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Decision CRTC 2001-582

Our file: 8678-C12-11/01 and 8624-B20-01/00

Ottawa, 10 September 2001

To: Interested Parties

Re: Public Notice CRTC 2001-37 - Price cap review and related issues: Requests for clarification of issues and determinations on public disclosure of information and on further responses to interrogatories

On 13 August 2001, the Commission received letters from TELUS Communications Inc. (TELUS) and Bell Canada (Bell), respectively, requesting Commission determinations on issues related to Price cap review and related issues, Public Notice CRTC 2001-37, 13 March 2001 (PN 2001-37). In response to these requests, a letter was issued on 17 August 2001 to PN 2001-37 interested parties, requesting comments on the matters raised by TELUS and Bell, as well as reply comments from parties.

Comments were received from Bell, Aliant Telecom Inc., MTS Communications Inc. and Saskatchewan Telecommunications (collectively, the Companies), AT&T Canada Corp. and AT&T Canada Telecom Services Company (collectively, AT&T Canada), GT Group Telecom Services Corp. (GT) and Call-Net Enterprises (Call-Net).

On 22 August 2001, the Commission received a letter from Call-Net in relation to interrogatory responses provided by Bell in response to a staff letter dated 8 August 2001 (the Staff letter) which dealt with parties' requests for disclosure and for further responses to interrogatories. In its letter, Call-Net requested the Commission's enforcement of a determination in the Staff letter.

This letter provides the Commission determinations on the issues raised in the letters from TELUS and Call-Net. The request in the letter from Bell, that the Commission render a determination that revised primary exchange service (PES) costs be considered in this proceeding, will be dealt with under separate cover at a later date.

All information to be provided pursuant to this letter is to be filed with the Commission by Thursday, 13 September 2001, serving copies on interested parties by the same date. This material must be received, and not merely sent, by that date.

TELUS - Requests for clarification of issues

The Commission hereby confirms that the responses to the interrogatories in question are both relevant to the proceeding and necessary for the public record. Further, the Commission clarifies the issues raised by TELUS as follows:

a) With respect to Service Improvement Plans, the intention is not to change the basic service objective enunciated in Telephone Service to High-Cost Serving Areas, Telecom Decision CRTC 99-16, 19 October 1999 (Decision 99-16), but rather to explore different scenarios in extending some level of service to as many unserved and underserved communities as possible. The Commission is not considering any fundamental changes to the determinations in Decision 99-16.

b) With respect to the competitor services cost mark-up, this issue is being considered as part of the issue of possible changes to the current treatment of competitor service rates. Further, the Commission is of the view that the information filed by the incumbent local exchange carriers (ILECs) in a follow-up proceeding to Restructured bands, revised loops and related issues, Decision CRTC 2001-238, 27 April 2001 (Decision 2001-238), which looks at whether the mark-up on local loop costs should be reduced from 25% to 15%, would be helpful in arriving at a policy determination regarding competitor service rates in the PN 2001-37 proceeding. Accordingly, the Commission hereby makes the record of the above-noted follow-up to Decision 2001-238 part of the record of the PN 2001-37 proceeding.

c) Interrogatory TELUS(CRTC)26Jun01-1800 was not formulated with the view to making changes to the imputation test, but rather to explore the company's rationale for requiring a 25% mark-up on costs for competitor services. Changes to the imputation test are not being considered in this proceeding.

d) The Commission considers that the rules governing promotions are within the scope of this proceeding. The information requested by AT&T Canada could be used in developing arguments as to whether the current rules governing promotions which were established in Price Cap Regulation and Related Issues, Telecom Decision CRTC 97-9, 1 May 1997 remain appropriate.

e) The Commission considers that the activities of in-territory affiliates are relevant to the state of competition within markets for local services, and consequently to the pricing flexibility determinations to be made in this proceeding. Accordingly, TELUS is directed to provide a response to interrogatory TELUS(GT)26Jun01-13.

f) With respect to the local competition issues raised in interrogatories such as TELUS(CRTC)26Jun01-1303 b) and TELUS(CRTC)26Jun01-1305, the Commission notes that PN 2001-37 invited proposals on changes to the current pricing treatment of Utility segment competitor services. Competitive conditions in the local markets are relevant to determining the degree of pricing flexibility, if any, to be granted to the ILECs.

g) With respect to interrogatories such as TELUS(CRTC)26Jun01-1701 and -1703 dealing with the subsidy requirement, the intent was to ensure that the Commission has a complete record upon which to examine proposals put forth by parties in this proceeding. The Commission is not contemplating fundamental changes to the determinations in Changes to the contribution regime, Decision CRTC 2000-745, 30 November 2000.

h) The Commission does not intend to change any of the existing quality of service indicators or create new indicators in this proceeding. The Commission requires TELUS' responses to the interrogatories in question to examine the adequacy of service quality during the course of the current price cap regime. Accordingly, TELUS is directed to provide responses to interrogatories TELUS(Call-Net)26Jun01-902 to TELUS(Call-Net)26Jun01-912; TELUS(Call-Net)26Jun01-914 to TELUS(Call-Net)26Jun01-918; and TELUS(ATT)26Jun01-506.

TELUS - Other issues

The Commission considers that the information filed in confidence in response to interrogatory TELUS(CRTC)26Jun01-1302 (local competition market analyses developed by NBI/Sone & Associates and by Lemay-Yates Associates) is relevant to this proceeding, and that it would be appropriate for all parties to have an opportunity to review and respond to it. Accordingly, TELUS is directed to file, on the public record, the requested information in the response to interrogatory TELUS(CRTC)26Jun01-1302.

The Commission notes that it is apparent from the context of the City of Calgary's 24 July 2001 requests for further responses to interrogatories that some interrogatories were incorrectly referenced. The Commission considers that the information requested in the Staff letter is relevant to the issues in this proceeding. Accordingly, TELUS is directed to provide a full response to interrogatory TELUS(Calgary)26Jun01-23 d).

Call-Net issue

The Commission is of the view that information requested by Call-Net in its interrogatory The Companies(Call-Net)26Jun01-1007d) is relevant in considering the issue of competition in the local markets, as discussed above. Accordingly, the Companies are directed to provide the requested response to interrogatory The Companies(Call-Net)26Jun01-1007 d), as amended by Call-Net in its letter of 23 July 2001.

Yours sincerely,

Ursula Menke
Secretary General

c.c.: Valerie Plaskacz, CRTC (819) 997-4589

Date Modified: 2001-09-20

Date modified: