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Ottawa, 8 June 1998
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Telecom Order CRTC 98-558
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On 7 November 1997, Bell Canada (Bell) filed Tariff Notice (TN) 6145 which proposed to modify the existing Centrex tariff with regards to Centrex digital tie-trunk terminals, by adding the note "Tie-trunk terminals for digital installations are only provided in multiples of 24".
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File No.: TN 6145
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1. Bell cited the requirement to physically connect digital tie-trunks in groups of 24 as the reason for the proposed change. This would result in a billed amount of $672.00 per terminated DS-1 circuit (the equivalent of 24 individual voice frequency circuits).
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2. In a related issue, on 20 June 1996 Distributel Communications Limited (Distributel) filed a Part VII application alleging that Bell's digital tie-trunk terminal rates were unjustly discriminatory because at $28.00 per DS-0 circuit they were three times as high as the Digital Exchange Access (DEA) termination rate for the same equipment item. The DEA termination rate is $216.00 to terminate a DS-1 circuit (24 DS-0 or voice frequency equivalent circuits), which equates to $9.00 per voice frequency circuit. In a letter decision dated 21 January 1997, the Commission denied Distributel's application on the grounds that the DEA termination is only one element of a group of unbundled service elements and does not provide any service by itself. On the other hand, the Centrex Tie-trunk termination is a bundled rate for a complete service item.
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3. On 3 December 1997, Distributel filed its comments on TN 6145. First, Distributel stated that Bell's rationale for the tariff revision seems to contradict the Commission's finding when it denied Distributel's earlier part VII application. Distributel noted that Bell's only rationale for charging Centrex digital tie-trunk terminations in multiples of 24, was that they are physically terminated in groups of 24 by a Digital Trunk Card (DTC). Distributel interpreted this to indicate that the predominant cost of the service was the cost of the DTC. Distributel then alleged, based on rough economic calculations, that the cost of DTCs could not possibly support the proposed $672.00 per month charge and that the rate is not just and reasonable. Distributel also submitted that if the DTC does not represent the overwhelming cost of providing tie-trunk terminations, it would not be appropriate to permit Bell to charge a customer for 24 terminations if it only uses one.
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4. Distributel also stated that there was insufficient information on the public record to permit a proper determination of rates for digital tie-trunk terminations. Accordingly, Distributel also submitted a set of proposed interrogatories for Bell to answer and also requested that the Commission amend the standard procedures to require Bell to answer them. The interrogatories related to the cost of the DTC, Bell's provisioning practices and the costs of other functionality of tie-trunk terminations.
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5. In its reply comments dated 15 December 1997, Bell alleged that Distributel was attempting to pursue the same issue as in its 20 June 1996 Part VII application. Bell further submitted that Distributel's proposed interrogatories were irrelevant, immaterial and unnecessary in the proceeding, and in any event, much of the information requested by Distributel is confidential cost information which would not be provided to Distributel. Bell submitted that Centrex is a competitive multi-line terminal alternative and must be priced in a manner which recovers costs and also to compete with competitors. Bell submitted that it should be permitted to charge market based rates, and that it is appropriate, given that a minimum 24 tie-trunk capability is provided, that Bell charge for 24 tie-trunk terminals.
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6. On 23 December 1997 (after the record in this proceeding was closed), the Commission received comments from Ontel Long Distance which essentially supported Distributel's filing.
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7. The Commission notes that Bell has an approved tariff rate of $28.00 per month for a Centrex Tie-trunk termination per individual analog or digital circuit. It is also clear from the record of this proceeding that currently, digital tie-trunks are terminated in multiples of 24 circuits as DS-1 signals. The Commission also notes that in Bell General Tariff Item 5300.3.(2), Digital Exchange Access, the Public Switched Telephone Network Termination at $216.00 per DS-1 per month represents a cost-based rate for the DTC, which is the same equipment used as part of the Centrex digital Tie-trunk Termination.
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8. The Commission considers it reasonable in establishing cost-based rates to take into account the actual provisioning practice. However, the Commission agrees with Distributel that it would be unreasonable to require a customer to pay the full $28.00 bundled rate per month in the instance where there are unused circuit terminations simply because a portion of the costs are incurred in multiples of 24. The Commission considers that an unbundled rate structure for Centrex digital Tie-trunk terminations would resolve the issue.
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9. The existing bundled charge for 24 Centrex digital Tie-trunk terminations is equal to $672.00 ($28.00 x 24). Of that amount, $216.00 could be considered to be the charge for the DTC, leaving $456.00 for other functionality of the 24 terminations. Thus, the Commission considers that an appropriate rate structure would consist of a rate of $216.00 per 24 Centrex digital Tie-trunk terminations plus a per digital Tie-trunk termination rate element with respect to the other functionality of the Tie-trunk termination which is now included in the existing bundled rate.
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10. In light of the foregoing, the Commission denies Bell TN 6145 and notes that it would be prepared to approve a proposal that would unbundle the rate structure for Centrex digital Tie-trunk terminations as reflected herein.
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11. With respect to the interrogatories proposed by Distributel, the Commission does not consider that it is necessary to review the existing rate of $28.00 per Centrex Tie-trunk termination and therefore it is unnecessary to supply cost support for this rate at this time. The Commission therefore denies the request to require Bell to respond to the interrogatories.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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