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Ottawa, 29 December 1994
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Telecom Public Notice CRTC 94-59
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DE-AVERAGED PER-MINUTE CONTRIBUTION MECHANISM
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I BACKGROUND
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In Applications by Unitel Communications Inc. and Sprint Canada Inc. to Review and Vary Part of Decision 94-19, Telecom Decision CRTC 94-27, 29 December 1994 (Decision 94-27), the Commission stated that submissions made in that proceeding raised serious concerns on its part regarding the negative impact of the average per-minute contribution mechanism adopted in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19), on the level of competition in the residential consumer market, a substantial portion of which is an off-peak market. Accordingly, the Commission found that there was substantial doubt as to the correctness of Decision 94-19 with respect to the implementation of an average per-minute contribution charge and with respect to the timing of the change in the contribution mechanism.
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In Decision 94-27, the Commission considered that a de-averaged per-minute contribution mechanism could provide a reasonable means of reconciling the need to move to a per-minute mechanism with the need for appropriate incentives for competition in the off-peak market. Accordingly, the Commission proposed the adoption of a de-averaged per-minute contribution mechanism with two components, a peak and an off-peak charge. Under the Commission's proposal, the off-peak charge would be set at one-half the charge for the peak period, with the peak period charge adjusted upwards accordingly. The peak contribution charge would apply to originating minutes switched at the point of origination between 8 a.m. and 5 p.m., Monday to Friday. Similarly, for terminating traffic, the time of day at the terminating point would determine whether the peak or the off-peak contribution charge would apply.
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Under the Commission's proposal, the differential between peak and off-peak per-minute contribution charges is primarily based on an assessment of the relative levels of subsidy that should be borne by traffic carried in the peak and off-peak periods, respectively. It is not related to the level of contribution implicit in the telephone companies' peak and off-peak toll rates. Thus, the proposed de-averaged per-minute contribution charges would be consistent overall with the framework established in Decision 94-19.
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The Commission invites comment on its proposed de-averaged per-minute contribution mechanism and on the impact it would have on long distance service providers, on the market in general and on the residential market in particular. In addition, parties are invited to comment on the appropriate timing for the implementation of such a contribution mechanism.
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II PROCEDURE
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1. AGT Limited, BC TEL, Bell Canada, The Island Telephone Company Limited, Manitoba Telephone System, Maritime Tel & Tel Limited, The New Brunswick Telephone Company Limited, Newfoundland Telephone Company Limited (the telephone companies), ACC Long Distance Ltd., Cam-Net Communications Inc., fONOROLA Inc., Sprint Canada Inc., Smart Talk Network, TelRoute Communications Inc., Unitel Communications Inc. and Westel Telecommunications Ltd. (the entrants) are made party to this proceeding.
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2. Other parties wishing to participate in this proceeding must notify the Commission of their intention to do so by writing to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 7 February 1995. The Commission will issue a complete list of parties and their mailing addresses.
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3. By 21 February 1995, the telephone companies are to file and serve on all parties, proposed de-averaged per-minute contribution charges, based on the estimated final 1995 per-minute charges calculated in accordance with the method described in Implementation of Regulatory Framework - Split Rate Base, 1995 Contribution Charges, Broadband Initiatives and Related Matters, Telecom Public Notice CRTC 94-52, 1 November 1994.
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4. By 21 February 1995, the telephone companies and entrants are to file with the Commission and serve on all parties, 1995 forecast data regarding their respective total originating and terminating conversation minutes, by peak and off-peak periods, by domestic and non-domestic traffic and (in the case of entrants) by telephone company operating territory. The Commission anticipates that this information will be filed on the public record, given the level of aggregation of the information requested.
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5. Any party may address interrogatories to the telephone companies or the entrants. Any such interrogatories must be filed with the Commission and served on the party or parties in question by 14 March 1995.
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6. Responses to interrogatories addressed pursuant to paragraph 5 are to be filed with the Commission and served on all parties by 11 April 1995.
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7. Requests by parties for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on the party or parties in question by 18 April 1995.
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8. Written responses to requests for further responses to interrogatories and for public disclosure must be filed with the Commission and served on the party making the request by 25 April 1995.
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9. The Commission will issue a determination with respect to requests for disclosure and for further responses as soon as possible. The Commission intends to direct that any information to be provided pursuant to that determination be filed with the Commission and served on all parties to the proceeding by 16 May 1995.
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10. All parties may file comments with the Commission, serving copies on all other parties, by 2 June 1995.
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11. Telephone companies and entrants may file replies to any comments, serving copies on all parties, by 16 June 1995.
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12. 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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Allan J. Darling
Secretary General
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