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Telecom Decision CRTC 2002-9
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Ottawa, 12 February 2002
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CRTC directs Aliant Telecom Inc. to submit individual-company
price cap summaries in tariff notices
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Reference: NewTel tariff notice (TN) 657, and NBTel TNs
862 and
865
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Summary
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Recently, Aliant Telecom Inc. (Aliant Telecom) filed three tariff
applications on behalf of NewTel Communications Inc. (NewTel) and
NBTel Inc. (NBTel), two of Aliant Telecom's regional
telecommunications companies. The three filings included amalgamated
price cap summaries for all four of Aliant Telecom's regional telcos.
The Commission asked Aliant Telecom to submit separate summaries for
NewTel and NBTel. Aliant Telecom noted that amalgamated information
appeared to be sufficient for Commission rulings on previous
applications. |
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However, the Commission stated that, in all the specific examples
cited by Aliant Telecom, the Commission was satisfied that the
applications, in fact, complied with individual-company price cap
criteria under the current price cap regulatory regime. |
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The Commission determines that, at this time, the amalgamation of
company-specific information would provide Aliant Telecom with
additional pricing flexibility that would be beyond the flexibility
established under the price cap regime. In this decision, the
Commission directs Aliant Telecom to submit individual price cap
summaries for the three recent tariff applications, as well as any
other tariff application that has been filed on an amalgamated
basis. |
1. |
On 29 June 2001, Aliant Telecom Inc. (Aliant Telecom) filed NBTel
Inc. (NBTel) tariff notice (TN) 862 and NewTel Communications Inc. (NewTel)
TN 657, providing for changes to the late payment and non sufficient
funds charges. Aliant Telecom included a price cap summary that was
prepared on an amalgamated basis. |
2. |
On 28 September 2001, Aliant Telecom filed NBTel TN 865 to revise
NBTel's General Tariff regarding rate increases for directory
assistance. TN 865 included a price cap summary that was also
prepared on an amalgamated basis for Aliant Telecom.
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3. |
By letter dated 1 November 2001, Aliant Telecom was requested to
file a separate price cap summary for NBTel that reflects the
proposed rate increases for directory assistance.
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4. |
By letter dated 7 November 2001, the Commission asked Aliant
Telecom to provide price cap summaries for NBTel and NewTel that
reflect the proposed increases in the non sufficient funds charges. |
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Aliant Telecom's submissions
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5. |
In a letter dated 28 November 2001, Aliant Telecom submitted that
the use of amalgamated indices complies with the objectives and
principles of the price cap regime, and is fully consistent with the
Commission's stated views on the treatment of pricing rules for
amalgamated companies. |
6. |
Aliant Telecom further submitted that requesting company-specific
indices for NBTel, or any of the pre-Aliant Telecom companies, is
not consistent with the Commission's determinations in three
previously approved tariff notices that supplied only amalgamated
indices and is not consistent with three additional price cap
filings that Aliant Telecom submitted in response to Commission
directions. |
7. |
Aliant Telecom stated that at no time for any 2001 price cap
filings has it proposed to use company-specific indices. In fact,
according to Aliant Telecom, on every occasion when it has submitted
2001 price cap indices, it has submitted only amalgamated indices.
Each of these occasions is listed below. |
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2001 annual price cap filing
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8. |
On 30 March 2001, Aliant Telecom filed amalgamated indices in its
2001 annual price cap filing. The price cap indices and the service
band limits of the pre-Aliant Telecom companies were calculated as
the revenue weighted average indices using the revenue weights from
the 2000 annual price cap filings.
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NBTel TN 860 and NewTel TN
650
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9. |
On 10 April 2001, Aliant Telecom filed the above identified
tariff notices to increase the monthly rates for individual line
residence primary exchange service in New Brunswick and
Newfoundland. Aliant Telecom submitted only amalgamated price cap
indices. Aliant Telecom noted that it received no questions from the
Commission on the calculation of the price cap indices filed with
the applications.
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NewTel TN 653
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10. |
On 7 May 2001, Aliant Telecom filed for rate changes for certain
Megalink service components. The attachment to the filing included
the calculation of the Aliant Telecom amalgamated price cap indices.
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11. |
Again, Aliant Telecom noted that it did not receive any questions
from the Commission on the calculation of the price cap indices
associated with this application.
