ARCHIVED - Decision CRTC 2001-363

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Decision CRTC 2001-363


File # 8678-C12-11/01
and 8624-B20-01/00

Ottawa, 19 June 2001

Sheridan Scott
Chief Regulatory Officer
Bell Canada
105, rue Hôtel-de-Ville
6e étage
Hull, Québec

Ms. Scott,

Re: Request for procedural ruling - Public Notice CRTC 2001-37, Price cap review and related issues

The Commission approves the Companies' request that if the Commission decides in this proceeding that there should be an earnings-sharing overlay, the determination on an allowable rate of return on common equity be made in a follow-up proceeding.

Aliant Telecom Inc., Bell Canada, MTS Communications Inc. and Saskatchewan Telecommunications (collectively, the Companies) filed a request for a procedural ruling on 31 May 2001. The Companies requested that the Commission clarify that, should it decide to adopt an earnings-sharing formula in this proceeding, a determination on the allowable rate of return on common equity (ROE) for the Companies be addressed in a follow-up proceeding.

In Public Notice CRTC 2001-37, Price cap review and related issues, dated 13 March 2001, the Commission invited comments on whether the current form of price caps continues to represent the most appropriate form of regulation, or whether some other form of price regulation with or without an earnings-sharing overlay, should be adopted.

In support of their request, the Companies argued that:

  • to file evidence on the allowable ROE during this proceeding would be a significant undertaking;
  • no party to the proceeding is prejudiced by the proposed process;
  • there is ample time to conduct a follow-up proceeding; and
  • the quality and relevance of ROE testimony would be greatly improved through a follow-up process.

The Commission concurs with the Companies that evidence regarding ROE or the implementation of any other mechanism related to any earnings-sharing overlay that may be found appropriate in this proceeding would be best examined in a follow-up proceeding. Accordingly, the Commission approves the Companies' request.

Notwithstanding the above, the Commission stated in PN 2001-37 (paragraph 13) that it does not intend to conduct a revenue requirement assessment of utility segment results unless a telephone company proposes rate increases to be effective at the outset of the next price cap regulation regime other than those that would reduce the subsidy requirement in high-cost serving areas. The Commission therefore reserves the right to examine evidence on an allowable ROE in that regard.

Ursula Menke
Secretary General

For further information, please contact Céline Ménard (819) 953-2421

c.c. Interested parties - PN 2001-37

Date Modified: 2001-06-19

Date modified: