ARCHIVED -  Telecom Order CRTC 99-1111

On 26 May 1997, the Société d'administration des tarifs d'accès des télécommunicateurs (SATAT) filed, on behalf of its members, proposed final 1997 company-specific Carrier Access Tariffs (CATs). SATAT updated and amended its 1997 application and filed proposed final 1998 CATs on 16 July 1999.

1. Regulatory framework for the independent telephone companies in Quebec and Ontario (except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), Telecom Decision CRTC 96-6 dated 7 August 1996 (Decision 96-6) directed that company-specific CATs be developed annually based on the companies' Phase III forecast results and their toll minutes, effective 1 January 1997.

7. La Compagnie de Téléphone Upton Inc. (Upton) included the net shortfall of $80,810 from its terminal BSC in calculating its 1997 contribution requirement. The Commission considers that this is inconsistent with the directives in Decision 96-6. Accordingly, Upton's 1997 contribution requirement has been decreased by the amount noted above.

8. In their 1997 contribution calculations, La Compagnie de Téléphone de Lambton Inc. (Lambton) and La Compagnie de Téléphone de Warwick (Warwick) have included the surpluses from their terminal BSCs of $14,352 and $8,764 respectively. The Commission considers that this treatment is inconsistent with the directives in Decision 96-6. Accordingly, Lambton's and Warwick's 1997 contribution requirements have been increased.

9. The 1997 proposed contribution requirement for CoopTel includes $24,745 for patronage dividends that it pays to its members. The Commission considers, as it did in Order 99-842, that CoopTel's patronage dividend is similar to an ordinary dividend and that it should not be classified as an expense. Accordingly, CoopTel's 1997 contribution requirement has been adjusted to reflect this determination.

La Corporation de Téléphone de La Baie (1993)

La Compagnie de Téléphone de Lambton Inc.

Téléphone Milot Inc.

Compagnie Téléphone Nantes Inc.

Sogetel inc.

The Commission has reviewed SATAT's explanations and finds that some of the excess expenses were subject to management discretion. In the Commission's view, other expenses, rather than being unexpected, were the result of normal business operations. As such, the Commission considers that these expenses should have been taken into account in the companies' budgets.

12. The Commission is of the view that the explanations provided by SATAT with respect to its excess expense claims do not justify increasing the 1997 contribution requirement base.

13. Accordingly, the Commission has calculated the final 1997 contribution requirement using the lower of (a) the previous year's approved contribution requirements, after accounting for local rate increases, and (b) the current year's proposed contribution requirement, after taking into account the adjustments made in this order.

Compagnie de Téléphone de Lambton Inc.

Compagnie Téléphone Nantes Inc.

La Compagnie de Téléphone Upton Inc.

CoopTel

16. Bell submitted that, should the Commission determine that it is appropriate to recover certain one-time expenses through the CATs due to exceptional circumstances, then an amount equivalent to these expenses should be excluded from the base when determining the 1999 CATs.

17. Given the unique circumstances surrounding year 2000 and ice storm-related expenses, the Commission is of the view that these excess expenses should be allowed for the purpose of calculating the final 1998 CATs. However, the Commission agrees with Bell that all of the one-time year 2000 and ice storm-related expenses are not to be included in the 1998 base for the purpose of calculating the proposed 1999 CATs.

18. Accordingly, the Commission has calculated the final 1998 contribution requirement using the lower of (a) the 1997 adjusted contribution requirement as set out in sections B and C, after accounting for the 1998 local rate increases, and (b) the current year's proposed contribution requirement taking into account the same adjustments made to the 1997 contribution requirement as set out in sections B and C.

a) revised tariff pages to reflect the approved final 1997 and 1998 CATs set out in Attachment A to this order; and

b) revised interim 1999 CATs based on the final 1998 CATs, filed pursuant to a) above, after accounting for the impact of the 1999 local rate increases. The revised interim 1999 contribution requirement filed herein will become the cap identified in paragraph 97 of Review of contribution regime of independent telephone companies in Ontario and Quebec, Telecom Decision CRTC 99-5 dated 21 April 1999. Pursuant to Decision 96-6, the revised interim 1999 CATs will also become interim 2000 CATs.

a) the proposed final 1999 CATs including Phase III results, contribution eligible-minutes (toll and DAL minutes) and CAT calculations, in accordance with Decision 96-6;

b) proposed tariff pages setting out the proposed CATs for 1999;

c) the impact of any local rate increases implemented during 1999 and the number of network access services subject to a rate increase; and

d) detailed explanations for any increase in the direct toll component where the proposed final 1999 direct toll component exceeds the approved final 1998 direct toll component by more than 5%.