ARCHIVED -  Telecom Order CRTC 97-1961

Telecom Order

Ottawa, 30 December 1997

Telecom Order CRTC 97-1961

Rogers Cantel Inc.'s (Cantel) applications to review rates of cellular/wireless and paging access services charged by BC TEL, The Island Telephone Company Limited, (Island Tel) Maritime Tel & Tel Limited, MTS NetCom Inc. and NewTel Communications Inc., [collectively, the companies].

File No.: 8661-C7

1. By letters dated 26 September 1997, Cantel requested that the Commission review the rates for the network and telephone number elements of the cellular (or wireless) access tariffs and the paging (or Terminal Network Access (TNA)) number tariffs for 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/wireless access service and paging/TNA number service, 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 cellular/wireless service and paging/TNA number service have declined significantly in recent years and, by comparison with other Stentor companies, the rates for these companies no longer reflect the underlying costs of providing cellular/wireless access service and paging/TNA number service, 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 Canada's (Bell's) interim rates for: (1) the number and network 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. (TCI), 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. The companies opposed Cantel's requests for the rate reductions, submitting that there is no merit to Cantel's underlying premise that the companies' rates should be revised because of the apparent decline in Bell's costs.

7. By letters dated 20, 23 and 24 October 1997, the Canadian Wireless Telecommunications Association (CWTA), Clearnet Communications Inc. and Microcell Telecommunications Inc., respectively, all expressed support for Cantel's applications, submitting that the evidence presented by Cantel provided prima facie evidence that the cellular/wireless access tariffs and paging/TNA number tariffs for the companies no longer reflected the underlying costs of providing these services and that a significant immediate reduction in the rates was warranted for cellular/wireless access service and paging/TNA number service.

8. 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.

9. The Commission also notes that the cost information filed by TCI, The New Brunswick Telephone Company, Limited and TELUS Communications (Edmonton) Inc. since 1992, has similarly demonstrated significant cost reductions associated with providing cellular access service and/or paging access service.

10. In the circumstances, the Commission considers that, with the exception of Island Tel, on an interim basis the companies should apply the same rates as TCI's current rates associated with the network and telephone number elements of the cellular access service and the paging number service, along with the per number reserved rate of $0.04, if applicable.

11. With respect to Island Tel, the Commission is of the view that the impact on basic residential local service rates must be considered.

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

(i) rates for the number and network elements of the cellular/wireless access service and the paging/TNA number service for the companies, be made interim effective 1 January 1998;

(ii) the companies, with the exception of Island Tel, use on an interim basis, TCI's approved rates for the number and network elements of the cellular/wireless access service and the paging/TNA number service, along with the per reserved number rate of $0.04, if applicable; Island Tel is to implement cellular/paging access rates, to be effective 1 January 1998, such that rate reductions are made to yield a reduction in revenues equivalent to the revenues resulting from a $0.50 increase in basic residential local service rates;

(iii) each of the companies is directed to inform the Commission by 30 January 1998, serving a copy on Cantel, whether it wishes to undertake new resource cost studies;

(iv) companies that wish to undertake new cost studies are directed to file them, serving copies on parties to this proceeding by 30 April 1998; (a) parties may address interrogatories to these companies by 15 May 1998; (b) responses to interrogatories are to be filed with the Commission and served on all parties by 12 June 1998; (c) parties may file comments, serving copies on the relevant companies, on the companies' proposals by 26 June 1998; and (d) the companies may file their replies, serving copies on other parties, by 10 July 1998;

(v) for those companies that do not wish to undertake new cost studies: (a) parties may file comments by 27 February 1998, serving copies on the relevant companies regarding the appropriateness of giving final approval to the interim rates; (b) these companies may file their replies, serving copies on other parties, by 13 March 1998, following which the Commission expects to dispose of the rates on a final basis;

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

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

Laura M. Talbot-Allan
Secretary General

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