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Our File: 2001.8638.C12.58
Ottawa, 22 July 2002
BY TELECOPIER
Mr. Roy Bruckshaw
Director, Regulatory Affairs
MTS Communications Inc.
P. O. Box 6666
Rm MP19C
333 Main Street
Winnipeg, Manitoba
R3C 3V6
Dear Mr. Bruckshaw:
Re: Follow-up to Decision CRTC 2001-767: MTS' Revised SIP dated 28 June 2002
Pursuant to Public Notice 2001-37 - Price cap review and related issues - Disposition of the MTS service improvement plan, Decision CRTC 2001-767 dated 19 December 2001, MTS Communications Inc. (MTS) filed a revised service improvement plan (SIP) dated 28 June 2002.
Commission staff requires additional information and is issuing the attached interrogatories. MTS is to file responses to these interrogatories by 6 August 2002, serving copies on the Commission, and on interested parties who have registered with the Commission, pursuant to a separate letter dated today setting out a public process.
Where a document is to be filed or served by a specific date, the document should be actually received, not merely sent, by that date.
Yours sincerely,
Scott Hutton
Director - Efficiency and Expenditure Analysis
(819) 997-4573
attachment: interrogatories
c.c. Hugh Thompson, CRTC, (819) 953-6081
Gary Krushen, CRTC Winnipeg
MANITOBA TELECOM SERVICES INC.
COMMISSION INTERROGATORIES
1. In the response to interrogatory MTS(CRTC)27Apr01-607, Attachment, Note 1 (with respect to Internet access via a local call), MTS stated that:
The estimated costs .do not include the cost of the underlying facilities needed to home smaller communities on larger centres. MTS' SIP includes some of the costs associated with these underlying facilities.
- Provide an explanation for the statement "MTS' SIP includes some of the costs associated with these underlying facilities", including what costs are excluded, and why.
- With reference to the answer in a) above, indicate whether MTS is planning to absorb the costs that are not included in the SIP. If no, provide the answer to c).
- Provide cost information for the non-satellite communities as follows:
- the cost of the underlying facilities needed to home smaller communities on larger centres for each non-satellite exchange listed in the interrogatory response;
- an indication of which costs in the answer to part (i) have already been included in the SIP for each non-satellite exchange;
- a net total subtracting the response in part (ii) from the response in part (i) for each non-satellite exchange; and
- a total net cost for all non-satellite communities.
2. Refer to the following excerpts from an MTS News Release dated 14 May 2002.
Premier Gary Doer announced today that the government's Provincial Data Network (PDN) will be upgraded to enhance broadband access for hospitals and provincial government buildings and serve as a catalyst for the future expansion of high-speed telecommunications to rural and Northern Manitoba.
"This announcement is an investment in the future that lays the foundation for the eventual delivery of broadband services to rural communities."
To support the distribution of broadband infrastructure to rural communities, the province is upgrading its provincial data network which serves provincial government offices and hospitals. The upgrade will utilize the latest technology, designed to handle up to 100 mega-bytes per second of data, voice and video traffic. In total, this initiative will provide broadband capabilities to 85 communities with hospitals or government offices.
The upgrade will improve the government's ability to transfer data and images and will provide greater opportunities for telecommunications services such as video-conferencing. The initiative will also enhance the government's ability to deliver existing health programs.
To facilitate the upgrade, three contracts, worth a total of $47.4 million over five years, for upgrading and expanding the capacity of the Provincial Data Network were tendered and have been awarded to Manitoba Telecom Services Inc. (MTS). The average annual costs for the contract are $9.48 million which is comparable to the projected annual costs associated with an expanded network under the previous contract. This new network design allows for the potential future expansion into schools and libraries.
"[MTS] has gained tremendous expertise in delivering these services after having launched our DSL high-speed Internet in 34 rural communities as part of our $300 million Next Generation Services initiative to bring high-speed Internet to 85 per cent of Manitobans by the end of 2003."
The announcement was made at the Telehealth video-conference facility at the Health Sciences Centre. Other Telehealth sites include Churchill, Dauphin, Flin Flon, Gillam, Killarney, Leaf Rapids, Lynn Lake, Pine Falls, Russell, Ashern, Berens River First Nation, Steinbach, Swan River, Brandon, Thompson, The Pas and the recently opened site in Selkirk. Sites have also been established at Boundary Trails Hospital, the St. Boniface General Hospital and the Rehabilitation Centre for Children. All Manitoba regional health authorities have joined the Manitoba Telehealth Network.
