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Ottawa, 6 November 1989
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Telecom Decision CRTC 89-13
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BRITISH COLUMBIA TELEPHONE COMPANY - 1988 CONSTRUCTION PROGRAM REVIEW
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Table of Contents
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A. Usage Categories
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B. Service to Remote Communities
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C. Rural Service
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D. Rural Service Upgrading - Big Sheep Creek Valley
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E. #1 EAX Analogue Switch Conversion Plan
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F. Integrated Service Digital Network
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G. Proposed ISDN Technological Trial
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H. Customer Access Enhancement Program
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I. Feature Enhancements to Digital Switches
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J. Broadband Switching Technology
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K. Level of Forecast Capital Expenditures
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L. Request By ACTS for Revisions to the List of Central Offices
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M. The CPR Process and the Company's Evidence
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N. Conclusion
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In CRTC Telecom Public Notice 1988-39, 19 August 1988 (Public Notice 1988-39), the Commission announced that it would conduct a review of the construction program (CPR) of British Columbia Telephone Company (B.C. Tel). On 2 October 1988, B.C. Tel filed its 1989-1993 capital plan (1988 View) along with other relevant information that the Commission had requested. The review meeting was held on 7, 8 and 9 March 1989 in Vancouver, British Columbia.
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Participants in this review included the Association of Competitive Telecommunications Suppliers (ACTS), the Consumers' Association of Canada (CAC), the Government of British Columbia (BCG), and the group comprising the B.C. Old Age Pensioners' Organization, the Council of Senior Citizen's Organization, the Senior Citizens' Association, the Federated Anti-Poverty Groups of B.C., the West End Seniors' Network and Local 1-217 IWA Seniors (collectively referred to as BCOAPO). Comments from these parties, with the exception of ACTS, were filed on 7 April 1989. Comments from ACTS were filed on 13 April 1989. Reply comments from B.C. Tel in response to all parties except ACTS were filed on 28 April 1989, and in response to ACTS on 8 May 1989.
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The document entitled Capital Plan -Planning and Methods describes (1) how the five-year capital plan is developed, analyzed and monitored, (2) the forecasting and plant provisioning processes, and (3) the relationship between the capital plan and efficiency and quality of service. In response to the Commission's request in Public Notice 1988-39, B.C. Tel submitted with its 1989-1993 five-year capital plan an update, dated 29 September 1988, to its 25 September 1987 revision of this document. The update comprised various additions and revisions. The Commission has reviewed these changes and finds them acceptable.
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A. Usage Categories
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The following table summarizes B.C. Tel's capital program by usage category.
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1989 1990 1991 1992 1993
($ millions/millions de dollars)
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Usage Category/
Catégorie d'utilisation
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Primary Telephone Service/ 210.4 184.8 189.6 210.4 232.6
Service téléphonique de base
Modernization/ 87.4 104.9 117.5 75.2 59.7
Modernisation
Service Improvements/ 9.3 8.9 10.7 8.8 13.4
Améliorations du service
Operating Improvements/ 18.5 27.7 13.9 8.6 5.6
Améliorations opérationnelles
Administrative Support/ 35.7 36.9 44.0 41.5 34.8
Soutien administratif
Total/Total 361.3 363.2 375.7 344.5 346.1
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1. Primary Telephone Service
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The primary telephone service category comprises programs that are necessary to provide and maintain network plant or equipment to meet present and projected demand for existing telecommunications services. The 1987 View and 1988 View forecasts of capital expenditures for the years 1989 and 1990 are as follows:
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1989 1990 Total
($ millions/millions de dollars)
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1987 View/Aperçu de 1987 197.0 183.1 380.1
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1988 View/Aperçu de 1988 210.4 184.8 395.2
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For the years 1989 and 1990, the expenditures forecast in the current 1988 View are 4% greater than those forecast in the 1987 View. This increase is substantially less than the increases in the company's current demand forecasts for this two-year period (in the 1988 View the customer access line growth forecast is 17.9% greater than that in the 1987 View, and the billed long distance message volume forecast is 27.8% greater).
