ARCHIVED - Order CRTC 2001-509

Order CRTC 2001-509

Ottawa, 5 July 2001

CRTC approves depreciation submission by People's Telephone Company of Forest Inc.

Reference: 8630-P1-01/01

The depreciation of equipment and other assets is part of the calculations that telephone companies use to determine their service-delivery costs. Recently, People's Telephone Company of Forest Inc. provided the Commission with the company's first depreciation study for all of its accounts since August 1996, when the Commission began regulating independent telephone companies. With one exception, the Commission approves the submission by People's.

1.

On 15 February 2001, People's Telephone Company of Forest Inc. filed an application for approval of depreciation life characteristics.

2.

No comments were received from interested parties.

3.

The Commission finds the proposed depreciation life characteristics to be reasonable with the exception of the Fibre optic transmission systems (FOTS) account, which is discussed below.

4.

The Commission finds that an average service life (ASL) of ten years for the FOTS account would be in line with industry lives and more appropriate than the current seven-year ASL proposed by the company.

5.

However, the Commission notes that in Telecom Decision CRTC 96-6, Regulatory framework for the independent telephone companies in Quebec and Ontario (except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), dated 7 August 1996, depreciation life characteristics for the independent telephone companies that had been approved by the previous regulators were generally left in place. However, the Commission stated that changes to life characteristics were to be filed annually with a maximum interval of five years between depreciation studies.

6.

In light of the above and given that the current five-year interval ends in 2001, the Commission will delay the implementation of the revised ASL for the FOTS account until 1 January 2001.

7.

Accordingly, the Commission orders that the accounts listed in the attached table 1 be depreciated, effective 1 January 2000, and that the account in the attached table 2 be depreciated, effective 1 January 2001, using the depreciation life characteristics contained therein.

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

Table 1

PEOPLE's TELEPHONE COMPANY of FOREST INC.
2000 DEPRECIATION LIFE CHARACTERISTICS

Description

ASL/AYFR

Buildings

2030

Parking lot

20 years

Central office - Power

20 years

Central office - Digital switching hardware

15 years

Concentrators

15 years

Carrier/LD-1

15 years

Main distribution frame

20 years

Buried cable and station connections - Outside plant

18.1 years

Aerial cable

20 years

Fibre optic transmission systems

7 years

Furniture and office equipment

12.7 years

Computer hardware

5 years

Computer software

5 years

Motor vehicles

7.8 years

Tools and equipment

17.5 years

Paystations

10 years

Table 2

PEOPLE's TELEPHONE COMPANY of FOREST INC.
2001 DEPRECIATION LIFE CHARACTERISTIC

Description

ASL

Fibre optic transmission systems

10 years