIDGED
August 3, 2018
TABLE OF CONTENTS
Introduction ..............................................................................................................1
Traffic stimulation has resumed to Iristel’s numbers in the North ..........................5
The history of traffic stimulation in the North ..................................................... 5
Traffic stimulation has resumed to 2017 levels ................................................... 7
The return of stimulated traffic justifies a public proceeding ................................11
The focus of the public proceeding should be on Iristel and any TSPs that use
Iristel’s numbers to confer an undue preference upon themselves .................... 12
A Commission investigation would aid the public proceeding.......................... 14
How CLEC rates are determined for mandated interconnection services .............15
Northwestel’s Bundled CAT rate...........................................................................17
Applicability of the Bundled CAT rate to CLEC tariffs. ................................... 19
Iristel’s costs are below the Bundled CAT rate.................................................. 20
The precedent and rationale for making Iristel’s current rate interim ...................24
Waiting for final rates would not be a timely remedy........................................ 25
The policy objectives and the Policy Direction support the requested relief ........26
Conclusion .............................................................................................................28
TELUS Communications Inc. Application for Interim Relief to Curtail
August 3, 2018 Traffic Stimulation to Iristel Numbers
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Introduction
1. TELUS Communications Inc. (“TELUS”) hereby applies, pursuant to Part 1 of the

Canadian Radio-television and Telecommunications Commission Rules of Practice
and Procedure1 (the “Rules”), for relief regarding renewed traffic stimulation
involving the telephone numbers of Iristel Inc. (“Iristel”) in Northwestel’s
incumbent territory and regarding an unjust and unreasonable long distance call
termination rate in Iristel’s tariff (the “Application”).
2. As will be discussed more thoroughly in this Application, the artificially stimulated

traffic which led to Decision 2017-4562 stopped only briefly after the issuance of
the Commission’s directive. By April of 2018, the stimulated traffic escalated
rapidly, just as it did in the early months of 2016. This recurrence indicates that
traffic stimulation will continue as long as the parties involved can retain the
benefits, and as long as telecommunications service providers (“TSPs”) must pay a
rate for call termination that exceeds the incremental cost of call termination. Such
traffic stimulation activities have conferred an undue preference upon Iristel (and
possibly other parties) and subjected TELUS to a corresponding undue
disadvantage.
3. In order to discourage traffic stimulation permanently and to provide interim

protection from the harm associated with paying excessive rates for artificially
stimulated traffic, TELUS requests that the Commission:
a) initiate a full public proceeding to review the renewed traffic stimulation

activities toward Iristel’s numbers in the incumbent serving territory of
Northwestel (“the North”)3 to determine which TSPs are involved in the
artificial stimulation of voice traffic to Iristel’s numbers and the nature of
1
SOR/2010-277.
2
Rogers Communications Canada Inc. – Allegation of traffic stimulation by Iris Technologies Inc. and
Iristel Inc., Telecom Decision CRTC 2017-456, December 20, 2017
3
Northwestel’s incumbent serving territory includes Nunavut, the Yukon, the Northwest Territories (NPA
867) and parts of northern British Columbia (NPA 236/250/672/778).
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their involvement, and to consider whether general rules are required to
prevent further occurrences;
b) direct that Iristel file a tariff notice to establish a new rate for long distance
call termination to its customers in the North; and
c) make interim Iristel’s current tariffed rate for long distance call termination
in the North, allowing for the possibility of retroactive applicability of final
rates.
4. Part a) of the requested relief addresses the specific arrangements that are driving
the current outbreak of traffic stimulation. Iristel claimed to be compliant with
Decision 2017-456, yet the traffic stimulation has resumed, and Iristel is once again
the direct beneficiary of the resulting increased flow of charges from other TSPs.
The situation requires a full public proceeding including the opportunity for
interveners to issue requests for information to Iristel and any other TSPs to which,
or through which, stimulated traffic flows after it leaves Iristel’s network. To this
end, and in the interest of a well-informed public proceeding, TELUS proposes that
the Commission conduct a preliminary investigation to gather the relevant facts and
documentation, and place its findings on the record of the proceeding.
5. Part b) of the requested relief is also in the interest of a permanent cessation of

traffic stimulation. TELUS will show that Iristel’s tariffed rate for long distance
termination in the North is significantly higher than Iristel’s cost of call termination
and that this creates the incentive for traffic stimulation. By reducing these rates to
the true incremental cost (plus the normal mark-up for mandated interconnection
services), the incentive will be eliminated. TELUS will also show that Iristel’s
current rate is neither just nor reasonable, so it must be revised to comply with
subsection 27 (1) of the Telecommunications Act4 (the “Act”), regardless of the
Commission’s determinations with respect to traffic stimulation.
4
SC 1993, c 38.
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6. Part c) of the requested relief is aimed at protecting TELUS from upwardly
spiraling costs associated with stimulated traffic until Iristel’s long distance
terminating rate is revised. Because the Commission determined in Decision 2017-
456 that it would not direct Iristel to provide rebates for charges associated with
stimulated traffic when the traffic is terminated pursuant to a forborne wholesale
toll agreement, TELUS plans to migrate traffic to Iristel’s NPA 867 numbers to
tariffed interconnections. Accordingly, Iristel’s tariffed rate is relevant to the
cessation of traffic stimulation.5
7. Furthermore, Iristel’s current rate should be made interim because it significantly

exceeds Iristel’s cost of termination. Iristel should not continue to benefit from an
excessive rate while a new rate is set. An excessive rate for Iristel’s mandated
interconnection service increases costs (directly or indirectly) to other TSPs and
creates upward pressure on retail prices.
8. In this Application, TELUS will:
a) review the history of traffic stimulation activities in Canada, show that they
have begun anew, again using Iristel’s telephone numbers in the North, and
compare the current and previous situations;
b) demonstrate that the resumption of traffic stimulation has conferred an

undue preference on Iristel and subjected TELUS to an undue disadvantage,
which lends support for part a) of the requested relief, namely, a proceeding
that focuses on Iristel and any TSPs that use Iristel’s numbers in NPA 867;
5
Making Iristel’s IXSP interconnection rate interim was proposed by Rogers in the proceeding which led
to Decision 2017-456, but the Commission did not rule on the reasonableness of Iristel’s IXSP rate
because it and the forborne termination paid by Rogers were not directly linked. Decision 2017-456,
para 55.
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c) review how CLEC rates are determined for mandated interconnection
services and why Iristel’s tariff for switching and aggregation service refers
to Northwestel’s “Bundled CAT”6 rate;
d) review the rationale behind Northwestel’s Bundled CAT rate and explain
why Iristel’s use of this rate is inconsistent with the Commission’s
assumptions for CLEC terminating rates and causes harm to the public;
e) explain why TELUS expects that Iristel’s incremental cost of service is

significantly lower than Northwestel’s Bundled CAT rate;
f) discuss the precedent and rationale for making Iristel’s rates interim; and
g) show how the requested relief is supported by the policy objectives in the
Act and by the Policy Direction.7
9. Attachment 1 to this Application contains a list of numbers that TELUS suspects

are in service for the purpose of traffic stimulation.
10. This Application, including all parts of the requested relief, constitutes a new
application as opposed to an application to review and vary past directives. TELUS
is not challenging either the correctness of the conclusions in Decision 2017-456 or
the procedures followed in reaching them. TELUS is requesting the initiation of a
new proceeding in light of the recurrence of stimulated traffic after the issuance of
Decision 2017-456.
11. With respect to Iristel’s tariffed rate for long distance termination in the North,
TELUS is only requesting that a new rate be applied in a prospective manner. The
requested relief is partly based upon the existence of traffic stimulation, a
circumstance that was not relied upon in the approval of the current rate. Moreover,
6
Bundled CAT is Item 302.2.4 in Northwestel tariff CRTC 21480 and applies to the termination of long
distance calls in Northwestel territory.
7
Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy
Objectives, SOR/2006-355.
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the length of time since the approval of the current rate (nearly five years) requires
that it be treated as a new application.
12. TELUS is filing certain data in this Application and Attachment 1 in confidence
with the Commission pursuant to section 39 of the Telecommunications Act and
Rule 32 of the Canadian Radio-television and Telecommunications Commission
Rules of Practice and Procedure. Some of this information is commercial
information that is consistently treated as confidential by TELUS. Public release
of this information could allow competitors to develop better business plans to
compete with TELUS, or compromise TELUS’ negotiating position with respect to
wholesale services. This would cause TELUS specific and direct harm. Also filed
in confidence are telephone numbers that TELUS suspects are associated with
traffic stimulation, where such numbers are not publicly available. Abridged
versions of the Application and Attachment 1 are being filed for the public record.
Traffic stimulation has resumed to Iristel’s numbers in the North
13. The current rash of stimulated traffic shares many similarities with the original
outbreak, but there is one important difference which makes the current situation
more troubling. The history and the current situation are described in this section
and in section 3.0 and pertain to part a) of the requested relief, the request for a new
proceeding.
The history of traffic stimulation in the North
14. During 2016, traffic to Iristel’s numbers in the North grew exponentially. This led
to the application by Rogers Communications Canada Inc. (“Rogers” or “RCCI”)
which initiated the proceeding leading to Decision 2017-456. In that proceeding,
Iristel admitted that it was sharing incoming call termination revenues with
customers who used Iristel’s numbers in the North.8 The Commission concluded
8
Answer of Iris Technologies Inc., December 2, 2016, para 36. Also, Decision 2017-456, para 25.
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that revenue sharing was linked to artificial traffic stimulation. Specifically, the
Commission stated:
36. With respect to traffic efficiency, although calls to

AudioNow’s Call-to-Listen service may technically be
terminating in the 867 NPA, further traffic related to
such calls is relayed over IP, connecting callers to
AudioNow’s services in Virginia, which is located in a
different NPA. While there may be justifications for
using an 867 NPA phone number when the called
services are located in a different NPA, the facts raised
on the record do give rise to concerns in this particular
instance. There is no clear reason for the use of these 867
numbers by FCCG, Yakfree, and AudioNow, absent the
revenue-sharing arrangements in place. 9
(emphasis added)
15. Consequently, the Commission concluded that Iristel was conferring upon itself an
undue preference10 and directed that Iristel terminate its agreement with Free
Conference Call Global (“FCCG”):
47. The Commission therefore imposes a condition under

section 24 of the Act and directs Iristel and any of its
affiliates, within 30 days of the date of this decision, to
 terminate any agreement that assigns FCCG any 867
NPA numbers that are ultimately used by AudioNow,
and not re-enter into provisions of such an agreement
with FCCG or any of its affiliates; and
 file a report with the Commission confirming
compliance with this directive.11
(emphasis added)
16. The letter of the Commission’s directive was very narrow. It ordered the
termination of the then-existing agreement between Iristel and FCCG, but it did not
make a general statement against traffic stimulation that would prevent the
9
Decision 2017-456, para 36.
10
11
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resumption of traffic stimulation through alternative financial arrangements with
the same parties, or through the same financial arrangements with different parties.
17. Iristel filed its report as a letter to Commission Staff on January 19, 2018. In the
letter, Iristel stated the following:
2. Specifically, Iristel has informed Free Conference Call

Global (FCCG), via a letter dated January 12, 2018, that
FCCG must cease to supply AudioNow any NPA 867
number which might ultimately confer undue preference
to Iristel or any other party by January 19, 2018,
otherwise Iristel will terminate its agreement with
FCCG.
3. In addition to the above, Iristel has also informed FCCG
that effective January 19, 2018, revenue sharing
associated with NPA 867 numbers will be terminated.12
(emphasis added)
18. Iristel claimed in its letter that it had met the requirements of Decision 2017-456.
Iristel did not explain why it only terminated its revenue sharing arrangement with
FCCG instead of complying with the Commission’s plainly stated instruction to
“terminate any agreement that assigns FCCG any 867 NPA numbers that are
ultimately used by AudioNow” (emphasis added).
19. In February of 2018, TELUS’ traffic to Iristel’s NPA 867 numbers and the average
length of calls dropped back to pre-stimulation levels.
Traffic stimulation has resumed to 2017 levels
20. TELUS’ traffic to Iristel’s NPA 867 numbers began its upward trend again by
April. By May, traffic levels were four or five times normal levels and still
climbing. Also indicative of artificially stimulated traffic is the average call length,
with stimulated calls being longer. By May, the average length of a call was almost
12
Letter from Samer Bishay (CEO, Iristel) to Mr. Claude Doucet, Secretary General of the Commission,
January 19, 2018, re: CRTC file 8622-R28-201611781 - Iristel Inc. confirmation of compliance with
Telecom Decision CRTC 2017-456.
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back to its January level of # # minutes. Table 1 shows TELUS’ monthly
traffic to Iristel’s NPA 867 numbers from January to May of this year.
Table 1: TELUS Traffic to Iristel’s NPA 867 Numbers
Month Total minutes Average call

length (min)
January # #
February # #
March # #
April # #
May # #
21. TELUS has made no changes to its retail offerings that could have accounted for
such dramatic increases in traffic or length of call, nor have there been any changes
to population that could be responsible. TELUS’ total traffic to other carriers
serving the North has remained relatively steady over the same period, so the
increase in minutes to Iristel cannot be attributed to customer migration from other
carriers to Iristel. The increase in traffic can only be attributed to the actions of
Iristel or the users of Iristel’s numbers.
22. TELUS’ investigations of the frequently-called numbers or numbers with unusually

long hold times revealed that many numbers connect to conference bridges and
listen-only services, the same types of services and calling patterns as in the last
episode of traffic stimulation. For instance:
1. Iqaluit number 867-292-3030 is the Canadian dial-in number for

FreeConference.com.13 Whitehorse number # # reaches
another conference calling service.
13
See Attachment 2 for a screen capture of FreeConference.com’s webpage, located at
https://www.freeconference.com/feature/local-conference-numbers/. Ostensibly in Behchoko, NT, 867-
292-3030 is described on the website as a “Toronto number”.
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2. Iqaluit number # # and Yellowknife number # #
reach Lyft, a ride sharing service. According to its website, Lyft does not
serve Iqaluit or Yellowknife.14
3. Iqaluit number # # connects to a listen-only service for Punbaji

Radio USA. Whitehorse number # # connects to Zeno Radio,
a listen-only radio service of Zeno Media. Of the 59 numbers included in
Attachment 1, TELUS has confirmed 30 as being listen-only audio
programs.
4. TELUS sent # # calls to Iristel’s Iqaluit numbers in the first half July that
lasted either 45:02 minutes or 45:03 minutes exactly. In some cases the same
calling number initiates two or three sequential calls of this duration,
separated only by a few minutes.
23. However, the current rash of stimulated traffic is different from the last occurrence
in that evidence suggests the adoption of a screening mechanism. In 2016, the
numbers to which high volumes of traffic were destined could be called by anyone,
which is how the nature of the audio services drawing some of the stimulated traffic
was discovered. Today, calls to many of the numbers in question are met with the
announcement “We're sorry, the subscriber you are calling is currently not
reachable. Please try again later.” (TELUS does not originate this message.) This
is true even for the case where calls from other parties are being successfully
completed to the same numbers. All of the calls mentioned above that were
precisely 45:02 minutes or 45:03 minutes long were to numbers with this
announcement.
24. If all callers were met with this announcement, there would have been no calls
lasting more than 30 seconds, when in fact there have been hundreds of calls each
lasting 45 minutes. TELUS has determined that callers from certain numbers do
not receive the message and are instead connected to a program. (Punjabi Radio
14
https://www.lyft.com/rider/cities.
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USA is one such program.) TELUS concludes that either the end customer or one
of the TSPs involved in completing the call is screening calls on the basis of calling
numbers.
25. Upon further investigation, TELUS has confirmed that Punjabi Radio USA is a
client of Zeno Media.15 Zeno Media offers to put broadcasters on call-to-listen
services and shares carrier revenues with them.16 Zeno does not publish the call-in
numbers, it assigns each listener a unique telephone number to call.17
26. TELUS suspects that each of the lines featuring the aforementioned announcement
connects to Zeno or to a service provider with the same practice of assigning unique
dial-in numbers to each subscriber. It would be easy for such a provider to screen
each dialled number to allow only the designated subscriber(s) to be connected to
the program. There could be a legitimate reason to do such screening, but one effect
of the screening is that it becomes more difficult to establish whether it supports a
traffic-stimulating service. The possibility that its purpose is to deter investigations
into regulatory arbitrage of high-cost NPA 867 numbers cannot be dismissed.
27. The aforementioned announcement is also deceptive and may cause confusion
among consumers. It sounds like an announcement a wireless service provider
would make when a wireless subscriber is unreachable, but the dialed numbers are
not wireless numbers. Anyone calling such a number will receive a bill for a toll
call (as applicable, according to the caller’s service plan), which is not normal for
a call to an unavailable wireless customer. Should customers ask their service
15
See Attachment 2 for a screen capture of Zeno Media’s webpage showing its clients, located at
https://www.zenomedia.com/clients/.
16
See Attachment 2 for screen captures of Zeno Media’s home page, located at
https://www.zenomedia.com/call-to-listen/. See also the Observer article located at
http://observer.com/2015/09/will-listener-interaction-make-the-difference-for-internet-radio/ which
describes the affiliation of Zeno Radio and ZenoLive, and the CNBC article located at
https://www.cnbc.com/id/100746807 which describes Zeno Radio’s revenue stream from carrier
termination rates.
17
See Attachment 2 for a screen capture of Zeno Live’s FAQ webpage located at
https://www.zenolive.com/faq.
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providers about the charges, the issue will likely be irreconcilable, because their
service providers’ records will indicate that the call was answered.
28. This screening practice is part of the reason that TELUS has requested that the
Commission use its investigative powers to determine what services are being
provided and where they are being delivered to the customer, among other things.
In Iqaluit, this message is the response to dozens of numbers. See Attachment 1 for
the specific numbers tested.
The return of stimulated traffic justifies a public proceeding
29. The cessation of traffic stimulation in January of 2018 indicates that Decision 2017-
456 was correct in its conclusions that the incentives for traffic stimulation stemmed
from the particular contractual arrangements in place amongst Iristel and the parties
that used Iristel’s NPA 867 numbers. Beyond the specific directive to Iristel,
however, the Commission made it abundantly clear that regulatory arbitrage of any
sort is harmful to consumers.18 The Commission also indicated that it views
arbitrage to be a very serious matter, when it considered pursuing administrative
monetary penalties (“AMPs”) and suggested that they would be available if Iristel
did not comply with the Commission’s directives.19
30. The proceeding that led to Decision 2017-456 was initiated by a situation-specific
application by Rogers and the Commission’s directive was specific to that situation.
TELUS expected that the additional statements regarding arbitrage and AMPs
would have discouraged any TSP from stimulating traffic. Unfortunately, the
18
Decision 2017-456, para 41: “Iristel’s assignment of 867 NPA numbers to FCCG, in combination with
its applicable revenue-sharing arrangement, has created the conditions for the regulatory arbitrage
activities described above to take place. As a result, the Commission finds that Iristel has (a) conferred
a preference upon itself, FCCG, Yakfree, and AudioNow in the form of the revenue generated by these
activities, and (b) subjected RCCI to a disadvantage in the form of the costs RCCI incurred as a result of
the activities. The Commission considers that consumers could be disadvantaged in the longer term as
the efficiency and affordability of the telecommunications system are affected by the inefficiency in the
way traffic is routed as a result of these arbitrage activities.” (emphasis added)
19
Decision 2107-456, para 48: The Commission chose not to pursue AMPs under the assumption that
Iristel was “not necessarily aware of the situation” when it entered into its revenue sharing arrangement
with FCCG.
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resumption of stimulated traffic only two months after its temporary cessation
shows that they were insufficient.
31. Accordingly, TELUS proposes that the Commission initiate a full public
proceeding to review the renewed traffic stimulation activities toward Iristel’s
numbers in the North; to determine which TSPs are involved in the artificial
stimulation of voice traffic to Iristel’s numbers and the nature of their involvement;
and, to consider whether general rules are required to prevent further occurrences.20
A full public proceeding will permit additional evidence to be filed and allow more
in-depth scrutiny of the arrangements driving traffic stimulation. It will also
promote a full discussion of potential conditions on any TSPs involved that will be
more difficult to circumvent. Furthermore, a full proceeding is needed if general
rules are to be considered for the industry, so that unnecessary restrictions are not
placed on legitimate retail and wholesale arrangements.
The focus of the public proceeding should be on Iristel and any TSPs that use
Iristel’s numbers to confer an undue preference upon themselves
32. The Commission has stated that, depending on the circumstances, traffic
stimulation activities may give certain parties an undue preference and subject
others to a corresponding undue disadvantage, in contravention of subsection 27(2)
of the Act.21 While not identical, the circumstances in the present case are
substantially similar to the circumstances underlying the Commission’s finding of
a subsection 27(2) violation in Decision 2017-456.
33. First, as shown above, since February 2018 there has been an exponential increase
in traffic to Iristel’s NPA 867 numbers, including both the total volumes and call
duration.
20
In parts b) and c) of the requested relief, TELUS proposes that an Iristel rate be reduced, partly as a
measure to discourage traffic stimulation. While TELUS expects this rate reduction to be effective, there
will always be some circumstances where the terminating rates exceed costs, so general rules may be in
order.
21
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34. Second, the calls connect to call-to-listen services, similar to those offered by
AudioNow; conference bridges, similar to those offered by FCCG; and other
services that draw incoming traffic but likely do not originate traffic. As mentioned
previously, the “FreeConference.com” access number for Canada is an Iristel NPA
867 number in Behchoko, a community of approximately 2,000 people in the
Northwest Territories. The “FreeConference.com” website indicates that its service
is that of iotum, whose website indicates it has offices in Toronto and Los
Angeles.22 Accordingly, TELUS does not believe that the conference call service
is located in Behchoko and questions why Iristel could not have connected the
service to a Toronto telephone number. Similarly, Punjabi Radio USA is based in
the western USA23 and would have no apparent reason to obtain a telephone number
in Iqaluit.
35. TELUS strongly suspects that the same inefficient routing practices and relay
tactics described in Decision 2017-456 are being employed for these numbers.
Again, there is no clear reason for the use of NPA 867 numbers when the called
services are not located in the North, absent a financial benefit.24
36. Third, the financial incentive to artificially stimulate traffic remains. While Iristel
indicated in its compliance report that it had “informed FCCG that, effective
January 19, 2018, revenue sharing associated with NPA 867 numbers will be
terminated”25, several indicators point to a continued financial incentive to
stimulate, whether or not it can be called formal revenue sharing. Importantly,
Iristel was not specifically directed to stop all revenue sharing as a result of
Decision 2017-456 and its January representation was only in respect of a particular
party, FCCG, with whom Iristel had previously admitted to sharing revenues.26 The
interconnection agreement remains in place and the resumption of traffic
22
https://www.iotum.com/company/ See Attachment 2.
23
http://punjabiradiousa.com/about-us/ See Attachment 2.
24
25
Letter from Samer Bishay (CEO, Iristel) to Mr. Claude Doucet, Secretary General of the Commission,
January 19, 2018, re: CRTC file 8622-R28-201611781 - Iristel Inc. confirmation of compliance with
Telecom Decision CRTC 2017-456.
26
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stimulation is creating surplus revenues for Iristel. TELUS urges the Commission
to exercise its powers under the Rules and/or the Act27 to determine the precise
nature of the underlying financial arrangements among Iristel and the parties that
use Iristel numbers, so it may determine whether any other parties in addition to
Iristel may be benefitting, as well as where they are located.
37. With or without a formal revenue sharing agreement, Iristel is conferring an undue
preference upon itself and TELUS is subjected to a corresponding disadvantage. It
is a continued form of regulatory arbitrage that takes advantage of a loophole that
was not closed in Decision 2017-456. The resulting harms caused to TELUS and
its customers (particularly the financial costs of renewed regulatory arbitrage
activities and the resulting upward pressure on retail rates) are material and serious
consequences that render such disadvantage and preference undue.
A Commission investigation would aid the public proceeding
38. A Commission investigation would assist the public proceeding by establishing a