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In the local growth program, the view-over-view increase in forecast expenditures is 10.6%. This increase is almost entirely attributable to the higher growth in customer access lines. Compared to the 1987 View, forecast expenditures for toll growth have increased by approximately $4 million in 1989 and $10.5 million in 1990. There are expenditure reductions in both years due to advancement of the schedule for the company's portion of the Telecom Canada Lightguide Transmission System (LTS). As a result, some expenditures anticipated for the years 1989 and 1990 were made earlier. The 1989 reduction related to the LTS schedule change is more than offset by expenditure increases associated with other toll facilities, primarily to accommodate increased demand for existing digital microwave radio facilities. The 1990 LTS expenditure reduction is only partly offset by increased expenditures associated with other toll facilities. Planned expenditures for station activity are increased in both years due to higher demand. Reductions in the 1989 and 1990 forecast expenditures for special services result from lower forecast demand for Datapac service and the implementation of new Datapac technology.
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2. Modernization
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The modernization category comprises programs that replace obsolete plant or equipment with modern technology. The 1987 View and 1988 View forecasts of capital expenditures for the years 1989 and 1990 are as follows:
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1989 1990 Total
($ millions/ millions de dollars)
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1987 View/Aperçu de 1987 108.0 111.1 219.1
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1988 View/Aperçu de 1988 87.4 104.9 192.3
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For the years 1989 and 1990, the expenditures forecast in the 1988 View are 12.2% less than those forecast in the 1987 View. This decrease is primarily due to a significant reduction in the forecast of 1989 expenditures for the toll switching system replacement program. This reduction is caused by deferral of the replacement of toll switching and analogue switchboard systems from 1989 to later years as a result of a change to the deployment plans for Automatic Calling Card service in North America and uncertainties regarding the deployment of Directory Assistance service in switchboard system development.
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In relation to the 1987 View, there are also 1989 and 1990 expenditure reductions in the facility grooming program, primarily as a result of the transfer of the customer access enhancement program to the primary telephone service category.
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3. Service Improvement
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The service improvement category comprises programs that are undertaken to provide new or improved customer services. The 1987 View and 1988 View forecasts of capital expenditures for the years 1989 and 1990 are as follows:
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1989 1990 Total
($ millions/millions de dollars)
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1987 View/Aperçu de 1987 11.7 11.3 23.0
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1988 View/Aperçu de 1988 9.3 8.9 18.2
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For the years 1989 and 1990, the expenditures forecast in the 1988 View are 20.9% less than those forecast in the 1987 View. The forecast expenditures for the computer communication networks and radiotelephone automation programs are increased in relation to those in the 1987 View. However, these increases are more than offset by expenditure reductions related to the electronic messaging program and the deletion from the capital plan of the integrated services digital network (ISDN) program. The net effect is an overall reduction of approximately 20% in planned expenditures for the service improvements category in the 1989/1990 period.
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The increase in expenditures for the computer communication networks program is the result of new plans for local data transport, local packet networks and intra digital reach. The intra digital reach project will provide digital end-to-end connectivity between all digital switching offices within the company's operating territory. The increase in expenditures for the radiotelephone automation program is mainly the result of plans for marine radiotelephone and exchange area radiotelephone service facilities. The reduction in planned expenditures for the electronic messaging program is due to a significant decrease in the forecast growth in usage, since
market trends indicate that the acceptance rate for electronic mail will be lower than originally anticipated. Planned expenditures identified under the previous ISDN program have been reallocated to other programs.
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4. Operating Improvement
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The operating improvement category comprises programs that are undertaken to improve the operating efficiency of the company. The 1987 View and 1988 View forecasts of capital expenditures are as follows:
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1989 1990 Total
($ millions/millions de dollars)
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1987 View/Aperçu de 1987 12.4 5.5 17.9
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1988 View/Aperçu de 1988 18.5 27.7 46.2
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For the years 1989 and 1990, the expenditures forecast in the 1988 View are 158.1% greater than those forecast in the 1987 View. This very significant variance is the result of significant expenditure increases in a number of individual programs: automatic remote line testing, regional network control centres, safety requirements, common channel signalling (CCS 7), and network support systems. These expenditure increases are only slightly offset by reductions in forecast expenditures for the directory assistance information system (DAISY) enhancements program.
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The expenditure increase for the automatic remote line testing program is due to upgrading of the existing systems in the Columbia and Mackenzie areas. The increase in expenditures for the regional network control centres is a result of the need to replace the current alarm monitor and control system, which is nearing maximum capacity. The increase for the safety requirements program is due to the implementation of building entry security systems. The increase for the CCS 7 program is attributable to a revised rollout plan based on current market forecasts for services using this technology. The increase for the network support systems program is mainly due to the implementation of an access management system to enable customer access to operational support system information such as trouble report analysis and billing details. The reduction in expenditures related to the DAISY enhancements program is the result of a decision to retain the existing DAISY processor until 1991.
