ARCHIVED -  Telecom Decision CRTC 85-28

Telecom Decision

Ottawa, 20 December 1985

Telecom Decision CRTC 85-28

CNCP TELECOMMUNICATIONS - GENERAL INCREASE IN RATES

Table of Contents

I INTRODUCTION
II QUALITY OF SERVICE
III CONSTRUCTION PROGRAM
IV FINANCIAL CONSIDERATIONS
V TARIFF REVISIONS
VI TARIFF FILINGS
VII FOLLOW-UP ITEMS

I INTRODUCTION

On 28 June 1985, CNCP Telecommunications (CNCP) filed an application with the Commission for a general increase in its rates to be effective 1 January 1986.

In its application, CNCP proposed a variety of increases. An increase of 4% was proposed for Telex and Data Telex tolls, and for monthly rates for Telenets Private Switched Network Services, various terminal equipment associated with private leased services and all non-contract special services items. Increases of 10.5% were proposed for Telex and Data Telex monthly access charges. In addition, increases of up to 17% were proposed for various Telex and Data Telex terminal equipment. Non-recurring service charges associated with all the above rate components were proposed to increase by 17%. CNCP proposed to increase the rates for Public Message Service (PMS) by 6% and to eliminate the Tel-Tex classification of PMS. For intra-Canada Telepost service, it proposed increases of 6% - 7% to the basic rate and of 63% to the "additional word block" rate. Increases ranging from 22% to 188% were proposed for Canada Telepost-U.S.A. Mailgram and Canada Telepost-Alaska Mailgram rates.

CNCP proposed that certain specified services be exempted from rate increases, some on account of competitive considerations and others because their rate structures are under review and could be subject to separate applications.

CNCP estimated that the proposed rate changes, if approved effective 1 January 1986, would provide additional revenues of $9.1 million in 1986. This would represent an increase of 2.4% on 1986 forecast revenues of $376.9 million.

The Commission received 13 letters of intervention and comment in response to the application. Interveners included Nigel David Allen (Allen); Canadian Press and Broadcast News Limited; British Columbia Telephone Company (B.C. Tel); and the Ministry of Transportation and Communications, Government of Ontario (Ontario). Only Ontario stated its intention to attend a public hearing, should one be deemed necessary.

By letter dated 27 August 1985, CNCP suggested to the Commission that the public interest would be better served if the proceeding were completed on the basis of written submission, without an oral public hearing.

In CRTC Telecom Public Notice 1985-65, dated 6 September 1985, the Commission concluded that it was unnecessary to hold an oral public hearing in the circumstances of the current application and instead established procedures for completing the proceeding on the basis of written argument and reply. In addition, by letter dated 7 October 1985, the Commission directed CNCP to place on the public record certain information for which CNCP had claimed confidentiality.

CNCP filed responses to supplementary Commission interrogatories and placed on the public record certain information for which it had previously claimed confidentiality. CNCP, B.C. Tel and Allen filed final argument, and CNCP filed reply argument.

II QUALITY OF SERVICE

CNCP is required to file quarterly reports on service quality results for indicators dealing with PMS delivery by telephone, PMS delivery by messenger, telephone calls to PMS offices, complaints about PMS and elapsed time to delivery of Telepost Messages. In this proceeding, results covering CNCP's five operating areas were reported for the period April 1984 to March 1985 inclusive.

The Commission considers that, in general, CNCP has met the prescribed quality of service standards for PMS. In instances where standards were not met, the failures were marginal and corrective action has been taken. However, the Commission is concerned about the reporting of, and the service performance for, Telepost.

Telepost performance reports, normally produced by Canada Post Corporation (Canada Post) for CNCP, were not provided for the period April to July 1984 or for the period subsequent to February 1985. CNCP explained that Canada Post has been reviewing and revising the study criteria and format of the Telepost service performance reports, and consequently has not produced the performance reports for the periods in question. CNCP also indicated that it is very concerned with an apparent deterioration in Telepost delivery performance, and that it recently requested Canada Post to provide specific delivery intervals for the two levels (regular and special delivery) of Telepost service.