number of facts and gathering documents that will be required in the proceeding.
These facts include, but are not limited to:
a) the names of the parties (TSPs and end customers) that use the Iristel NPA
867 numbers in Attachment 1;
b) whether each TSP is subject to the Commission’s jurisdiction pursuant to
section 24 or section 24.1 of the Act and whether each is registered with the
Commission as a carrier or reseller;
c) the point of delivery of calls to each of these parties for the numbers in
question;
d) any agreement amongst two or more of these parties pertaining to, or
depending on, the numbers in question or the traffic to the numbers;
27
Subsection 71(1) of the Act permits the Commission to designate an inspector for the purposes of
verifying compliance or preventing non-compliance with the provisions of the Act and with the decisions
of the Commission under the Act. Subsection 71(9) permits an inspector to, by notice, require a person
to submit information to the inspector in the form and manner and within the reasonable time that is
stipulated in the notice.
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e) the specific Iristel NPA 867 numbers assigned to each of these parties; and
f) invoices and settlement records indicating traffic carried and compensation
paid with respect to these agreements.
39. In the proceeding that led to Decision 2017-456, the lack of clarity around some of
these facts, and the inability of Rogers to establish them on its own, caused the
Commission to issue requests for information. Because a new proceeding will
require the same information, a preliminary investigation will avoid the need for
speculation by interveners and will facilitate more informed arguments. Additional
information may still be required, and TELUS proposes that interveners be able to
submit requests for information to Iristel and any TSPs that use Iristel’s NPA 867
numbers. TELUS expects that less information will be required through the
interrogatory process if the information above is first gathered through a
Commission investigation.
How CLEC rates are determined for mandated interconnection services
40. Sections 4.0, 5.0 and 6.0 address parts b) and c) of the requested relief, regarding
the amendment of Iristel’s rate for IXSP interconnection in the North.
41. The rates that CLECs include in their tariffs were discussed in Local Competition,
Telecom Decision CRTC 97-8 (“Decision 97-8”), primarily in section II, entitled
“Interconnection”. Interconnection rates were set at Phase II costs plus a mark-up,
then 25% (now 15%). The Commission specifically addressed CLEC rates for
interconnection with an interexchange service provider (“IX service provider” or
“IXSP”), stating the following:
Further, the Commission considers that it is in the public

interest to require CLECs to provide equal access to all IX
service providers, at terms and conditions that are equivalent
to the terms and conditions contained in the ILECs' tariffs.
Accordingly, the Commission will require CLECs to file
proposed tariffs for IX equal access, and to justify any
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departure from the terms and conditions contained in ILECs'
tariffs.28
42. For the convenience of CLECs, the Commission created the CLEC Model Tariff
with rate references for the various services in the ILECs’ tariffs.29 In particular,
item 302 of the CLEC Model Tariff refers to the ILECs’ tariffs for the call
termination services used by IXSPs, i.e., Direct Connect (“DC”) and Access
Tandem (“AT”) charges,30,31 with different rates for the various ILEC operating
territories. Notably, there is no rate reference in the Model CLEC Tariff for
Northwestel’s incumbent territory.
43. Iristel added an IXSP interconnection rate for the North in Iristel’s Tariff Notice
11.32 In this tariff notice, Iristel made reference to the tariff number of
Northwestel’s Bundled CAT rate.33 Iristel made no statements in its tariff or tariff
notice regarding whether it considered the Bundled CAT rate to be a DC rate or a
combination of AT and DC (“AT+DC”).34 TELUS will explain why the reference
to the Bundled CAT rate does not constitute a just and reasonable rate for AT+DC
or DC in the following sections.
28
29
CLEC Model Tariff (version 34.1), Item 302.2.4 (https://crtc.gc.ca/cisc/eng/cisf3g5.htm).
30
DC and AT (collectively, “Switching and Aggregation”) are part of the suite of unbundled Equal Access
services set out initially in Unbundled Rates to Provide Equal Access, Telecom Decision CRTC 97-6,
April 10, 1997. In the third paragraph of this decision, these services are defined: “The Switching and
Aggregation services consist of the Direct Connection and Access Tandem (AT) Connection services
which comprise the two most significant components of the unbundled services. The Direct Connection
[service] provides for interconnection at [an ILEC] end office switch while the AT Connection provides
for interconnection at [an ILEC] toll (tandem) switch.” The DC service is offered at the last point of
interconnection available to IXSPs and therefore the minimum charge for call termination applies. AT
service is optional to the IXSP and includes delivery to all points in the serving area of a given access
tandem switch. Calls delivered to an access tandem switch pay both the AT rate plus the DC rate.
31
It is important to recognize that CLECs’ switching and aggregation services pertain only to calls to or
from the CLEC’s own customers. CLECs have no obligation to calls to transit calls to another carrier,
so a CLEC’s costs include no payments to other carriers for call termination.
32
https://crtc.gc.ca/8740/eng/2013/j64_11.htm.
33
CRTC 21670, Item 302.2.4. The specific reference is “Northwestel CRTC 21480, Items 40.2 (a) and
(b)”. Item 40.2(a) is the Bundled CAT. Item 40.2(b) is a rate for a Direct Access Line (DAL), an item
which is not in the CLEC Model Tariff and is not relevant to this Application.
34
Decision 2017-456 referred to Iristel’s IXSP interconnection rate as a DC rate.
16
ABRIDGED
44. In the absence of a specific rate or rate reference in the CLEC Model Tariff, Iristel
referred to the Bundled CAT rate and the tariff was approved. However, to the
extent that the rate is not just or reasonable for CLECs in general or for Iristel in
particular, it should nonetheless be made interim and, ultimately, amended. This
was the Commission’s determination in a similar proceeding regarding wholesale
high-speed access (“HSA”), which concluded with Decision 2016-117.35 In that
decision, the Commission stated:
However, the Commission has determined in this decision

that changes are necessary to certain costing assumptions,
which demonstrates that current wholesale HSA service
rates are likely not just and reasonable. … Consequently,
the Commission hereby makes interim all current wholesale
HSA service rates that are currently approved on a final
basis, including the monthly capacity rate per 100 Mbps
service. The Commission will assess the extent to which, if
at all, retroactivity will apply when new cost studies are
submitted in support of revised wholesale HSA service
rates.36
(emphasis added, footnote omitted)
Northwestel’s Bundled CAT rate
45. The Commission reviewed Northwestel’s IXSP interconnection rate in the

proceeding which led to TRP 2011-77137. In TRP 2011-771, the Commission
reaffirmed that Northwestel’s “CAT” rate,38 the charge applicable to
interconnecting IXSPs, must recover the costs of satellite “toll-connect” links.
(Toll-connect links connect end-office (local) switches to access tandem (“AT” or
toll) switches.) From TRP 2011-771:
35
Review of costing inputs and the application process for wholesale high-speed access services, Telecom
Decision CRTC 2016-117, March 31, 2016.
36
Decision CRTC 2016-117, para 105.
37
Northwestel Inc. – Review of regulatory framework, Telecom Regulatory Policy CRTC 2011-771.
38
The CAT rate is identified as the “Bundled CAT” rate in Northwestel’s tariff (CRTC 21480 Item
40.2.(a)). TELUS uses these terms interchangeably in this Application.
17
ABRIDGED
81. The Commission continues to be of the view that toll-
connect link costs should be recovered from toll service
providers…
82. During the proceeding, Northwestel indicated that the
CAT rate would be $0.038 per minute per end if the
residential satellite toll-connect link costs were included.
83. The Commission considers that a CAT rate of $0.038 per
minute per end is reasonable for Northwestel, and
approves this CAT rate effective 1 January 2012.
(footnote omitted)
46. In fact, the CAT contains not only satellite toll-connect links, but terrestrial toll-
connect links. The costing behind the CAT rate of $0.038/minute is set out in
Northwestel’s response to a Commission request for information in the proceeding
which led to TRP 2011-771, specifically a request to determine a revised CAT rate
based on the inclusion of costs for both terrestrial and satellite toll-connect links.39
In Attachment 2 to that response, NWTel summarized the costs as set out in the
following table.
Table 2: Costing of Northwestel’s CAT Rate
Revised CAT Rate

