ARCHIVED - Telecom Order CRTC 97-1049
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Telecom Order |
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Ottawa, 31 July 1997
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Telecom Order CRTC 97-1049
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BC TEL, Maritime Tel & Tel Limited (MT&T), The Island Telephone Company Limited (Island Tel) and NewTel Communications Inc. (NewTel) (collectively, the companies) filed for approval of their respective Phase III/Split Rate Base (SRB) Manual Update Reports on 27 March 1997 (BC TEL), 31 March 1997 (MT&T and Island Tel) and 1 April 1997 (NewTel).
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File No.: BC TEL 97-8654-B1-01
NewTel 97-8654-N2-01 Island Tel 97-8654-J1-01 MT&T 97-8654-M1-01 |
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1. The Phase III/SRB Manual Update Reports were filed, with explanations, in accordance with Proposed Revisions to the Phase III Manual Update Procedure, Telecom Letter Decision CRTC 89-26, 1 December 1989, Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994, Review of Phase III of the Cost Inquiry, Telecom Decision CRTC 94-24, 18 November 1994 and Implementation of Regulatory Framework - Splitting of the Rate Base and Related Issues, Telecom Decision CRTC 95-21, 31 October 1995.
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2. No comments on the companies' proposed updates were submitted by interested parties.
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3. The updates submitted by the companies included miscellaneous methodology updates in various investment and expense studies but the majority of changes involved the introduction of new tariffed services, the addition and deletion of accounts to match revisions to their respective Accounting Manuals and other minor changes.
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4. The Commission notes that in MT&T's update submission, many of the proposed methodology changes for non-investment related expenses reflect the company's discontinued use of time reporting on a corporate basis to track employee related costs.
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5. The Commission notes that, as a result, MT&T proposed to use, as an interim measure, trended historical ratios derived from recent time reporting experience in place of actual time reporting until it develops a permanent methodology for the 1997 version of its Phase III/SRB Manual.
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6. The Commission also notes that MT&T indicated that it was evaluating the possibility of using a periodic organizational analysis of activities performed to verify the trended ratios with the intention of reviewing this methodology on a yearly basis to ensure that it accurately portrays the actual costs incurred.
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7. The Commission further notes that MT&T proposed to use a combination of actual time reporting and historical ratios in the production of its 1996 Phase III/SRB results.
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8. The Commission has reviewed the proposed updates filed by the companies and, other than as noted above, finds them acceptable.
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9. The Commission considers that since corporate time reporting information is no longer used by MT&T, approval of the company's proposed methodology to use historical ratios to assign employee related costs is appropriate for the 1996 Phase III/SRB results.
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10. The Commission notes, however, that trended historical ratios can be expected to change as products and services evolve in a competitive marketplace.
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11. Accordingly, the Commission considers that MT&T should submit, in a future update submission applicable to the production of its 1997 Phase III/SRB results, a revised proposal to replace the trended historical ratios.
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12. In light of the foregoing, the proposed Phase III/SRB Manual Update Reports filed by BC TEL, MT&T, Island Tel and NewTel are approved.
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13. MT&T is directed to file for approval, no later than 31 March 1998, a revised methodology to assign employee related costs for use in the production of its 1997 Phase III/SRB results.
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14. The amended pages to the Phase III/SRB Manuals of the companies which are to include all updates approved in this Order that are relevant to the production of the 1996 SRB results, are to be filed with the Commission within 30 days of the date of this Order.
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15. Copies of the amended pages to the companies' respective Phase III/SRB Manuals are to be served on interested parties for each company by the same date.
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Laura M. Talbot-Allan
Secretary General |
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This document is available in alternative format upon request.
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