ARCHIVED - Telecom Order CRTC 97-1760
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Ottawa, 27 November 1997
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Telecom Order CRTC 97-1760
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On 27 August 1997, Le Téléphone de St-Éphrem Inc. (St-Éphrem) filed an application for approval of the use of its deferral account balance at 31 December 1996 and excess earnings deferred in 1996.
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File No.: 96-2421
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1. Deferral accounts for excess earnings were established for the Quebec independents while under the jurisdiction of the Régie des télécommunications du Québec.
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2. In Regulatory Framework for the Independent Telephone Companies in Quebec and Ontario (Except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), Telecom Decision CRTC 96-6, 7 August 1996 (Decision 96-6), the Commission directed that each company showing a balance in its deferral account accumulated to 31 December 1994 and any excess earnings deferred in 1995 and 1996 submit a plan for the disposition of the funds.
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3. The Commission expressed the preliminary view that it would be prepared to approve plans that would apply the funds accumulated to 31 December 1994 to the improvement of basic local service.
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4. Due to the existence of a contribution component in the Carrier Access Tariff (CAT) in 1995 and 1996, the Commission favoured a pro-rata refund of any excess earnings in those years to long distance carriers.
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5. The Commission issued Telecom Order CRTC 97-277 on 27 February 1997 (Order 97-277), ordering St-Éphrem to apply its accumulated deferral account of $236,571 at 31 December 1994 and excess earnings of $17,711 deferred in 1995 to assets acquired for the purposes of improving basic local service.
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6. St-Éphrem proposed to apply its excess earnings of $67,728 for the year ended 31 December 1996 to assets acquired for the purpose of improving basic local service.
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7. The Commission notes that in 1996 St-Éphrem had a revenue settlement agreement with Québec-Téléphone and was not part of any contribution component in the CAT.
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8. The Commission is of the view that St-Éphrem's excess earnings for the year ended 31 December 1996 should be applied to assets acquired for the purpose of improving basic local service.
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9. For the period ending 31 December 1995, St-Éphrem reported accumulated assets for improving local service in excess of the amount ordered in Order 97-277 resulting in the company reporting a deferred account debit balance of $73,890.
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10. For the period ending 31 December 1996, St-Éphrem reported a deferral account debit balance of $38,135 after applying to the 31 December 1995 deferred account debit of $73,890 balance, the 1996 excess earnings of $67,728 and the use of assets on the amount of $31,973 acquired for the purpose of improving basic local service.
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11. St-Éphrem proposed to apply its deferral account debit balance of $38,135 at 31 December 1996 to any anticipated 1997 excess earnings.
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12. The Commission notes that St-Éphrem's practice to apply the use of assets to improve basic local service above the amount of the accumulated excess earnings, thereby creating a negative balance in the deferred account, is contrary to the determinations in Decision 96-6 and Order 97-277.
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13. The Commission also notes that with the possible replacement in 1997 of the existing Commission and Line Haul Agreement with a CAT mechanism for St-Éphrem, there will likely be less excess earnings in 1997. Furthermore, any excess earnings in 1997, as prescribed in Decision 96-6, will be refunded to various long distance carriers on a pro-rata basis based on their share of the total minutes carried in the year.
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14. In light of the foregoing, the Commission orders that:
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(a) St-Éphrem apply its excess earnings for the year ended 31 December 1996 to assets acquired for improving basic local service; and
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(b) St-Éphrem reverse its reported deferral account debit balance at 31 December 1996 to nil in 1997 by increasing its net fixed assets by an equivalent amount.
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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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