Toll Connect $0.024
Switching and Equal Access $0.007
$0.031
25% Mark-up (excl. EA portion) $0.007
Total CAT $0.038
47. Table 2 shows that Northwestel’s true switching and aggregation cost was, at the
time, $0.007/minute, which would yield a CAT of around $0.008/minute with
mark-up. Northwestel has since made a number of network modifications which
have undoubtedly changed its cost structure to some degree, but the cost breakdown
above shows that its actual cost of switching and aggregation was then less than a
penny per minute.
39
NWTel(CRTC)07Jul11-1602.
18
ABRIDGED
Applicability of the Bundled CAT rate to CLEC tariffs.
48. Northwestel’s Bundled CAT rate40 cannot be directly applied to CLEC tariffs
because it is a special rate set for the specific purpose of supporting Northwestel in
serving Northwestel’s customers. It is a blended rate based on the assumption that
a certain proportion of toll calls would be to remote areas served by terrestrial or
satellite toll-connect links, and the rest would be to the less costly areas like
Whitehorse and Yellowknife. The Bundled CAT would only be valid as a CLEC
rate if that CLEC were to terminate the same proportion of calls to remote
customers as Northwestel does.
49. For example, if TELUS were to enter the exchange of Hay River NT and serve it
with terrestrial facilities, the use of the Bundled CAT rate as an IXSP
interconnection rate would overcompensate TELUS because it includes
compensation for satellite costs that TELUS would not incur. As this hypothetical
example shows, to the extent that a CLEC incurs no satellite costs, or that its
satellite costs are lower in proportion to total calls in comparison to Northwestel, it
will lead to overcompensation of the CLEC for call termination. Such a rate is
neither just nor reasonable, and the surplus termination revenues it generates create
an opportunity for revenue sharing.
50. Even if a CLEC provides service in a remote exchange that Northwestel serves with
terrestrial or satellite toll-connect links, the CLEC may not incur transport costs for
all calls to numbers associated with that exchange. In particular, Iristel’s retail
voice offerings are access-independent VoIP services, i.e., Iristel’s customers
connect to the Iristel network through their own Internet access.41 For calls to these
customers, Iristel incurs no satellite or terrestrial costs because its customer is
paying for the Internet access in the remote exchange. To complete a call to such
a customer, Iristel need only send the call onto an Internet connection in a
40
The Bundled CAT rate remains at $0.038/minute today.
41
http://www.iristel.com/faq: “What is VoIP? Voice over Internet Protocol (VoIP) allows you to make and
receive phone calls over a secure internet connection instead of a standard phone line. With VoIP, the
standard telephone audio is converted into a digital format that can be transmitted over the Internet
versus a land wire.” (emphasis added)
19
ABRIDGED
convenient location and would incur no costs related to transport to the remote
exchange.
51. Similarly, a CLEC could agree to deliver all of a customer’s calls (including calls
to satellite-served locations or other remote exchanges) to a single location, which
might be the case if the customer maintains a private network to reach all of its
locations. In this case, the CLEC would not be incurring satellite costs to terminate
a call to the customer’s satellite-served locations.42
52. In summary, the Bundled CAT rate should not be applied to CLEC tariffs because
it is a special rate set for the specific purpose of supporting Northwestel in serving
Northwestel’s customers. Its use as a tariffed CLEC terminating rate
overcompensates CLECs for calls terminating to places like Yellowknife and
Whitehorse; for calls terminating to access-independent VoIP customers (of which
Iristel has many); and for calls that are delivered to more convenient locations at
the request of the customer. To the extent that there is overcompensation,
consumers will pay more than they should for voice services and an opportunity for
profitable traffic stimulation exists.
Iristel’s costs are below the Bundled CAT rate
53. Iristel’s true cost of call termination in the North is significantly below Iristel’s
tariffed interconnection rate of $0.038/minute, even for connection at Iristel’s
switch in Toronto. TELUS will demonstrate this by comparison to Iristel’s
negotiated rates with TELUS and then in comparison to existing tariff rates or their
underlying costs. TELUS’ comparisons to negotiated retail rates are based on the
reasonable assumption that Iristel has agreed to rates which allow it to (at a
42
This arrangement presents another traffic stimulation opportunity if CLEC terminating rates are not
corrected. The customer could obtain numbers for a satellite-served exchange but have no actual
presence in that community. IXSPs sending traffic to these numbers would be charged rates which
assume that satellite costs are incurred, but the traffic would be sent terrestrially to the customer’s true
location, yielding a high margin.
20
ABRIDGED
minimum) recover its incremental costs of completing any given call. All rate
comparisons will be summarized at the end of this section.
54. Comparison 1: Iristel and TELUS negotiated a rate for wholesale toll services to
the North, with an interconnection point in # #, of # # plus
#
#. This rate was in effect
for # # and includes:
#


 #
55. Comparison 2: Iristel and TELUS had previously negotiated a rate of

# #43 for wholesale toll services to the North, with the same
interconnection point as for the arrangement in Comparison 1. It also had the same
# # for an effective total of # #. This rate has been in
effect since # # It includes the same functionality as the negotiated
rate in Comparison 1, except that #
# Assuming, again, that Iristel sets

wholesale toll rates that cover all of its costs, then Iristel has allowed
# #. Even if Iristel would have to incur
additional switching costs to terminate the call (and TELUS doubts that this is so),
then Iristel would incur additional costs of no more than an additional
$0.004/minute, based on the recently approved DC rates for small ILECs, which
43
# #
21
ABRIDGED
are discussed in Comparison 3, next. This leaves a total of # #, well
below Iristel’s current tariffed rate.
56. Comparison 3: This comparison is between Iristel’s IXSP interconnection rate and
TELUS’ estimate of the known costs that Iristel would incur in completing a call.
For switching, the rates of a small ILEC will be used. Iristel’s IXSP interconnection
rate is far in excess of small ILECs’ DC rates, which were the subject of a lengthy
and thorough review by the Commission.44 The highest rate approved for the small
ILECs was $0.007901/minute. Twenty-six of 28 approved rates were less than
$0.0038/minute, one tenth of the $0.038/minute in the Iristel tariff. Some of these
small ILECs have customer bases measured in the hundreds, meaning they have a
smaller economy of scale than Iristel, which serves over 2000 exchanges.
Disregarding the outliers among the small ILEC rates (the two highest rates), this
would benchmark the DC rate for small LECs, even one in a remote area, at no
more than $0.004/minute, which should be achievable by Iristel.
57. For an interconnection in Toronto (which would be required for Iristel’s access
tandem (AT+DC) rate, if not its DC rate), Iristel might also incur transport costs to
the North. A portion of this route (and according to Iristel a significant portion of
the costs) is provided by Northwestel’s Wholesale Connect service. In its reply in
the proceeding which led to Decision 2017-456, Iristel criticized a number of
aspects of Wholesale Connect, concluding that the cost of the service was
“prohibitive and uneconomic” and that “Iristel has a very high cost structure to
support IXC traffic termination services in Northern Canada”.45 This may be true
in some cases, but not in the case of traffic being terminated in the major centres of
Whitehorse or Yellowknife.
44
Various companies – Final rates for direct connect services, Telecom Order CRTC 2017-282, August
10, 2017; and Execulink Telecom Inc. – Revision to Direct Connect service rate, Telecom Order 2014-
499, September 26, 2014. In Direct connection service rates for certain small incumbent local exchange
carriers, Telecom Order CRTC 2013-594, November 7, 2013, the Commission approved rates for seven
small ILECs that opted for a proxy rate instead of filing cost studies.
45
Reply of Iris Technologies Inc. in the matter of Rogers Communications Canada Inc. Part 1 Application
Concerning Iris Technologies Inc., February 8, 2017, para 37-38. CRTC file no. 8622-R28-201611781.
22
ABRIDGED
58. Wholesale Connect is a wholesale IP transport service, with the lowest rates
available to “Type A Communities” including Whitehorse, Yellowknife and Hay
River.46 TELUS calculates that the cost of voice transport using Wholesale
Connect to either community (from the customer’s interconnection point with
Northwestel) to be $0.0084/minute, for 40 voice channels on a 10 Mbps Wholesale
Connect channel. At 100 Mbps, the cost drops to $0.005/minute.47
59. TELUS is not a customer of Wholesale Connect and acknowledges that there might
be other aspects of using this service that increase the effective cost. However,
even if the conservative Wholesale Connect cost above was increased by 50% to
$0.0126/minute, and in combination with the benchmark DC rate of a typical
SILEC ($0.004/minute), it totals only to $0.0166/minute, less than half of the
current Iristel rate of $0.038/minute.
60. As discussed above, Iristel is an access-independent VoIP provider that delivers

calls to its retail customers through an Internet connection paid for by the retail
customer. Consequently, Iristel will incur no Wholesale Connect costs to deliver a
call to a retail customer in the North. For all these retail customers, Iristel incurs
costs no higher to terminate an incoming call than it does for terminating a call in
Toronto,48 and certainly no higher than the benchmark small ILEC rate of
$0.004/minute.
61. In summary, Comparison 1 implies a terminating cost of # #. From

Comparison 2, Iristel’s terminating cost is estimated to be # # or less.
Comparison 3 adds the known costs of DC switching and Wholesale Connect costs
to yield a conservative $0.0166/minute for an on-net customer and $0.004/minute
for terminating a call to Iristel’s access-independent customers. Finally, as
46
Northwestel tariff CRTC 21480 Item 300. Whitehorse, Yellowknife and Hay River are the principal
exchanges in three of the five Northwestel LIRs served by Iristel.
47
For each case, TELUS assumed for each voice channel a transmission rate of 100kb/s. TELUS applied
the surcharge for Highest CoS and the 40% usage factor for higher classes of service. TELUS used a
conservative loading factor of 5000 minutes per month for each voice channel. The per-minute cost will
fall for higher usages.
48
For Toronto, the current DC rate is $0.00088/minute.
23
ABRIDGED
discussed above, Northwestel’s switching and aggregation costs (exclusive of toll-
connect costs) are around $0.008/minute. These comparisons to known costs and
rates provide compelling evidence that Iristel’s true incremental cost of switching
and aggregation is well below its current tariffed rate of $0.038/minute. Iristel’s
tariffed rate for IXSP interconnection in the North is therefore neither just nor
reasonable. Accordingly, Iristel should be directed to file a tariff notice to establish
a new rate for long distance call termination to its customers in the North.
The precedent and rationale for making Iristel’s current rate interim
62. Making interim Iristel’s tariffed rate for ISXP interconnection in the North is
consistent with recent Commission practice. Final rates for aggregated wholesale
HSA were made interim Decision 2016-117 because they were “likely not just and
reasonable”.49 Similarly, in Order CRTC 2014-36450, the Commission made
interim the tariffed rates of Bell and Bell Aliant for pass-through of traffic to small
ILECs. The Commission recognized that the then-pending changes to the DC rates
of certain small ILECs cast uncertainty onto the rates of Bell and Bell Aliant which
incorporated these small ILEC rates. The Commission concluded:
However, since the Bell companies’ toll transport service

rates are based on the Bell companies’ costs to connect to
the small ILECs, including the small ILECs’ DC rates, the
Commission considers that benefits from any reductions in
the small ILECs’ DC rates should accrue to long distance
service providers. Conversely, the Commission considers
that the Bell companies should not be penalized if the small
ILECs’ DC rates were to increase. The Commission
considers, therefore, that it would be appropriate to make the
Bell companies’ toll transport service rates for the other
small ILECs interim, effective the date of this order.51
49
Decision 2016-117, par 105.
50
Bell Aliant Regional Communications, Limited Partnership and Bell Canada – Rebilling of carrier
access tariff charges for incumbent local exchange carriers, Telecom Order CRTC 2014-364, July 11,
2014.
51
Order 2014-364, para 21.
24
ABRIDGED
63. The Commission’s rationale for making the Bell rates interim is directly applicable
to Iristel’s rate, namely that IXSPs should benefit from any eventual rate reduction
and Iristel should not be penalized if the rates are to increase. Accordingly, the
Commission should make interim Iristel’s rate for IXSP interconnection in the
North, pending the determination of a final switching and aggregation rates
pursuant to a determination regarding an Iristel tariff notice, or whatever other
means the Commission may choose.
64. Moreover, making Iristel’s tariffed IXSP interconnection rate interim would
improve the business case for IXSPs to interconnect with Iristel on a regulated
basis, putting them in a position to benefit from reductions to Iristel’s IXSP
interconnection rate and from the protection that the Commission’s jurisdiction may
offer regarding charges attributed to stimulated traffic. It would have the opposite
effect on parties involved in traffic stimulation in that they will have to accept the
risk to their profits if there is any linkage to the Iristel’s incoming call termination
revenues. This would put a chill on traffic stimulation activities because the parties
involved would have no way of knowing if they would be profitable. Any reduction
in traffic stimulation that may come about due to making Iristel’s rates interim will
reduce the upward pressure on retail rates associated with this abusive practice.
Waiting for final rates would not be a timely remedy
65. In the preceding paragraphs, TELUS has proposed action to prevent harm to
TELUS and its customers. Unless Iristel’s rates are made interim, the harm could
continue for an extended period of time. TELUS anticipates this for two reasons.
First, rate-setting proceedings using Phase II costing principles can take a year or
more due to their complexity, and Iristel’s network is substantially different from
the ILEC networks from whose costs the current switching and aggregation rates
were derived. Such a tariff notice might also raise policy issues regarding mandated
interconnection to CLECs, which will not be resolved in the process of a single-
party tariff notice.
25
ABRIDGED
66. Second, if the Commission should choose to first address the particulars of the
current rash of traffic stimulation, it could, based on the experience with the
proceeding leading to Decision 2017-456, also take about a year.
67. Making rates interim does not prevent Iristel from recovering its true cost of call
termination, because they will be reflected in the final rates. However, it will shield
TELUS and other carriers from excessive rates while final rates are being
developed. Furthermore, it will put into doubt the continued existence of any excess
revenues that could otherwise create a financial incentive for traffic stimulation.
The policy objectives and the Policy Direction support the requested relief
68. The Commission ruled in Decision 2017-456 that the financial arrangements in
place at the time violated the policy objectives set out in subsections 7(a), (b), (c)
and (h) of the Act. Regardless of the specific financial arrangements in place today
which have led to the resumption of traffic stimulation, the current situation still
offends the same policy objectives and also the Policy Direction. The three
elements of requested relief are the next steps toward correcting this situation.
69. Objective 7 (a) is to facilitate the orderly development throughout Canada of a

telecommunications system that serves to safeguard, enrich and strengthen the
social and economic fabric of Canada and its regions. Traffic stimulation, whether
through mandated or forborne toll interconnections, has disrupted the order in the
telecommunications system. It has led to disputes between carriers and will
continue to do so, and creates upward pressure on retail rates.
70. Making Iristel’s IXSP termination rate interim will reduce the financial risk
associated with traffic stimulation further, by creating a situation where IXSPs can
foresee an eventual rate reduction for traffic to Iristel customers. It will reduce, but
perhaps not eliminate, any benefits derived through the stimulation of traffic.
71. The Bundled CAT rate is misapplied as Iristel’s IXSP terminating rate because it
includes costs for the support of satellite and terrestrial toll-connect links not used
for calls to Iristel’s retail VoIP customers, or for that matter, for calls to the majority
26
ABRIDGED
of the population in the North. Even in the absence of stimulated traffic, it
encourages CLECs to serve the populated areas, not the remote communities. In
this way, it detracts from the orderly development of the telecommunications
system in the North.
72. Objective 7 (b) is to render reliable and affordable telecommunications services of

