ARCHIVED -  Telecom Order CRTC 97-1960

Telecom Order

Ottawa, 30 December 1997

Telecom Order CRTC 97-1960

Rogers Cantel Inc.'s (Cantel) applications to review rates of cellular and paging access services charged by Bruce Municipal Telephone System (Bruce), Kenora Municipal Telephone System (Kenora), Northern Telephone Limited (Northern), Québec-Téléphone, Sogetel inc. (Sogetel), Télébec ltée (Télébec), and The Corporation of the City of Thunder Bay - Telephone Division (Thunder Bay Telephone), [collectively, the companies].

File No.: 8661-C7

1. By letters dated 29 August 1997, Cantel requested that the Commission review the rates for the network and telephone number elements of the cellular access tariffs and in some cases the paging number rates currently charged by the companies.

2. Cantel's various applications requested that the companies be directed to develop and file cost studies that identify the costs incurred to provide the above-mentioned elements of cellular access and paging number services, and that a public process be instituted to enable Cantel to pose interrogatories to each company concerning the cost studies, and to submit comments on any rates proposed.

3. The applications were based on the grounds that the costs of provisioning the network and number elements of wireless and paging access services have declined dramatically in recent years and, by comparison with Bell Canada (Bell), the rates for the companies no longer reflect the underlying costs of providing cellular access and paging number services, and are no longer just and reasonable.

4. Cantel also submitted that as the review process will likely take several months to complete and as the companies' rates are higher than other Stentor companies, the companies should be required to use, on an interim basis, Bell's interim rates for: (1) the network and number elements of the wireless access service (set out in Telecom Order CRTC 97-83 (Order 97-83) dated 21 January 1997); and (2) paging number service (set out in the Commission's letter of 16 May 1997), which are both set at the rates approved for TELUS Communications Inc., along with a per number reserved rate of $0.04. Cantel further submitted that the final rates determined by the Commission should be made retroactive to the date of the interim order.

5. Cantel stated that in the alternative, should the companies not wish to undertake a new resource cost study, it would have no objection to the companies establishing the same rates as those approved for Bell. Cantel submitted that in such case, the companies' interim rates should reflect those approved in Order 97-83 and the Commission's letter of 16 May 1997, with Bell's final rates to be applied retroactively to the date of the interim rate order.

6. Following Cantel's application, Québec-Téléphone filed tariff revisions to its cellular access services, which received interim approval in Telecom Order CRTC 97-1815 dated 10 December 1997.

7. The Commission notes that Québec-Téléphone's revised rates for cellular access and paging number services are the same as those set out in Order 97-83 and the Commission's letter of 16 May 1997.

8. Sogetel indicated that it was willing to employ Québec-Téléphone's cellular access and paging number service rates, effective 1 November 1997.

9. Cantel replied that it had no objection to Sogetel's proposal provided that Sogetel: (a) amends its interim rates for the network and telephone number elements of the cellular access tariffs and the paging number tariffs to reflect those in force for Québec-Téléphone from time to time; and (b) adjusts these rates retroactively following approval of new interim or final rates for Québec-Téléphone.

10. In the circumstances, the Commission considers that, on an interim basis, Sogetel's cellular access rates and paging number service rates should be the same as those of Québec-Téléphone's, in effect on 1 November 1997.

11. Télébec submitted that its current cellular access rates were consistent with those of other Stentor companies and that Cantel's proposed rate reductions would have a significant impact on the company's financial results.

12. The other companies generally submitted that, although not opposed to rate reductions for these services (in a manner consistent with previous Commission-approved rates for cellular access services), the rate reductions proposed by Cantel would have a significant impact on their financial results and would have to be made up by further increasing the contribution charges, which are already considered too high in comparison with the contribution charges of the Stentor companies.

13. Northern submitted that the existing rates for its cellular access service should be made interim effective 1 January 1998 and that the Commission should initiate a proceeding to consider possible changes to its rates as well as to determine how any associated revenue impacts should be recovered.

14. The Commission notes that the recent evidence filed in the proceeding initiated by Bell Tariff Notice 5903 has demonstrated significant cost reductions associated with the provision of network and number elements for the wireless access service due to the digital evolution of the network, the deployment of fibre optics and updated traffic assumptions.

15. The Commission notes that it has no information available to it on which to base an assessment of the impact on other rates if Cantel's proposed interim rates were approved at this time.

16. Coincident with this proceeding, cellular access service rates were also filed by Ontario Northland Transportation Commission (the telecommunications operating division of which is now known as O.N. Tel). The Commission considers that O.N. Tel's proposed rates should be considered in the proceeding initiated pursuant to paragraph 17(iv) of this Order.

17. In light of the above, the Commission orders that:

(i) rates for the network and number elements of the cellular access service and the paging number service (where applicable) for the companies and O.N. Tel, be made interim effective 1 January 1998;

(ii) Sogetel use, on an interim basis, Québec-Téléphone's rates for the network and number elements of the cellular access service and the paging number service in effect on 1 November 1997, effective 1 January 1998;

(iii) interveners may file comments regarding Sogetel's and Québec-Téléphone's rates by 30 January 1998, serving copies on the relevant companies, and these companies may file their replies, serving copies on interveners, by 13 February 1998, following which the Commission expects to dispose of the rates of Sogetel and Québec-Téléphone on a final basis;

(iv) (a) Northern, Bruce, Thunder Bay, Kenora, Télébec and O.N. Tel, to the extent applicable, are directed to file by 30 April 1998, (i) proposed rates for the network and number elements of the cellular access service and the paging number service (where applicable) with supporting justification, and (ii) a proposal to determine how any associated revenue impacts should be recovered; (b) Cantel and other parties may address interrogatories to these companies by 15 May 1998; (c) responses to interrogatories are to be filed with the Commission and served on all parties by 12 June 1998; (d) parties may file comments, serving copies on the relevant companies, on these companies' rate and revenue impact proposals by 26 June 1998; and (e) the companies may file their replies, serving copies on parties, by 10 July 1998;

(v) tariff pages, reflecting the above determinations are to be issued forthwith; and

(vi) submissions are to be actually received, not merely mailed, by the above dates.

Laura M. Talbot-Allan
Secretary General

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