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ARCHIVED -  Telecom Order CRTC 96-1315

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Telecom Order

Ottawa, 21 November 1996
Telecom Order CRTC 96-1315
IN THE MATTER OF applications by The New Brunswick Telephone Company, Limited (NBTel) under Tariff Notice 541 (TN 541) dated 16 May 1996 and Tariff Notice 564 (TN 564), dated 9 August 1996, proposing to increase Exchange Business Communications Service (BCS) rates in three stages and to decrease Business Multi-Line Access (BMA) rates as well as to restructure these rates.
WHEREAS on 24 July 1996, in response to TN 541, the Commission issued a letter to NBTel which stated in part: "...the Commission is of the preliminary view that it would be appropriate to raise the BCS rates over a two-year or three-year period starting 1 October 1996 such that NBTel's BCS rates would be on average at least 50% of its multi-line rates";
WHEREAS NBTel responded by filing TN 564 proposing to restructure its BMA rates from three rate groups to one with the proposed single rate being lower than the existing highest rate;
WHEREAS NBTel stated that with TN 564 and based on average revenue per line, the proposed BCS rates met the Commission's stated objective of having BCS rates on average at least 50% of BMA rates;
WHEREAS comments were received from ACC TelEnterprises Ltd. (ACC), Fundy Cable Ltd. (Fundy Cable), SCL Atlantic Communications (SCL Atlantic), AT&T Canada Long Distance Services Company (AT&T Canada) and a number of individual subscribers;
WHEREAS reply comments were filed by NBTel;
WHEREAS individual subscribers who intervened, generally opposed the proposed BCS rate increases;
WHEREAS SCL Atlantic stated that the Commission's proposal did not go far enough in reducing the rate differential between BCS and BMA rates, and suggested that the average or median ratio of Centrex and multi-line rates of other Canadian jurisdictions be used as the benchmark for New Brunswick;
WHEREAS SCL Atlantic also argued for a restructuring of the BMA rates to incorporate a sliding scale reduced rate for additional access lines similar to the BCS rate structure;
WHEREAS NBTel stated that such a rate structure would be illogical because multi-line access service increases both in value per line to the customer and in cost per line to the company as a function of the number of access lines;
WHEREAS ACC and Fundy Cable noted the absence of costing information on the record and stated that NBTel should be required to demonstrate that its BCS rates, as well as Brunswick BCS rates, are compensatory and maximize contribution;
WHEREAS Fundy Cable suggested that the Commission consider a public notice proceeding to assess the appropriateness of the entire BCS (both Exchange and Brunswick) in light of the developing competitive marketplace;
WHEREAS AT&T Canada stated that because no costing information was submitted with TN's 541 and 564, the applications should be denied;
WHEREAS NBTel submitted that TN 541 will bring BCS rates to a compensatory level and that it would take six to eight months to complete the costing information sought by interveners, and that, in the circumstances, a broader proceeding by way of public notice is not required;
WHEREAS Fundy Cable submitted that NBTel's BCS rating structure (both Exchange and Brunswick) is anti-competitive and that NBTel had failed to comply with Telecom Order CRTC 91-1510, dated 25 November 1991 pertaining to the unbundling of PBX access;
WHEREAS NBTel denied Fundy Cable's allegations;
WHEREAS the Commission notes that BCS has been the subject of many interventions since the Commission assumed jurisdiction over NBTel;
WHEREAS the Commission notes that Direct-Inward-Dialing (DID) is a feature that is generally included with other Centrex-like services but is optional in NBTel's Exchange BCS;
WHEREAS the Commission notes that, with the inclusion of DID on BCS lines equipped with DID, the proposed rates in TN's 541 and 564 meet the Commission's stated 50% minimum criterion;
WHEREAS Fundy Cable and AT&T Canada argued that the Commission should also review the pricing of Brunswick BCS;
WHEREAS NBTel responded that Fundy Cable had failed to understand the marketing principles behind Brunswick BCS;
WHEREAS the Commission considers that a substantial price differential remains between Brunswick BCS and the proposed rates for Exchange BCS and that therefore no rate action is required for Brunswick BCS at this time;
WHEREAS the Commission decided in a letter, dated 29 October 1996, regarding Review and Vary and Other Applications Regarding Rates for Connection of Equipment for Centrex-like services in MT&T's and NBTel's Territory, to delay the elimination of the 1:1 rule for NBTel to coincide with any BCS rate changes based on the disposition of TN 541;
WHEREAS the Commission considers that customers whose systems are currently configured to take advantage of the 1:1 rule will choose a variety of new configurations which may have an impact on the requirement for the DID option;
WHEREAS the Commission considers that the rate changes should be implemented without further delay to bring BCS rates to compensatory levels as soon as practical; and
WHEREAS the Commission considers that the ultimate BCS rates proposed in TN 541 should be effective by 1 January 1998, to coincide with the implementation of price caps -
IT IS HEREBY ORDERED THAT:
1. Tariff Notice 564 is approved effective 1 January 1997.
2. Tariff Notice 541 is approved, but modified to implement the rate increases in the following two stages:
(a) the proposed rates for 1 July 1997 are to become effective 1 January 1997; and
(b) the proposed rates for 1 July 1998 are to become effective 1 January 1998.
3. By 30 April 1997, NBTel is to file an affidavit, sworn by a senior officer of the Company, attesting that the Company is in compliance with its tariffs respecting BCS and, in particular: (i) that no PBX equipment is being used to provision BCS access lines, (ii) that where switching, concentrating, or multiplexing equipment is attached to BCS lines, the multi-line rates are, in fact, charged in accordance with the relevant tariffs, and (iii) that DID rates are, in fact, charged whenever that feature is used with BCS lines.
Allan J. Darling
Secretary General

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