ARCHIVED - Order CRTC 2001-813

Order CRTC 2001-813

Ottawa, 5 November 2001

SATAT - 2000 and 2001 Carrier Access Tariffs and Network Access (¼ mile) Tariffs

Reference: SATAT tariff notices 13 to 30 (with related A/B filings)

The Commission approves final 2000 and 2001 Carrier Access Tariffs (CATs) and Network Access (¼ mile) Tariffs, effective 1 January 2000 and 2001 respectively, for CoopTel, Courcelles, La Baie, Milot, St-Liboire, Sogetel, Upton and Warwick.

The Commission approves a final 2000 CAT and ¼ mile tariff and an interim 2001 CAT and ¼ mile tariff, effective 1 January 2000 and 2001 respectively, for Nantes.

1.

Pursuant to Order CRTC 2000-1159, SATAT - Final 1999 Carrier Access Tariffs and network (¼ mile) tariffs, dated 19 December 2000, the Société d'administration des tarifs d'accès des télécommunicateurs (SATAT) filed, on behalf of its members, proposed final 2000 Carrier Access Tariffs (CATs) and Network Access (¼ mile) Tariffs and interim 2001 CATs and ¼ mile tariffs under tariff notices 13 to 30 (with related A/B filings) on 21 February 2001, 24/25 July 2001 and 20 August 2001.

Interim or final CAT rates - Forecast or proxy minutes

2.

SATAT proposed final 2000 CATs for all companies except La Compagnie de Téléphone de Warwick. SATAT requested only interim 2001 CATs for all companies, due to concerns over the fluctuation of conversation minutes during 2001 for its member companies noted above.

3.

In addition, la Compagnie de téléphone Nantes inc. requested interim 2001 rates (CAT and ¼ mile), as it was not in a position to provide estimates for 2001 because its service improvement plan (SIP) has not been approved by the Commission.

4.

The Commission considers it appropriate for Nantes to propose revised 2001 rates CAT and ¼ mile minute forecast, once its SIP has been approved.

5.

Warwick requested interim 2000 and 2001 CAT rates, as it was awaiting a decision on the review and vary application of its 1999 CAT order.

6.

With respect to Warwick's request for interim rates, the Commission notes that it recently approved Warwick's review and vary application in Order CRTC 2001-779, dated 26 October 2001. Therefore, Warwick's CAT rates can be considered on the same basis as the other SATAT member companies.

7.

With respect to all other SATAT member companies, the Commission is concerned that, should the 2001 CATs only be made interim, they would not be finalized until sometime in 2002, after the independent telephone companies' new regulatory framework and revenue-based contribution collection mechanism are in place.

8.

According to Telecom Decision CRTC 99-5, Review of contribution regime of independent telephone companies in Ontario and Quebec, dated 21 April 1999,CAT rates should be set based on forecast minutes and the actual minutes would be used for the billing and collection of CAT revenues.

9.

Accordingly, the Commission considers it appropriate to set CAT and ¼ mile rates for 2001 as final for all companies except Nantes.

10.

The Commission considers that circumstances have changed significantly since Decision 99-5 was issued in April 1999. In particular, toll minutes have become increasingly more difficult to forecast, resulting in increased risk for both the SATAT member companies and the toll providers.

11.

When Decision 99-5 was issued, the Commission expected that the independents and their toll providers would be able to forecast toll minutes reliably. The record of this proceeding shows that this is not the case. Further, the companies are unable to agree on the 2000 actual and 2001 forecast minutes for most of the SATAT member companies.

12.

Prior to Decision 99-5, proxy minutes were used to set the CAT rates and then the same proxy minutes were also used for the billing and collection of CAT revenues.

13.

The Commission is of the view that if proxy minutes were used, the risk for both the SATAT member companies and toll providers would be eliminated because the minutes used to set the final CAT rates would also be used for the billing and collection of CAT revenues.

14.

Given the Commission's desire to finalize CAT rates sooner rather than later and the increased difficulty in forecasting minutes, the Commission directs the SATAT member companies to use the minutes (as approved below) as proxy minutes for purposes of billing and collection of CAT revenues for the years 2000 and 2001.

15.

The Commission considers it appropriate for Nantes to provide a revised 2001 minute forecast when filing its final 2001 CAT and ¼ mile rates.

Minutes to be used in the calculation of the final CAT rates

16.

SATAT submitted measured conversation and direct access line (DAL) minutes for 2000 for all nine SATAT member companies. Bell Canada submitted actual conversation minutes for five SATAT member companies for 2000.

17.

The Commission notes that the differences in the minute data are not significant. Based on its review of the submissions, the Commission finds the data provided by SATAT for 2000 to be reasonable and complete.

18.

Therefore, the Commission has set the final 2000 contribution and direct toll rates using SATAT's minutes. As identified in paragraph 14, these same minutes should also be used for the billing and collection of CAT revenues.

19.

SATAT initially projected a 3% increase in minutes for 2001 for eight of the nine companies and a 1% increase for Warwick. SATAT then filed revised minute forecasts for six companies to reflect the reduced traffic patterns exhibited during the first six months of 2001.

20.

Bell Canada initially submitted that a 3% increase over its 2000 conversation minutes was a reasonable estimate for 2001. Subsequent to SATAT's revised filing, Bell Canada disagreed with three of the revised forecasts and provided its own revised minute forecasts for CoopTel, Milot and Warwick.

21.

The Commission finds the differences in the minute data for 2001 provided by SATAT and Bell Canada are not significant and approves the use of SATAT's forecasted minutes for the purpose of calculating of the 2001 CAT rates.

22.

Therefore, the final 2001 contribution and direct toll rates (interim for Nantes) have been set using SATAT's minute forecast. As identified in paragraph 14, these same minutes should also be used for the billing and collection of CAT revenues.

