ARCHIVED - Telecom - Commission Letter - 8678-C12-09/00 - Preparation for price capreview

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Letter

Our file: 8678-C12-09/00

Ottawa, 29 January 2001

To: PN 2000-99 Interested parties

Re: Preparation for price cap review

The Commission anticipates issuing a Public Notice in early 2001 that will initiate a proceeding to review price caps for the former Stentor companies. In Proceeding to determine the scope of the price cap review, Public Notice CRTC 2000-99, dated 14 July 2000 (PN 2000-99), the Commission had indicated that Saskatchewan Telecommunications (SaskTel) would also be part of this process, although SaskTel is not currently regulated under price caps.

In PN 2000-99, the Commission requested interested parties to provide comments on the current price cap regime and to identify issues to be considered in the upcoming price cap review. Subsequent to the close of the PN 2000-99 record, the Commission was informed that representatives of various industry stakeholders have initiated a series of consultations, with a view to issuing a proposal to the Commission regarding the regulatory regime that will follow the current price cap period.

While the Commission is hopeful that the outputs of these consultations will be issued in time to be considered by the Commission in its preparation of the upcoming Public Notice, the price cap review may need to commence prior to the outcome of these industry discussions.

Service improvement plans (SIPs)

In Telephone service to high cost serving areas, Telecom Decision CRTC 99-16, dated 19 October 1999 (Decision 99-16), the Commission directed all incumbent local carriers to file SIPs for Commission approval, or to demonstrate that the basic service objective, outlined in Decision 99-16, has been and will continue to be achieved in their territory. The Commission noted, in the decision, that many of the former Stentor companies have significant programs underway to improve service. The Commission further noted that it would consider these companies' proposals for additional upgrades and improvements in the proceeding to review price caps.

Decision 99-16 did not apply to SaskTel, since the company was not federally regulated at that time. However, in SaskTel - Transition to federal legislation, Telecom Decision CRTC 2000-150, dated 9 May 2000, the Commission noted that it would consider, in a future proceeding, how Decision 99-16 would apply to SaskTel once the company came under the Commission's jurisdiction.

The Commission considers that it would be appropriate to initiate the filing of information on the SIPs prior to the commencement of the price cap review. Accordingly, the following companies are directed to file, within 45 days of the date of this letter, their respective SIPs or demonstrate that the basic service objective has been and will continue to be achieved in their territory:

  • Bell Canada;
  • TELUS Communications Inc., separately for the territories served prior to 1 January 2001 by TELUS Communications (B.C.) Inc. and TELUS Communications Inc;
  • Aliant Telecom Inc., separately for the territories served prior to 1 January 2001 by Island Telecom Inc.; Maritime Tel & Tel Limited; NBTel Inc; and NewTel Communications Inc.;
  • MTS Communications Inc.; and
  • SaskTel.

The SIPs should include roll-out plans as well as annual and cumulative planned capital expenditures for each year of the SIP, by major asset category (e.g. switching hardware, switching software, transmission, outside plant, wireless, station, operational support systems, buildings, and other). In addition, any operating costs (e.g. maintenance) related to the planned SIP capital expenditures should be provided on an annual and cumulative basis.

Companies are to indicate whether least-cost technology has been used and justify their choice of any alternatives to least-cost technology. Companies are also to provide a proposed tracking plan that will monitor the progress of the service extension and upgrade programs. Any issues regarding the recovery of costs associated with the SIPs will be addressed in the price cap review proceeding.

Yours sincerely,

Ursula Menke

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