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ARCHIVED -  Telecom Order CRTC 95-1071

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Telecom Order

Ottawa, 29 September 1995
Telecom Order CRTC 95-1071
IN THE MATTER OF the 1994 Phase III and Access Study Manuals Update Report of Bell Canada (Bell) filed on 31 March 1995, which included an amended procedure for Customer Account Query Activities expenses contained in BSCC 75.640.04, Customer Provisioning Business Office Expense.
WHEREAS, Unitel Communications Inc. (Unitel) disagreed with Bell's statement that the study period in the latter half of September does not contain special promotions, that requests for installation/changes to residential lines from students are significantly diminished and that the queries observed are representative of the queries usually received on a day to day basis;
WHEREAS, Unitel continues to support the use of a quarterly survey to improve the accuracy and reliability of the distribution of Customer Account Query Activities expenses to BSCs;
WHEREAS, Bell submitted that in selecting a study period, the company specifically avoided months that contained special activities, promotional and seasonal campaigns, and as a result had selected a time frame that contains representative general queries received by the Company;
WHEREAS Bell noted that Unitel had not provided any evidence to support its assertion that quarterly work sampling studies will improve the accuracy and reliability of distribution of expenses to the BSC's;
WHEREAS Bell uses a sample size of 15,000 observations that has a relative precision of 2% at the 95% confidence level in the annual work sampling technique;
WHEREAS, the Commission is of the view that Bell's choice of the latter half of September as a period in which to conduct the 1994 abbreviated sample referred to in Review of Phase III:
Inquiry Officer's Report is acceptable for the purpose of statistical sampling and agrees with Bell that such a period is representative and does not involve anomalies which would otherwise distort the sample;
WHEREAS, the Commission considers that a relative precision of 2% at the 95% confidence level for an annual survey is acceptable and that such a precision at that confidence level would not be enhanced by quarterly surveys;
WHEREAS, the Commission accepts the annual study approach proposed by Bell for the 1994 Phase III and Access Study Manuals;
WHEREAS Unitel stated that Bell's Work Sampling Study Guide contains the same mapping as the Business Sales and Services Expenses;
WHEREAS Unitel submitted that under the Business Sales time survey, only 8% of the expense was allocated to the Access BSC and by contrast, under the Customer Account Query Activity work sampling survey, 48% of the expense was allocated to the Access BSC;
WHEREAS Bell does not agree with Unitel's submission that it is anomalous to have different results from two different work time studies using the same mapping of activities;
WHEREAS, the Commission considers that Business Sales and Services activities are company driven, and Customer Account Query Activities are responses to subscriber requests and consequently are different activities;
WHEREAS, the Commission agrees with Bell that it is not anomalous to have different results from two different work time studies using the same mapping of activities;
WHEREAS, the Commission accepts Bell's 1994 mapping technique for Customer Account Query Activities for the 1994 Phase III and Access Study Manuals;
WHEREAS, Unitel stated that BSCC 75.640.04, Customer Provisioning Business Office Expense, indicates that Service Orders are a separate function code with the costs allocated using organizational analysis and the use of USOC/SAC ratios;
WHEREAS, the USOC/SAC ratios were previously used to assign Business
Sales expenses, but have since been deemed by Bell to be an inappropriate allocator for that purpose;
WHEREAS, this allocator has been replaced by a time survey that has produced very different results from those arising from the use of the USOC/SAC ratios;
WHEREAS, Bell stated that, with respect to Unitel's suggestion that Bell be directed to extend the Work Sampling Study to the assignment of service orders, the update process has been established by the Commission to provide interested parties the opportunity to comment on Bell's proposed Phase III manual updates;
WHEREAS, Bell stated it has made no proposal to modify the methodology of the assignment of costs related to service orders and therefore Unitel's comments on this issue should be disregarded;
WHEREAS, the Commission considers that the extension of the Work Sampling Study to the service order activity as proposed by Unitel, is beyond the scope of this particular proceeding, and that, in any event, there is no correlation between the service order activity (which is generally routine involving the provisioning of products and facilities to provide service, activation of billing and other related activities) and Business Sales activities that relate to the sales effort required to market services provided by the company;
