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Telecom Public Notice
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Ottawa, 24 February 1986
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Telecom Public Notice CRTC 1986-17
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BELL CANADA - RESALE, SHARING AND RELATED RATE REVISIONS - PROPOSED REVISIONS TO MTS/WATS
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References: Tariff Notices 1643, 1822, 1823, 1823A and 1896
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In Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985 (Decision 85-19), the Commission directed the federally regulated carriers to file tariff revisions to permit sharing to provide primary exchange voice service, sharing of Message Toll Service (MTS) to provide MTS, and resale and sharing to provide all services other than MTS, Wide Area Telephone Service (WATS) and primary exchange voice service. The Commission directed the carriers to file these revisions by 26 November 1985.
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In Decision 85-19, the Commission invited the carriers to file, within the same period, revisions to the rates for interexchange services other than MTS/WATS, which they believed to be necessary prior to allowing resale and sharing in that market. The Commission stated that these revisions were to be designed to result in no changes to the net revenue of the competitive network category.
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The Commission received two applications from Bell Canada (Bell) both dated 26 November 1985, under Tariff Notices 1822 and 1823. In the application under Tariff Notice 1822, Bell proposed a restructuring of rates for intra-company and Trans-Canada WATS and for MTS within Ontario and Quebec (intra-company MTS). Bell stated that the proposed changes were designed to have no effect, in the aggregate, on the net revenue obtained from the MTS/WATS category.
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In its application under Tariff Notice 1823, as amended by Tariff Notice 1823A, dated 23 December 1985, Bell proposed tariff revisions permitting resale and sharing, pursuant to the Commission's direction in Decision 85-19.
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In the same application, Bell responded to the Commission's invitation in Decision 85-19 by proposing rate revisions to its intra-company and Trans-Canada competitive network services. Bell stated that the proposed rate revisions would result in no changes to the net revenue of the competitive network category.
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On 30 December 1985, the Commission wrote to Bell to advise it that the Commission considers the Bell revenue requirement proceeding, scheduled for June 1986 (the June 1986 proceeding), to be the appropriate forum to deal with the intra-company MTS/WATS rate revisions proposed in Tariff Notice 1822, and that accordingly it would dispose of them in that proceeding.
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In the same letter, the Commission noted that, in the absence of approval of the proposed changes to MTS/WATS rates, approval of the proposed rates for intra-company competitive network services, proposed in Tariff Notice 1823, would likely result in demand migration to these services from MTS/WATS, giving rise to revenue reductions for MTS/WATS and revenue increases for the competitive network services category. The Commission advised Bell that, in view of the relationships between the proposed MTS/WATS rate revisions in Tariff Notice 1822 and the intra-company competitive network services rate proposals in Tariff Notice 1823, it would deal with these specific proposed rate revisions for these services during the June 1986 proceeding.
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The Commission invited Bell to submit again proposed tariff revisions for its competitive network services where rate differentials for these services may not be sufficiently close to associated cost differentials. The Commission requested Bell to demonstrate that the rates proposed result in no change to the net revenue of the category. The Commission also directed Bell to resubmit, in this same filing, the proposed tariff revisions for Trans-Canada WATS rates as well as the proposed tariff revisions allowing resale and sharing pursuant to Decision 85-19.
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On 20 January 1986, Bell filed Tariff Notice 1896. Included in the submission were proposed tariff revisions providing for resale and sharing as set out in Decision 85-19. Bell stated that the intra-company and Trans-Canada competitive network services rates proposed are the same as those proposed in Tariff Notices 1823 and 1823A, for which Tariff Notices the company requested withdrawal and the Commission agreed, by letter dated 11 February 1986.
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In its filing submitted under Tariff Notice 1896, Bell assumed no migration from the competitive network category to the MTS/WATS category. Bell acknowledged that its proposals may give rise to some migration between the MTS/WATS and the competitive network categories. Bell estimated that the net effect would be some reduction in MTS/WATS revenue which would be partially offset by increases in competitive network revenues. The company said that the result would be an overall small decrease in its revenue. Bell stated that if it had considered the effect of this migration in the exercise of ensuring no net change in the competitive network category revenues, it would have had to reduce further the proposed rates for the category, with the result of an even greater loss in overall corporate revenue.
