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Order CRTC 2001-644
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Ottawa, 13 August 2001
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Ontario Telecommunications Association final 2001 Carrier Access
Tariffs
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Reference: Tariff notice 72
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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 CATs revenues.
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1. |
Pursuant to Order CRTC 2000-1164, dated
21 December 2000, Ontario Telecommunications Association
(OTA) filed, on behalf of its members, proposed interim 2001 Carrier
Access Tariffs (CATs) under Tariff notice 72 on
31 January 2001.
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2. |
OTA requested interim 2001 CATs because it had not negotiated an
agreement with Bell Canada concerning the 2001 forecast minutes, and
OTA and Bell Canada were still reviewing their options to terminate
their billing and collection agreements.
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3. |
Bell Canada supported OTA's request for interim 2001 CATs, but
submitted that its 2001 forecast minutes should be used to set the
interim CAT rates.
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4. |
OTA re-filed TN 72, on 11 May 2001, to correct
certain CAT calculations and include revised 2001 forecast minutes.
OTA's revised proposed interim 2001 CATs ranged between $0.0536 and
$0.1287 per minute.
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Interim or final CAT rates
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5. |
OTA and Bell Canada agreed to proceed with interim CATs until the
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 OTA/Bell Canada proposal, the risk for both the OTA
member companies and Bell Canada would be eliminated because the
minutes used to set the final CATs 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 based on
forecast minutes and the 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 OTA 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.
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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 OTA/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. |
In response to Commission interrogatories, OTA and Bell Canada
provided revised 2001 total market forecast minutes for each OTA
member company, along with explanations for changes between the 2001
forecast minutes and the 2000 actual minutes. AT&T Canada
Telecom Services Company and Call-Net Enterprises Inc. (for Sprint
Canada Inc.) provided similar company-specific information.
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15. |
Based on an analysis of the 2001 forecast minutes and the 2000
actual minutes, the Commission notes that OTA and Bell Canada agreed
on the general direction of the change for 12 of the 18 OTA member
companies. However, there was little agreement on the magnitude of
the changes.
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16. |
Given the Commission's determination above 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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17. |
Based on the detailed company-specific explanations provided by
OTA for the changes in its 2001 forecast minutes, the Commission
considers OTA's 11 May 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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18. |
OTA's 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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19. |
The Commission has reviewed the contribution requirements for
each company and finds the proposed 2001 contribution requirements
to be appropriate and reasonable.
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Direct toll components
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20. |
OTA provided the direct toll components for all companies and
identified that only Roxborough Telephone Company Limited had a
year-over-year increase in its 2001 direct toll component in excess
of 5%. OTA provided the required explanation in support of the
increase.
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21. |
The Commission has reviewed and accepts the explanation provided
by Roxborough.
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22. |
In Order CRTC 2001-509, dated 5 July 2001, the Commission
approved revised depreciation life characteristics for People's
Telephone Company of Forest Inc., which included a different
depreciation life for the fibre optic transmission system account
than was proposed. While the change in depreciation life did not
impact People's contribution requirement, it does reduce People's
direct toll component by approximately $4,800, or a reduction of
$0.0002 in its proposed direct toll rate.
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23. |
Accordingly, the Commission approves the OTA's direct toll
components, subject to the depreciation adjustment for People's
noted above.
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Termination of billing and collection agreements
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24. |
The Commission notes that part of the rationale for proposing
interim CAT rates was that OTA 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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25. |
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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26. |
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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27. |
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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28. |
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 OTA to issue amended CAT tariff pages within 15
days;
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c) directs OTA to use its 11 May 2001 forecast
minutes as proxy minutes for the billing and collection of CAT
revenues;
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d) directs OTA to proceed with billing adjustments as
expeditiously as possible; and
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e) directs OTA 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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Appendix |
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Ontario Telecommunications Association member companies |
Final 2001 contribution rate |
Final 2001 direct toll rate |
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Amtelecom Inc. |
$0.0548 |
$0.0419 |
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Brooke Telecom Co-operative Ltd. |
$0.0672 |
$0.0340 |
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Execulink Telecom Inc. |
$0.0605 |
$0.0237 |
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Gosfield North Communications
Co-operative Limited |
$0.0446 |
$0.0295 |
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Hay Communications Co-operative Limited
top |
$0.0452 |
$0.0431
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Huron Telecommunications
Co-operative Limited |
$0.0352 |
$0.0392 |
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Lansdowne Rural Telephone Co. Ltd. |
$0.0638 |
$0.0188 |
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Mornington Communications
Co-operative Limited |
$0.0570 |
$0.0330 |
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Nexicom Telecommunications Inc. |
$0.0412 |
$0.0384 |
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Nexicom Telephones Inc.
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$0.0745 |
$0.0256 |
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North Frontenac Telephone Corporation Ltd. |
$0.0671 |
$0.0324 |
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North Renfrew Telephone Company Limited |
$0.0426 |
$0.0156 |
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People's Telephone Company of Forest Inc. |
$0.0508 |
$0.0194 |
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Quadro Communications Co-operative Inc. |
$0.0979 |
$0.0308 |
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Roxborough Telephone Company Limited |
$0.0376 |
$0.0237 |
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Tuckersmith Communications
Co-operative Limited |
$0.0263 |
$0.0273 |
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Westport Telephone Company Limited |
$0.0540 |
$0.0191 |
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Wightman Telecom Ltd. |
$0.0437 |
$0.0246 |