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Order CRTC 2001-813
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Ottawa, 5 November 2001 |
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SATAT – 2000 and 2001 Carrier Access Tariffs and Network
Access (¼ mile) Tariffs
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Reference: SATAT tariff notices 13 to
30 (with related A/B
filings) |
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The Commission approves final 2000 and 2001 Carrier Access
Tariffs (CATs) and Network Access (¼ mile) Tariffs, effective
1 January 2000 and 2001 respectively, for CoopTel,
Courcelles, La Baie, Milot, St-Liboire, Sogetel, Upton and Warwick. |
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The Commission approves a final 2000 CAT and ¼ mile tariff and
an interim 2001 CAT and ¼ mile tariff, effective
1 January 2000 and 2001 respectively, for Nantes. |
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1. |
Pursuant to Order CRTC 2000-1159, SATAT – Final 1999 Carrier
Access Tariffs and network (¼ mile) tariffs, dated
19 December 2000, the Société d'administration des
tarifs d'accès des télécommunicateurs (SATAT) filed, on behalf of
its members, proposed final 2000 Carrier Access Tariffs (CATs) and
Network Access (¼ mile) Tariffs and interim 2001 CATs and ¼ mile
tariffs under tariff notices 13 to 30 (with related A/B
filings) on 21 February 2001, 24/25 July 2001 and
20 August 2001. |
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Interim or final CAT rates – Forecast or proxy minutes |
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2. |
SATAT proposed final 2000 CATs for all companies except La
Compagnie de Téléphone de Warwick. SATAT requested only interim
2001 CATs for all companies, due to concerns over the fluctuation of
conversation minutes during 2001 for its member companies noted
above. |
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3. |
In addition, la Compagnie de téléphone Nantes inc. requested
interim 2001 rates (CAT and ¼ mile), as it was not in a position to
provide estimates for 2001 because its service improvement plan
(SIP) has not been approved by the Commission. |
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4. |
The Commission considers it appropriate for Nantes to propose
revised 2001 rates CAT and ¼ mile minute forecast, once its SIP has
been approved. |
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5. |
Warwick requested interim 2000 and 2001 CAT rates, as it was
awaiting a decision on the review and vary application of its 1999
CAT order. |
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6. |
With respect to Warwick's request for interim rates, the
Commission notes that it recently approved Warwick's review and vary
application in Order CRTC 2001-779, dated 26 October 2001.
Therefore, Warwick's CAT rates can be considered on the same basis
as the other SATAT member companies. |
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7. |
With respect to all other SATAT member companies, the Commission
is concerned that, should the 2001 CATs only be made interim, they
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 the actual minutes would be used for
the billing and collection of CAT revenues. |
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9. |
Accordingly, the Commission considers it appropriate to set CAT
and ¼ mile rates for 2001 as final for all companies except Nantes. |
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10. |
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 SATAT member
companies and the toll providers. |
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11. |
When Decision 99-5 was issued, the Commission expected that the
independents and their toll providers 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 the 2000
actual and 2001 forecast minutes for most of the SATAT member
companies. |
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12. |
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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13. |
The Commission is of the view that if proxy minutes were used,
the risk for both the SATAT member companies and toll providers
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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14. |
Given the Commission's desire to finalize CAT rates sooner rather
than later and the increased difficulty in forecasting minutes, the
Commission directs the SATAT member companies to use the minutes (as
approved below) as proxy minutes for purposes of billing and
collection of CAT revenues for the years 2000 and 2001. |
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15. |
The Commission considers it appropriate for Nantes to provide a
revised 2001 minute forecast when filing its final 2001 CAT and ¼
mile rates. |
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Minutes to be used in the calculation of the final CAT rates |
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16. |
SATAT submitted measured conversation and direct access line
(DAL) minutes for 2000 for all nine SATAT member companies. Bell
Canada submitted actual conversation minutes for five SATAT member
companies for 2000. |
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17. |
The Commission notes that the differences in the minute data are
not significant. Based on its review of the submissions, the
Commission finds the data provided by SATAT for 2000 to be
reasonable and complete. |
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18. |
Therefore, the Commission has set the final 2000 contribution and
direct toll rates using SATAT's minutes. As identified in paragraph
14, these same minutes should also be used for the billing and
collection of CAT revenues. |
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19. |
SATAT initially projected a 3% increase in minutes for 2001 for
eight of the nine companies and a 1% increase for Warwick. SATAT
then filed revised minute forecasts for six companies to reflect the
reduced traffic patterns exhibited during the first six months of
2001.
