ARCHIVED - Order CRTC 2000-743

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Order CRTC 2000-743

Ottawa, 8 August 2000

Bell Canada local channel rate restructuring denied

Reference: Bell Canada Tariff Notices 6415 and 6415A, Public Notice CRTC 2000-20
The Commission denies Bell Canada's application to restructure its tariffs for local channel services. The Commission finds the telco's proposal to create a separate access channel flat rate and competitive link tariffs for local channels to be unjustified.

1.

Bell Canada proposed to change from a distance sensitive rate structure for local channels to a flat-rate plan.

2.

The local channels included in this application are class A and B channels used for low speed signalling applications, schedule 1, 2, 3 and 3A channels used for low speed data transmission, and class C and schedule 4 data channels used for voice grade bandwidth. Class C and schedule 4 copper channels are also used with digital terminal equipment to enable high speed data transmission.

3.

The issue of using copper facilities for local channels was raised by the Canadian Association of Internet Providers in a separate application. That application resulted in negotiation among the parties and will be dealt with in a separate process.

4.

Bell Canada now charges by distance for local channels from a customer premise to the connecting wire centre, then adds line conditioning and distance charges for any required inter-office connection within the exchange. Bell Canada proposed to have a flat rate per access channel and a flat per channel link rate. Inter-office distance charges within an exchange and most line conditioning charges would be included in the flat rate per access channel.

5.

A flat-rate access charge and a link charge would apply for each access channel. Bell Canada stated that the separate access and link rate elements facilitate the separation of revenues into what it identified as access versus competitive revenues.

6.

Bell Canada and British Columbia Telephone Company - Improving the match between revenues and costs associated with the Phase III competitive network and access categories, Telecom Decision CRTC 90-13, dated 14 June 1990, approved an allocation of local channel revenues from the access category to a competitive category because there was a mismatch of revenues and costs in the Phase III competitive network and access categories. All local channel revenues were in the access category, but costs for intra-exchange, inter-office facilities were considered to be competitive network costs. At that time, Bell Canada argued that a revenue allocation was more efficient than unbundling the tariff elements into access and competitive components.

7.

In this application, Bell Canada proposed to unbundle the local channel rate into separate access and competitive link rate components using the same allocation factor as determined in Decision 90-13. With the resulting rate allocation, Bell Canada then proposed not to change the access component, but to double the level of the link rate component. The average proposed rate increase is 27 percent.

8.

Under the price cap framework, Bell Canada identified the access component of local channels as an "other capped" service subject to the price cap constraints. The proposed link component was identified by Bell Canada as a competitive service.

9.

Bell Canada's proposal notes that the revenue assignment established in Decision 90-13 would be modified such that a larger percentage of revenues would be assigned to the competitive category. The additional revenues would not be reflected in any price cap indices as the revenues are assigned to the competitive category.

10.

Bell Canada did not provide evidence that there were competitive alternate providers for the link component.

11.

The Commission does not find it appropriate at this time to permit an overall increase to local channel rates that would increase the portion of local channel revenues assigned to the competitive category.

12.

The Commission denies Tariff Notices 6415 and 6415A.
Secretary General
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