Decision CRTC 2001-363
BY TELECOPIER
File # 8678-C12-11/01
and 8624-B20-01/00
Ottawa, 19 June 2001
Sheridan Scott
Chief Regulatory Officer
Bell Canada
105, rue Hôtel-de-Ville
6e étage
Hull, Québec
J8X-4H7
Ms. Scott,
Re: Request for procedural ruling – Public Notice CRTC 2001-37, Price cap review and related issues
The Commission approves the Companies’ request that if the
Commission decides in this proceeding that there should be an
earnings-sharing overlay, the determination on an allowable rate of
return on common equity be made in a follow-up proceeding.
Aliant Telecom Inc., Bell Canada, MTS Communications Inc. and
Saskatchewan Telecommunications (collectively, the Companies) filed a
request for a procedural ruling on 31 May 2001. The Companies
requested that the Commission clarify that, should it decide to adopt
an earnings-sharing formula in this proceeding, a determination on the
allowable rate of return on common equity (ROE) for the Companies be
addressed in a follow-up proceeding.
In Public Notice CRTC 2001-37, Price cap review and related
issues, dated 13 March 2001, the Commission invited comments on
whether the current form of price caps continues to represent the most
appropriate form of regulation, or whether some other form of price
regulation with or without an earnings-sharing overlay, should be
adopted.
In support of their request, the Companies argued that:
- to file evidence on the allowable ROE during this proceeding
would be a significant undertaking;
- no party to the proceeding is prejudiced by the proposed
process;
- there is ample time to conduct a follow-up proceeding; and
- the quality and relevance of ROE testimony would be greatly
improved through a follow-up process.
The Commission concurs with the Companies that evidence regarding
ROE or the implementation of any other mechanism related to any
earnings-sharing overlay that may be found appropriate in this
proceeding would be best examined in a follow-up proceeding.
Accordingly, the Commission approves the Companies’ request.
Notwithstanding the above, the Commission stated in PN 2001-37
(paragraph 13) that it does not intend to conduct a revenue
requirement assessment of utility segment results unless a telephone
company proposes rate increases to be effective at the outset of the
next price cap regulation regime other than those that would reduce
the subsidy requirement in high-cost serving areas. The Commission
therefore reserves the right to examine evidence on an allowable ROE
in that regard.
Ursula Menke
Secretary General
For further information, please contact Céline Ménard (819)
953-2421
c.c. Interested parties - PN 2001-37
Date Modified: 2001-06-19 |
