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Telecom Public Notice
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Ottawa, 16 November 1989
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Telecom Public Notice CRTC 1989-56
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CANTEL INC. V. BELL CANADA - RATES FOR CELLULAR TELEPHONE NUMBERS
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The Commission has received an application, dated 3 May 1989, from Cantel Inc. (Cantel). Cantel requests that the Commission issue orders: (1) directing that Bell Canada (Bell) include activated cellular telephone numbers in its "total telephone number count" for rate group purposes; and (2) reducing the rate charged to Cantel for each activated seven digit telephone number with outpulsing to $0.24 a month from its current level of $1.25 a month. On 2 June 1989, Bell filed an answer to Cantel's application. Cantel filed its reply on 15 June 1989.
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Cantel noted in its application that, pursuant to Bell's General Tariff, Bell subscribers pay local exchange rates that increase as the number of subscribers in the local calling area increases. Cantel stated that a growing number of telephones in Bell's operating territory are cellular telephones. Bell subscribers have local exchange access to cellular telephone subscribers within the same exchange. Cantel contended that this increases the value of local exchange service to Bell's local subscribers and should be reflected in the total telephone number count used for rate group purposes.
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Cantel noted that, in Cellular Radio Service, Telecom Decision CRTC 84-29, 19 December 1984 (Decision 84-19), the Commission determined that it would not be in the public interest for the general body of Bell or British Columbia Telephone Company (B.C. Tel) subscribers to assume "the costs associated with achieving interconnection" with the cellular networks. Cantel stated that it is concerned that Bell may have interpreted this determination too broadly, with the result that Cantel is paying more than the costs associated with achieving interconnection. Cantel challenged the requirement that the charge it pays for interconnection include recovery of the cost of Bell subscribers using Bell's network to access Cantel's cellular network. Cantel submitted that this cost should be borne by Bell subscribers. Cantel stated that, were its application granted, it would continue to pay for the costs of (1) interconnection facilities, (2) originating and terminating traffic on its own network, and (3) terminating traffic on Bell's network.
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Cantel noted that the monthly rate for each number activated by the cellular service operator consists of $0.19 for provisioning and activating the number, $0.82 for use of Bell's local network, and a contribution to fixed common costs of $0.24. Cantel stated that, if Bell were required to include cellular telephone numbers in its total telephone number count for rate group purposes, there would no longer be any basis for the $0.82 component in the rate for seven digit telephone numbers. The value to Bell's subscribers of being able to call local cellular numbers would be reflected in Bell's rate group calculation and paid for by the general body of subscribers.
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Cantel submitted that, if the $0.82 network usage component were removed, it also would be reasonable to reduce the contribution to common costs from $0.24 to $0.05.
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In its answer, Bell stated that the Commission had dealt with the issues raised in Cantel's application in the proceeding dealing with Tariff Notice 1837, which led to Telecom Order CRTC 87-35, 13 January 1987 (Order 87-35). Bell noted that, in Order 87-35, the Commission had reiterated that Bell subscribers should not bear any additional costs arising from the introduction of cellular service with access to the public switched telephone network (PSTN). In reality, stated Bell, Cantel's application is a request that the Commission review and vary its earlier decision, pursuant to section 66 of the National Telecommunications Powers and Procedures Act (NTPPA). Bell submitted that Cantel's application should be dismissed because Cantel has not demonstrated that any of the standard criteria for review and variance have been met.
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Bell contended that the adoption of a value of service approach, as proposed by Cantel, would constitute a significant departure from the approach followed by the Commission with respect to rates for telephone numbers with outpulsing. Bell submitted that, in Radio Common Carrier Interconnection With Federally Regulated Telephone Companies, Telecom Decision 84-10, 22 March 1984 Decision 84-19), as affirmed in Decision 84-29, the Commission directed Bell and B.C. Tel to negotiate with cellular providers to develop cost-based rates.
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Bell noted that Cantel's proposal, if accepted, would result in Bell being compensated for the costs associated with the use of the local exchange network through higher local rates paid by the general body of subscribers. In Bell's view, acceptance of Cantel's proposal would likely lead to similar proposals from other users of telephone numbers with outpulsing, thus further accelerating upward pressures on local rates.
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In its reply, Cantel disputed Bell's contention that Cantel's application is, in reality, an application pursuant to section 66 of the NTPPA. Cantel submitted that, in asking that activated cellular telephone numbers be included in the telephone number count for rate group purposes, it is asking that the Commission enforce Bell's existing General Tariff and the Commission's current value of service approach to the setting of local exchange rates.
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Cantel submitted that the number of calls placed over Bell's local network to the cellular network has grown to the extent that new issues in regulatory policy have been raised. Cantel submitted that its application is an application for rate revision, based on a change in circumstances that brings into question the justness and reasonableness of the existing rates for seven digit telephone numbers with outpulsing. Cantel submitted that its application demonstrates ample cause to review Bell's rates and to grant the orders requested.
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Cantel submitted that, should the Commission choose to regard its application as a request pursuant to section 66 of the NTPPA, at least one of the relevant criteria for review and variance has been met, i.e., its application establishes on a prima facie basis that there has been a fundamental change in circumstances or facts since the decision. Cantel noted that the Commission also has a residual discretion to reconsider any of its decisions.
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Cantel submitted that it is not suggesting a departure from cost-based rates for seven digit telephone numbers. Cantel stated that what it questions is the attribution of certain costs to the provision of cellular telephone numbers. Cantel argued that this is an issue of cost causality, not an issue of moving back to value of service pricing. Cantel submitted that it is the rates that Bell charges its own subscribers for local exchange service that are based on value of service principles.
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In reply to Bell's argument that similar applications would likely follow if the Commission approved Cantel's application, Cantel submitted that its application must be judged on its own merits.
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The Commission hereby invites comment on the issues raised by the submissions noted above.
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PROCEDURE
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(1) Because British Columbia Telephone Company (B.C. Tel) provides service to Cantel under tariffs that are similar to Bell's, B.C. Tel is joined as a party to this proceeding.
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(2) Other parties wishing to participate in this proceeding (interveners) must file a notice of intention to participate with the Commission, serving copies on Bell, B.C. Tel and Cantel, by 18 December 1989. The Commission will issue a list providing the names and addresses of the interveners.
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(3) By letter dated 26 July 1989, the Commission addressed interrogatories to Cantel with respect to its application. Cantel filed its responses to those interrogatories on 25 August 1989. By 29 December 1989, Cantel is to serve on interveners copies of its and Bell's submissions, including its responses to the Commission's interrogatories.
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(4) The Commission has also addressed interrogatories to Bell and B.C. Tel. Bell and B.C. Tel are directed to file responses to the Commission's interrogatories, serving copies on Cantel, the interveners and on each other, by 29 December 1989.
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(5) Interveners may file comments with the Commission, serving copies on Bell, B.C. Tel and on each other, by 26 January 1990.
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(6) Bell and B.C. Tel may file final argument, serving copies on Cantel, the interveners and on each other, by 9 February 1990.
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(7) Cantel may file reply argument, serving copies on Bell, B.C. Tel and on the interveners, by 23 February 1990.
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(8) Where a document is to be filed or served by a specific date, the document must be actually received, not merely mailed, by that date.
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(9) The addresses to be used in connection with this proceeding are:
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Mr. Fernand Bélisle
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
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Mr. Laurence J.E. Dunbar Johnston and Buchan
Counsel for Cantel Inc.
Suite 1500
275 Slater Street
Ottawa, Ontario
K1P 5H9
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Mr. Peter J. Knowlton Assistant General Counsel
Bell Canada
25 Eddy Street
4th Floor
Hull, Quebec
J8X 4B5
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and
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Ms. D.E. Byrne
Vice President Regulatory
Matters & Corporate Secretary
British Columbia Telephone
Company
3777 Kingsway
Burnaby, British Columbia
V5H 3Z7
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Related documents may be examined at the offices of the CRTC, Room 201, Central Building, Les Terrasses de la Chaudière, 1 Promenade du Portage, Hull, Quebec, or Suite 1500, 800 Burrard Street, Vancouver, British Columbia.
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Fernand Bélisle
Secretary General
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