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5. Administrative Support
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The administrative support category comprises programs required to provide and maintain the plant or equipment necessary to support the company's operational needs. The 1987 View and 1988 View forecasts of capital expenditures for the years 1989 and 1990 are as follows:
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1989 1990 Total
($ millions/millions de dollars)
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1987 View/Aperçu de 1987 29.9 32.2 62.1
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1988 View/Aperçu de 1988 35.7 36.9 72.6
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For the years 1989 and 1990, the expenditures forecast in the 1988 View are 16.9% greater than those forecast in the 1987 View. The increases in forecast expenditures are mainly in the administrative buildings, computer equipment and internal communications equipment programs. These increases are only partly offset by a reduction in forecast expenditures for the motor vehicles program.
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The increase in planned expenditures for administrative buildings is mainly due to additional building renovation projects, the transfer of an engineering department from leased premises in Prince George, and the expansion of the Abbotsford Plant Centre. The increase in planned expenditures for the computer equipment program is primarily due to higher equipment costs for a mechanized dispatch system whose implementation has been deferred as a result of the supplier's time frame for delivery. Expenditure increases for the internal communications equipment program are due to greater demand for office automation equipment and corporate systems to improve operational efficiency within the company. The reduction in planned expenditures allocated for motor vehicles is attributable to deferral, from 1990 to 1991, of the purchase of a replacement aircraft.
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B. Service to Remote Communities
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B.C. Tel's Capital Program Management System (CPMS) 32000, Service to Remote Communities, commenced in 1979 with the objective of providing service to twenty-two remote communities identified under the program. By the end of 1988, nineteen communities had received service. The planning guideline for the program defines remote communities as those comprising fifty or more persons that do not receive twenty-four hour publicly available telephone service. Locations with high frequency (HF) radio or public service very high frequency (VHF) fixed stations are considered to be unserved because of periodic transmission outages on HF radio and possible problems with public access to VHF radio. CPMS 32000 entails the provision of coin or toll station service, but not full exchange service. The extension of full exchange service is provided, under CPMS 32200, Rural Service, to communities that qualify.
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The provision of service to unserved and underserved communities, and the cost of construction as an impediment to the extension of full exchange service to these communities, were discussed in the proceeding leading to British Columbia Telephone Company - Revenue Requirement for the Years 1988 and 1989 and Revised Criteria for Extended Area Service, Telecom Decision CRTC 88-21, 19 December 1988, (Decision 88-21). In that decision, the Commission expressed its view that the record of the proceeding was insufficient to permit a determination with respect to these issues. The Commission stated that, in light of their importance, it intended to review them further during the 1988 CPR proceeding.
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The 1988 View forecast of capital expenditures for CPMS 32000 is as follows:
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1989 1990 1991 1992 1993
($ thousands/milliers de dollars)
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263 67 -- 40 153
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In the 1988 CPR, the Commission and BCG addressed several interrogatories to the company pertaining to CPMS 32000. In an interrogatory response, B.C. Tel stated that its current policy is to limit the number of communities qualifying for service under this program to those already identified. B.C. Tel also stated that it was preparing a tariff filing for Exchange Area Radiotelephone Service (EARS), which would meet the needs of many communities and individual customers in remote areas. B.C. Tel added that it planned to undertake a review of CPMS 32000 in 1989 to assess the impact of EARS and to determine whether to continue the program in its present form.
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On 20 February 1989, B.C. Tel filed Tariff Notice 1866, proposing tariff revisions concerning the introduction of EARS. B.C. Tel described EARS as an automated fixed station radiotelephone service intended to improve service in remote areas of the company's operating territory. EARS will replace manual radiotelephone service for fixed stations (radio toll station service) with an automated direct dialing system that will provide seven digit dialing and access to Direct Distance Dialing and operator assisted toll calling. Because the company expected that it would be unable to offer EARS in certain very remote areas, it also proposed under Tariff Notice 1865, revisions covering the continued provision under the name Remote Radiotelephone Service, of manual fixed station radiotelephone service in these areas. The Commission issued a public notice and received comments from a number of parties, most of whom expressed general support for the proposed service because of the improved level of service.
