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Telecom Public Notice

Ottawa, 24 February 1995

Telecom Public Notice CRTC 95-9

MARITIME TEL & TEL LIMITED - APPLICATION FOR INTERIM RATE INCREASES

On 1 February 1995, Maritime Tel & Tel Limited (MT&T) filed in confidence an application for interim rate increases to take effect on 3 April 1995. At the same time, MT&T filed proposed directions on procedure for a proceeding to consider an application to make the interim rate increases final effective 1 October 1995.

On 20 February 1995, MT&T placed its proposed directions on procedure on the public record, along with an abridged copy of its interim rate increase application. In its application, MT&T is requesting among other things, monthly interim increases of (1) $2.95 for residence one-party and two-party service, (2) between $5.60 and $9.30 for business single-line service, and (3) between $10.40 and $14.25 for business multi-line service, and (4) $2.00 per Centrex line.

Without rate increases in 1995, MT&T forecasts that its Utility segment will earn a rate of return on average common equity (ROE) of 6.0%, while its company-wide ROE for the year will be 6.4%. MT&T expects that its proposed rate increases would generate approximately $18 million in revenue in 1995, if in effect on an interim basis on 3 April 1995, and $24 million in 1996. With approval of the interim rate increases, to take effect on a final basis on 1 October 1995, MT&T forecasts that its Utility segment would earn ROEs of 8.3% in 1995 and 11.2% in 1996, with company-wide ROEs of 8.1% in 1995 and 8.7% in 1996.

The test used by the Commission in considering interim rate increases was first enunciated in Bell Canada, General Increase in Rates, Telecom Decision CRTC 80-7, 25 April 1980, as follows:

 The Commission considers that, as a rule, general rate increases should only be granted following the full public process contemplated by Part III of its Telecommunications Rules of Procedure. In the absence of such a process, general rate increases should not in the Commission's view be granted, even on an interim basis, except where special circumstances can be demonstrated. Such circumstances would include lengthy delays in dealing with an application that could result in a serious deterioration in the financial condition of an applicant absent a general interim rate increase.

The Commission does not consider that an effective date of 3 April 1995 for MT&T's proposed interim rate increases would permit a meaningful public process. The Commission therefore invites comment on MT&T's proposed interim increases, with an effective date of 1 May 1995. The Commission notes that, by letter dated 21 February 1995, interested parties were invited to comment on a request by MT&T that all existing Utility segment rates be made interim, prior to the Commission's decision as to whether or not to grant any interim rate increases.

As noted above, MT&T is also seeking approval of directions on procedure for an application to make the requested interim increases final effective 1 October 1995. In the Commission's view, there is some question as to whether a meaningful proceeding with regard to final 1995 rates could be held prior to the Commission's decision in the proceeding initiated by Implementation of Regulatory Framework - Split Rate Base, 1995 Contribution Charges, Broadband Initiatives and Related Matters, Telecom Public Notice CRTC 94-52, 1 November 1994 (the Split Rate Base proceeding). Accordingly, the Commission invites MT&T and interested parties, in their submissions with regard to the company's interim rate increase application, to comment on (1) whether a proceeding with regard to final 1995 rates should be held before or after the Commission's decision in the Split Rate Base proceeding, and (2) in either event, the nature and scope of the review that should take place. The Commission is deferring its decision as to MT&T's proposed directions on procedure until the record with regard to the interim application is complete, i.e., until comment and reply comment have been received and considered.

Procedure

1. The interim rate increase application is available for public inspection during normal business hours at the offices of the CRTC in the following locations:

Room 201
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Hull, Quebec

Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia

The interim rate increase application is also available for inspection during normal business hours at MT&T's business offices at 1505 Barrington Street and at 3601 Joseph Howe Drive in Halifax, Nova Scotia, and at MT&T's business offices in Sydney, New Glasgow, Truro, Kentville, Bridgewater and Yarmouth.

2. If you wish to comment on MT&T's interim rate increase application or on the issues noted above, please write to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: (819)953-0795, by 24 March 1995. A copy of your letter should be sent to Ms. Wendy J. Paquette, Regulatory and Government Relations Manager, Maritime Tel & Tel Limited, 1505 Barrington Street, 8th Floor South, P.O. Box 880, Station Central RPO, Halifax, Nova Scotia, B3J 2W3, fax: (902)421-1538.

3. MT&T may file a reply, serving a copy on all those who file comments, by 31 March 1995.

4. 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.

Allan J. Darling
Secretary General