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Order CRTC 2001-643
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Ottawa, 13 August 2001
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Canadian Alliance of Publicly-Owned Telecommunications Systems
final 2001 Carrier Access Tariffs
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Reference: Tariff notice 13
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The Commission approves final 2001 Carrier Access Tariffs (CATs)
rates effective 1 January 2001 and directs the use of
proxy minutes for the billing and collection of CAT revenues.
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1. |
Pursuant to Order CRTC 2001-209, dated 9 March 2001,
the Canadian Alliance of Publicy-Owned Telecommunications Systems
(CAPTS) filed, on behalf of its members, proposed interim 2001
Carrier Access Tariffs (CATs) under Tariff notice 13 on
23 April 2001.
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2. |
CAPTS requested interim 2001 CATs because it had not agreed on
forecast minutes with Bell Canada, and CAPTS and Bell Canada were
still reviewing options to terminate their billing and collection
agreements.
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3. |
Bell Canada supported CAPTS' request for interim 2001 CATs, but
submitted that its 2001 forecast minutes for Kenora Municipal
Telephone System and Thunder Bay Telephone should be used to set the
interim CAT rates.
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4. |
CAPTS re-filed TN 13, on 6 June 2001, to correct
certain CAT calculations. CAPTS' revised proposed interim 2001 CATs
ranged between $0.0171 and $0.0344 per minute.
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Interim or final CAT rates
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5. |
CAPTS and Bell Canada both submitted that the CATs should only be
made interim until actual minutes become available during the first
quarter of 2002, at which time, the 2001 CATs would be finalized.
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6. |
Under the CAPTS/Bell Canada proposal, the risk for both the CAPTS
member companies and Bell Canada would be eliminated because the
minutes used to set the final CAT rates would also be used for the
billing and collection of CAT revenues.
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7. |
However, the Commission is concerned that under this proposal,
the 2001 CATs would not be finalized until sometime in 2002, after
the independent telephone companies' new regulatory framework and
revenue-based contribution collection mechanism are in place.
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8. |
According to Telecom Decision CRTC 99-5, Review of contribution
regime of independent telephone companies in Ontario and Quebec,
dated 21 April 1999, CAT rates should be set based on forecast
minutes and then actual minutes would be used for the billing and
collection of CAT revenues.
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9. |
The Commission considers that circumstances have changed
significantly since Decision 99-5
was issued in April 1999. In
particular, toll minutes have become increasingly more difficult to
forecast, resulting in increased risk for both the CAPTS member
companies and Bell Canada.
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10. |
When Decision 99-5 was issued, the Commission expected that the
independents and their toll provider would be able to forecast toll
minutes reliably. The record of this proceeding shows that this is
not the case. Further, the companies are unable to agree on 2001
forecast minutes for two of four companies.
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11. |
Prior to Decision 99-5, proxy minutes were used to set the CAT
rates and then the same proxy minutes were also used for the billing
and collection of CAT revenues.
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12. |
The Commission is of the view that the CAPTS/Bell Canada proposal
has the same result as using proxy minutes; the risk for the parties
would be eliminated.
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13. |
Given the Commission's desire to finalize CAT rates sooner rather
than later and the increased difficulty in forecasting minutes, the
Commission directs the companies to use the forecast minutes
approved below as proxy minutes for the purposes of billing and
collection of CAT revenues for the year 2001.
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Conversation and direct access line minutes
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14. |
CAPTS provided 2001 forecast minutes for all member companies.
Bell Canada provided its 2001 forecast minutes for Kenora and
Thunder Bay Telephone. In reply comments, CAPTS identified that its
2001 forecast minutes were, in fact, the 2000 actual minutes.
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15. |
Given the Commission's determination to use proxy minutes, the
issue of forecast minutes becomes less relevant because the minutes
used to set the CAT rates will also be used for the billing and
collection of CAT revenues.
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16. |
Based on the supporting explanations provided by CAPTS with its
2001 forecast minutes, the Commission considers CAPTS' 6 June
2001 forecast minutes to be reasonable and has used this forecast to
determine the contribution and direct toll rates.
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Contribution requirements
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17. |
CAPTS' proposed 2001 contribution requirements were filed in
accordance with Decision 99-5. The companies proposed the lower of
the contribution requirement based on the Phase III calculation and
the previous year's approved contribution requirement adjusted for
local rate increases.
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18. |
CAPTS also identified that, due to the introduction of a Network
Access Tariff, it had excluded any network broad service category
(BSC) surpluses from the calculation of the companies' contribution
requirements.
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19. |
According to Telecom Decision CRTC 96-6, Regulatory framework for
the independent telephone companies in Quebec and Ontario (except
Ontario Northland Transportation Commission, Québec-Téléphone and
Télébec ltée), dated 7 August 1996, the contribution
requirements should include any network BSC surpluses.
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20. |
Therefore, the Commission considers that any network BSC
surpluses should be included in the company's contribution
requirement. The Commission notes that, while three companies have
network BSC surpluses, only Dryden Municipal Telephone System
(Dryden MTS) is affected because the other two companies are limited
by the previous year's contribution requirement cap. Including
Dryden MTS's network BSC surplus in its CAT calculation reduces its
contribution requirement by approximately $14,100.
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21. |
The Commission has reviewed the contribution requirements for
each company and finds the proposed 2001 contribution requirements
appropriate and reasonable, subject to the adjustment for Dryden
MTS's network BSC surplus noted above.
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Direct toll components
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22. |
CAPTS provided the direct toll components for all companies and
identified that Bruce Municipal Telephone System (BMTS) and Dryden
MTS had year-over-year increases in their 2001 direct toll
components in excess of 5%. CAPTS provided the required explanations
in support of the increases.
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23. |
The Commission has reviewed and accepts the explanations provided
by BMTS and Dryden MTS.
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24. |
Accordingly, the Commission approves the CAPTS' direct toll
components.
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Termination of billing and collection agreements
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25. |
The Commission notes that part of the rationale for proposing
interim CAT rates was that CAPTS and Bell Canada were still
reviewing their options to terminate their billing and collection
agreements. One option is to include any compensation as part of the
2001 direct toll component of the CAT.
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26. |
In Decision 99-5, the Commission determined that the direct toll
component should be unbundled to the extent of removing those
services, such as billing and collection, which could be provided by
other toll providers.
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27. |
The Commission considers that if compensation for the termination
of the billing and collection agreements is included in the direct
toll components, then other toll providers would pay for the
termination of a service they did not require or use through higher
direct toll rates.
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28. |
Therefore, the Commission directs that compensation for the
termination of the billing and collection agreements cannot be
included in the direct toll components of the CATs.
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Implementation
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29. |
In light of the above, the Commission:
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a) approves the final 2001 company-specific contribution and
direct toll rates listed in the appendix of this order, effective
1 January 2001;
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b) directs CAPTS to issue amended CAT tariff pages within 15
days;
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c) directs CAPTS to use its 6 June 2001 forecast
minutes as proxy minutes for the billing and collection of CAT
revenues;
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d) directs CAPTS to proceed with billing adjustments as
expeditiously as possible; and
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e) directs CAPTS to provide, by 31 October 2002,
actual 2001 rates of return for the regulated portion of the
company when it files actual 2001 Phase III results, and in the
event a company has over-earned, the amount that will be
refunded to the toll provider(s).
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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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