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The 1988 View forecast of capital expenditures for the EARS project, included as part of the planned expenditures for the radiotelephone automation program, is as follows:
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1989 1990 1991 1992 1993
($ thousands/milliers de dollars)
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570 1150 1810 1250 500
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In its comments, BCG noted that toll station line service is currently considered the minimum service level. BCG suggested that most customers would probably consider EARS an attractive alternative, particularly where communities or individuals would qualify for conversion to EARS without the application of construction charges. BCG encouraged the implementation of EARS in such circumstances and suggested that, if the service was approved, B.C. Tel should accelerate its conversion plan and include any existing unserved communities along with the areas targeted in its EARS coverage plan.
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BCG was concerned with the means of providing service to communities of fifty or more potential subscribers, where the density criterion for full exchange service is met. BCG submitted that EARS would not be a reasonable substitute for full exchange service. BCG asserted that service levels would be impaired where there are more than fifty subscribers, due to the lack of available frequencies for EARS. In this regard, BCG noted that the company has not established a comprehensive list of communities eligible for exchange service.
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BCG questioned the basis for the computation of construction charges associated with the provision of exchange service. BCG submitted that subscribers should not be required to pay a contribution charge in addition to the payment covering the actual costs of material and labour.
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BCG endorsed the company's intention to initiate a process to address the needs of the remaining unserved or underserved communities. However, BCG suggested that, as part of that process, B.C. Tel should reconsider its current policy of providing
four-party service as the standard offering in rural areas.
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BCG suggested that the provision of at least toll station line service to unserved communities should not be delayed. It noted that three communities identified under CPMS 32000, and eighteen other communities identified in the company's presentation at the review meeting, are currently without service. BCG submitted that the capital expenditures allocated to CPMS 32000 should be increased to provide service to these specific communities, either by toll station line or radio technology. BCG suggested that, as a first step toward meeting the needs of unserved or underserved areas, the company should increase capital expenditure allocations for the related programs.
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In its reply, B.C. Tel confirmed that it has initiated a process to address the needs of the remaining unserved and underserved communities. B.C. Tel agreed with BCG that, at some point, a community should be eligible for full exchange service and that such communities should be identified. B.C. Tel stated, however, that the appropriate qualification criteria (number of subscribers, density, level of funding, etc.) have not yet been established. In the company's view, depending on the density criterion selected, EARS may be a reasonable means of providing service to some larger communities.
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B.C. Tel asserted that it is incorrect to conclude that EARS is not a reasonable alternative for full exchange service in communities of fifty or more potential subscribers. The company submitted that the system is capable of handling more than fifty subscribers and suggested that the geographic distribution of potential subscribers will be a key determinant in selecting the technology to serve a particular community.
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In response to BCG's comments regarding a "contribution" charge, B.C. Tel asserted that it does not assess any construction charge in excess of the actual costs of material and labour associated with the provision of exchange service.
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In response to BCG's suggestion that the company reconsider its policy as to standard rural service, B.C. Tel stated that four-party service most appropriately addresses the needs of the majority of its rural subscribers, in light of the high costs associated with provision of service in rural areas and the unwillingness of most rural subscribers to contribute to the cost of upgrading service.
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B.C. Tel noted that the three remaining unserved communities identified in CPMS 32000 are currently served by fixed station VHF radio. The company suggested that EARS would be the most effective means of providing them with improved service.
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After the filing of submissions in this proceeding, the Commission approved EARS in Exchange Area Radiotelephone Service - B.C. Tel Tariff Notices 1865 and 1866, Telecom Letter Decision CRTC 89-14, 16 June 1989 (Letter Decision 89-14). The Commission stated that, while EARS would result in improved service in many communities, it should not be considered an equivalent to basic exchange service. However, the Commission recognized that, in circumstances where a remote community qualifies for full exchange service but cannot afford the associated construction charges, EARS can provide an improvement over the one or two toll station lines presently providing access to such communities.
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The Commission noted in Letter Decision 89-14 that B.C. Tel had undertaken to develop a revised Remote Communities program for presentation at the 1989 CPR. The Commission also stated that, while the issue of full exchange service criteria is important, it affected only a minimal number of communities relative to those that could benefit from EARS. Given the pressing need for provision of service to many other communities and subscribers, the Commission considered it appropriate to approve EARS and to explore other more general problems concerning service to remote communities in the 1989 CPR.
