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ARCHIVED -  Telecom Order CRTC 97-1487

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Telecom Order

Ottawa, 16 October 1997
Telecom Order CRTC 97-1487
By letters dated 24 and 26 February 1997, the Utilities Consumers' Group (UCG) of Whitehorse, Yukon, requested that the Commission review its approval of monthly surcharges imposed by Northwestel Inc. (Northwestel) of $.10 per residential subscriber, $.20 per business single line subscriber and $.60 per trunk and multi-line subscriber and the allocation of $400,000 in 1993 excess earnings to recover costs of implementing exchange service to eight remote, underserved communities in Northwestel's territory.
File No.: 8662-U3-01/97
1. UCG maintained that the surcharges discriminate against Northwestel's Yukon customers since the underserved communities are located outside of the Yukon.
2. UCG argued that the surcharges should not be applied to Yukoners, since these subscribers currently pay twice the rates that customers in Northwestel's Eastern area pay for long distance.
3. In its response of 8 April 1997, Northwestel noted that UCG's complaint related to Telecom Order CRTC 95-886, 9 August 1995 (Order 95-886), in which the Commission approved the monthly surcharges in question.
4. Northwestel submitted that it had been open to UCG to make known its concerns during the process which led to Order 95-886 but that UCG had chosen not to do so.
5. Northwestel submitted that UCG's complaint constitutes an application to review and vary Order 95-886, and that UCG had failed to address any of the criteria used by the Commission to assess review and vary applications.
6. Northwestel stated that, pursuant to Order 95-886, it had made significant capital expenditures to service the remote communities in question and that five of them are now receiving upgraded telephone service.
7. In its reply of 23 April 1997, UCG addressed the criteria used by the Commission to assess review and vary applications, alleging error of fact and error of law.
8. UCG submitted that the approval of the surcharges and the allocation of excess earnings compelled customers to subsidize underserved communities while allowing Northwestel to shed its responsibility as a monopoly service provider.
9. UCG recommended that the Commission rescind the Order which approved the surcharges and that the money collected from subscribers and the excess earnings be used to equalize intra schedule long distance rates in Northwestel's Western and Eastern Operating Areas.
10. UCG acknowledged that the public's submissions concerning the underserved communities were considered in the process leading to Order 95-886.
11. UCG stated that it did not intervene at that time because it was not aware of these activities or of Northwestel's proposals regarding its service extension plan.
12. UCG further submitted that not all stakeholders were properly notified.
13. The Commission considers that UCG 's submissions constitute an application to review and vary Order 95-886, and, as a necessary consequence, Telecom Order CRTC 95-1163, 31 October 1995 (Order 95-1163), wherein the Commission approved the tariff filing incorporating the surcharges.
14. The Commission considers that UCG's submissions made with respect to Order 95-886 apply equally to Order 95-1163.
15. With respect to UCG's argument that the Commission made an error of fact, the Commission notes that it has generally considered the subsidization of service in rural or remote areas to be in the public interest.
16. The Commission further notes that, in Order 95-886, it considered that the monthly surcharges would assist in recovering the costs of implementing exchange service to the remote communities, while not imposing undue hardship on the general body of subscribers.
17. The Commission is not persuaded that this mechanism is an inappropriate means of funding the provision of service to the remote communities.
18. The Commission is also not persuaded that Order 95-886 allowed Northwestel to shed its responsibility as a monopoly provider by compelling the general body of subscribers to pick up the costs of subsidizing service; in particular, the Commission disagrees with UCG's effective submission that shareholders should bear this burden.
19. In the Commission's view, UCG has failed to demonstrate that the Commission made an error of fact.
20. With respect to UCG's argument that the Commission made an error of law, the Commission notes that the proceeding leading to Order 95-886 stemmed from the proceeding leading to Northwestel Inc.-Revenue Requirement for 1993, Telecom Decision CRTC 93-20, 21 December 1993 (Decision 93-20), wherein the Commission directed Northwestel to send a copy of its application to various government, native and business organizations, and to publish notices in newspapers in the company's territory.
21. The Commission notes that, during the proceeding leading to Decision 93-20, the issue of service to underserved communities was not only raised by interveners, but also in oral submissions from the public in two regional hearings in Northwestel's territory.
22. In response to these concerns, Northwestel was directed to file proposals for the remote communities, serving copies on parties to the proceeding leading to Decision 93-20.
23. In Order 95-886, the Commission directed Northwestel to submit a tariff reflecting these surcharges, which tariff was subsequently filed with the Commission and, consistent with normal procedure, made available for public examination.
24. In light of the above, the Commission is of the opinion that UCG had adequate notice of the processes leading to Decision 93-20 and to Orders 95-886 and 95-1163.
25. In the Commission's view, UCG has failed to demonstrate that the Commission made an error of law.
26. Based on the foregoing, the Commission denies UCG's request to review and vary Order 95-886 and Order 95-1163.
Laura M. Talbot-Allan
Secretary General
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