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Bell argued that, in light of intra-company and Trans-Canada competitive network considerations, the filing under Tariff Notice 1896 should be treated independently of both the MTS/WATS rate proposals in Tariff Notice 1822 and the June 1986 proceeding. Pointing out the national nature and similarity of intra-company and Trans-Canada competitive network services, Bell argued that they should be treated as a single package.
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For the same reasons, Bell submitted in its letter dated 20 January 1986 that intra-company and Trans-Canada WATS should also be treated as a package. The company therefore proposed, and the Commission by letter dated 11 February 1986 agreed, that consideration of Trans-Canada WATS rates should be included in the June 1986 proceeding so as to be considered together with the intra-company WATS rates.
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In CRTC Telecom Public Notice 1985-50, dated 30 July 1985, the Commission called for comment on an application filed by Bell under Tariff Notice 1643, dated 3 June 1985, proposing a restructuring of its Canada-United States MTS rates. The Commission views as appropriate the consideration of these rate proposals and the intra-company MTS rate proposals in the same proceeding. Accordingly, it has decided to include the proposed Canada-United States MTS rates in the June 1986 proceeding.
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In summary, therefore, the following proposed revisions to the rate schedules of Bell will be scrutinized in the June 1986 proceeding:
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(1) intra-company MTS (Tariff Notice 1822),
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(2) intra-company WATS (Tariff Notice 1822),
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(3) Trans-Canada WATS (Tariff Notice 1822), and
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(4) Canada-United States MTS (Tariff Notice 1643).
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The Commission notes that, by virtue of CRTC Telecom Public Notice 1986-1, dated 14 January 1986, letters of intervention, notices of intervention to participate at the central hearing and interrogatories addressed to Bell in relation to the June 1986 proceeding are required to be filed by 11 April 1986.
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Having considered Bell's request to address separately from the June 1986 proceeding the proposed intra-company and Trans-Canada competitive network services tariff revisions, the Commission has decided to call for comments on Tariff Notice 1896.
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With regard to permitting the resale and sharing, the carriers filed proposed tariff revisions which may give rise to varying interpretations of the resale and sharing permitted by Decision 85-19. The Commission considers that it would be desirable that a consistent interpretation be reflected in each of the carriers' tariffs and, accordingly, invites interested persons to comment on the restrictions to be included in the tariffs of the federally regulated carriers which would apply to the resale and share of facilities so as to preclude the offering of MTS/WATS services. In this regard, the Commission notes the current restrictions on the interconnection of CNCP's facilities with the public switched telephone network which prevent it from offering MTS/WATS services.
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For information regarding applications from British Columbia Telephone Company, see CRTC Telecom Public Notice 1986-18, dated 24 February 1986. For information regarding applications from CNCP Telecommunications, NorthwesTel Inc., Telesat Canada and Terra Nova Telecommunications Inc., see CRTC Telecom Public Notice 1986-19, dated 24 February 1986.
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The application filed under Tariff Notice 1896 may be examined at any of the company's business offices or at the offices of the CRTC, Room 561, Central Building, Les Terrasses de la Chaudière, 1 Promenade du Portage, Hull, Quebec or Complex Guy Favreau, East Tower, 200 Dorchester Blvd. West, 6th floor, Montreal, Quebec. A copy of the application may be obtained by any interested party upon request directed to the company at the address shown below.
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If you wish to comment on the application filed under Tariff Notice 1896, please write to Mr. Fernand Bélisle, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, by 26 March 1986. A copy of your letter should be sent to Mr. E.E. Saunders, Q.C., c/o Mr. Peter J. Knowlton, Assistant General Counsel, Bell Canada, 25 Eddy Street, 4th floor, Hull, Quebec, J8Y 6N4.
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Fernand Bélisle
Secretary General
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