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Telecom Public Notice
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Ottawa, 2 August 1991
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Telecom Public Notice CRTC 1991-61
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BELL CANADA AND NORTHWESTEL INC. - SALE OF FACILITIES IN THE NORTHWEST TERRITORIES
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Reference: Northwestel Tariff Notice 403
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The Commission has received applications from Bell Canada (Bell) and Northwestel Inc. (Northwestel) related to the proposed transfer to Northwestel of substantially all of Bell's assets in the eastern portion of the Northwest Territories. Approval of these applications would enable Bell to transfer its current operations in the Northwest Territories to Northwestel, effective 1 January 1992.
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Bell states that the proposed transaction has been structured to provide compensation to Northwestel in the amount of $18,420,000. Bell submits that this amount represents the net present value, after certain deductions, of the net loss that Bell would incur over the ten year period beginning 1 January 1992, if it were to continue operating in the Northwest Territories.
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Under the terms of the proposed sale, Bell would transfer the assets and liabilities associated with its operations in the Northwest Territories to Northwestel at their net book value, which Bell states is also the fair market value, as of 1 January 1992. Bell estimates this amount to be $17,967,000, representing $18,021,000 in assets and $54,000 in liabilities. The transaction would also result in a cash payment to Northwestel of $453,000, this being the difference between the net present value of the estimated loss for the ten year period and the net book value of the assets and liabilities to be transferred.
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Bell proposes to establish an offsetting deferred charge of $18,420,000, which it would amortize against income over the ten year period from 1992 to 2001. Northwestel would establish a corresponding deferred credit of $18,420,000, which it proposes to amortize to income over the same period.
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In addition to its application for approval of the sale, Bell has submitted for the Commission's approval an Interconnection and Settlement Agreement, providing for the settlement of revenues between the two companies on the basis of the Commission and Prorate method. Bell states that this agreement is similar to those between it and various other independent telephone companies.
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In conjunction with the proposed transfer, Northwestel has filed Tariff Notice 403, proposing tariff revisions that would permit it to provide service to the 22 exchanges in the eastern Northwest Territories now served by Bell, namely: Arctic Bay, Arviat, Baker Lake, Broughton Island, Cape Dorset, Chesterfield Inlet, Clyde River, Coral Harbour, Grise Fiord, Hall Beach, Igloolik, Iqaluit, Lake Harbour, Little Cornwallis Island, Nanisivik, Pangnirtung, Pond Inlet, Rankin Inlet, Repulse Bay, Resolute, Sanikuluaq and Whale Cove. Tariff Notice 403 also proposes rate revisions applicable to Northwestel's present operating territory.
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Northwestel states that the proposed tariff revisions are intended to equalize local and competitive service rates in the two areas and to move towards the equalization of long distance rates. The tariff revisions would result in increases in local rates for some subscribers, both business and residence, in both areas. Rates for message toll calls within Northwestel's existing operating territory would decrease, as would rates for calls from that area to the eastern Northwest Territories. Rates for message toll calls within the eastern Northwest Territories would remain the same, while rates for calls from that area to Northwestel's existing territory would either increase or decrease, depending upon mileage band. Other message toll service rates would remain unchanged.
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In support of its application, Northwestel has submitted information for which it has claimed confidentiality. An abridged version of this information has been provided for the public record.
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Procedure
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1. The mailing addresses to be used in connection with this proceeding are:
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Mr. Allan J. Darling
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
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Mr. Peter J. Knowlton
Assistant General Counsel
Bell Canada
25 Eddy Street
Hull, Quebec
J8X 4B5
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Mrs. S. A. Simpson
Director of Administration and Regulatory Affairs
Northwestel Inc.
P.O. Bag 2727
301 Lambert Street
Whitehorse, Yukon
Y1A 4Y4
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2. The applications may be examined at the business offices of either company or at the offices of the CRTC in the following locations:
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Room 201
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Hull, Quebec
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Suite 602
Complex Guy-Favreau
East Tower
200 René-Lévesque Blvd. West
Montréal, Quebec
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Suite 1810
275 Portage Avenue
Winnipeg, Manitoba
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Suite 1380
800 Burrard Street
Vancouver, British Columbia
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A copy of each company's application or applications may be obtained by any interested person upon request directed to the company in question at the address shown above.
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3. Persons wishing to participate in this proceeding (interveners) must file a notice of intention to participate with the Commission by 30 August 1991. The Commission will issue a complete list of parties and their mailing addresses.
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4. Interveners may address interrogatories to the companies. Any such interrogatories must be filed with the Commission and served on the company in question by 30 August 1991. The Commission will also address interrogatories to the companies by that date.
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5. Bell and Northwestel are to file responses to interrogatories with the Commission, serving copies on each other and on interveners, by 27 September 1991.
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6. Interveners may file comments with the Commission, serving copies on Bell and Northwestel, by 18 October 1991.
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7. Bell and Northwestel may file replies to any comments, serving copies on each other and on interveners, by 1 November 1991.
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8. Where a document is to be filed or served by a specific date, that document must be actually received, not merely mailed, by that date.
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Allan J. Darling
Secretary General
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