WHEREAS, Unitel stated that the mapping table provided by Bell indicates that, as part of the study, activities were mapped to three additional categories: Other, Lunch and Service Orders;
WHEREAS, Unitel stated that the Phase III Manual documentation provided to date by Bell regarding the new study does not describe the allocation of the activities identified as Other and Lunch;
WHEREAS, Bell stated, that with respect to Unitel's concern about the allocation of the activities and expenses identified as Lunch and Other, the Company notes that, in the Work Sampling Study, all time is observed and the Lunch activity is recognized as unpaid time and is therefore not allocated;
WHEREAS, Bell stated that the Other activity includes breaks, meetings with supervisors, training, etc., and costs associated with this time are allocated to all BSCs based on the ratios derived from the results of mapping all Customer Account Query Activities;
WHEREAS the Commission accepts Bell's response as Other is allocated in the accepted Phase III process known as associated loading;
WHEREAS, Unitel indicated that the following types of queries should not be assigned directly to the Access BSC; Terms of Service, Interest Rates, Adjustments, Rate Change, Copy of Bill, Security Deposits as these activities are joint costs not related to any one service;
WHEREAS, Bell provided information for each line item contained in the Access section of Bell's Work Sampling guide concerning Customer Account Query Activities;
WHEREAS, the Commission notes that Bell's procedure with respect to the above items is consistent with BC TEL's treatment of queries of a general nature;
WHEREAS, the Commission accepts Bell's allocation of Customer Account Query Activities amended in BSCC 75.640.04 to each line item in the Access section of Bell's Work Sampling Guide for the 1994 Phase III and Access Study Manuals as information is not available to amend the existing study;
WHEREAS, the Commission is of the view that these functions identified by Unitel are of a joint use nature and intends to undertake a process to further review the appropriate allocation of these joint-use functions of the telephone companies following the release of the Split Rate Base Decision;
WHEREAS, Unitel stated that a review of the mapping list also reveals that queries related to Operator Services/Directory Assistance are associated with Monopoly Local BSC;
WHEREAS, Unitel stated that the costs associated with Operator Services/Directory Services should be assigned to both the Monopoly Local and Competitive Toll category;
WHEREAS, Bell stated that the company will examine the assignment of this activity in more detail for the 1995 Phase III study;
WHEREAS, Unitel proposed that the Commission should reject Bell's proposal to delay any review of the assignment of Long Distance Directory Assistance until the 1995 study and direct Bell to reflect the appropriate allocation of Long Distance Directory Service customer account query expense to the Competitive Toll category for the 1994 Phase III results;
WHEREAS, the Commission is of the view that Unitel's observation has merit but as the 1994 information concerning the identification of Operator Services/Directory Assistance between Monopoly Local and Competitive Toll is unavailable, Unitel's suggestion to reject Bell's proposal to delay a review of the assignment of Long Distance Directory Assistance to the 1995 Phase III study is denied;
WHEREAS, the Commission notes Bell's undertaking to discretely identify local and long distance directory assistance queries for Bell's 1995 Split Rate Base results;
WHEREAS, Bell and BC TEL were requested by a commission staff letter dated 16 June 1995, to, among other things, explain the differences between the methodologies of Bell and BC TEL pertaining to the assignment of Customer Account Queries;
WHEREAS, Bell stated that in its view the materiality of its Customer Account Query Activities warrants a more discrete analysis than the general revenue approach adopted by BC TEL;
WHEREAS, BC TEL stated that the Adjusted Gross Revenue Ratio is a proper driver for the BSC assignment of the Business Office Expenses dealing with Customer Account Queries; and
WHERAS, the Commission intends to initiate a proceeding, following the release of the Split Rate Base decision, to consider the methodologies of the telephone companies (including Bell and BC TEL) with respect to Customer Account Queries -
IT IS HEREBY ORDERED THAT:
The proposed revisions to the Phase III and Access Study Manuals filed on 31 March 1995 are approved.
Allan J. Darling
Secretary General

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