ARCHIVED - Order CRTC 2001-209

Order CRTC 2001-209

Ottawa, 9 March 2001

Canadian Alliance of Publicly-Owned Telecommunications Systems
- Final 2000 Carrier Access Tariffs

Reference: Tariff Notices 10, 10A and 10B

The Commission approves final 2000 contribution and direct toll rates for the period 1 January 2000 to 31 December 2000 and directs CAPTS to file proposed final 2001 CATs within 45 days.

Order CRTC 2000-588, dated 23 June 2000, approved final 1999 CATs for the members of Canadian Alliance of Publicly-Owned Telecommunications Systems (CAPTS) and directed CAPTS to file proposed final 2000 Carrier Access Tariffs (CATs) within 45 days.

On 10 August 2000, pursuant to Order 2000-588, CAPTS filed, on behalf of its members, under Tariff Notice 10, proposed final 2000 CATs that ranged between $0.0172 per minute and $0.0360 per minute. CAPTS also advised that Keewatin Municipal Telephone System and Kenora Municipal Telephone System had amalgamated under the name of Kenora.

On 1 September 2000, CAPTS filed, on behalf of its members, under Tariff Notice 10A, revised proposed final 2000 CATs, that ranged between $0.0168 per minute and $0.0333 per minute, to reflect the approved billing and collection tariff.

On 3 November 2000, CAPTS filed, on behalf of its members, under Tariff Notice 10B, revised proposed final 2000 CATs that ranged between $0.0216 per minute and $0.0333 per minute, to correct Phase III allocation errors relating to certain working capital accounts and omissions relating to fibre deployment for Dryden Municipal Telephone System.

2000 Contribution-eligible minutes

CAPTS provided forecast 2000 contribution and direct toll minutes, which had been agreed to by its long-distance toll provider. The forecast minutes ranged between a decrease of 6% to an increase of 15% over the comparable 1999 minutes.

The Commission approves CAPTS proposed 2000 contribution and direct toll minutes.

Proposed final 2000 contribution requirements

CAPTS calculated its proposed final 2000 contribution requirements as the lower of (a) the current year's (forecast Phase III) contribution requirement, and (b) the revised interim 1999 contribution requirement adjusted for the annualized impact of the 1 July 1999 local rate increases.

Bell Canada submitted that, in accordance with paragraph 101 of Telecom Decision CRTC 99-5 Review of contribution regime of independent telephone companies in Ontario and Quebec, dated 21 April 1999, the 2000 contribution requirements should be based upon the final 1999 contribution requirements and not the revised interim 1999 contribution requirements.

CAPTS submitted that it had calculated its proposed final 2000 contribution requirements using the same information the Commission had used to determine the interim 2000 CATs, which were approved in Order CRTC 2000-589, dated 27 June 2000.

The Commission considers that the final 2000 contribution requirements should be based upon the approved final 1999 contribution requirements. This is consistent with Decision 99-5 and the determinations made with respect to the final 2000 contribution requirements for other independent telephone companies.

The issue of the base 1999 contribution requirements only affects Bruce Municipal Telephone System and Dryden because only their revised interim 1999 contribution requirements were higher than their approved final 1999 contribution requirements.

Proposed final 2000 direct toll components

CAPTS stated, in its Tariff Notice 10 filing, that there were no companies with direct toll increases in excess of 5%.

Bell Canada submitted that:

CAPTS, in its Tariff Notice 10A filing, corrected the direct toll components to reflect the unbundling of billing and collections and identified that its billing and collection revenues were correct because its tariff is based upon the number of accounts and not the number of network access services.

In response to Commission interrogatories, CAPTS provided explanations for the direct toll increases for Bruce, Kenora and Thunder Bay. CAPTS also filed Tariff Notice 10B and provided explanations for Dryden's direct toll increase, as it now exceeded 5%.

Bell Canada submitted that CAPTS had not adequately justified the proposed increases and requested the Commission limit the direct toll increases to 5%, at most.

In response to Bell Canada's concerns, CAPTS provided further explanations for the increases in the direct toll components.

The Commission does not agree with Bell Canada's approach to limit the direct toll increase to 5% and notes that the direct toll component is intended to allow the recovery of the costs incurred to deliver toll traffic on behalf of the toll providers. Further, a limit of 5% is inappropriate if the direct toll increase is adequately explained.

The Commission has reviewed the explanations provided by CAPTS regarding the direct toll increases and finds them to be reasonable.

Broadband Investment

In Decision 99-5, the Commission directed the Ontario and Quebec small independents, as part of their CAT filings, to file information on broadband applications including investment levels and planned use for any fibre investments.

CAPTS identified that Bruce and Dryden did not include any fibre deployment in their forecasts and provided the investment account, related dollars and planned usage for Kenora and Thunder Bay.

Bell Canada noted that CAPTS provided very limited general statements regarding their broadband applications and that it was unable to provide any informed comments based on the information provided. Bell Canada suggested that the Commission should carefully scrutinize the associated expenditures to ensure that only legitimate expenditures are included in the Phase III results and the associated rate calculations.

CAPTS noted that the information provided was consistent with previous filings and that the fibre expenditures were for the provision of utility services or, as applicable, to provide trunking of toll traffic for toll providers.

The Commission notes that the intent of the directives of Decision 99-5 was to ensure the independent telephone companies did not include inappropriate broadband investments and expenses in the calculation of the CAT.

The Commission is satisfied with CAPTS' explanations of its broadband expenditures.

Implementation

In light of the above, the Commission:

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix A