ARCHIVED -  Telecom Public Notice CRTC 97-11

Telecom Public Notice

Ottawa, 25 March 1997

Telecom Public Notice CRTC 97-11

IMPLEMENTATION OF PRICE CAP REGULATION, 1997 CONTRIBUTION CHARGES AND RELATED ISSUES

I INTRODUCTION

In Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994, the Commission determined that, among other things, earnings regulation would be replaced with price cap regulation for the Utility segment, effective 1 January 1998.

In Price Cap Regulation and Related Issues, Telecom Public Notice CRTC 96-8, 12 March 1996 (PN 96-8), the Commission initiated a proceeding to determine an appropriate form of price cap regulation, to be implemented effective 1 January 1998, for the Utility segments of BC TEL, Bell Canada (Bell), The Island Telephone Company Limited (Island Tel), Maritime Tel & Tel Limited (MT&T), MTS NetCom Inc. (MTS) (formerly Manitoba Telephone System), The New Brunswick Telephone Company, Limited (NBTel), NewTel Communications Inc. (NewTel) (formerly Newfoundland Telephone Company Limited) and TELUS Communications Inc. (TCI) (formerly AGT Limited) (the telephone companies).

In PN 96-8, the Commission stated that the effectiveness of price cap regulation is dependent on establishing the major components of a price cap plan in a manner that fairly balances the interests of subscribers, shareholders and other affected parties over the price cap period and on setting the rates of the Utility segment prior to the implementation of price caps (going-in rates) at appropriate levels.

Accordingly, in PN 96-8, the Commission stated that it will (1) set the principles and components of price cap regulation for each telephone company and (2) examine the amount of the third rebalancing component and other issues, such as accelerated depreciation expense, which could have a significant impact on the going-in rates. The Commission intends to issue its Decision pursuant to PN 96-8 by 1 May 1997.

In PN 96-8, the Commission stated that the Decision to be issued pursuant to that Public Notice would set out directions for a follow-up proceeding in 1997 to finalize the going-in rates for each telephone company. In order to give all parties advance notice of the schedule for the follow-up proceeding that is required to meet the 1 January 1998 implementation date for price cap regulation, the Commission hereby initiates a proceeding to determine, among other things, the appropriate going-in rates for each telephone company's Utility segment. The Commission notes that any significant change to the schedule set out in Part III of this Public Notice would likely result in a delay of the implementation of price caps.

II SCOPE OF PROCEEDING

A. 1997 Financial Forecasts

In PN 96-8, the Commission noted that the results of several other proceedings may also impact on the final determination of the telephone companies' going-in rates (for example, the proceedings initiated by Equal Access, Telecom Public Notice CRTC 94-26, 24 May 1994; and Implementation of Regulatory Framework - Local Interconnection and Network Component Unbundling, Telecom Public Notice CRTC 95-36, 11 July 1995). In addition, the Commission notes that the proceedings initiated by Implementation of Regulatory Framework - Local Number Portability and Related Issues, Telecom Public Notice CRTC 95-48, 10 November 1995 and Scope of IX Contribution Paying Services, Telecom Public Notice CRTC 96-19, 23 May 1996 may also impact on the telephone companies' going-in rates. The Commission intends to issue its decisions in these proceedings by 1 May 1997.

In PN 96-8, the Commission also noted that the telephone companies' financial forecasts for 1997 will likely have to be updated closer to the 1 January 1998 implementation date for price cap regulation. The Commission will require the telephone companies to file, by 13 June 1997, their respective financial forecasts, split rate base results, depreciation studies and capital plan submissions for 1997. In this regard, the Commission intends to address interrogatories to the telephone companies, by 1 May 1997.

B. 1997 Contribution Charges

In 1996 Contribution Charges, Telecom Decision CRTC 96-11, 10 December 1996 (Decision 96-11), the Commission considered that it would be more efficient to include the 1997 contribution charges proceeding in the follow-up proceeding to finalize the going-in rates under price caps for each telephone company.

In Decision 96-11, the Commission noted that TELUS Communications (Edmonton) Inc. (TCI Edmonton) (formerly ED TEL Communications Inc.) was not a party to the proceeding initiated by PN 96-8. The Commission considers that in light of the schedule set out in Part III of this Public Notice, it would be appropriate to consider issues regarding TCI Edmonton's 1997 contribution rates in the context of this proceeding.

The telephone companies and TCI Edmonton will be required to file, by 13 June 1997, proposed tariff pages setting out estimated contribution charges for 1997. Underlying calculations will be required in the format shown in Attachment A to Decision 96-11.

By letter dated 23 December 1996, the telephone companies and TCI Edmonton were requested to file 1995 and 1996 quarterly data regarding conversation minutes. In the same letter, ACC TelEnterprises Ltd. (ACC), AT&T Canada Long Distance Services Company (AT&T Canada LDS) (formerly Unitel Communications Company), Cam-Net Communications Inc. (Cam-Net), fONOROLA Inc. (fONOROLA), Sprint Canada Inc. (Sprint) and Westel Telecommunications Ltd. (Westel) (the entrants) were requested to provide similar information for each telephone company's operating territory. This information was required by the telephone companies, TCI Edmonton and the entrants in order to complete their 1997 forecasts. The Commission will require the telephone companies, TCI Edmonton and the entrants to file for the record of this proceeding the information noted above as well as their respective 1997 forecasts by 13 June 1997.

