ARCHIVED - Telecom Decision CRTC 2002-12

Telecom Decision CRTC 2002-12

Ottawa, 18 February 2002

CRTC approves Saskatchewan Telecommunications' revised primary exchange service costs and related loop rates

Reference: SaskTel tariff notice 24 and 8661-C12-02/00

Summary

After the Commission issued its April 2001 rebanding decision, Saskatchewan Telecommunications' (SaskTel) tax status changed. This decision approves SaskTel's subsequent applications to revise its residential primary exchange service costs and monthly unbundled loop rates. The new costs and rates reflect the company's current tax status.

1.

In paragraph 135 of Decision CRTC 2001-238, Restructured bands, revised loop rates and related issues, dated 27 April 2001, with regard to Saskatchewan Telecommunications' (SaskTel) use of a return on equity of 11% to determine loop and primary exchange service (PES) Phase II cost estimates, the Commission stated, "[s]hould SaskTel's tax status change in the future, the Commission would be prepared to review the changes in loop costs and residential PES costs due to this tax change."

2.

On 28 June 2001, amendments by the Government of Saskatchewan to The Corporation Capital Tax Act received royal assent. A result of the amendments was the introduction of a new capital tax for SaskTel.

3.

On 17 December 2001, SaskTel filed tariff notice 24 to seek Commission approval of proposed revisions to its Type A and Type B unbundled loop rates. The proposed revisions would incorporate the new capital tax.

4.

By letter dated 17 December 2001, SaskTel also asked the Commission to approve revised residential PES costs determined in Decision 2001-238, to incorporate the new capital tax. SaskTel indicated that there is no need to adjust the interim subsidy amounts, set by the Commission on 14 December 2001, as a result of this change.

5.

SaskTel indicated that the new capital tax is equal to 0.9% of its telecommunications capital. SaskTel submitted that, for the purposes of this capital tax, telecommunications capital is defined as the gross investment in local loop and local switching functionality in Saskatchewan, including aerial, underground and buried copper plant, underground duct and conduit, pole lines, and switching hardware and software.

6.

The Commission did not receive comments from other parties on the two SaskTel submissions.

7.

The Commission finds that SaskTel's proposed changes are consistent with the directives in Decision 2001-238.

8.

Therefore, effective as of the date of this decision, the Commission approves SaskTel's proposed revised residential PES costs, and revised Type A and B loop rates, as set out in the attached table.

9.

The Commission directs SaskTel to issue forthwith revised unbundled loop tariff pages reflecting these changes.

10.

The Commission also notes that the final 2002 subsidy amounts for SaskTel will incorporate the revised residential PES costs shown in the table.

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

Table

SaskTel's revised residential PES costs and unbundled loop rates ($ per month)