ARCHIVED - Telecom Decision CRTC 2002-10

Telecom Decision CRTC 2002-10

Ottawa, 12 February 2002

Proposed revisions by TELUS Communications Inc. to digital network access tariffs in Alberta and British Columbia

Reference: Tariff notice 10

Summary

The Commission directs TELUS Communications Inc. (TCI) to provide digital network access (DNA) service to customer locations outside the base rate areas of exchanges in Alberta and eliminate the extra charge covered under the Special Assembly Tariff for facilities to those locations. The Commission further denies TCI's request to amalgamate the DNA tariffs of the former TCI and the former TELUS Communications (B.C.) Inc.

The application

1.

Under tariff notice (TN) 10, dated 5 July 2001, TELUS Communications Inc. (TCI) filed proposed revisions to amalgamate and restructure the tariffs for digital network access (DNA) service in Alberta and British Columbia under a common DNA tariff.

2.

Among other things, TCI proposed:

a) to provide standard DNA service structures, rates, and terms and conditions in the two provinces;

b) to introduce new rates, and terms and conditions in the integrated DNA tariff to apply to DS-0 and DS-1 circuits that extend beyond the existing DNA base rate area (BRA) boundaries in Alberta, which are currently provisioned as part of the former TCI's Special Assembly Tariff (SAT); and

c) to incorporate the access special routing tariffs of the former TCI and the former TELUS Communications (B.C.) Inc. (the former TCBC) into the new, integrated DNA service tariff.

3.

TCI also proposed to no longer offer the Megaplan satellite access service in Alberta and B.C. The company stated that there are no customers for this service in either province.

4.

TCI also proposed to migrate the customer-specific DS-1 special assemblies associated with the Megalink service to the existing Megalink service rates and charges in Alberta. The company stated that as the number of special assemblies associated with Megalink service is extremely small, the effect on revenues of eliminating the special assembly charges would be insignificant.

Comments on TCI's application

5.

On 26 July 2001, Rogers Wireless Inc. (RWI) requested that the Commission deny the proposed rate changes and direct TCI to re-file the rates in a manner that would be revenue-neutral for existing customers of the above services. RWI submitted that the proposed rate changes would result in significant additional costs to RWI despite the fact that there would be no improvements or enhancements to RWI's existing DS-1 and DS-3 connections in Alberta or B.C. RWI also submitted that there would be no net negative impact on TCI as TELUS Mobility, a division of TCI, would be simply paying the wireline division of TCI.

6.

On 11 September 2001, TCI replied that the rate restructuring and the associated tariff changes proposed in TN 10, as well as the DNA changes proposed in TNs 392 and 4153, which were filed on 27 June 2001 by TCI, provide a fair, reasonable and pragmatic way to integrate the DNA services and tariffs in Alberta and B.C. It also argued that approval of TN 10 would provide a reasonable and effective way to eliminate the reliance on the provision of existing (and future) special assembly DS-0/DS-1 channels in Alberta to meet the Commission's goal stipulated in Decision CRTC 2001-269, dated 16 May 2001, which considered that general tariffs are preferable to special facilities tariffs.

Commission's determinations

With respect to DS-1 extensions to customer service points outside of the BRAs of exchanges in Alberta, the Commission is not persuaded that customers in Alberta should continue to be treated differently from those in the other former Stentor companies, including TCI in B.C. Consistent with the approach taken by the other telephone companies, the Commission considers that the DNA service in Alberta should include the provision of facilities from the central office to customer locations within an exchange, regardless of whether the customer service points are inside or outside the BRAs of exchanges.

To account for the reclassification from uncapped special assembly revenues to capped revenues, TCI proposed to make a one-time adjustment to the overall price cap index and the Other Capped services sub-basket limit equivalent to the amount of the change in the respective actual price index and sub-basket index.

9.

In Telecom Decision CRTC 97-9, Price cap regulation and related issues, dated 1 May 1997, the Commission determined that an exogenous factor adjustment will be considered for inclusion in the price cap index for events that satisfy three criteria. One of these criteria is that an event should have a material impact on the Utility segment of a company. The Commission considers that the loss of SAT revenues relating to the provision of extensions to customer service points outside of the BRAs of exchanges is not material to warrant compensation. Accordingly, the Commission does not find it appropriate to allow a one-time adjustment to the overall price cap index and the Other Capped services sub-basket limits.

10.

TCI filed its proposed standard DNA rates on the basis of amalgamated price cap indices for the former TCI and the former TCBC.

11.

In Telecom Decision CRTC 2002-6, CRTC denies TELUS Communications Inc.'s application to merge price cap models, dated 12 February 2002, the Commission determined that it is not appropriate, at this time, to allow the amalgamation of the price cap indices for the former TCI and the former TCBC.

12.

The Commission finds that the proposed rate increases, if approved, would cause the former TCI's actual price index to exceed its price cap index.

13.

Accordingly, TCI TN 10 is denied, except as stated below:

a) TCI is directed to issue tariff pages for the former TCI in Alberta, within 10 days, to indicate that the provision of DS-0 and DS-1 access services for customer service points outside the BRAs of exchanges are included in the existing tariffs for DNA service (item 500 of the General Tariff);

b) TCI is directed to issue tariff pages, within 10 days, deleting the DS-0/DS-1 DNA extensions included in its current SAT;

c) TCI's proposal to migrate the customer-specific DS-1 special assemblies associated with Megalink service to the existing Megalink service rates and charges in Alberta is approved; and

d) TCI's proposal to eliminate the Megaplan satellite access service offering in Alberta and B.C. is approved.

14.

The revisions approved in this decision take effect as of the date of this decision.

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