ARCHIVED -  Telecom Order CRTC 99-638

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Telecom Order CRTC 99-638


Ottawa, 13 July 1999


On 15 January 1999, the Cochrane Public Utilities Commission (Cochrane) filed a letter with respect to its 1999 Carrier Access Tariff (CAT).


File No.: 8740-C1-0017/98




1. In Regulatory Framework for Abitibi-Consolidated and Cochrane Public Utilities Commission, Telecom Decision CRTC 98-13, 1 September 1998 (Decision 98-13), the Commission established the regulatory framework for Cochrane.


2. The Commission noted that Cochrane had not filed a proposed Phase III Manual or forecast Phase III results and, for reasons provided in Decision 98-13, the Commission stated that, in its view, the CAT for Northern Telephone Limited (Northern) was an appropriate benchmark to use as a proxy interim CAT for Cochrane. The Commission concluded that Northern’s final 1997 CAT would be used as the interim 1998 CAT for Cochrane.


3. Telecom Order CRTC 98-1241, 10 December 1998 (Order 98-1241), made final Cochrane’s interim 1998 CAT, effective 1 January 1998, and set an interim 1999 CAT, based on Northern’s final 1998 CAT, of $0.0585 per minute with a Contribution rate of $0.0408 per minute and a Direct Toll rate of $0.0177 per minute, effective 1 January 1999. Cochrane was also ordered to notify the Commission whether or not it intended to file a 1999 Phase III forecast and a proposed final 1999 CAT.


4. By letter dated 15 January 1999, Cochrane informed the Commission that it would not file a 1999 Phase III forecast or a proposed 1999 company-specific CAT.


5. On 13 April 1999, the Commission issued a letter stating that it was of the preliminary view that Cochrane’s interim 1999 CAT should be made final, effective 1 January 1999. Cochrane and O.N. Tel were provided an opportunity to file comments and reply comments.




6. O.N. Tel submitted that Cochrane’s 1999 CAT should remain interim until the following are implemented:


(a) the directives from Review of Contribution Regime of Independent Telephone Companies in Ontario and Quebec, Telecom Decision CRTC 99-5, 21 April 1999 (Decision 99-5);


(b) the implications of the pending decision from Service to High-Cost Serving Areas, Telecom Public Notice CRTC 97-42, 18 December 1997 (PN 97-42) that impact 1999; and


(c) any rate increases approved for Cochrane in 1999.




7. The Commission agrees with the general principle raised by O.N. Tel that revenues generated from local rate increases should be used to reduce a company’s contribution requirement.


8. The Commission notes that Cochrane increased its local rates by $2.00, effective 1 January 1999. In the event that Cochrane were to apply for a further rate increase in 1999, the implications of the application would be considered at that time.


9. While Decision 99-5 states that Cochrane could apply to the Commission for any local rate increases which would be required by the company, it was in the context of the Commission’s plans to issue a public notice to consider reducing Cochrane’s contribution component of the CAT to $0.02 per minute, effective 1 January 2000. The purpose of mentioning the possibility of such increases was to allow Cochrane the opportunity of recovering decreases in contribution revenues resulting from a reduction in the contribution rate to $0.02 in 2000.


10. While Decision 99-5 also stated that the independents should be given the flexibility to increase their rates for optional services and/or penetration/demand for those services, the Commission notes that in the event that Cochrane were to apply for rate increases in 1999 for optional services, the implications of any such applications would be considered at that time.


11. With respect to O.N. Tel’s submission that Cochrane’s 1999 CAT should remain interim until the implications of the decision from PN 97-42 that impact 1999 have been implemented, the Commission considers that any impact on Cochrane of the decision resulting from that process during 1999 would be minimal, given that the decision will not be released until later this year.


12. Therefore, the Commission is not convinced that Cochrane’s interim 1999 CAT should not be made final at this time.




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


(a) the proposed CAT of $0.0585 per minute with a Contribution rate of $0.0408 per minute and a Direct Toll rate of $0.0177 per minute is approved on a final basis, effective 1 January 1999; and


(b) Cochrane is to issue forthwith, revised tariff pages reflecting its final 1999 CAT.


Secretary General


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