ARCHIVED -  Telecom Order CRTC 96-1219

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Telecom Order

Ottawa, 6 November 1996
Telecom Order CRTC 96-1219
IN THE MATTER OF applications by Stentor Resource Centre Inc. (Stentor) under Tariff Notices 288 dated 19 April 1996 and 310 dated 28 May 1996, and by TELUS Communications Inc. (TCI) (formerly AGT Limited) under Tariff Notices 779 dated 30 May 1996 and 803 dated 30 September 1996.
WHEREAS, in response to Stentor - Introduction of DS-3 Access Service, Telecom Public Notice CRTC 96-21, 31 May 1996 (Public Notice 96-21), interveners filed comments on Stentor Tariff Notices 288 and 310, and on TCI Tariff Notice 779;
WHEREAS Stentor Tariff Notice 288 proposed the introduction of DS-3 access service on behalf of the Stentor member companies with the exception of TCI;
WHEREAS the current Stentor National Services Tariff (NST) DS-3 access service is limited to that offered by Bell Canada (Bell);
WHEREAS other Stentor member companies have been providing DS-3 access service under special tariffs;
WHEREAS Stentor proposed three rate bands with each member company designating the rate band for each of its DS-3 access serving wire centres;
WHEREAS the proposed Band 3 rate would be the same as the existing NST DS-3 access rate that is currently limited to Bell, with Band 2 rates that are 10% lower and Band 1 rates that are 20% lower;
WHEREAS the companies proposed that where service was requested in a wire centre that was not designated as a DS-3 access serving area, the highest band rate applicable to that company would apply, plus a charge for any additional costs that are incurred;
WHEREAS Stentor proposed rates for additional channels at the same location that provided for discounts in relation to the initial channel rate;
WHEREAS Stentor also proposed the introduction of a channelizing service that would enable a DS-3 access to be connected to DS-1 channels at either the customer premise or at a central office;
WHEREAS in Tariff Notice 779, TCI proposed essentially the same DS-3 access service, but as part of TCI's General Tariff;
WHEREAS Stentor Tariff Notice 310 proposed, among other things, to restructure the existing NST DS-1 access rates, for all member companies except TCI, by introducing a similar three band rate structure as proposed in Tariff Notice 288 for DS-3 access service;
WHEREAS Stentor proposed DS-1 access service Band 3 rates that are the same as the existing NST DS-1 access rates, Band 2 rates that are 15% lower and Band 1 rates that are 30% lower;
WHEREAS Stentor also proposed to restructure the rates for additional channels provided at the same location;
WHEREAS fONOROLA Inc. and the Canadian Business Telecommunications Alliance supported approval of these applications;
WHEREAS other interveners objected to the proposed banded rate structure claiming that it constituted targeted pricing;
WHEREAS Stentor claimed that competitors were actively providing high speed access service and that the rate banding took into account the cost of providing service, as well as marketing and strategic factors;
WHEREAS interveners claimed that Stentor had not provided evidence that it was not cross-subsidizing the rates in the lower rated bands with revenues from the higher rated areas;
WHEREAS Stentor stated the rates were compensatory for each rate band and supported this claim with cost to revenue ratios for each band, for each company and for both the DS-3 access service and the restructured DS-1 access service;
WHEREAS the Commission finds the proposed banded rate to be acceptable and to more appropriately recognize the underlying costs of providing the DS-3 and DS-1 access services;
WHEREAS interveners also claimed that Stentor had not specified the criteria by which the member companies had determined serving wire centres and how these wire centres would be assigned to the rate bands;
WHEREAS interveners further claimed that absent specific criteria the companies could assign the wire centre to a rate band to suit a particular customer;
WHEREAS Vidéotron Télécom ltée stated that the banding structure constitutes unjust discrimination;
WHEREAS Stentor stated that once a wire centre's rate band is established, or if it is changed, the rate would apply to all customers in that wire centre;
WHEREAS, in the Commission's view, the banding is not unjustly discriminatory as it applies to all customers in a given wire centre;
WHEREAS interveners stated that Stentor had not provided a separate economic study for the channelizing feature and that in their view the proposed rates for this feature are not compensatory;
WHEREAS Stentor stated that the channelizing feature is not a service by itself but a feature of the DS-3 service and that the overall DS-3 service is compensatory;
WHEREAS Stentor further stated that use of the channelizing feature required use of other components of the DS-3 service that provide more than enough mark-up to cover any possible costs associated with the channelizing feature;
WHEREAS, in the Commission's view, the channelizing feature does not require a separate economic study;
WHEREAS interveners claimed that Stentor had not provided sufficient costing evidence to justify the large difference in rates between initial and additional DS-1 and DS-3 accesses;
WHEREAS Stentor stated that the rates for additional channels were cost based and reflected the cost efficiencies of provisioning additional channels at the same customer premise;
WHEREAS the Commission accepts that there are cost efficiencies in provisioning additional channels at the same customer location;
WHEREAS AT&T Canada Long Distance Services Company (AT&T Canada) (formerly Unitel Communications Company) commented that the number of DS-1 access servicing wire centres in Bell had been significantly reduced (from 210 to 99) and that AT&T Canada would have to pay construction charges in areas where such charges were not previously applicable;
WHEREAS, on 13 September 1996, Stentor provided a correction to its filing to indicate that the number of DS-1 access serving wire centres would not be reduced and would include 325 wire centres; and
WHEREAS TCI in Tariff Notice 803 proposed revisions to its DS-1 access service similar to those proposed by Stentor in Tariff Notice 310 -
Stentor Tariff Notices 288 and 310 and TCI Tariff Notices 779 and 803 are approved.
Allan J. Darling
Secretary General

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