CNCP is directed to provide a report to the Commission, within 60 days of the date of this decision, outlining the progress of its discussions with Canada Post on Telepost service performance. The report is also to include an assessment, by CNCP, of the revised format and study criteria (including sample size) adopted by Canada Post for its Telepost "Service Performance Results and Analysis" reports.

III CONSTRUCTION PROGRAM

A. Introduction

CNCP submitted its 1985-1989 construction program as part of its application.

B. Demand Forecasts

CNCP submitted forecasts for demand indicators in response to interrogatories from the Commission. Due to the competitive nature of most of CNCP's services, these forecasts were submitted in confidence to the Commission. The Commission finds the demand forecasts submitted by CNCP for 1985-1989 to be reasonable.

C. The 1985 View

In its 1985 view, CNCP estimated its total construction expenditures for the 1985-1989 period at $346.9 million. The forecast annual expenditures for the current and previous views are identified below.

Previous Current
View View
($ Millions)
1984 1985

1985 74.9 75.0
1986 88.5 86.3
1987 100.4 59.6
1988 115.2 60.6
1989 N.A. 65.4

Totals 379.0 346.9

For the four year period 1985-1988, the current view indicates a decrease in the expenditure forecast of $97.5 million, or 25.7%, from the previous view. This includes decreases of approximately 40% in the area of competitive terminal equipment, 45% in switching equipment, and 20% in multiplexing equipment. According to CNCP, neither view includes expenditures directly related to CNCP's 25 October 1983 application with regard to interexchange (IX) competition, which the Commission denied in Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985.

D. Expenditures by Class of Plant

For 1985 and 1986, the expenditures by class of plant were forecast to be as follows:

($ Millions)
Class of Plant 1985 1986

Radio & Microwave 5.5 7.8
Subscriber Equipment 10.8 10.5
Switching Equipment 6.5 5.7
Cable Plant 17.8 25.5
Land & Buildings 2.7 2.8
Multiplex 22.3 23.0
Test Facilities 2.0 3.1
Other 7.4 7.9

Totals 75.0 86.3

Annual expenditures in cable plant are expected to decline after 1986, when major sections of mainline fibre optic facilities will have been completed.

E. Usage Categories

In the allocation of capital expenditures to usage categories, the "other" class of plant category was excluded. Each of the remaining classes of plant was allocated to usage categories, using a yearly estimate, as follows:

($ Millions)
Usage Category 1985 1986

Growth 51.4 59.4
Modernization 7.9 8.9
Replacement 8.3 10.1
Other (exluded above) 7.4 7.9

Totals 75.0 86.3

F. Conclusion

Having reviewed the evidence, the Commission finds that variations from previous views have been explained satisfactorily and concludes that CNCP's forecast capital expenditure program for the period 1985-1989 is reasonable.

IV FINANCIAL CONSIDERATIONS

A. Depreciation

For the purposes of calculating depreciation, the fixed assets of CNCP were separated into three categories: contributed assets owned by Canadian Pacific Limited (CPL), contributed assets owned by Canadian National Railways (CNR) and assets acquired and owned by CNCP.

For each of these categories, the plant balances and depreciation expenses, provided in evidence, are summarized as follows:

Category Plant Balance Depreciation
of At 31 Dec. Expense
Assets ($ Millions) ($ Millions)

84 85 86 84 85 86

CPL 206 196 185 12.2 11.0 9.0
CNR 226 213 199 14.5 14.1 12.1
CNCP 239 313 398 19.9 24.4 32.8

Totals 671 722 782 46.6 49.5 53.9

Included in the depreciation expense noted above is the amount claimed against investment which was made in support of CNCP's application in respect of IX competition. Except for the IX related depreciation expense, which is discussed below, the Commission finds the depreciation expense forecast by CNCP to be reasonable.

B. Investment Related to IX Competition

In its application, CNCP noted that the supporting financial statements included capital expenditures relating to its IX application. In response to interrogatory CNCP(CRTC)13Aug85-1401, CNCP stated that the expenditures related to the IX application amounted to approximately $1 million for 1984, $8 million for 1985 and $11 million for 1986. The forecast depreciation expense associated with these capital expenditures was $39,000 for 1985 and $428,000 for 1986. CNCP also stated that, as of 31 July 1985, $5.4 million of the capital expenditure had been committed.

In response to CNCP(BCTel)14Aug85-111 (deficiency) concerning the disposition of assets related to the IX application, in the event that the application was not approved, CNCP stated that, "at the appropriate time CNCP will determine whether to deploy the switches in other CNCP services or sell them". In its final argument submitted after the denial of its IX application, CNCP stated that it still hoped to use the switches for IX voice applications. It stated further that, if this does not prove possible, it will either use them to provide other CNCP services or sell them, but that, in any case, the investment will not be wasted.

CNCP argued that it had made a management judgement on these expenditures which was part of its overall business plan for participation in the long distance market contemplated in its IX application. CNCP submitted that there was no evidence to suggest that its decision was inappropriate in the circumstances, and that these expenditures should receive the same treatment as all other expenditures which are required to earn revenues.

CNCP submitted that the Commission's jurisdiction to review the reasonableness of expenditures flows from its responsibility to set just and reasonable rates. CNCP argued that, since its rates are being held down by competitive circumstances and its rate of return is less than reasonable, then any action which would further depress its revenues would result in rates which are unjust and unreasonable, and would impose a double penalty on CNCP.

B.C. Tel challenged CNCP's argument. It argued that to accede to CNCP's request would result in CNCP's current customers paying for facilities which might be used to provide services to a future generation of customers. This would enable CNCP to provide services in the future in competition with B.C. Tel at a cost lower than would otherwise obtain. B.C. Tel argued that a fair and equitable treatment would result only from the application of deferred accounting treatment whereby the facilities in question would be subject to the normal utility accounting practice of capitalizing financial costs until the facilities are placed in service, with depreciation commencing at that time.

Allen proposed that all expenditures related to the IX application be excluded from the rate base.

In its reply, CNCP stated that it has every intention of utilizing this plant in revenue-producing service in 1986 and submitted that its accounting treatment of this investment reflects that intention.

The Commission considers that on the basis of the record, there is reasonable doubt as to whether this plant will be used in revenue producing service. In this circumstance, the Commission considers that the associated costs should be borne by CNCP's shareholders until such time as the plant is actually placed in service.

The traditional method of ensuring that the costs associated with such investments are borne by the shareholders is to remove the expenditures from the rate base. The Commission recognizes, however, the unusual circumstances with respect to CNCP's rate of return, revenue requirement and proposed rates. In the Commission's view, provided that the proposed rates are held down by competitive circumstances and CNCP's rate of return with proposed rates is lower than its cost of capital, the cost associated with this investment will be borne by the shareholders in the form of a less than adequate return on capital.

Accordingly, for the purposes of this proceeding, the Commission accepts the accounting treatment proposed by CNCP. However, the Commission will monitor CNCP's future financial performance in order to ensure that the costs are effectively borne by its shareholders.

The Commission notes that the construction programs submitted for review, both in this proceeding and in the previous general rate application, were developed without taking into account the impact of CNCP's IX application. Hence, the construction programs which the Commission has found to be reasonable in these two proceedings did not include expenditures related to the IX application. CNCP is reminded that definite plans to expend funds must be identified in future construction program submissions.

C. Assignment of CPL Long-Term Debt

In its application, CNCP stated that, commencing in 1985, revised procedures had been adopted for the assignment of CPL debt expense to CNCP. In response to interrogatory CNCP(CRTC)13Aug85-1405, CNCP explained that under the current approach, by which the CP portion of CNCP's debt expense is based on the weighted cost of issues included in the CPL general pool, CNCP's effective interest rate is subject to annual fluctuations due to demands placed on the general pool by divisions other than CNCP. To avoid this undesirable situation, CNCP proposed to base its future interest costs on specific CPL debt issues drawn from balances outstanding in the general pool as at 31 December 1984. To achieve an effective cost rate comparable to the average rate of the general pool as at 31 December 1984, CNCP selected equal amounts of a 9 1/4% Collateral Trust Bond issue due to mature in 1989, and an issue of 4% Perpetual Consolidated Debenture Stock (with no maturity date).

In final argument, B.C. Tel questioned CNCP's selection of the 4% Perpetual Consolidated Debenture Stock, arguing that the age of this particular instrument predated the assets employed by CNCP.

The Commission shares the concern of B.C. Tel in this matter. In particular, in reviewing the evidence of previous proceedings, the Commission notes that the 4% Perpetual Consolidated Debenture Stock had been specifically excluded from the general pool with the explanation that this stock issue, due to its historic relationship with the rail operation, is assigned directly to CP Rail.

The Commission also notes that CNCP's responses to interrogatories CNCP(CRTC)30June80-412, page 3 of 3, and CNCP(CRTC)02June81-407(c), page 1 of 1 (attachment), indicate that the 4% Perpetual Consolidated Debenture Stock was not included in the general pool of debt from which the CP portion of CNCP debt expense was derived for the years 1979 and 1980.

In light of the above, the Commission is not prepared to accept the proposed revised procedure at this time, and directs CNCP to provide the following additional information within 60 days of the date of this decision:

1. the date/year that the 4% Perpetual Consolidated Debenture Stock was added to the general
pool;

2. justification for the apparent reversal of CNCP's former position, given the reasons for previously
excluding the 4% Perpetual Consolidated Debenture Stock as stated in interrogatory
CPT(CRTC)-122 in the 1977 rate case, and on page 30 of the CP Telecommunications
(CPT)report to the Commission entitled "Treatment of Weighted Cost of Capital" dated October
1978;

3. references to any evidence provided by CNCP, other than in the present proceeding, notifying
the Commission of the change to include the 4% Perpetual Consolidated Debenture Stock in
the general pool for purposes of determining the CP portion of CNCP debt expense;

4. calculations of the CP portion of CNCP's debt expense, for each of the years 1981 to 1984, in
the format of interrogatory CNCP(CRTC)27Apr84-403(c), to include supporting schedules
indicating the average cost of the general pool debt, in the format of the attachment to
interrogatory CNCP(CRTC)02June81-407(c), page 1 of 1, entitled "Summarized Cost of
Borrowing for 1980"; and

5. an alternative proposal for the assignment of CPT long-term debt, employing the "specific issue"
approach, assuming the 4% Perpetual Consolidated Debenture Stock issue is not acceptable to
the Commission.

The Commission will make its final determination on this matter after considering submissions filed in accordance with the procedure set out in Part VII of this decision.

D. Accounting for Foreign Currency Gains/Losses

In response to interrogatories from the Commission, CNCP stated that, beginning in 1985, it proposed to adopt the accounting recommendations of the Canadian Institute of Chartered Accountants (CICA) in respect of the treatment of gains/losses on the translation of foreign currency denominated long-term debt. Under the proposed method, debt issues denominated in foreign currency would be translated into Canadian dollars at year-end exchange rates and any unrealized gains/losses would be amortized to income over the remaining lives of the related debt issues.

CNCP noted that the only exception to the above described procedure related to the CPL issue of 4% Perpetual Consolidated Debenture Stock referred to in the preceeding section of this decision. CNCP explained that since there is no maturity date for this issue, the exchange difference cannot be amortized over its remaining life, and to include the total translation adjustment in income would distort current operating results. Accordingly, CNCP proposed to apply the exchange adjustment for this issue directly to Partners' equity.

In response to interrogatory CNCP(CRTC)070ct85-2402, CNCP reviewed its position and proposed to adopt the revised accounting treatment beginning in 1984.

With respect to the proposed accounting treatment for debt issues with determinate maturity dates, the Commission notes that Bell Canada and B.C. Tel have both adopted the CICA recommended treatment, and in NorthwesTel Inc. - General Increase in Rates, Telecom Decision CRTC 85-23, 29 October 1985, the Commission found this accounting treatment to be consistent with the setting of just and reasonable rates. Accordingly, the Commission approves the accounting treatment proposed by CNCP, as described above.

However, the Commission has decided to defer its determination with regard to the appropriate treatment for the 4% Perpetual Consolidated Debenture Stock. In this matter, it directs CNCP to provide, within 60 days of the date of this decision, the reasons why the associated liability for income taxes (deferred income tax) should not also be provided for, given that the proposed treatment is intended to provide for a possible future gain on proceeds that would be subject to income tax at the time of realization.

E. Revenue Forecasts

In its application, CNCP estimated that its operating revenues for 1985 and 1986, without rate increases, would be $368.0 million and $376.9 million respectively. In its responses to interrogatories filed on 13 September 1985, CNCP reduced its revenue forecast for 1985 to $356.0 million. Compared to the previous year, these forecasts represent revenue increases of 5.3% for 1985 and 5.9% for 1986.

The Commission notes that the revised forecast of $356.0 million for 1985 is more in line with CNCP's actual revenue performance for the first seven months of 1985, and that its forecast for 1986 reflects past trends in revenue growth and is consistent with CNCP's forecasts of demand for the corresponding period. The Commission accordingly finds CNCP's forecasts of operating revenues for 1985 and 1986 to be reasonable.

F. Expense Forecasts

CNCP estimated that its operating expenses would total $260.7 million in 1985 and $268.8 million in 1986, representing increases of 8.1% and 3.1% respectively over the previous year. In response to interrogatory CNCP(CRTC)01June85-606, CNCP attributed the higher increase of 8.1% estimated for 1985 mainly to lower 1984 expenses due to the labour disruptions, and a higher than usual increase in the volume and cost of leased facilities.

The Commission notes that CNCP did not file a revised expense forecast for 1985 as a consequence of the downward revision in its revenue forecast. In this regard, on the basis of CNCP's actual expense performance for the first five months of 1985, the Commission estimates that 1985 expenses could be overestimated by as much as $5.0 million. If the 1985 expense forecast were reduced by $5.0 million, the 1986 forecast of $268.8 million would represent an increase of 5.1% which, in the Commission's view, would appear to be reasonable in light of CNCP's demand forecast for 1986 combined with its estimate of 3.9% for price increases.

G. Return on Equity

In its application, CNCP forecasted a return on average common equity (ROE), assuming the proposed rate increases are approved, of 10.2% in 1986. After adjustment to reflect CNCP's proposed accounting treatment of foreign currency gains/losses on long-term debt, the estimated ROE becomes 9.0% for 1986.

The Commission notes that this level of ROE is less than the risk-free rate of return as represented by the yield on long-term Government of Canada bonds and, as noted by CNCP in its evidence, is well below the rates of return of most of its competitors in the telecommunications industry.

Given this situation, the Commission concludes that CNCP's forecasted ROE for 1986 is obviously below the lower limit of what would be considered a fair and reasonable range. In arriving at this conclusion, the Commission has taken into account the impact of any adjustments which may be necessary as a result of possible revisions in the assignment of CPL long-term debt as discussed in a previous section of this decision.

H. Onus of Proof

In final argument, B.C. Tel submitted that, in each rate case, an applicant has the responsibility to provide evidence as to what constitutes a fair and reasonable rate of return.

Recognizing that CNCP's forecasted rate of return is obviously below the lower limit of what would be considered a fair and reasonable range, the Commission is of the view that it is unnecessary for CNCP to incur expense relating to the establishment of a theoretically allowable rate of return. Should the forecasted ROE approach what might be considered an allowable level, the Commission would expect CNCP to file the appropriate supporting evidence.

V TARIFF REVISIONS

A. Elimination of Tel-Tex Service

CNCP proposed to discontinue Tel-Tex service in an effort to improve the financial performance of PMS. CNCP submitted that the existing Telex-input Telepost service is a superior substitute for Tel-Tex because it is less costly to provide, has a broader geographical coverage and provides an essentially equivalent service at lower rates.

Allen argued that Telex-input Telepost is not a perfect substitute for Tel-Tex because subscribers to the former are not insulated from Canada Post labour disputes.

Regarding Allen's position, the Commission notes that:

- no interventions were received from Tel-Tex users objecting to the proposed elimination;

- subsequent to the encouragement given by CNCP to its customers to use Telex-input Telepost,
Tel-Tex traffic has declined by an estimated 65% from 1983 levels;

- both current and proposed rates for Telex-input Telepost are substantially below those for
comparable Tel-Tex service; and

- in the event of a postal strike, subscribers could still use regular PMS (telegrams) for their
messaging needs.

In recognizing CNCP's need to improve its financial performance, the Commission is prepared to consider proposals by CNCP to rationalize its services. In the present case, the Commission accepts CNCP's position that Telex-input Telepost is a reasonable substitute to Tel-Tex in that it is more cost effective for both CNCP and the subscriber, and it provides a similar service over a wider geographical area. Consequently, the Commission approves the elimination of Tel-Tex service.

B. Proposed Telex Rates

CNCP stated that the proposed Telex rate increases are necessary to prevent a deterioration of its overall financial performance in 1986.

Several subscribers submitted that the combined impact of the proposed increases in access charges, transmission tolls and equipment rentals on monthly bills would be an increase far in excess of inflation and that they are therefore unjustified.

The Commission notes that Telex has been and remains one of CNCP's major revenue producing services. Given this, and in light of CNCP's poor overall financial performance, the Commission considers that the proposed increases are reasonable. Accordingly, the Commission grants approval to the proposed increases.

C. Proposed PMS Rates

In support of its application for a 6% increase in PMS rates, CNCP indicated that the increase would help to reduce the loss forecast for PMS in 1986 from approximately $4.7 million to approximately $3.8 million.

Allen submitted that the rates for PMS should be increased by no more than the increase approved for Telex service.

In light of the poor financial performance of PMS, the Commission accepts CNCP's position regarding the proposed rate increase. Accordingly, the Commission approves the proposed increase in PMS rates.

D. Telepost Service Rates

CNCP proposed a 6.5% increase in the Telex-input Telepost delivery charge. For PMS-input Telepost service, CNCP proposed various increases in basic rates ranging from 6% to 22%, and in "additional word block" rates ranging from 63% to 188%. CNCP stated that the increases are justified by the cost of manually handling PMS-input Telepost messages and by the poor overall financial performance of PMS. Regarding the Canada-U.S. and Canada-Alaska rates, CNCP stated that the increases are necessary because existing rates do not adequately reflect the U.S. delivery charges which are substantially higher than those charged by Canada Post.

Allen's position was that the proposed increases are excessive, given the proposed 4% increase in Telex rates and the relatively low wage increases for PMS operators in 1984 and 1985.

The Commission accepts CNCP's reasons regarding the need for the proposed increases. The Commission therefore approves the proposed rates.

E. Services to be Exempted from Increases

CNCP proposed that several services be exempted from rate increases at this time. The proposed exemptions are of two general types:

1. those services with rates which are already at competitive levels; and

2. those services for which rate structures are being reviewed and which are or could be the
subject of separate applications.

In its final argument, B.C. Tel contended that the exemption of many competitive services from rate increases, together with increases proposed for CNCP's monopoly PMS and "near-monopoly" Telex access services of 6% and 10.5%, respectively, "amounts to a cross-subsidization of competitive services by monopoly services...." In addition, B.C. Tel noted that several of the services which CNCP has proposed to exempt from increases compete with services for which B.C. Tel was directed to increase their rates in British Columbia Telephone Company - General Increase in Rates, Telecom Decision CRTC 85-8, 30 April 1985 (Decision 85-8).

Regarding B.C. Tel's cross-subsidy argument, the Commission notes that PMS is forecast to suffer a loss of $3.8 million in 1986 even with the proposed increases. Therefore, it is unlikely that competitive services are being cross-subsidized by PMS subscribers, as suggested by B.C. Tel. The Commission also notes that Telex, in addition to competing with Telecom Canada's TWX service, is facing increasing competition from other messaging services.

With respect to B.C. Tel's second point concerning the relationship of its rates to CNCP's, the Commission notes that Telecom Order CRTC 85-382, dated 28 June 1985, approved, with an effective date of 1 July 1985, rate increases for CNCP's intra-B.C. interconnected services reflecting increases granted to B.C. Tel in Decision 85-8. These increases maintain the 10% and 5% discounts, established by CNCP Telecommunications - Rates for the Provision of Interconnected Private Line Voice Services, Telecom Decision CRTC 83-10, 26 July 1983, for interconnected intercity private line and bulk facilities services, respectively.

The Commission further notes that on 1 November 1985, under Tariff Notice 323, CNCP filed tariff revisions to match the unbundled rates approved for B.C. Tel's intra-B.C. Telpak and interexchange channel services. This filing was approved by Telecom Order CRTC 85-772 dated 20 November 1985.

In light of the above, the Commission considers the exemptions proposed by CNCP to be reasonable.

F. General

The Commission approves all other rate revisions proposed by CNCP in its application.

VI TARIFF FILINGS

CNCP is directed to file proposed tariff revisions forthwith, with an effective date of 1 January 1986, to give effect to the rates and other changes approved in this decision.

VII FOLLOW-UP ITEMS

A. Status of Items Identified in Previous Decisions

The Commission has reviewed the follow-up items from previous general rate application decisions and has determined that the required action has been completed, except for an ongoing requirement for the following:

Telecom Decision CRTC 77-15, Proposed Tariff Revisions, section
4(a), page 14; "...the Commission wishes to be kept advised of any planned or projected office
closures, and any major changes in the nature of PMS or Telepost service".

B. Summary of Items Identified in this Decision

The Commission has identified the following items in this decision for which it requires further submissions:

85-28-01 Telepost Service Performance (page 4);

85-28-02 The assignment of CPL Long-Term Debt (page 12); and

85-28-03 Accounting for foreign currency gains/losses on the 4% Perpetual Consolidated
Debenture Stock (page 14).

C. Follow-up Procedure

The Commission intends to deal with follow-up items identified in this decision in accordance with the following procedure:

1. any intervener who wishes to receive copies of documents relating to follow-up items should
register with the Commission by letter, specifying the follow-up items of interest, by 17 January
1986;

2. the Commission will compile a list of parties who have registered, noting the follow-up items of
interest of each party, and will provide a copy of this list to each registered party;

3. subject to sub-paragraph (6), a copy of each document filed with the Commission shall be sent
to each party registered for the particular follow-up item;

4. parties may comment on any document within thirty days from the date of filing. A copy of
comments shall be sent to the Commission and to each party registered for the follow-up item;

5. CNCP may reply to comments within ten days from the date of their receipt; and

6. the provisions of section 19 of CRTC Telecommunications Rules of Procedure apply
to any claim of confidentiality. In addition, a party asserting such a claim shall send to each party
registered for the particular follow-up item a copy of the claim and supporting reasons.

Please note that interveners who do not register pursuant to these procedures will nevertheless have access to all documents by consulting the public files of the Commission in its public examination room, located in Room 561 of the Central Building, Les Terrasses de la Chaudière, Hull, Quebec.

Fernand Bélisle
Secretary General