ARCHIVED - Telecom Order CRTC 95-886
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Telecom Order |
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Ottawa, 9 August 1995
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Telecom Order CRTC 95-886
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IN THE MATTER OF a Service Extension Plan (the Plan) and subsequent revisions filed by Northwestel Inc. (Northwestel) pursuant to the Commission's direction in Northwestel Inc. - Revenue Requirement for 1993, Telecom Decision CRTC 93-20, 21 December 1993 (Decision 93-20).
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WHEREAS, in the Plan, filed on 20 June 1994, Northwestel included a list of communities in its operating territory that are not currently served by a regular telephone exchange, in particular the Upper Halfway area of northern British Columbia (the Upper Halfway area) and the communities of Colville Lake, Jean Marie River, Kakisa, Nahanni Butte, Snare Lakes, Trout Lake and Umingmaktok (Bay Chimo) in the Northwest Territories;
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WHEREAS Northwestel provided the associated capital and operating costs in the Plan, with a proposed three-year schedule for implementation of improved telephone service to the British Columbia and six of the Northwest Territories communities and to Bay Chimo when commercial power becomes available;
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WHEREAS, in Decision 93-20, the Commission identified the company as having $400,000 in excess earnings;
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WHEREAS Northwestel proposed contributing $50,000 of its excess earnings to the Upper Halfway area and, in addition, $50,000 to each of the seven underserved Northwest Territories communities for the provision of improved service;
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WHEREAS Northwestel also received grant funding under the Canada/B.C. Infrastructure Works Program and the Peace River Regional Council that will considerably reduce the projected capital and operational costs for improved service to subscribers of the Upper Halfway area;
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WHEREAS, for the Upper Halfway area, the company proposed the creation of a Rural Serving Area;
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WHEREAS Northwestel proposed a one-time provisioning charge of $1500 per subscriber in the Upper Halfway area, as well as a flat monthly access premium of $41;
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WHEREAS Northwestel submitted that the access premium would provide revenue sufficient to maintain a rate of return equal to the cost of capital required to serve the Upper Halfway area;
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WHEREAS Northwestel stated that subscriber response in the Upper Halfway area to the company's proposal has been largely favourable;
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WHEREAS, for the seven underserved communities in the Northwest Territories, the company proposed a monthly access premium of $10 for residential subscribers and $20 for business subscribers who would receive improved service under the Plan;
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WHEREAS Northwestel also proposed that monthly surcharges of $.10 per residential subscriber, $.20 per business single-line subscriber and $.60 per trunk per PBX and multi-line subscriber be charged to all Northwestel subscribers in order to recover the costs of serving the underserved communities in the Northwest Territories;
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WHEREAS the Government of the Northwest Territories (GNWT) supported Northwestel's proposed monthly surcharges for the general body of subscribers, but was concerned that the monthly access premiums of $10 and $20 would be a significant burden on the subscribers in the seven underserved communities of the Northwest Territories;
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WHEREAS the GNWT generally submitted that, if approved, the proposed Plan should be completed within a shorter time-frame and specifically, that full telephone service should be provided to Bay Chimo within two years of the introduction of commercial power;
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WHEREAS Northwestel submitted that its implementation of improved services over the three year time-frame would mitigate the impact on required resources and was intended to minimize the effect of increased rates on its subscribers;
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WHEREAS the Commission considers the company's proposed one-time provisioning charge and recurring monthly access premiums for subscribers in the Upper Halfway area to be reasonable taking into account the unique characteristics of the area to be served;
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WHEREAS the Commission notes that in the company's most recently revised Plan, the estimated capital cost of serving the underserved communities in the Northwest Territories decreased substantially due to technological improvements;
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WHEREAS the Commission considers Northwestel's proposed monthly access premiums of $10 and $20 for subscribers in underserved communities in the Northwest Territories to be substantial, when compared with rates applied to other rate groups of similar size in the company's operating territory;
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WHEREAS the Commission notes that, in Decision 93-20, it denied proposed monthly residence exchange rate increases of between $3.53 and $9.50 by Northwestel;
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WHEREAS, in Telecom Order CRTC 95-629, 31 May 1995, the Commission denied Northwestel's rate rebalancing proposal, which would have resulted in an average monthly rate increase of $10;
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WHEREAS the Commission notes that Northwestel's proposed monthly surcharges of $.10 per residential subscriber, $.20 per business single-line subscriber and $.60 per trunk per PBX and multi-line subscriber, to be charged to the general body of subscribers, will assist in recovering the operating costs of serving the underserved communities, while not imposing undue hardship on the general body of subscribers; and
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WHEREAS the Commission considers that the capital expenditures incurred in serving the underserved communities, spread over three years, will not cause significant erosion in Northwestel's return on equity -
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IT IS HEREBY ORDERED THAT:
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1. With respect to the provision of improved service to the Upper Halfway area:
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a) the company's proposed per-line provisioning charge and monthly access premium are approved; and
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b) Northwestel is to file proposed tariff pages establishing the Rural Serving Area, along with the one-time per-line provisioning charge and monthly access premium, within 60 days of the date of this Order.
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2. With respect to the provision of improved service to the communities in the Northwest Territories:
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a) the proposed monthly access premiums of $10 and $20 for the underserved communities are denied;
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b) the company's proposed monthly surcharges are approved;
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c) Northwestel is to implement telephone service to Bay Chimo within one year of commercial power becoming available;
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d) Northwestel is to file proposed tariff pages establishing the monthly surcharges within 60 days of the date of this Order;
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e) the effective date for implementation of the monthly surcharges will be determined upon final approval of the filed tariff pages; and
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f) upon final approval of the proposed tariff pages, Northwestel is to inform its subscribers of the surcharges by means of a billing insert.
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Allan J. Darling
Secretary General |
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- Date modified: