Licensing International Services in Canada
In Canada, the provision of basic international telecommunications services requires a class licence. The requirement to obtain a licence to provide international telecommunications services is set out in section 16.1(2) of the Canadian Telecommunications Act (the “Act”). This section stipulates that telecommunications service providers that provide international telecommunications services within a class specified by the Canadian Radio-television and Telecommunications Commission (the “CRTC”) must obtain an international telecommunications service licence.
The framework of the international telecommunications services licensing regime was established by the CRTC in Telecom Decision CRTC 98-17 “Regulatory Regime for the Provision of International Telecommunications Services” (“Decision 98-17”). In this Decision, the CRTC adopted a class licence-based approach to regulating the provision of basic international telecommunications services. Aspects of this framework were subsequently modified following a public consultation on the licensing regime. Details of the modifications of the framework were set out in a Telecom Circular issued by the CRTC (Telecom Circular CRTC 2005-8).
Pursuant to Telecom Decision 98-17, there are two classes of basic international telecommunications services (“BITS”) licences:
- Class A licensees are "those who operate telecommunications facilities, whether owned by them or leased from a separate facilities provider, used in transporting basic telecommunications service traffic between Canada and another country; and/or those who operate telecommunications equipment that converts (i) circuit-switched basic international minutes originating in Canada to non-circuit switched traffic, or (ii) non-circuit switched traffic originating outside of Canada to basic minutes terminating in Canada."
- Class B licensees are "those who do not operate telecommunications facilities owned by them or leased from a separate facilities provider used in transporting basic telecommunications service traffic between Canada and another country… [This includes] service providers who only resell the switched services of other service providers or who hand off all of their international traffic to another service provider in Canada for termination in another country."
In practice, there is no meaningful distinction between the two classes of licence. The terms and conditions of each class of licence are substantively the same and the application procedure for each class of licence is identical. Although Class B licensees were at one time exempt from making universal service payments, at present, both classes of licensees are required to participate in the Canadian contribution (universal service) regime.
The requirements and procedures for obtaining a BITS licence are outlined in paragraphs 351 to 367 of Decision 98-17. Some of the requirements were modified in Telecom Circular CRTC 2005-8. Applicants for licence are required to file a statement containing certain prescribed information about, inter alia, the applicant, its jurisdiction of incorporation, the contact information of the applicant’s Response Manager, and certain details about the nature of the applicant’s operations. This statement must be made on the public record and by affidavit.
Once a licence application is filed with the CRTC, it is placed on the public record in the CRTC’s public examination rooms. At present, licence applications are not made available for public review on the Internet.
If the application is satisfactory on its face and if no adverse comments concerning the application are received, then a licence is issued after 21 days of having been placed on the public record. If adverse comments concerning an application are received, the CRTC must consider and dispose of the comments as soon as it is possible.
The CRTC has published a set of instructions for preparing the application for obtaining a BITS licence. This set of instructions and a draft affidavit for submission as an application for licence are posted on the CRTC’s website. A link to these documents is set out below.
In order to facilitate the licensing process, the CRTC has published a “Fact Sheet” about international services licensing that explains the background to the BITS licensing regime. This Fact Sheet has links to a number of important documents, including the actual licence application, the terms and conditions of a BITS licence, and the list of licensees.
BITS licences are subject to only minimal terms and conditions. The main requirements imposed upon BITS licensees relate to keeping information on file with the CRTC current, to comply with the terms of the Canadian contribution (universal service) regime, a prohibition on engaging in anti-competitive conduct, and to file any information required to be filed by the CRTC. The initial term of licence is ten (10) years—the maximum licence term allowed under section 16.3(4) of the Telecommunications Act.
The original terms and conditions of licence are set out in Attachment 2 of Decision 98-17. However, these terms and conditions have been amended on a number of occasions. The most recent version of the terms and conditions of BITS licences are available on the CRTC’s website. A link to a copy of the terms and conditions of a Class A BITS licence is also set out below.