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Ottawa, 16 December 1998
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Telecom Order CRTC 98-1257
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By letter dated 7 May 1998, TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI) (collectively the companies) advised the Commission that their affiliate, TELUS Advanced Communications Inc. (TAC), was not represented in the Commission's list of non-dominant carriers or that of registered resellers. The companies stated that TAC began operation in 1995 with a mandate to provide data services in Alberta and that it was submitting its reseller registration concurrent with this submission.
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File No.: 8626-T34-01/98
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1.The companies stated that in accordance with the Commission's determinations in Telecom Order CRTC 97-648 dated 16 May 1997 (Order 97-648) relating to NBTel Inc. (formerly The New Brunswick Telephone Company, Limited) (NBTel) and its affiliate NBTel interActive (1994) Inc., the companies have determined and billed TAC for the contribution payments due to TCI and TCEI for the periods 1995 to 1997, and January to April of 1998, including late payment charges on the contribution amounts.
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2.The companies also stated that in accordance with the Commission's determination in Order 97-648, they have recalculated the rate of return on average common equity (ROE) for the Utility segment of TCI and for the total company of TCEI after incorporating the respective contribution payments, including late payment charges, into the actual earned regulated income for the years 1995 to 1997.
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3.The companies submitted that on the basis of the approved ROE range of 10.25% to 12.25% for TCI's Utility segment and 11.5% to 13.5% for TCEI for the years 1995 to 1997, the recalculated ROE, after incorporating the contribution amounts referenced above, would still be within the approved ranges for both companies. The companies submitted that therefore a deferral account for excess earnings above the upper limit of the approved ROE ranges, as referenced in paragraph 90 of Order 97-648, is not required.
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4.The companies finally stated that they would also be billing TAC for the contribution amounts of approximately $250,000 due to TCI and $50,000 due to TCEI for the months of January to April of 1998. The companies stated that TAC intended to file a contribution exemption application with the Commission shortly pursuant to the directives in Telecom Order CRTC 97-590 dated 1 May 1997 (Order 97-590) and Applications for Contribution Exemptions, Telecom Decision CRTC 93-2, 1 April 1993 (Decision 93-2).
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5.By letter dated 20 August 1998, pursuant to Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992, Decision 93-2 and Order 97-590, TAC submitted its application for contribution exemption. TAC sought exemption from contribution charges for configurations used to provide Internet services, as well as configurations used solely for administrative purposes. TAC stated that it is a data and dedicated services provider and does not provide to its customers any voice or data services which would attract contribution charges. TAC provided diagrams and circuit lists representing the various TAC network configurations, which are the subject of this application.
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6.TAC attached affidavits affirming the configurations provided in its application. TAC noted that in the case of all administrative circuits, long distance calls are routed trunk side via trunk-side equal access arrangements to the Stentor companies' facilities.
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7.TAC noted that pursuant to Effective Date of Contribution Exemptions, Telecom Public Notice CRTC 95-26, 12 June 1995 (PN 95-26), the Commission stated that it will generally grant contribution exemptions for administrative circuits effective the date of installation. TAC submitted that its administrative circuits which are shown in configurations 4, 5, 6 and 7 in an attachment to its application should be exempt effective the date of installation. TAC requested that all other circuits eligible for contribution exemption in this application be effective the date of this application.
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8.By letter dated 21 September 1998, the companies stated that they have reviewed the configuration and circuit information and agree with the evidence provided for such exemptions with the exception of the Centrex circuits. The companies submitted that they are unable to confirm the Centrex configuration without a listing of the Centrex phone numbers. The companies understood that TAC would be submitting a list of these phone numbers shortly as an addendum to its application. Regarding TAC's request for the effective dates of its contribution exemption, the companies agreed with TAC's request which follows the guidelines set out in PN 95-26.
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9.In light of the above, the companies were satisfied with the evidence provided by TAC in its contribution exemption application. Accordingly, the companies agreed with the requested exemption, subject to the requirement that TAC submit a list of the Centrex circuits so that the companies can confirm that these circuits are eligible for a contribution exemption as determined by the Commission.
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10.By letter dated 5 October 1998, TAC attached a revised affidavit identifying the Centrex circuits and their configuration for concurrence by the companies. By letter dated 20 October 1998, the companies stated that they have reviewed this configuration along with the circuit information and that they are satisfied with the evidence provided by TAC in its contribution exemption application.
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11.With respect to the issue of non-compliance, the Commission notes that both TCI and TCEI have failed to enforce their tariffs vis-à-vis TAC. In the circumstances, the Commission finds that the behaviour of TCI and TCEI is unacceptable. The Commission expects TCI and TCEI to introduce management controls to prevent recurrence of similar situations.
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12.The Commission notes that TCI and TCEI did not provide detailed calculations with their submission. Accordingly, TCI and TCEI are directed to file within 30 days of this Order, detailed calculations for the contribution owed by TAC, broken down by each of (a) the circuit categories, (b) the years 1995 to 1998, and (c) TCI and TCEI, accompanied by copies of the relevant tariff pages to support their calculations.
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13.With respect to the issue of unpaid contribution to TCI and TCEI for 1995 to 1997, the Commission notes that the companies calculated that TAC owes TCI $1,158,357 and TCEI $160,249 for the period in question. The Commission agrees with the companies' submission that they are still within their respective approved ROE ranges, and that therefore there are no excess earnings above the upper limit of the approved ROE ranges.
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14.With respect to the issue of unpaid contribution to TCI and TCEI in 1998, the Commission finds that the $250,000 that the companies calculated that is owed by TAC to TCI in 1998 is not material with respect to residential subscriber rates or contribution rates. Similarly, the Commission finds that the $50,000 owed by TAC to TCEI in 1998 is not material to TCEI's contribution rates. Accordingly, no adjustments are required.
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15.With respect to the issue of contribution exemption, the Commission has examined TAC's circuit diagrams and is of the view that they demonstrate that the circuits in question are used for the described purposes. The Commission is of the view that TAC has met the Commission's evidentiary requirements. Accordingly, TAC's contribution exemption application is approved.
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16.With respect to the issue of effective dates, the Commission is of the view that TAC's request for the date of installation for the administrative services follows the guidelines set out in PN 95-26. Although TAC did not file its formal application until 20 August 1998, the Commission was made aware of its intent to file the application as a result of the companies' letter dated 7 May 1998. The Commission is of the view that it would be appropriate to use 7 May 1998 as the effective date for the remainder of the circuits consistent with the Commission's general practice.
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17.Accordingly, TAC's application with respect to administrative circuits (configurations 4, 5, 6 and 7) is approved effective the date of installation. TAC's application with respect to the remainder of the circuits (configurations 1, 2 and 3) is approved effective 7 May 1998. TAC is directed to remit forthwith any unpaid balance of the contribution payments (including late payment charges) to TCI and TCEI for the years 1995 to 1998 that result from the determinations in this case.
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Secretary General
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This document is available in alternative format upon request.
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