ARCHIVED - Decision CRTC 2001-767

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Decision CRTC 2001-767


Ottawa, 19 December 2001


Reference: 8678-C12-11/01 and 8624-B20-01/00


To: Interested parties


Subject: Public Notice CRTC 2001-37 - Price cap review and related issues - Disposition of the MTS service improvement plan




In the proceeding initiated by Price cap review and related issues, Public Notice CRTC 2001-37 dated 13 March 2001, MTS Communications Inc. filed a proposed service improvement plan (SIP) dated 6 April 2001, in which MTS stated that it proposed to spend $55 million in capital expenditures in the 10-year period, 2000-2009, to upgrade service to its underserved customers. MTS submitted that it had no unserved customers and that it had addressed the Commission's basic service objective (BSO) set out in Telephone service to high-cost serving areas, Telecom Decision CRTC 99-16, dated 19 October 1999. MTS indicated that completion of its SIP would provide service to virtually all of its customers in its territory in compliance with the Commission's BSO.


Manitoba Keewatinowi Okimakanak (MKO) provided comments with respect to MTS' SIP. MKO referred, among other things, to the following concerns:


a) inadequate consultation between MTS and MKO prior to the filing of the MTS SIP to: (i) consider additional service options and levels; and (ii) study the possibility of MKO securing additional sources of funding for capital and ongoing expenses to give the SIP a better chance of meeting the current and future needs of the remote and isolated communities of northern Manitoba; and


b) a lack of toll-free access to the Internet in some communities, as well as generally poor quality of service within the MKO communities served by satellite; problems cited include echo, delay, and static on the lines; difficulty in getting outside lines at certain times of the day; and poor fax service.


MTS submitted, among other things, that it had invested substantial time and money travelling to its satellite sites, to test and re-verify its network equipment, with the assistance of Telesat Canada. Face-to-face meetings were held with customers, extensive testing was done of its equipment, all with the aim of investigating the actual state of systems in northern Manitoba. MTS also submitted that its senior management has had numerous meetings over the past year with Chiefs and Councils of different First Nations in northern Manitoba, concerning a wide range of service, network and operations issues. MTS also argued that MKO is actually requesting high-speed access to the Internet, and perhaps access to other services for MKO communities. MTS submitted that the provision of high-speed Internet access is not part of the BSO. MTS submitted that it would not be in the public interest to defer the approval or implementation of any part of its SIP proposal. MTS submitted that the Commission should reject MKO's proposal and approve MTS' SIP as filed without delay.


The Commission posed several interrogatories to MTS and Telesat Canada during the proceeding regarding the quality of service concerns raised by MKO. MTS stated that it was confident that the problems would be corrected. During the proceeding, MTS' witness indicated that the company would be visiting every MKO community served by satellite by the end of October 2001.


MTS' service improvement plan


In Decision 99-16, the Commission established the following parameters for SIPs:


41. The Commission directs all incumbent local carriers to file service improvement plans for Commission approval, or to demonstrate that the basic service objective has been and will continue to be achieved in their territory (Appendix 3 sets out the filing and implementation schedule). Plans filed should indicate how incumbent local carriers will reinforce their existing networks where necessary to improve service or to extend service to unserved areas. Subject to network design and cost limitations, these plans should:

  • Incorporate least-cost technology.
  • Target larger communities or areas first.
  • Serve unserved areas prior to providing upgrades.
  • Serve permanent dwellings before seasonal ones.

42. Plans must also include proposals to fund such improvements. When funding proposals include rate increases, a reasonable balance should be achieved between the speed and cost of implementation and the need to maintain affordable rates.


43. Incumbent local carriers should consult stakeholders prior to preparing their service improvement plans. In addition, communities and other organizations will have an opportunity to comment on the reasonableness of the carriers' proposals before the Commission rules on them.


In the Commission's view, prior consultation with stakeholders (as required by paragraph 43 of Decision 99-16) regarding MTS' SIP proposal was inadequate. The Commission notes that consultation with stakeholders is an important element in the development of the most appropriate and efficient SIP proposals.


The Commission is also mindful of the importance of deploying SIPs as expeditiously as possible to the benefit of consumers, and is concerned about a plan that would take 10 years to implement.


As stated in Decision CRTC 2001-582, dated 10 September 2001, the Commission is not considering at this time any fundamental changes to the determinations in Decision 99-16. This means that with respect to Internet access, for example, the BSO would be met through the provision of individual line service with Touch-Tone dialling, provided by a digital switch with capability to connect via low-speed data transmission to the Internet at local rates. Broadband access is not required pursuant to the BSO. However, the Commission also considers that it is appropriate for parties to explore whether any additional sources of funding for current and future needs of the remote and isolated communities would be available in the near future. If such funding was available and sufficient to offset any increase in cost to MTS, it may be appropriate in some circumstances to incorporate funds for future needs.


