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Decision CRTC 2001-767
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Ottawa, 19 December 2001
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Reference: 8678-C12-11/01 and
8624-B20-01/00
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To: Interested parties
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Subject: Public Notice CRTC 2001-37 – Price cap review and
related issues – Disposition of the MTS service improvement plan
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Background
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1. |
In the proceeding initiated by Price cap review and related
issues, Public Notice CRTC 2001-37 dated 13 March 2001, MTS
Communications Inc. filed a proposed service improvement plan (SIP)
dated 6 April 2001, in which MTS stated that it proposed to spend
$55 million in capital expenditures in the 10-year period,
2000-2009, to upgrade service to its underserved customers. MTS
submitted that it had no unserved customers and that it had
addressed the Commission’s basic service objective (BSO) set out
in Telephone service to high-cost serving areas, Telecom
Decision CRTC 99-16, dated 19 October 1999. MTS indicated that
completion of its SIP would provide service to virtually all of its
customers in its territory in compliance with the Commission’s
BSO.
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2. |
Manitoba Keewatinowi Okimakanak (MKO) provided comments with
respect to MTS’ SIP. MKO referred, among other things, to the
following concerns:
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a) inadequate consultation between MTS and MKO prior to the
filing of the MTS SIP to: (i) consider additional service options
and levels; and (ii) study the possibility of MKO securing
additional sources of funding for capital and ongoing expenses to
give the SIP a better chance of meeting the current and future
needs of the remote and isolated communities of northern Manitoba;
and
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b) a lack of toll-free access to the Internet in some
communities, as well as generally poor quality of service within
the MKO communities served by satellite; problems cited include
echo, delay, and static on the lines; difficulty in getting
outside lines at certain times of the day; and poor fax service.
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3. |
MTS submitted, among other things, that it had invested
substantial time and money travelling to its satellite sites, to
test and re-verify its network equipment, with the assistance of
Telesat Canada. Face-to-face meetings were held with customers,
extensive testing was done of its equipment, all with the aim of
investigating the actual state of systems in northern Manitoba. MTS
also submitted that its senior management has had numerous meetings
over the past year with Chiefs and Councils of different First
Nations in northern Manitoba, concerning a wide range of service,
network and operations issues. MTS also argued that MKO is actually
requesting high-speed access to the Internet, and perhaps access to
other services for MKO communities. MTS submitted that the provision
of high-speed Internet access is not part of the BSO. MTS submitted
that it would not be in the public interest to defer the approval or
implementation of any part of its SIP proposal. MTS submitted that
the Commission should reject MKO’s proposal and approve MTS' SIP
as filed without delay.
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4. |
The Commission posed several interrogatories to MTS and Telesat
Canada during the proceeding regarding the quality of service
concerns raised by MKO. MTS stated that it was confident that the
problems would be corrected. During the proceeding, MTS’ witness
indicated that the company would be visiting every MKO community
served by satellite by the end of October 2001.
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MTS' service improvement plan
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5. |
In Decision 99-16, the Commission established the following
parameters for SIPs:
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41. The Commission directs all incumbent local carriers to file
service improvement plans for Commission approval, or to
demonstrate that the basic service objective has been and will
continue to be achieved in their territory (Appendix 3 sets out
the filing and implementation schedule). Plans filed should
indicate how incumbent local carriers will reinforce their
existing networks where necessary to improve service or to extend
service to unserved areas. Subject to network design and cost
limitations, these plans should:
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- Incorporate least-cost technology.
- Target larger communities or areas first.
- Serve unserved areas prior to providing upgrades.
- Serve permanent dwellings before seasonal ones.
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42. Plans must also include proposals to fund such
improvements. When funding proposals include rate increases, a
reasonable balance should be achieved between the speed and cost
of implementation and the need to maintain affordable rates…
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43. Incumbent local carriers should consult stakeholders prior
to preparing their service improvement plans. In addition,
communities and other organizations will have an opportunity to
comment on the reasonableness of the carriers' proposals before
the Commission rules on them.
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6. |
In the Commission's view, prior consultation with stakeholders
(as required by paragraph 43 of Decision 99-16) regarding MTS' SIP
proposal was inadequate. The Commission notes that consultation with
stakeholders is an important element in the development of the most
appropriate and efficient SIP proposals.
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7. |
The Commission is also mindful of the importance of deploying
SIPs as expeditiously as possible to the benefit of consumers, and
is concerned about a plan that would take 10 years to
implement.
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8. |
As stated in Decision CRTC 2001-582, dated 10 September 2001, the
Commission is not considering at this time any fundamental changes
to the determinations in Decision 99-16. This means that with
respect to Internet access, for example, the BSO would be met
through the provision of individual line service with Touch-Tone
dialling, provided by a digital switch with capability to connect
via low-speed data transmission to the Internet at local rates.
Broadband access is not required pursuant to the BSO. However, the
Commission also considers that it is appropriate for parties to
explore whether any additional sources of funding for current and
future needs of the remote and isolated communities would be
available in the near future. If such funding was available and
sufficient to offset any increase in cost to MTS, it may be
appropriate in some circumstances to incorporate funds for future
needs.
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9. |
Accordingly, in balancing these circumstances, and based on the
record of this proceeding, the Commission approves MTS' SIP
expenditures for the years 2000 to 2002 only. The Commission notes
that the recovery of such funds will be disposed of in the decision
with respect to PN 2001-37. The remainder of MTS' SIP proposal is
denied. With respect to 2003 and beyond, the Commission directs MTS
to file a revised SIP proposal, based on a five-year plan
(2003-2007), after further consultation with stakeholders as
discussed below.
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10. |
The Commission directs MTS to consult with stakeholders,
including MKO, to develop a revised SIP proposal. The Commission
directs MTS to form a consultative committee, which includes MKO,
and any other interested stakeholders. In addition to general
consultation regarding MTS' revised SIP proposal, the consultative
committee is to provide specific feedback on the following issues:
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(a) exploring options for current and future needs of the
remote and isolated communities and whether this can be
supported without additional cost to MTS by additional funding
from MKO or others; and
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(b) the consultative committee should also prepare and
approve minutes of its meetings; copies of the minutes are to be
forwarded to the Commission as soon as possible after each
meeting.
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11. |
MTS is also directed to file with the Commission, within 30 days
of the date of this decision, a suggested schedule for consultations
with the consultative committee. The Commission is of the
preliminary view that MTS' revised SIP proposal should be filed no
later than 30 June 2002. MTS may propose, within 90 days of the date
of this decision, an alternative date for the filing of its revised
SIP proposal, but should allow sufficient time for Commission
consideration to allow construction to proceed in 2003.
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12. |
The Commission also wishes to note its concern regarding the
quality of service issues raised by MKO in this proceeding. The
Commission is particularly concerned that the current level of
satellite service to health care institutions in MKO communities may
be inadequate. The Commission also recognizes that the parties
continue to hold conflicting views as to the reliability of such
satellite services. While acknowledging the steps taken by both
parties to facilitate constructive and open communication, the
Commission wishes to ensure that such communication is further
strengthened and maintained. The Commission reminds both MTS and MKO
that each party bears a responsibility for identifying any service
problems as promptly as possible, and informing the other party
expeditiously of any such problems. The Commission expects both
parties to work together diligently to develop joint solutions to
any service problems. The Commission also notes that some service
difficulties may arise not from technical malfunctions, but from a
need for consumer education and awareness regarding products and
services. The Commission considers that MTS bears a responsibility
in this regard, and encourages MTS to collaborate with MKO to
develop strategies to provide thorough and accessible information
regarding MTS' products and services.
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13. |
The Commission requests both MTS and MKO to provide reports to
the Commission by 31 March 2002 regarding the steps that have been
taken to further build and strengthen communication between MTS and
the MKO communities regarding telecommunications services.
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14. |
The Commission expects MTS to resolve expeditiously any
deficiencies in quality of service that have been identified in MKO
communities. The Commission also directs MTS to file a report within
30 days from the date of this decision providing a list of any
quality of service problems reported and/or found in MKO satellite
communities from 1 October 2001 onwards, along with details as to
corrections made and an indication that MKO users are satisfied with
the corrections to the service. MTS is to continue filing this
report on a quarterly basis for the next year. The initial report
must also address whether the MKO satellite communities can be
monitored and maintained through a centralized network management
system; if not, MTS must provide a proposal for provision of such a
system. This report will be made publicly available, allowing MKO,
and any other interested party, the opportunity to comment, if
desired.
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Unserved premises
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15. |
In letters dated 31 October and 7 November 2001, Commission staff
requested MTS' comments on correspondence received by the Commission
suggesting that MTS might have at least six unserved premises. MTS
was also requested to comment on whether it would be appropriate for
it to serve any unserved customers according to the same criteria
outlined in Bell Canada's SIP proposal, and if not, to propose
alternate criteria. MTS was advised that the letters of
31 October and 7 November 2001, as well as MTS' response, would
form part of the PN 2001-37
proceeding.
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16. |
In its response dated 9 November 2001, MTS maintained its
position that it has no unserved customers, suggesting that its
current General Tariff CRTC 24001 covers the premises in question.
In particular, MTS stated that adequate provision already exists
within tariff 24001 for service extension in areas where the BSO has
been met and unusual cost is required to extend existing service to
individuals.
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17. |
In paragraph 41 of Decision 99-16, the Commission directed all
incumbent local carriers to file SIPs for Commission approval, or to
demonstrate that the BSO has been and will continue to be achieved
in their territory. Plans were to address, among other things, the
extension of service to unserved areas, and were to, in general,
serve unserved areas prior to providing upgrades.
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18. |
MTS referred to paragraph 51 of Decision 99-16, in which the
Commission stated, in part, that "no change is warranted to the
tariffs or the Terms of Service with regard to the handling of
ongoing service extension requests." MTS argues that it has no
unserved areas or unserved customers, because all individuals who
have requested service are in areas served by MTS, but at locations
where there is a requirement for the company to incur unusual
expense to extend its existing facilities to their properties.
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19. |
The Commission does not consider it appropriate to make
distinctions between unserved customers in "served areas"
versus "unserved areas" as proposed by MTS. In developing
its revised SIP proposal described above, the Commission directs MTS
to address capital criteria for the extension of service to unserved
customers, and also to determine the number of unserved customers
that would be included and excluded in its plan, and a cost estimate
for the provision of service.
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Yours sincerely,
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Ursula Menke
Secretary General
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Prepared by Hugh Thompson, (819) 953-6081 |
Date Modified: 2001-12-19
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