high quality accessible to Canadians in both urban and rural areas in all regions of
Canada. Traffic stimulation creates an upward price influence on retail services in
Canada, creating an incentive for TSPs to reduce the value of their retail offerings.
For instance, they could choose to remove NPA 867 from unlimited calling plans.
Correcting CLEC rates for IXSP interconnection in the North, including making
Iristel’s rates interim, will eliminate the financial incentive behind traffic
stimulation.
73. Using the Bundled CAT rate as a CLEC toll terminating rate creates an incentive
for CLECs to engage in traffic stimulation, and to enter areas not served by satellite
(or expensive terrestrial) links. Affordable telecommunications services in remote
areas are best achieved by ensuring that carrier payments for satellite services are
directed to the service provider actually incurring the satellite cost to deliver traffic.
Since Iristel serves retail customers with access independent VoIP, any satellite
costs would be incurred by the retail customer through rates for retail Internet
access, not by Iristel. Making Iristel’s toll terminating rate interim will be the first
step in re-aligning charges for toll-connect link costs with the service providers that
incur these costs.
74. Objective 7 (c) is to enhance the efficiency and competitiveness, at the national and
international levels, of Canadian telecommunications. In Decision 2017-456, the
Commission determined that the provision of numbers in the North for services or
customers not located in the North, is inefficient.52 All three elements of relief will
serve to limit or reduce traffic routed in this manner.
52
27
ABRIDGED
75. Objective 7 (h) is to respond to the economic and social requirements of users of
telecommunications services. Paying excessive rates for toll termination in the
North, exacerbated by traffic stimulation, creates upward pressure on retail prices
to the detriment of the economic requirements of users.
76. The Policy Direction requires that the Commission, when relying on regulation,
should use measures that neither deter economically efficient competitive entry nor
promote economically inefficient entry. A mandated toll termination rate that is
significantly above the CLEC’s incremental costs promotes inefficient entry, by
creating a source of revenue from other carriers that can be used to subsidize entry.
As Iristel has shown, terminating rates that are above the cost of call completion
also create an opportunity for traffic stimulation.
Conclusion
77. Traffic stimulation in Canada is no longer a hypothetical concern. The Commission

determined that it existed because of Iristel’s revenue sharing arrangement (which
depends on having excess revenues to share) and resulted in a violation of the Act.
Traffic stimulation has returned only months after the Commission’s first directive
aimed at stopping it, and it will certainly persist unless the underlying financial
incentives are changed. Additional rules, sanctions or both may also be needed.
However, the length of the proceeding that led to Decision 2017-456 was over a
year, and if a full year of profit can be obtained through any new traffic stimulation
scheme, then it will remain a problem.
78. Mandated toll interconnection is the best alternative to negotiated wholesale toll
rates, for which TSPs can expect no relief from the Commission for charges
associated with stimulated traffic. However, as long as Iristel’s tariffed toll
terminating rate remains at $0.038/minute, it will overcompensate Iristel for a
mandated interconnection service. It will also present the opportunity for profitable
traffic stimulation and create upward pressure on the retail and wholesale services
of other TSPs.
28
ABRIDGED
79. Unless relief is granted, service providers facing costs for stimulated traffic will
eventually have to reduce the value of their retail offerings as a way of containing
costs. The tariff measures proposed in this Application are designed to eliminate
the profit which drives traffic stimulation. They may not result in the complete
cessation of traffic stimulation, but they are important for immediate relief.
80. Excessively high terminating rates create the opportunity for arbitrage. The
Commission has found this to have occurred already and there is substantial reason
to believe that it is occurring again. The Commission can and should immediately
address this problem with the rate that it controls, i.e., Iristel’s rate for IXSP
interconnection in the North. However, it is not necessary for the Commission to
complete the new review of traffic stimulation involving Iristel’s numbers to
address Iristel’s unjust and unreasonable rate for IXSP interconnection in the North.
The Commission only needs to recognize that there is substantial doubt that Iristel’s
current rate is just and reasonable.
81. Accordingly, TELUS requests that the Commission:
a) initiate a full public proceeding to review the renewed traffic stimulation

activities toward Iristel’s numbers in the ILEC serving territory of
Northwestel to determine which TSPs are involved in the artificial
stimulation of voice traffic to Iristel’s numbers and the nature of their
involvement, and to consider whether general rules are required to prevent
further occurrences;
b) direct that Iristel file a tariff notice to establish a new rate for long distance
call termination to its customers in the North; and
c) make interim Iristel’s current tariffed rate for long distance call termination
in the North, allowing for the possibility of retroactive applicability of final
rates.
* * * End of document * * *
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TELUS Application For Interim Iristel Rate - ABRIDGED

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BEFORE THE CANADIAN RADIO-TELEVISION AND

TELUS COMMUNICATIONS INC.

APPLICATION TO CURTAIL TRAFFIC STIMULATION ACTIVITIES

1. TELUS Communications Inc. (“TELUS”) hereby applies, pursuant to Part 1 of the

2. As will be discussed more thoroughly in this Application, the artificially stimulated

3. In order to discourage traffic stimulation permanently and to provide interim

a) initiate a full public proceeding to review the renewed traffic stimulation

5. Part b) of the requested relief is also in the interest of a permanent cessation of

7. Furthermore, Iristel’s current rate should be made interim because it significantly

8. In this Application, TELUS will:

b) demonstrate that the resumption of traffic stimulation has conferred an

e) explain why TELUS expects that Iristel’s incremental cost of service is

9. Attachment 1 to this Application contains a list of numbers that TELUS suspects

Traffic stimulation has resumed to Iristel’s numbers in the North

The history of traffic stimulation in the North

36. With respect to traffic efficiency, although calls to

47. The Commission therefore imposes a condition under

2. Specifically, Iristel has informed Free Conference Call

Traffic stimulation has resumed to 2017 levels

Table 1: TELUS Traffic to Iristel’s NPA 867 Numbers

Month Total minutes Average call

22. TELUS’ investigations of the frequently-called numbers or numbers with unusually

1. Iqaluit number 867-292-3030 is the Canadian dial-in number for

3. Iqaluit number # # connects to a listen-only service for Punbaji

The return of stimulated traffic justifies a public proceeding

A Commission investigation would aid the public proceeding

38. A Commission investigation would assist the public proceeding by establishing a

How CLEC rates are determined for mandated interconnection services

Further, the Commission considers that it is in the public

However, the Commission has determined in this decision

Northwestel’s Bundled CAT rate

45. The Commission reviewed Northwestel’s IXSP interconnection rate in the

Table 2: Costing of Northwestel’s CAT Rate

Revised CAT Rate

Applicability of the Bundled CAT rate to CLEC tariffs.

Iristel’s costs are below the Bundled CAT rate

55. Comparison 2: Iristel and TELUS had previously negotiated a rate of

# Assuming, again, that Iristel sets

60. As discussed above, Iristel is an access-independent VoIP provider that delivers

61. In summary, Comparison 1 implies a terminating cost of # #. From

However, since the Bell companies’ toll transport service

Waiting for final rates would not be a timely remedy

69. Objective 7 (a) is to facilitate the orderly development throughout Canada of a

72. Objective 7 (b) is to render reliable and affordable telecommunications services of

77. Traffic stimulation in Canada is no longer a hypothetical concern. The Commission

81. Accordingly, TELUS requests that the Commission:

a) initiate a full public proceeding to review the renewed traffic stimulation

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