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12. |
In Order CRTC 2001-472, dated 18 June 2001, the Commission
approved this application and made no mention of any requirement for
company specific price cap indices. |
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Order CRTC 2001-434-1 |
13. |
On 5 June 2001, the Commission issued order CRTC 2001-434-1, MTT
– Provincial 9-1-1 service, that amended paragraph 15
of Order CRTC 2001-434, dated 31 May 2001, to indicate that Aliant
Telecom "is directed to make the appropriate modifications to
its price cap index and service basket limits, and to amend its
actual price cap index and service band indices." These changes
were required to reflect the exogenous adjustment for the $0.19
change to Maritime Tel & Tel Limited's network access service
monthly rates as directed in paragraph 6 of Order 2001-434.
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14. |
On 13 June 2001, Aliant Telecom filed modified amalgamated
indices in response to this order. Aliant Telecom stated that it
received no questions from the Commission on the revised amalgamated
indices. According to Aliant Telecom, if the Commission did not
accept the amalgamated Aliant Telecom indices, it would have, within
a reasonable timeframe, identified to Aliant Telecom that its filing
did not satisfy its requirements.
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Island Telecom Inc. TN 554 |
15. |
On 5 June 2001, Aliant Telecom filed Island Telecom Inc. TN 554
requesting an increase to the monthly rate for individual line
residence primary exchange service. In support of that filing,
Aliant Telecom submitted revised amalgamated price cap indices to
reflect the proposed rate increase.
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16. |
Aliant Telecom again noted that it did not receive any questions
from the Commission on the calculation of the price cap indices
associated with this application.
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17. |
The Commission approved the application in Order CRTC 2001-484,
dated 21 June 2001, and made no mention of any requirement for any
additional price cap indices information. |
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Decision CRTC 2001-372
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18. |
In Decision CRTC 2001-372, dated 22 June 2001, the Commission
denied Aliant Telecom's request for exogenous treatment of the
additional costs incurred in Newfoundland and Labrador to advance
Aliant Telecom's construction plan. The Commission directed Aliant
Telecom to re-file the price cap index and its sub-basket limits to
exclude the exogenous factor associated with the advancement of the
Newfoundland and Labrador Network Enhancement Plan.
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19. |
In response to this decision, on 28 June 2001, Aliant Telecom
filed revised amalgamated indices to reflect the directions in the
decision.
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20. |
Aliant Telecom again noted that it received no questions or
commentary from the Commission on the revised amalgamated indices. |
21. |
In its 28 June 2001 submission, Aliant Telecom also noted the
Commission's letter of 10 March 1999, concerning the
amalgamated TELUS Communications Inc. (TCI) and TELUS Communications
(Edmonton) Inc. (TCEI) price cap indices. According to Aliant
Telecom, in that letter, even though the Commission expressly noted
that TCI's costs could be recovered from TCEI's customers, it
approved the amalgamation. |
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Commission determinations
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22. |
The Commission notes that prior to issuing its letter of 10 March
1999, it conducted a public proceeding to determine when and how the
regulatory rules and regimes that were established separately for
TCI and TCEI should be combined. In its 10 March 1999 letter, the
Commission included the condition that TCEI could not increase its
rates by more than 10%, notwithstanding that, under the amalgamated
price cap indices, there would be room to increase the TCEI rates by
more than 10%. |
23. |
The existing price cap regime does not allow for amalgamated
price cap indices for the individual pre-Aliant Telecom companies.
No order or decision has been issued by the Commission approving
Aliant Telecom's use of amalgamated price cap indices. |
24. |
In all the instances cited above by Aliant Telecom involving
price increases, the Commission was satisfied that Aliant Telecom
had, in fact, complied with individual price cap indices. |
25. |
However, with respect to TNs 657,
862 and 865, in the
Commission's view, the amalgamation of the company-specific indices
at this time would provide additional pricing flexibility to Aliant
Telecom beyond that which is allowed under the current price cap
regime. |
26. |
The Commission notes that the issue of price cap amalgamation is
being considered in the price cap review proceeding. |
27. |
In view of the foregoing, if Aliant Telecom wishes the Commission
to consider further TNs 657,
862 and 865, or any other tariff filing
that has been filed on an amalgamated basis, Aliant Telecom is
directed to submit individual price cap indices within 15 days of
the date of this decision. In addition, when filing a tariff
application requiring the inclusion of price cap indices, Aliant
Telecom is directed to submit individual price cap indices.
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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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