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Order CRTC 2001-696
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Ottawa, 13 September 2001
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The Commission approves a TCI proposal for rate increases and
restructured tariffs for local radio program channel service
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Reference: Tariff notice 320 |
1. |
On 8 December 2000, TELUS Communications Inc. (TCI) filed tariff
notice 320 proposing to consolidate the former TELUS
Communications (Edmonton) Inc. (TCEI) tariff for radio program
service and the former TCI tariff for local exchange radio program
channel service into the new TCI tariff item 670 Local radio
program channel service (LRPCS). The company also proposed
significant rate increases for the service to bring the rates in
line with the rates for local channels, a similar service.
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2. |
The company also proposed to replace the existing service design
charge which is based on an hourly rate, multiplied by the actual
time spent to design a circuit, with a flat rate per circuit. The
proposed rates are the same as those approved for the company in
British Columbia. |
3. |
Interventions were received from the Canadian Association of
Broadcasters (CAB) and the Alberta Broadcasters Association (ABA). |
4. |
The CAB submitted that the proposal to restructure rates for
certain broadcast services across Alberta would result in a rate
increase of 300% for some radio stations. In addition, the proposal
to increase service charges by as much as 700% will be particularly
hard on those small-market radio broadcasters who have yet to make
the required capital investment in alternate digital technology.
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5. |
The ABA submitted that the proposed rates would make it
uneconomic for many radio broadcasters to continue the local
programming practice of "remote broadcasting". Remote
broadcasts, which require LRPCS at affordable rates, allow local
radio stations to deliver live, local-event coverage, as well as
live, extended-form local advertising. The ABA argued that both of
these types of programs are critical to the delivery of diverse,
high quality local broadcasting to Albertans.
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6. |
The ABA noted that TCI stated that it was proposing to change the
price cap designation of these circuits by TCEI from Other capped
services to Uncapped services in order to be consistent with
classification of this service in the rest of Alberta (as well as
the price cap classification for similar services in Bell Canada and
TELUS Communications (B.C.) Inc. (TCBC) territories). The ABA
submitted that the price cap classification of this service is not
clear in TCI or TCBC territory and in fact is designated as Other
capped services in Bell Canada territory. The ABA noted that it
disagreed with the proposal by TCI to treat LRPCS as an uncapped
service and submitted that the company should have demonstrated that
the proposed changes in TN 320 comply with the price cap
constraints.
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7. |
The ABA also objected to TCI's proposed "bundling" of
an equalization payment with the per quarter-mile rate for these
circuits. The ABA stated that TN 320 would make equalization a
mandatory service feature, even for customers who do not need it.
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8. |
In its reply, TCI submitted that the CAB case includes incorrect
percentage increases and worst-case scenarios rather than averages.
TCI noted that the CAB does not disagree with the stated objective
of bringing the rates in line with existing local channel tariffs.
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9. |
TCI also submitted that, apart from supporting the CAB assertions
in general and qualitative terms, the ABA comments have not provided
any quantifiable example to substantiate the various claims of
adverse effects of the proposed rates on ABA members. |
10. |
TCI noted that in Telecom Decision CRTC 98-2, Implementation
of price cap regulation and related issues, dated 5 March
1998, Attachment D (page 2) specifically identified TCBC item 406
under Uncapped services. The TCI LRPCS base-rate reference set-up
for Edmonton and Alberta is similar to the TCBC base-rate reference
set-up for an equivalent service. Therefore, TCI denied the ABA
allegation that TCI "may have mischaracterized the treatment of
these services for price cap purposes by the CRTC in Telecom
Decision CRTC 98-2."
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11. |
The Commission notes that there was disagreement about the
correct price cap classification of the proposed amalgamated tariff.
However, since the revenue impact of the proposed rate changes is
small compared to the total revenues of the price cap baskets, the
Commission considers that the price cap classification of this
service has no material impact on the ruling in this proceeding.
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12. |
The Commission considers it appropriate to replace the existing
extra work charge with the proposed flat rate service design
charges.
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13. |
The Commission notes that the proposed rate structure has
different rates for the different levels of equalization, and
therefore disagrees with ABA's submission that this proposal
constitutes inappropriate bundling.
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14. |
The Commission notes that the proposed rates for LRPCS bear a
reasonable relationship to the rates for voice grade local channels
that use similar facilities, and considers that the resultant rate
increases are not excessive.
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15. |
Accordingly, the Commission approves TN 320.
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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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