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The company's presentation at the 1988 review meeting indicated that there are at least twenty-one remote communities without twenty-four hour publicly available telephone service, including three communities identified in CPMS 32000 that are served only by fixed station VHF radio. The capital expenditures projected in the 1988 View for CPMS 32000 are not substantial given the number of communities involved. However, these expenditures exclude significant projected expenditures in the radiotelephone automation program for the implementation of EARS, which will substantially increase and improve the service to both remote communities and individuals in isolated locations. Moreover, the Commission expects the company to commit further expenditures as a result of its revised Remote Communities program.
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In light of the above, the Commission finds reasonable the expenditures forecast in the 1988 View for CPMS 32000, noting that they may be subject to change after the issue of service to remote communities is re-examined in the 1989 CPR. In CRTC Telecom Public Notice 1989-38, 10 August 1989 (Public Notice 1989-38), which initiated the 1989 CPR process, the Commission requested that the company file detailed information pertaining to the revised remote communities program and provide, at the review meeting, a detailed presentation on the development of the revised program. In this regard, the Commission expects the information provided with respect to the revised program to be of such detail as to allow the expeditious implementation of service improvements following the Commission's determination that the program is reasonable.
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There is evidence that some qualifying communities have been unable to obtain full exchange service because of charges for construction on public property.
In the 1989 CPR, the Commission intends to address the subject of construction charges for remote communities that qualify for full exchange service and, in that context, to examine possible alternatives for ensuring that construction costs are not a barrier to the provision of full exchange service in remote areas.
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In response to a Commission interrogatory, B.C. Tel estimated that increasing the free allowance for construction on private property from 100 metres to 165 metres in 1988 would have resulted in a revenue shortfall of approximately $150,000 for that year. The company noted, however, that the shortfall could vary significantly from year to year according to the number of new developments undertaken in highly populated areas. Since the introduction of EARS will significantly reduce the application of construction charges in some remote areas, the Commission does not propose to change the free allowance at this time. However, in order to obtain an indication as to whether the costs of increasing the free allowance would outweigh the benefits, the Commission directed in Public Notice 1989-38, that the company provide for the period January to October 1989, inclusive, an estimate of the revenue shortfall associated with construction on private property that would result if the free allowance were increased to 165 metres.
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With respect to service in rural areas, the Commission notes that four-party service was established as the standard in British Columbia Telephone Company, General Increase in Rates, Telecom Decision CRTC 81-3, 29 January 1981. In that decision, the Commission stated that the rates set for basic grades of telephone service, whether inside or outside the Base Rate Area (BRA), should in principle be independent of costs caused by distance. The Commission also stated that mileage charges to offset these costs are generally inappropriate, except where the grade of service provided is higher than the standard offering. Accordingly, single-party and two-party service outside the BRA boundary are subject to mileage charges.
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There is no evidence in the record of the current proceeding to permit the Commission to determine whether or not the standard service offering outside the BRA should be upgraded.
In order to make such a determination, the Commission would require the following information: (1) a ten-year projection (annualized) of the number of two-party and four-party Network Access Services (NAS) and of the revenues obtained from mileage charges for two-party subscribers over the same period of time, (2) the capital costs of upgrading to a two-party standard, (3) the percentage of four-party NAS leased on a seasonal basis only, and (4) the net present value (NPV) of a two-party conversion over ten and fifteen-year time frames. B.C. Tel is therefore directed to file this information, by 7 May 1990, along with a preliminary report on the impact of establishing two-party service as the standard offering in rural areas.
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CRural Service
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CPMS 32200, Rural Service, entails: (1) the establishment of new central offices (COs) in low density rural areas; (2) the extension of outside plant facilities beyond existing plant and beyond the BRA, the Island Base Rate Area (IBRA), or the Locality Rate Area (LRA), but within the exchange area boundary; or (3) the provision of temporary service to rural areas using fixed radiotelephone service. The 1988 View forecast of capital expenditures for this program is as follows:
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1989 1990 1991 1992 1993
($ millions/millions de dollars)
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3.3 3.1 3.1 3.3 3.5
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In its comments, BCG noted that it had addressed an interrogatory to the company requesting that the planned expenditures for the rural service program be broken down into separate components related to the establishment of new COs, the extension of telephone service, and the provision of temporary service using fixed radiotelephone facilities. The response indicated that records enabling this level of separation are not kept. BCG stated that it is difficult to identify how capital funds for rural service are actually expended since relevant information is not provided. For the actual 1988 expenditures and the planned 1989 and 1990 expenditures, BCG requested identification, on a year-by-year basis, of the specific expenditures associated with extension of service and the establishment of new COs. B.C. Tel did not reply to BCG's comments pertaining to the rural service program.
