ARCHIVED - Telecom Order CRTC 97-384
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Ottawa, 19 March 1997
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Telecom Order CRTC 97-384
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References: NBTel 542/A; 97-8657-52-01
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WHEREAS NBTel proposed that Saint John, Moncton and Fredericton would be included in a new Rate Code 6 with a monthly rate of $16.00, Miramichi, Bathurst, Campbellton and Edmunston would be in a new Rate Code 5 with a monthly rate of $18.00 and all non cities would be in a new Rate Code 4 with a monthly rate of $20.00;
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WHEREAS the residential rates proposed by NBTel do not include the $2.00 per month rate rebalancing increase effective 1 January 1997;
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WHEREAS NBTel proposed that, for business service, all single line access charges would move to one rate, which is the current rate for Rate Group 3;
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WHEREAS as part of its proposal, NBTel requested to expand local calling areas for most of the exchanges in the province, a proposal which it termed "Core Calling";
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WHEREAS NBTel defined thirteen cores which, it submitted, represented the "Natural Market Areas" of the province;
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WHEREAS NBTel submitted that Core Calling is the next step in responding to customer concerns over free local calling to their doctors, children's schools, etc.;
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WHEREAS as part of the implementation of Core Calling, NBTel proposed to merge some exchanges to help reduce the cost of providing local access without existing customers having to take a different telephone number or lose any existing services;
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WHEREAS under the NBTel proposal, existing surcharges for Community Calling Plus and mileage charges would be eliminated;
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WHEREAS NBTel stated that mileage is the number one customer irritant and that approximately 25% of residential customers pay mileage, a charge for which they do not perceive any value is received;
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WHEREAS NBTel proposed to eliminate the Rotary-dial differential and submitted that Rotary-dial terminal technology is obsolete and Rotary-dial capability is no longer a service requirement in the New Brunswick market;
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WHEREAS NBTel proposed to eliminate four-party service and submitted that the major benefit for customers upgrading to individual line service is that their address information can be provided for the 9-1-1 emergency service being implemented throughout New Brunswick;
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WHEREAS NBTel submitted that the elimination of Four-party service will save NBTel money as it would no longer have to manage the fill on four-party lines or purchase special line cards;
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WHEREAS NBTel stated that the elimination of Four-party and Rotary-dial services would mean that a current Rate Group 1 customer currently using them could see an increase of up to $10.30 but at the same time would be on an individual line, touch-tone service without mileage charges;
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WHEREAS the Commission, under Telecom Public Notice CRTC 96-29 (PN 96-29), conducted a public procedure to allow for the examination and the filing of comments by interested parties;
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WHEREAS the Commission received over 400 letters of comment including comments from Call-Net Enterprises Inc. (Call-Net), fONOROLA Inc. (fONOROLA) and AT&T Canada Long Distance Services Company (AT&T Canada LDS);
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WHEREAS Call-Net also filed an application dated 8 January 1997, supplemented by a submission dated 5 February 1997, requesting, among other things, deferral of certain current and any future tariff filings for rate restructuring and expansion of free calling areas, to a comprehensive general proceeding involving all Stentor companies (the Call-Net application);
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WHEREAS the Call-Net application was filed on behalf of AT&T Canada LDS, Call-Net, fONOROLA, Fundy Cable Ltd./Ltée and Rogers Network Services;
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WHEREAS fONOROLA, Call-Net and AT&T Canada LDS generally submitted that TN 542 should be denied due to its anti-competitive impacts in the toll market;
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WHEREAS fONOROLA submitted that the application by NBTel to establish 13 Core Calling Areas goes beyond a value-added service and could more appropriately be characterized as a toll lock out;
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WHEREAS AT&T Canada LDS submitted that TN 542 is about the expansion of Extended Area Service (EAS) and the Commission should, therefore, use the established tests for evaluating all EAS proposals to determine whether it should approve TN 542;
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WHEREAS AT&T Canada LDS argued that NBTel's proposal does not meet either the Community of Interest or the plebiscite conditions set out by the Commission in past decisions for establishing EAS;
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WHEREAS Call-Net argued that, to the extent that NBTel is permitted to expand its local calling areas as it increases basic residential rates, it will be reducing the potential for competitive entry in the local market that would otherwise result from such price increases;
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WHEREAS NBTel replied that the toll calls being eliminated as a result of TN 542 are the lower price, short-haul calls and that there will still exist in New Brunswick a sizeable intra-toll calling market and toll calling to other areas of Canada, the United States and overseas;
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WHEREAS NBTel replied that, after BSR is implemented, the net effect on the Utility Segment of the company would be a decrease in the Utility Segment's revenue shortfall, thus reducing the requirement for subsidization from long-distance companies;
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WHEREAS NBTel replied that, after BSR is implemented, it would have some of the smallest local free calling areas in the country since NBTel uses 31 miles as its reference for free calling while most other telephone companies use 40 miles;
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WHEREAS NBTel replied that customer response to the proposed changes was lower than expected, with less than 1.2% of customers attending company organized meetings or responding by letter or telephone call;
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WHEREAS the Commission considers that the proposal by NBTel is an overall restructuring of local rates and not simply an extension of EAS for certain communities;
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WHEREAS the Commission recognizes that the elimination of mileage charges and Community Calling Plus surcharges represents a major benefit for NBTel's subscribers;
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WHEREAS the Commission considers that residence rates should be subject to the same uniform treatment as NBTel has proposed for business rates;
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WHEREAS the Commission notes that NBTel has proposed a uniform, individual business line rate of $34.70 per month, irrespective of rate code and underlying cost differences between urban and rural customers;
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WHEREAS the Commission considers that an appropriate uniform rate for residence service, including the $2.00 rate rebalancing increase effective 1 January 1997, would be $20.00; and
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WHEREAS the Commission is prepared to approve NBTel's proposal for BSR if it were modified to include a uniform rate of $20.00 for residence subscribers -
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IT IS HEREBY ORDERED THAT:
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The application filed by NBTel under Tariff Notices 542 and 542A is denied.
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Allan J. Darling
Secretary General |
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- Date modified: