ARCHIVED - Public Notice CRTC 2000-27

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Public Notice CRTC 2000-27

Ottawa, 18 February 2000
Reference: 8661-C12-02-00

Restructured bands, revised local loop rates and related issues

The Commission is seeking comment on certain incumbent local exchange carriers’ (ILECs) proposals to restructure their costing and rate bands, associated revisions to local loop rates, and the issues of subsidies for business lines and extended quality of service indicators in high-cost areas.


1. In Telephone service to high-cost serving areas, Telecom Decision CRTC 99-16, dated 19 October 1999, the Commission stated it would provide an opportunity for ILECs to restructure their rate bands. This should result in more narrowly defined bands that will better identify high-cost areas.
2. Two benefits are expected from restructured ILEC rate bands: subsidies to achieve the basic service objective will eventually be targeted only to high-cost areas, and the rates for local loops in less remote areas should decrease. This would provide cost reductions and incentives for competitive local exchange carriers (CLECs) to provide local telephone service.
3. The Commission recognized in its local competition framework that ILECs’ local loops should be available, on reasonable terms, for CLECs to use to connect to their subscribers. In Local competition, Telecom Decision CRTC 97-8, dated 1 May 1997, the Commission approved the categorization of ILEC loops according to "rate bands." These bands are one basis for determining the rate or amount that a new entrant CLEC pays an ILEC to use its local loop.
4. In Decision 97-8, the Commission also established a portable subsidy arrangement whereby contribution is available to any local exchange carrier that serves a subsidized subscriber. This subsidy currently offsets the cost of providing residential local service within each band in certain circumstances.
5. In Final rates for unbundled local network components, Telecom Decision CRTC 98-22, dated 30 November 1998, the Commission used rate bands to establish rates for unbundled local loops (that is, the rate for the loop "unbundled from" the rate for the ILEC’s local service). The cost of providing local service generally varies with loop length and densities within each band.
6. ILECs’ proposals to restructure bands must be based on costs. The structure of each band should be based on costs which are as homogenous as possible. Each band must also have unambiguous and clearly identifiable boundaries. ILECs may propose to restructure bands by switching centre boundaries, enumeration area boundaries, and/or some reasonable alternative. ILECs are to justify their proposals with respect to the criteria set out in this paragraph.
7. The Commission expects ILECs to develop revised loop rates for each proposed band based on revised loop costs using the all-carrier demand of CLECs and ILECs, and in accordance with the costing methodologies used to determine the rates approved in Decision 98-22.
8. In this proceeding the Commission will determine whether ILECs’ bands should be restructured and, if so, it will finalize the restructured bands and associated revised local loop rates. Any revisions to bands and local loop rates are expected to become effective 1 January 2002. The Commission expects to finalize the portable subsidy allocation factors in the proceeding to review price caps as announced previously.
9. In Decision 99-16, the Commission also noted the concern of various parties that it costs more to provide single line business service in high-cost areas than it does in other regions. Parties commenting proposed that a "high-cost subsidy" be provided for such lines. However, information on the number of business lines in each band and associated costs and revenues was not available in that proceeding.
10. Accordingly, the Commission initiates this proceeding to examine issues identified below and related issues. The Commission invites interested parties to participate in this proceeding following the procedure set out at the end of this notice.


11. Parties are invited to comment on the following issues:
a) Proposals to restructure bands filed in this proceeding by BCT·TELUS, Bell Canada, Island Telecom Inc., Maritime Tel & Tel Limited, MTS Communications Inc., NBTel Inc., and NewTel Communications Inc. (ILECs).
b) Revised rates filed by ILECs for local loops that are associated with their proposed restructured bands.
c) ILECs’ submissions filed in this proceeding identifying those quality of service indicators where the standards should vary in high-cost serving areas, and proposing standards which would be appropriate for those areas.
d) Whether subsidies should be extended to business lines in high-cost areas.

Procedure and further details

12. BCT·TELUS, Bell Canada, Island Telecom Inc., Maritime Tel & Tel Limited, MTS Communications Inc., NBTel Inc., and NewTel Communications Inc. are made parties to this proceeding.
13. Other persons wishing to participate in this proceeding must notify the Commission of their intention to do so by writing to the Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, or by fax: (819) 953-0795, by 17 March 2000. Parties are to indicate in the notice their e-mail 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 or hard copy filings. The Commission will issue, as soon as possible after the registration date, a complete list of parties and their mailing addresses (including e-mail addresses, if available), identifying those parties who wish to receive disk versions.
14. ILECs are directed to file submissions, with detailed supporting assumptions and calculations, with the Commission by 31 March 2000, serving copies on all interested parties.
15. These submissions are to contain:
i) ILECs’ proposals to restructure bands, supporting cost studies and revised per line subsidy requirement calculations, based on current local service rates, using the format of ILEC name (CRTC)1May 97-508;
ii) proposed revised local loop rates and related proposed tariff revisions with supporting cost studies as per Decision 98-22;
iii) their proposed quality of service indicators for high-cost areas as set out in Decision 99-16; and
iv) their position on extending subsidies to single line business service in high-cost areas, including the number of business single lines in each proposed band, supporting cost studies and potential per line subsidy requirement calculations, and their proposal for the allocation of contribution.
16. Interested parties may address interrogatories to the ILECs, filing a copy with the Commission, by 28 April 2000.
17. Responses to these interrogatories are to be filed with the Commission and served on all parties by 2 June 2000.
18. Requests by interested 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 the ILEC in question by 9 June 2000.
19. ILECs may file written responses to requests for further responses to interrogatories and for public disclosure with the Commission, serving a copy on the party making the request, by 16 June 2000.
20. 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 no later than 14 July 2000.
21. Parties and interested parties may file comments with the Commission, serving a copy on other parties and interested parties, by 4 August 2000.
22. Parties and interested parties may file reply comments with the Commission, serving a copy on other parties and interested parties, by 25 August 2000.
23. 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.
24. 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 e-mail address for electronically filed documents is   Electronically filed documents can be accessed at the Commission's Internet site at
25. The applications may be examined, or will be made available promptly upon request, at the CRTC offices at the following addresses:
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage,
Room G-5
Hull, Quebec K1A 0N2
Telephone: (819) 997-2429 -
TDD: 994-0423
Telecopier: (819) 994-0218
Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia B3J 3K8
Telephone: (902) 426-7997 -
TDD: 426-6997
Telecopier: (902) 426-2721
405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Telephone: (514) 283-6607 -
TDD: 283-8316
Telecopier: (514) 283-3689
Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Telephone: (204) 983-6306 -
TDD: 983-8274
Telecopier: (204) 983-6317
530-580 Hornby Street
Vancouver, British Columbia
V6C 3B6
Telephone: (604) 666-2111 -
TDD: 666-0778
Telecopier: (604) 666-8322
CRTC Documentation Centre
Scotia Place Tower Two
19th Floor, Suite 1909
10060 Jasper Avenue
Edmonton, Alberta T5J 3R8
Telephone: (780) 495-3224
Telecopier: (780) 983-3214
CRTC Documentation Centre
55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Telephone: (416) 952-9096
Telecopier: (416) 954-6343
CRTC Documentation Centre
Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Telephone: (306) 780-3422
Telecopier: (306) 780-3319
Secretary General
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