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In light of the magnitude of the annual planned expenditures for the rural service program, the Commission considers BCG's request for a further breakdown of expenditures to be reasonable. The Commission expects B.C. Tel to be capable of providing information at a further level of breakdown. Accordingly, in Public Notice 1989-38, the company was directed to file in the 1989 CPR, a breakdown of the actual and forecast expenditures allocated for (1) the establishment of new COs, (2) the extension of telephone service and (3) the provision of temporary service to rural areas using fixed radiotelephone service, for each of the years 1988 to 1991.
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D. Rural Service Upgrading - Big Sheep Creek Valley
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The planning guideline for CPMS program 30200, Rural Service Upgrading, defines the rural area as that part of the exchange located outside the BRA, the IBRA or the LRA, where four-party service is the standard offering. Both two-party and single-party grades of service are available in rural areas, subject to the application of mileage charges. An upgrade is defined as a subscriber-initiated move from a lower to a higher grade of service and entails a service charge. The objective of this program is to provide sufficient plant facilities to permit rural subscribers to upgrade. Provisioning for upgrade requests is undertaken coincident with normal relief work in the area, unless costs are excessively high, in which case provisioning may be deferred until further growth occurs.
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In its comments, BCOAPO noted that, in Big Sheep Creek Valley (located approximately twenty kilometres west of Rossland), the previous open-wire facilities were replaced with SR-100 subscriber radio service in order to overcome transmission and other problems. The SR-100 system is not technically capable of providing four-party service, so subscribers are provided with two-party service at four-party rates. BCOAPO submitted that subscribers who are assessed full mileage charges when they request an upgrade to single-party service therefore receive unfair treatment.
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In its reply, B.C. Tel asserted that it treats subscribers in the Big Sheep Creek Valley area in the same manner as any other rural area subscribers. The company noted that, under the existing tariffs, any subscriber beyond the BRA who requests and receives an upgrade to single-party service must pay for mileage charges to the BRA boundary, regardless of the type of plant facilities in place. At the review meeting, B.C. Tel indicated that the tariff rate for single-party service in the Valley would comprise the Rossland BRA charge plus the mileage charge. B.C. Tel confirmed that the technical features of the upgraded plant facilities necessitate two-party service as the standard offering, although subscribers are charged only four-party rates since they did not request the upgraded service. B.C. Tel stated that it would be contrary to company tariffs to provide single-party service in response to subscriber requests, without assessing the appropriate mileage charge.
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The Commission agrees with B.C. Tel's assertion that the subscribers in the Valley are being provided with telephone exchange service in the same manner as other rural area subscribers, in accordance with existing company practices and tariffs.
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In the 1987 CPR, B.C. Tel filed the results of a 1986 economic evaluation study that assessed the costs and benefits of an acceleration of the digital conversion program for #1 EAX analogue switches. In that proceeding, both ACTS and CAC argued that no clear demand existed to justify the proposed capital expenditures related to acceleration of the conversion program. In British Columbia Telephone Company -1987 Construction Program Review, Telecom Decision CRTC 88-12, 19 August 1988 (Decision 88-12), the Commission noted that the rationale for advancing the conversion program was primarily based on an expectation of substantial future revenue streams resulting from strong growth in subscriber demand for custom calling features and, eventually, call management services. The Commission therefore directed B.C. Tel to file a full economic evaluation study reflecting a current forecast of subscriber demand and the revenues associated with these features and services. The Commission stated that it would rule on the reasonableness of the proposed #1 EAX conversion program after considering the results of that study.
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In November 1988, B.C. Tel filed an economic study of two possible conversion plans involving the replacement of nine switches. Plan 1 proposed the replacement of one switch in 1989, three switches in 1991 and five switches in 1992. Plan 2 proposed the replacement of four switches in 1995 and five switches in 1996. The 1988 study considered only nine of the thirteen switches assessed in the 1986 study, since four switches had already been committed for conversion in 1989. The study indicated that the NPV of Plan 1 was higher than the NPV of Plan 2 by $1.1 million. The study included projected revenues for custom calling features, smart features, advance line business services, call management and future enhanced digital network related services. It stated that implementing Plan 2 would increase operating costs and result in loss of revenue.
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