In Decision 96-11, AT&T Canada LDS and other entrants were directed to advise the Commission on the steps taken to resolve issues related to the Gross Receipts Tax (GRT) in Ontario. In addition, AT&T Canada LDS and other entrants operating in Ontario were directed to report for the next contribution proceeding, for each year since 1993, the amount of GRT paid in Ontario and the amount of contribution not paid as a result of the GRT adjustment. Entrants were also directed to provide their views, with supporting rationale, as to why the GRT adjustment should be continued. The Commission will require AT&T Canada LDS and other entrants to file for the record of this proceeding the information noted above by 13 June 1997.

The Commission intends to address interrogatories to the telephone companies, TCI Edmonton and the entrants, by 1 May 1997, regarding various issues related to contribution.

C. Other Issues Related to Going-in Rates

As noted above, the Commission intends to issue decisions in several proceedings, by 1 May 1997, that may impact on the final determination of the telephone companies' going-in rates. The Commission will set out the remaining scope of this proceeding in the Decision that will be issued pursuant to PN 96-8. The Commission intends to address interrogatories to the telephone companies, by 1 May 1997, seeking further information regarding these issues.

III PROCEDURE

1. BC TEL, Bell, Island Tel, MT&T, MTS, NBTel, NewTel and TCI (the telephone companies) are made parties to this proceeding. ACC, AT&T Canada LDS, Cam-Net, fONOROLA, Sprint, and Westel (the entrants), and TCI Edmonton are also made parties to this proceeding.

2. Other parties wishing to participate in this proceeding must notify the Commission of their intention to do so by writing to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 30 May 1997. Parties are to indicate in the notice their Internet email address, if available. If parties do not have access to the Internet, they are to indicate in their notice whether they wish to receive disk versions of hard copy filings. The Commission will issue a complete list of parties and their mailing addresses (including Internet email addresses if available), identifying those parties who wish to receive disk versions.

3. Any person who wishes merely to file written comments in this proceeding, without receiving copies of the various submissions, may do so by writing to the Commission at the address noted in the previous paragraph by 8 September 1997.

4. By 1 May 1997, the Commission will address interrogatories to the telephone companies, TCI Edmonton and the entrants. The telephone companies, TCI Edmonton and the entrants are directed to file responses to the interrogatories with the Commission and serve copies on all parties by 13 June 1997.

5. The telephone companies are directed to file their evidence or submissions pursuant to Part II of this Public Notice, as well as all evidence or submissions required to be filed pursuant to the Decision to be issued in the proceeding initiated by PN 96-8. TCI Edmonton and the entrants are directed to file their evidence or submissions pursuant to Part II, Section B of this Public Notice. All such material is to be filed with the Commission and served on all parties by 13 June 1997.

6. Any party may address interrogatories to any party who files evidence or submissions pursuant to paragraphs 4 and 5 above. Any such interrogatories must be filed with the Commission and served on the party or parties in question by 7 July 1997.

7. Responses to interrogatories addressed pursuant to paragraph 6 are to be filed with the Commission and served on all parties by 1 August 1997.

8. Requests by parties for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on the party or parties in question by 6 August 1997.

9. Written responses to requests for further responses to interrogatories and for public disclosure must be filed with the Commission and served on the party making the request by 11 August 1997.

10. The Commission will issue a determination with respect to requests for disclosure and for further responses as soon as possible, and intends to direct that any information to be provided pursuant to that determination be filed with the Commission and served on all parties to the proceeding by 19 August 1997.

11. Parties other than the telephone companies may, by 15 August 1997, file with the Commission and serve on all other parties evidence or other submissions relevant to this proceeding except for contribution issues referenced in Part II, Section B of this Public Notice.

12. Parties may address interrogatories to any party who files evidence or submissions pursuant to paragraph 11. Any such interrogatories must be filed with the Commission and served on the party or parties in question by 22 August 1997.

13. Responses to interrogatories addressed pursuant to paragraph 12 are to be filed and served on all parties by 29 August 1997.

14. All parties may file comments with the Commission on any matter within the scope of this proceeding, serving copies on all other parties, by 8 September 1997.

15. All parties may file replies to any comments, serving copies on all parties who filed comments, by 15 September 1997.

16. Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date.

17. In addition to hard copy filings, parties are encouraged to file with the Commission electronic versions of their submissions in accordance with the Commission's Interim Telecom Guidelines for the Handling of Machine-Readable Files, dated 30 November 1995. The Commission's Internet email address for electronically filed documents is public.telecom@crtc.gc.ca. Electronically filed documents can be accessed at the Commission's Internet site at http://www.crtc.gc.ca.

Allan J. Darling
Secretary General

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