ARCHIVED -  Telecom Order CRTC 99-391

Telecom Order

Ottawa, 29 April 1999

Telecom Order CRTC 99-391

On 18 July 1997, the Société d'administration des tarifs d'accès des télécommunicateurs (SATAT) filed, on behalf of its members, an application to review and vary that part of 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, 7 August 1996 (Decision 96-6), approving SATAT's final 1995 Carrier Access Tariff (CAT).

File No.: 8662-S10-01/97

I BACKGROUND

1.In Decision 96-6, the Commission granted final approval to SATAT's 1995 CAT and interim approval to SATAT's 1996 CAT.

2.SATAT requested that the Commission review and vary that part of Decision 96-6 with respect to SATAT's final 1995 CAT in order to allow the SATAT members to recover their 1995 actual shortfall through the final 1995 CAT and that this same methodology be applied in determining the final 1996 CAT.

II POSITIONS OF PARTIES

3.SATAT submitted that the Commission committed an error in fact for the following reasons:

1) the methodology established in Decision 96-6 to calculate the contribution requirement for 1997 and following years does not allow the SATAT members to recover any residual shortfall, after netting individual company surpluses and shortfalls against each other, for 1995;

2) it was only after Decision 96-6 was issued that the SATAT members became aware that the new methodology would no longer allow the adjustment mechanism which provided them their allowed rate of return for each year, by making adjustments in the following year; and

3) the approved final 1995 CAT was calculated in accordance with the Interconnection Agreement (the Agreement) between Bell Canada (Bell) and Association des compagnies de téléphone du Québec (ACTQ), which was given interim approval in Telecom Order CRTC 95-54, 17 January 1995, and did not take into account the new methodology set in Decision 96-6 which would have resulted in a different CAT.

4.SATAT also submitted that a new principle flowed from Decision 96-6 and argued that:

1) the methodology to be used in determining the 1997 and subsequent years' CATs was stated for the first time in Decision 96-6;

2) this new methodology has a direct and obvious impact on the 1995 and 1996 CATs;

3) with the application of this new methodology, SATAT's approved final 1995 CAT and interim 1996 CAT are no longer appropriate; and

4) the Commission should have provided SATAT with the opportunity to present its arguments on the final 1995 CAT with respect to the potential impact of Decision 96-6 methodology on its members' financial results.

5.Comments were received from Québec-Téléphone on 1 August 1997 and Bell on 18 August 1997. The two companies did not oppose SATAT's application. However, Bell submitted that there was a Phase III classification error of $90,602 in SATAT's proposal for La Compagnie de Téléphone Upton Inc. (Upton).

III COMMISSION DETERMINATIONS

6.The Commission notes that this application was filed prior to Guidelines for Review and Vary Applications, Telecom Public Notice CRTC 98-6, 20 March 1998 and accordingly, has been considered under the previous criteria used for assessing applications made under section 62 of the Telecommunications Act (the Act).

7.Under the previous criteria, the applicant had to demonstrate, on a prima facie basis, the existence of one or more of the following:

·an error in law or in fact;

·a fundamental change in circumstances or facts since the decision;

·a failure to consider a basic principle that had been raised in the original proceeding; or

·a new principle that has arisen as a result of the decision

8.In addition, the Commission also recognized that, notwithstanding the above criteria, residual discretion exists in section 62 of the Act so as to permit the Commission to determine that there is substantial doubt as to the correctness of its original decision and that reappraisal is accordingly warranted.

9.Based on the record of this proceeding, the Commission finds that there is substantial doubt as to the correctness of the final 1995 SATAT CAT approved in Decision 96-6. The Commission notes that prior to Decision 96-6, the interconnection agreement in place between SATAT members and Bell included an adjustment mechanism which effectively allowed SATAT members to attain their allowed rate of return for each year. The Commission therefore finds that the CAT should be varied by basing its calculation on actual 1995 Phase III results, subject to the adjustments set out in the following section. Similarly, the Commission is of the view that the 1996 CAT should be calculated based on the actual 1996 Phase III results. The Commission notes that in Tariff Notices 2 and 2A, SATAT has filed a revised CAT based on actual 1996 Phase III results.

IV ADJUSTMENTS

10.In Telecom Order CRTC 99-255, 19 March 1999 (Order 99-255), the Commission ruled on a settlement dispute between Sogetel inc. (Sogetel) and Québec-Téléphone for 1995. As a result of Order 99-255, Sogetel is to be excluded from the calculation of the 1995 SATAT CAT. Removing Sogetel from the calculation of the 1995 SATAT CAT results in an increase in SATAT's adjusted CAT for 1995, given that Sogetel's subsidy requirement per toll minute is lower than the average for the other SATAT members.

11.The Commission agrees that a classification error has been made by SATAT in determining the contribution requirement for Upton. The Commission notes that SATAT included, in its contribution requirement, a loss of $81,819 in the Terminal Broad Service Category (BSC) and a loss of $8,783 in the Other BSC. The Commission is of the view that under the Agreement neither of these losses should have been included in the contribution requirement. Consequently, the Commission finds that a downward adjustment to SATAT's total 1995 contribution requirement is necessary in order to properly reflect the classification methodology set out in the Agreement.

V ORDER

12.In light of the foregoing, the Commission orders that:

1) The final 1995 CAT for SATAT members (excluding Sogetel) be revised to $0.1170 per toll minute, $1.7748 per quarter mile and $0.0759 per equivalent minute, effective 1 January 1995 to 31 December 1995; and

2) SATAT issue forthwith, revised tariff pages to reflect the final 1995 CAT shown above.

VI 1996 CAT - FURTHER PROCESS

13.The Commission hereby establishes the following process to finalize SATAT's 1996 CAT, which was filed in Tariff Notices 2 and 2A:

a) Interveners may file comments with the Commission, serving a copy on SATAT, by 10 May 1999.

b) SATAT may file its reply comments, serving a copy on interveners, by 17 May 1999.

c) Comments and reply comments must be actually received, not merely filed, by the above dates.

Secretary General

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