ARCHIVED -  Telecom Public Notice CRTC 98-12

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ARCHIVED - Telecom Public Notice CRTC 98-12 | CRTC
 

Telecom Public Notice

  Ottawa, 29 May 1998
  Telecom Public Notice CRTC 98-12
  MTS COMMUNICATIONS INC. - MECHANISM TO RECOVER FUTURE INCOME TAX EXPENSE
  Reference: 8678-C12-02/98
  I INTRODUCTION
  1. By letter dated 31 March 1998, pursuant to the Commission's directives in various decisions regarding the price cap regime, MTS Communications Inc. (MTS) filed an application relating to, among other things, proposed rate revisions and the introduction of an exogenous factor in the company's price cap formula to meet the price cap constraints.
  2. MTS proposed that an exogenous factor be incorporated into the Price Cap Index (PCI) for 1998 relating to future tax expenses and that it be implemented only at the level of the total basket of capped services. MTS further proposed the implementation of eight annual exogenous adjustments, commencing 1 January 1999, that would provide for the gradual recovery of future tax expenses. These exogenous adjustments would be incorporated into the PCI, both at the level of the total basket of capped services and at the level of the Basic Residential Local Services Sub-basket.
  3. In Telecom Order CRTC 98-467, dated 12 May 1998, the Commission determined that, in light of the significance of the issues associated with MTS' proposal, it would be premature and inappropriate to proceed with the proposed 1998 exogenous factor. The Commission stated that it would be establishing a public process to examine MTS' proposed exogenous adjustments for future income taxes.
  4. Accordingly, the Commission hereby initiates a proceeding to examine the appropriateness and timing of MTS' proposed exogenous adjustment.
  II ISSUES
  5. By letter dated 27 April 1998, the Consumers Association of Canada (Manitoba) Inc. and the Manitoba Society of Seniors (CAC/MSOS) filed comments on MTS' 31 March 1998 application. CAC/MSOS requested that an oral hearing be held in Manitoba in the event the Commission decides to initiate a proceeding to consider MTS' proposal for an exogenous adjustment. In its reply dated 6 May 1998, MTS submitted that an expedited paper process should be considered by the Commission and that this would be more consistent with the Commission's goal of properly streamlining the regulatory processes and minimizing the regulatory burden on all concerned.
  6. The Commission notes that, in a letter dated 31 December 1997, it stated that "... exogenous factor adjustments to the price cap index provide an appropriate mechanism by which MTS may apply to recover present and future income taxes expenses ...". The Commission considers that the issues under examination in this proceeding can be adequately explored through interrogatories, comments and reply, and accordingly, parties do not require an opportunity to cross-examine MTS at an oral hearing. Therefore, the Commission concludes that an oral hearing is not warranted in these circumstances.
  7. As set out in Part III of this Public Notice, MTS is directed to file, by 29 June 1998, its evidence regarding its proposal for an exogenous factor adjustment to the PCI. In its evidence, MTS should address, among other matters, the following issues and provide rationale to support its position:
  a) the basis of allocating the exogenous event relating to income tax expense between capped and uncapped services;
  b) detailed description of the mechanism, along with supporting calculations and assumptions, to recover income tax expense from capped services; and
  c) the annual impact on the price cap constraints and the potential impact on residence and business subscribers.
  III PROCEDURE
  8. MTS is made a party to this proceeding.
  9. Other parties wishing to participate fully in this proceeding must notify the Commission of their intention to do so by writing to Mrs. Laura M. Talbot-Allan, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 19 June 1998. 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.
  10. 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 paragraph 9 by 20 November 1998.
  11. MTS is directed to file its evidence or submissions in this proceeding regarding its proposal for an exogenous factor adjustment, serving copies on all parties, by 29 June 1998.
  12. Requests by parties for public disclosure of information in MTS' evidence or submissions for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on MTS by 6 July 1998.
  13. Written responses to requests for public disclosure must be filed by MTS with the Commission and served on the party making the request by 10 July 1998.
  14. The Commission will issue a determination with respect to requests for disclosure 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 17 July 1998.
  15. Any party may address interrogatories to MTS. Any such interrogatories must be filed with the Commission and served on MTS by 31 July 1998.
  16. Responses to interrogatories addressed pursuant to paragraph 15 are to be filed with the Commission and served on all parties by 24 August 1998.
  17. 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 MTS by 31 August 1998.
  18. Written responses to requests for further responses to interrogatories and for public disclosure must be filed by MTS with the Commission and served on the party making the request by 8 September 1998.
  19. 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 18 September 1998.
  20. Any party may address supplementary interrogatories to MTS. Any such interrogatories must be filed with the Commission and served on MTS by 28 September 1998.
  21. Responses to interrogatories addressed pursuant to paragraph 20 are to be filed with the Commission and served on all parties by 19 October 1998.
  22. 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 MTS by 26 October 1998.
  23. Written responses to requests for further responses to interrogatories and for public disclosure must be filed by MTS with the Commission and served on the party making the request by 2 November 1998.
  24. 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 13 November 1998.
  25. All parties may file comments, serving copies on all other parties, by 20 November 1998.
  26. All parties may file replies to any comments, serving copies on all parties who filed comments, by 27 November 1998.
  27. 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.
  28. The record of this proceeding may be examined at the Commission's offices in the following locations:
  Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Room 201
Hull, Quebec
  275 Portage Avenue
Suite 1810
Winnipeg, Manitoba
  29. 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 .
  This document is available in alternative format upon request.
  Laura M. Talbot-Allan
Secretary General
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