Contribution requirements

23.

SATAT's proposed 2000 and 2001 contribution requirements were generally filed in accordance with the directives set out in Decision 99-5. i.e., the lower of (a) the contribution requirement based on the Phase III calculation and (b) the previous year's approved contribution requirement, adjusted for local rate increases and one time increases.

Adjustments required to the 2000 contribution amounts and rates

24.

Nantes proposed a 2000 contribution requirement that was $4,568 in excess of its 2000 base and explained that the increase resulted from additional administrative expenses related to its participation in Public Notice CRTC 2000-54, Independent telephone companies' service improvement plans, dated 17 April 2000.

25.

Warwick proposed a 2000 contribution requirement that was $26,428 in excess of its 2000 base and explained that the increase was the result of a loss on the disposal of an asset.

26.

The Commission considers that, in accordance with Decision 99-5, the contribution requirements should not be increased to recover expense increases experienced during the normal course of business.

27.

Therefore, the proposed contribution requirements for Nantes and Warwick have been reduced accordingly.

28.

The Commission notes, however, that it will consider the increased administrative costs for Nantes when it finalizes Nantes' SIP application filed pursuant to PN 2000-54.

Adjustments required to the 2001 contribution amounts and rates

29.

In 2000 and 2001, Warwick proposed that the increase in its regulatory fees be allocated 100% to the direct toll component.

30.

Consistent with the Commission's determinations in SATAT's 1999 CAT and Warwick's subsequent review and vary application, the Commission is of the view that the activities represented by these expenses relate as much to the local side of the business, as they do to the toll side, and should therefore be allocated accordingly.

31.

Therefore, 50% of Warwick's regulatory expense has been re-allocated to its contribution requirement and deducted from its direct toll component, for both 2000 and 2001.

32.

The Commission notes that Warwick's proposed 2000 contribution requirement is at its 1999 cap and, therefore, no upward adjustment can be made. However, since Warwick's proposed 2001 contribution requirement is less than its 2000 cap by more than $5,000, the Commission has increased Warwick's proposed 2001 contribution requirement by $5,000, the amount re-allocated from its direct toll component.

33.

After including the adjustments noted in paragraphs 27 and 32, the Commission approves the final 2000 and 2001 contribution requirements and rates (interim for Nantes for 2001) as set out in the Appendix of this order.

Direct toll component

34.

SATAT's proposed 2000 and 2001 direct toll components were filed in accordance with Order 2000-1159 and explanations were provided for the companies that experienced a year-over-year increase in their direct toll components in excess of the 5% threshold.

35.

Bell Canada submitted that it was concerned that, while the contribution requirements have been reduced, the direct toll components continue to increase.

36.

Bell Canada compared the direct toll components for six of the nine companies from 1999 to 2001 and noted that direct toll components increased by 54% over the two years, while toll minutes had only increased by 9.9% over the same period.

37.

In response, SATAT compared the direct toll components for all nine companies over a five-year period (1996 to 2001) and noted that the direct toll components only increased by 31.3%, while toll minutes increased by 40.1%.

38.

The Commission has reviewed and accepts the explanations provided by SATAT and is satisfied that the 2000 and 2001 direct toll components are reasonable.

39.

After including the adjustments noted in paragraphs 31 and 32, the Commission approves the final 2000 and 2001 direct toll components and rates (interim for Nantes for 2001) as set out in the Appendix of this order.

Network access (¼ mile tariff)

40.

The Commission approves the proposed 2000 and 2001 network access amounts and ¼ mile tariffs as set out in the Appendix of this order.

Implementation

41.

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

Société d'administration des
tarifs d'accès des télécommunicateurs (SATAT)

2000
Contribution

2001
Contribution

Amount

Per-minute rate

Amount

Per-minute rate

$

$

Courcelles

33,484

0.0190

33,484

0.0185

La Baie

75,895

0.0338

75,895

0.0358

Milot

803,495

0.0513

768,995

0.0517

Nantes*

50,511

0.0707

50,511

0.0687

St-Liboire

99,179

0.0161

99,179

0.0165

Upton

95,684

0.0118

95,684

0.0117

CoopTel

945,279

0.0422

902,949

0.0411

Warwick

1,135,188

0.0607

989,017

0.0528

Sogetel

1,989,444

0.0324

1,887,677

0.0299

2001 Direct toll component

2001 Direct
toll component

Amount

Per-minute rate

Amount

Per-minute rate

$

$

Courcelles

173,379

0.1041

171,961

0.1002

La Baie

136,343

0.0607

142,356

0.0671

Milot

401,736

0.0270

421,429

0.0295

Nantes*

50,147

0.0702

37,570

0.0511

St-Liboire

201,463

0.0332

214,077

0.0363

Upton

276,735

0.0344

305,298

0.0377

CoopTel

515,010

0.0265

596,990

0.0301

Warwick

550,363

0.0314

650,057

0.0370

Sogetel

1,494,158

0.0257

1,422,119

0.0238

2000
Network tariff (¼ mile)

2001
Network tariff (¼ mile)

Amount

Per-minute rate

Amount

Per-minute rate

$

$

Courcelles

1,885

0.5035

1,091

0.2914

La Baie

1,518

1.4056

1,426

1.3980

Milot

23,645

1.1164

22,925

1.0973

Nantes*

4,982

2.1291

4,982

2.1291

St-Liboire

4,105

11.4028

5,502

15.2833

Upton

3,642

0.6376

4,441

0.9638

CoopTel

117,401

0.5596

121,961

0.5814

Warwick

94,157

1.7575

98,882

1.3938

Sogetel

670,105

3.6292

679,532

3.9652