News release

September 12^th, 2002

CRTC SETS OUT FRAMEWORK FOR EXTENDING 
LOCAL CALLING AREAS

OTTAWA-GATINEAU - The Canadian Radio-television and Telecommunications Commission (CRTC) today issued the framework it will use in deciding whether to extend toll-free calling between local telephone exchanges. Effective immediately, the new framework sets out the principles, criteria and process the CRTC will follow in these cases.

The recent trend toward municipal amalgamation has underlined the need for the CRTC to establish a general framework to use in expanding local calling areas. The new framework was developed in response to requests from telephone subscribers and municipalities looking to reduce their long-distance telephone charges by expanding their local calling areas. It balances the interests of telephone users, municipalities, incumbent local telephone companies and telecommunications competitors.

Highlights:

Community of interest

Under the new CRTC framework criteria, an elected local, municipal or regional government can start the process of expanding its local calling area by passing a motion and making a request to the local incumbent telephone company. The Commission will accept a request from the appropriate level of government as evidence that there is a community of interest for the purpose of expanding a local calling area.

Distance

As there is great variation in the size of municipal or regional areas in Canada, the Commission will not require a distance criterion to expand a local calling area.

Compensation for lost long-distance revenues

Both incumbent telephone companies and competitors will be compensated for a portion of lost long-distance revenues caused by expanding the local calling area through a temporary surcharge. In the decision released today, the Commission suggests that this amount be equal to three years worth of long-distance revenue and seeks comments from the parties involved in the hearing on this topic.

In exchanges where the proposed temporary surcharge for residential subscribers would be above one dollar per month, all telephone subscribers will be able to vote on whether the local calling area should be expanded. A simple majority of respondents must vote in favour of expanding the local calling area for the proposal to go ahead.

How it will work

• The process to expand a local calling area will be triggered by a request from a local, municipal or regional government to the incumbent local telephone company.
• The local telephone company will then determine the estimated cost increases, lost toll revenue and cost of any required plebiscite.
• Based on this information, the requesting government would decide whether to proceed or not. If it decided to go forward, the local telephone company would take the next step and file an application with the CRTC. Interested parties would then have an opportunity to comment.
• Any required vote, to be paid for by the requesting government, would be held following the CRTC's conditional approval of the proposal.

The local calling area would be expanded if a simple majority of respondents approve the proposal.

Background

Over the course of this proceeding, the Commission received comments from incumbent local telephone companies and their associations, competitor companies, governments and consumer groups. In addition to submissions and participation by interested parties, the Commission received nearly 500 letters representing individuals, municipal governments and organisations from various regions across Canada.

The Canadian Radio-television and Telecommunications Commission is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.

Reference document: Telecom Decision CRTC 2002-56

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Media Inquiries:
   Denis Carmel, Tel: (819) 997-9403, eMail: denis.carmel@crtc.gc.ca 

General Inquiries:
   Ottawa, Ontario K1A 0N2
   Tel: (819) 997-0313, TDD: (819) 994-0423, Fax: (819) 994-0218
   Toll-free # 1-877-249-CRTC (2782), eMail: info@crtc.gc.ca
   TDD - Toll-free # 1-877-909-2782

Copies of today's documents are available through our Internet site (http://www.crtc.gc.ca) or by contacting the public examination room of any CRTC office. These documents are available in alternative format upon request.

Date Modified: 2002-09-12

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