Accordingly, in balancing these circumstances, and based on the record of this proceeding, the Commission approves MTS' SIP expenditures for the years 2000 to 2002 only. The Commission notes that the recovery of such funds will be disposed of in the decision with respect to PN 2001-37. The remainder of MTS' SIP proposal is denied. With respect to 2003 and beyond, the Commission directs MTS to file a revised SIP proposal, based on a five-year plan (2003-2007), after further consultation with stakeholders as discussed below.


The Commission directs MTS to consult with stakeholders, including MKO, to develop a revised SIP proposal. The Commission directs MTS to form a consultative committee, which includes MKO, and any other interested stakeholders. In addition to general consultation regarding MTS' revised SIP proposal, the consultative committee is to provide specific feedback on the following issues:


(a) exploring options for current and future needs of the remote and isolated communities and whether this can be supported without additional cost to MTS by additional funding from MKO or others; and


(b) the consultative committee should also prepare and approve minutes of its meetings; copies of the minutes are to be forwarded to the Commission as soon as possible after each meeting.


MTS is also directed to file with the Commission, within 30 days of the date of this decision, a suggested schedule for consultations with the consultative committee. The Commission is of the preliminary view that MTS' revised SIP proposal should be filed no later than 30 June 2002. MTS may propose, within 90 days of the date of this decision, an alternative date for the filing of its revised SIP proposal, but should allow sufficient time for Commission consideration to allow construction to proceed in 2003.


The Commission also wishes to note its concern regarding the quality of service issues raised by MKO in this proceeding. The Commission is particularly concerned that the current level of satellite service to health care institutions in MKO communities may be inadequate. The Commission also recognizes that the parties continue to hold conflicting views as to the reliability of such satellite services. While acknowledging the steps taken by both parties to facilitate constructive and open communication, the Commission wishes to ensure that such communication is further strengthened and maintained. The Commission reminds both MTS and MKO that each party bears a responsibility for identifying any service problems as promptly as possible, and informing the other party expeditiously of any such problems. The Commission expects both parties to work together diligently to develop joint solutions to any service problems. The Commission also notes that some service difficulties may arise not from technical malfunctions, but from a need for consumer education and awareness regarding products and services. The Commission considers that MTS bears a responsibility in this regard, and encourages MTS to collaborate with MKO to develop strategies to provide thorough and accessible information regarding MTS' products and services.


The Commission requests both MTS and MKO to provide reports to the Commission by 31 March 2002 regarding the steps that have been taken to further build and strengthen communication between MTS and the MKO communities regarding telecommunications services.


The Commission expects MTS to resolve expeditiously any deficiencies in quality of service that have been identified in MKO communities. The Commission also directs MTS to file a report within 30 days from the date of this decision providing a list of any quality of service problems reported and/or found in MKO satellite communities from 1 October 2001 onwards, along with details as to corrections made and an indication that MKO users are satisfied with the corrections to the service. MTS is to continue filing this report on a quarterly basis for the next year. The initial report must also address whether the MKO satellite communities can be monitored and maintained through a centralized network management system; if not, MTS must provide a proposal for provision of such a system. This report will be made publicly available, allowing MKO, and any other interested party, the opportunity to comment, if desired.


Unserved premises


In letters dated 31 October and 7 November 2001, Commission staff requested MTS' comments on correspondence received by the Commission suggesting that MTS might have at least six unserved premises. MTS was also requested to comment on whether it would be appropriate for it to serve any unserved customers according to the same criteria outlined in Bell Canada's SIP proposal, and if not, to propose alternate criteria. MTS was advised that the letters of 31 October and 7 November 2001, as well as MTS' response, would form part of the PN 2001-37 proceeding.


In its response dated 9 November 2001, MTS maintained its position that it has no unserved customers, suggesting that its current General Tariff CRTC 24001 covers the premises in question. In particular, MTS stated that adequate provision already exists within tariff 24001 for service extension in areas where the BSO has been met and unusual cost is required to extend existing service to individuals.


In paragraph 41 of Decision 99-16, the Commission directed all incumbent local carriers to file SIPs for Commission approval, or to demonstrate that the BSO has been and will continue to be achieved in their territory. Plans were to address, among other things, the extension of service to unserved areas, and were to, in general, serve unserved areas prior to providing upgrades.


MTS referred to paragraph 51 of Decision 99-16, in which the Commission stated, in part, that "no change is warranted to the tariffs or the Terms of Service with regard to the handling of ongoing service extension requests." MTS argues that it has no unserved areas or unserved customers, because all individuals who have requested service are in areas served by MTS, but at locations where there is a requirement for the company to incur unusual expense to extend its existing facilities to their properties.


The Commission does not consider it appropriate to make distinctions between unserved customers in "served areas" versus "unserved areas" as proposed by MTS. In developing its revised SIP proposal described above, the Commission directs MTS to address capital criteria for the extension of service to unserved customers, and also to determine the number of unserved customers that would be included and excluded in its plan, and a cost estimate for the provision of service.

Yours sincerely,

Ursula Menke
Secretary General 

Prepared by Hugh Thompson, (819) 953-6081

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