ARCHIVED -  Telecom Order CRTC 97-381

Telecom Order

Ottawa, 18 March 1997

Telecom Order CRTC 97-381

IN THE MATTER OF applications filed by NewTel Communications Inc. (NewTel) under Tariff Notice 483 (TN 483) dated 24 July 1996, for approval of tariff revisions providing for the compression of the existing primary exchange service rate groups from four to one for residence customers and from three to two for business customers, and under Tariff Notice 486 (TN 486) dated 24 July 1996, proposing to grandfather Extended Area Service (EAS) by no longer providing new EAS routes and to introduce a new service - Community Calling Plan (CCP) to provide for expanded local calling areas.

References: NewTel TNs 483 and 486; 97-8657-52-01

WHEREAS the Commission, under Telecom Public Notice CRTC 96-32 (PN 96-32), conducted a public procedure to allow for the examination and the filing of comments by interested parties to the applications;

WHEREAS the Commission received 78 letters of comment including comments from Call-Net Enterprises Inc. (Call-Net) and the Canadian Cable Television Association (CCTA);

WHEREAS Call-Net included with its comments dated 10 January 1997, an application dated 8 January 1997, supplemented by a submission dated 5 February 1997, requesting, among other things, deferral of certain current and any similar future tariff filings containing proposals such as rate or service restructuring or the expansion of free calling areas in a manner inconsistent with the Commission's existing policies and criteria, to a comprehensive general proceeding involving all Stentor companies or to the follow-up proceeding to the proceeding initiated by Telecom Public Notice CRTC 96-8, dated 12 March 1996, Price Cap Regulation and Related Issues (the Call-Net application);

WHEREAS the Call-Net application was filed on behalf of AT&T Canada Long Distance Services Company, Call-Net, fONOROLA Inc., Fundy Cable Ltd./Ltée and Rogers Network Services;

WHEREAS CCTA submitted that the rate group compression should be denied and NewTel directed to re-file after a decision in the PN 96-8 proceeding has been issued;

WHEREAS NewTel submitted that as a decision on its proposal would have no adverse impact on the regulatory proposals before the Commission, its applications should be approved;

WHEREAS based on the record of the proceeding initiated pursuant to PN 96-32 (including Call-Net's application), the Commission is of the view that the deferral of the consideration of TNs 483 and 486 is not appropriate;

WHEREAS the Commission considers that the rate group consolidation proposed by NewTel is consistent with the principle enunciated in Telecom Decision CRTC 94-19 of moving rates closer to costs;

WHEREAS the Commission considers that the magnitude of the phased rate increases sought by NewTel in TN 483 are not unreasonable;

WHEREAS the Commission considers that, in the light of the price cap method of regulation that is to become effective on 1 January 1998, it would be appropriate for the second phase of NewTel's rate restructuring to take effect on 1 January 1998;

WHEREAS in TN 486 NewTel proposed that, for the implementation of CCP between exchanges, a Community of Interest between the exchanges must exist for three consecutive months;

WHEREAS the Commission considers that such a criterion is overly restrictive and that it is not necessary for the three months to be consecutive;

WHEREAS in TN 486 NewTel also proposed that at least 60% of the customers whose rates would be increased by the provision of CCP must indicate their agreement by a balloting procedure conducted by the company;

WHEREAS in Telecom Letter Decision CRTC 91-3, the Commission modified Bell Canada's voting criterion for establishing EAS to read "A simple majority (over 50% of subscribers who vote) of subscribers whose basic local rates would be increased must approve of the new service."; and

WHEREAS the Commission considers that a simple majority of those customers who participate in a balloting procedure is sufficient for determining the acceptance of CCP -

IT IS HEREBY ORDERED THAT:

1. The application filed by NewTel under TN 483 is approved with the following change:

The second phase of the rate restructuring, proposed by NewTel to be effective 1 July 1998, shall become effective on 1 January 1998.

2. The application filed by NewTel under TN 486 is approved with the following changes:

(a) Item 50, Section 16. COMMUNITY CALLING PLAN, paragraph (b) (5) shall indicate that a community of interest must exist for any three months, not necessarily three consecutive months; and

(b) Item 50, Section 16. COMMUNITY CALLING PLAN, paragraph (b) (6) shall indicate that a simple majority of customers who respond to a balloting procedure conducted by the company must indicate their agreement.

Allan J. Darling
Secretary General