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20. |
Bell Canada initially submitted that a 3% increase over its 2000
conversation minutes was a reasonable estimate for 2001. Subsequent
to SATAT's revised filing, Bell Canada disagreed with three of the
revised forecasts and provided its own revised minute forecasts for
CoopTel, Milot and Warwick. |
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21. |
The Commission finds the differences in the minute data for 2001
provided by SATAT and Bell Canada are not significant and approves
the use of SATAT's forecasted minutes for the purpose of calculating
of the 2001 CAT rates. |
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22. |
Therefore, the final 2001 contribution and direct toll rates
(interim for Nantes) have been set using SATAT's minute forecast. As
identified in paragraph 14, these same minutes should also be used
for the billing and collection of CAT revenues. |
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Contribution requirements |
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23. |
SATAT's proposed 2000 and 2001 contribution requirements were
generally filed in accordance with the directives set out in
Decision 99-5. i.e., the lower of (a) the contribution requirement
based on the Phase III calculation and (b) the previous year's
approved contribution requirement, adjusted for local rate increases
and one time increases. |
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Adjustments required to the 2000 contribution amounts and rates |
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24. |
Nantes proposed a 2000 contribution requirement that was $4,568
in excess of its 2000 base and explained that the increase resulted
from additional administrative expenses related to its participation
in Public Notice CRTC 2000-54, Independent telephone companies'
service improvement plans, dated 17 April 2000. |
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25. |
Warwick proposed a 2000 contribution requirement that was $26,428
in excess of its 2000 base and explained that the increase was the
result of a loss on the disposal of an asset. |
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26. |
The Commission considers that, in accordance with Decision 99-5,
the contribution requirements should not be increased to recover
expense increases experienced during the normal course of business. |
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27. |
Therefore, the proposed contribution requirements for Nantes and
Warwick have been reduced accordingly. |
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28. |
The Commission notes, however, that it will consider the
increased administrative costs for Nantes when it finalizes Nantes'
SIP application filed pursuant to PN 2000-54. |
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Adjustments required to the 2001 contribution amounts and rates |
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29. |
In 2000 and 2001, Warwick proposed that the increase in its
regulatory fees be allocated 100% to the direct toll component. |
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30. |
Consistent with the Commission's determinations in SATAT's 1999
CAT and Warwick's subsequent review and vary application, the
Commission is of the view that the activities represented by these
expenses relate as much to the local side of the business, as they
do to the toll side, and should therefore be allocated accordingly. |
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31. |
Therefore, 50% of Warwick's regulatory expense has been
re-allocated to its contribution requirement and deducted from its
direct toll component, for both 2000 and 2001. |
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32. |
The Commission notes that Warwick's proposed 2000 contribution
requirement is at its 1999 cap and, therefore, no upward adjustment
can be made. However, since Warwick's proposed 2001 contribution
requirement is less than its 2000 cap by more than $5,000, the
Commission has increased Warwick's proposed 2001 contribution
requirement by $5,000, the amount re-allocated from its direct toll
component. |
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33. |
After including the adjustments noted in paragraphs 27 and 32,
the Commission approves the final 2000 and 2001 contribution
requirements and rates (interim for Nantes for 2001) as set out in
the Appendix of this order. |
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Direct toll component |
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34. |
SATAT's proposed 2000 and 2001 direct toll components were filed
in accordance with Order 2000-1159 and explanations were provided
for the companies that experienced a year-over-year increase in
their direct toll components in excess of the 5% threshold. |
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35. |
Bell Canada submitted that it was concerned that, while the
contribution requirements have been reduced, the direct toll
components continue to increase. |
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36. |
Bell Canada compared the direct toll components for six of the
nine companies from 1999 to 2001 and noted that direct toll
components increased by 54% over the two years, while toll minutes
had only increased by 9.9% over the same period. |
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37. |
In response, SATAT compared the direct toll components for all
nine companies over a five-year period (1996 to 2001) and noted that
the direct toll components only increased by 31.3%, while toll
minutes increased by 40.1%. |
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38. |
The Commission has reviewed and accepts the explanations provided
by SATAT and is satisfied that the 2000 and 2001 direct toll
components are reasonable. |
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39. |
After including the adjustments noted in paragraphs 31 and 32,
the Commission approves the final 2000 and 2001 direct toll
components and rates (interim for Nantes for 2001) as set out in the
Appendix of this order. |
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Network access (¼ mile tariff) |
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40. |
The Commission approves the proposed 2000 and 2001 network access
amounts and ¼ mile tariffs as set out in the Appendix of this
order. |
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Implementation |
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41. |
In light of the above, the Commission: |
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a) approves the final 2000
company-specific contribution, direct toll and ¼ mile amounts and
rates listed in the Appendix of this order, effective 1 January
2000; |
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b) approves the final (interim for
Nantes) 2001 company-specific contribution, direct toll and ¼ mile
amounts and rates listed in the Appendix of this order, effective
1 January 2001; |
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c) directs SATAT member companies to use
their 2000 actual minutes and 2001 forecast minutes, as proxy
minutes, for the billing and collection of CAT revenues; |
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d) directs SATAT member companies to
issue amended CAT tariff pages within 15 days of the release of
this order; |
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e) directs SATAT member companies to
proceed with billing adjustments as expeditiously as possible; |
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f) directs Nantes to file final 2001
Carrier Access and Network Access (¼ mile) Tariffs within 30 days
after receiving final determination of its SIP application; and |
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g) directs SATAT member companies to
provide actual 2001 rates of return for the regulated portion of the
companies when they file actual 2001 Phase III results, by
31 October 2002, 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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