Provide the following information:
- indicate which sites in the PDN above are also listed in the SIP (e.g., Lynn Lake);
- for the common sites listed in the response to part i), provide a detailed description of the PDN facilities provided to each site;
- indicate whether the PDN facilities described in the response to part ii) can be used in the SIP with the objective of decreasing the cost of the SIP. If so, provide a fully-detailed report, including all costing details; and
- provide a map comparing the routing of the PDN project and the SIP project.
- With reference to the revised SIP dated 28 June 2002, paragraphs 28 to 32, MTS stated that it planned to replace the Subscriber Radio (SR) 100 and SR 500 radio systems to provide Internet access. Assume a better method is found to provide Internet access (e.g., a DTH satellite overlay). Indicate whether MTS would still have to replace the SR 100 and SR 500 radio systems in the near future due to current or future maintenance problems. If so, provide timeframes.
- With reference to the revised SIP dated 28 June 2002, paragraph 34, MTS stated that in August 2002, it planned to make a toll-free number available throughout northern Manitoba for customers of its Sympatico Internet access service (IAS). Consequently, MTS' IAS customers will be able to gain access to the Internet without incurring toll charges.
- Indicate whether this service is limited to those northern customers in the SIP who currently must access the Internet via a toll call. Also, indicate whether this service will be available to MTS' satellite communities. If this service is limited to those northern customers in the SIP, describe how the limitation is carried out.
- If the toll-free IAS is to be used for the satellite communities, indicate whether there could be congestion on the trunk routes. If so, provide MTS' solution for this problem, along with the costs.
- Provide a list of communities in the SIP (with number of subscribers) for which this service is proposed.
- Provide a network diagram and a fully detailed description of the service, including upload/download capabilities.
- Indicate whether this service would replace the proposed plan and capital expenditures set out in the response to interrogatory MTS(CRTC)27Apr-607.
- Indicate whether MTS would request a subsidy to operate the 1-800 plan. If so, provide the Phase II cost, supported by fully detailed calculations.
- Indicate whether the 1-800 plan is a long-term solution for the provision of Internet access to those that currently must access the Internet via a local call. If not, provide MTS' long term plan.
- Refer to Long-distance competition and improved service for Northwestel customers, Decision CRTC 2000-746, 30 November 2000, wherein the Commission denied Northwestel's provisioning criteria for toll-free access to the Internet. Indicate the company's views on whether any of the issues set out in the Decision would apply to MTS, in particular, costs and any competitive issues.
- With reference to the revised SIP dated 28 June 2002, paragraph 38, MTS stated that the increase in costs for the SIP proposal of $67.03 million compared to $54.58 million is due largely to a change to the estimated costs for tower and site upgrades. MTS' experience in undertaking this tower and site work in the past year has indicated that the reconditioning and upgrading work required at these sites is more extensive than originally planned.
- Provide a list of all revised tower/site projects, the original estimate and the revised estimate, a fully detailed description of the revisions supported by justification, and a grand total of the revised estimates.
- Provide a list of all other revised projects, the original estimate and the revised estimate, a fully detailed description of the revisions supported by justification, and a grand total of the revised estimates.
6. The Commission has already approved the SIP expenditures for the three-year period 2000-2002 inclusive in Public Notice CRTC 2001-37 - Price cap review and related issues - Disposition of the MTS service improvement plan, Decision 2001-767, 19 December 2001 (Decision 2001-767). Therefore, the Commission must still assess the remainder of the proposed SIP expenditures in this proceeding.
- In Decision 2001-767, the Commission approved proposed expenditures for the years 2000-2002 of $4.275M + 2.845M + 7.600M = $14.720 million total, based on the proposal set out in MTS' SIP dated 6 April 2001. In MTS' revised SIP dated 28 June 2002, the total for the same years appears to be $4.275M + 1.426M + 6.114M = $11.815 million. Provide a detailed explanation of the changes, including changes in project scheduling. Indicate the total expenditures that should be considered as associated with approved projects.
- With reference to the revised SIP dated 28 June 2002, Appendix 1, indicate: (i) the total amount that should be considered approved the by Commission for 2000-2002 [reference to answer a) above], ii) the amount the Commission must assess in this proceeding in 2003-2007; and (iii) the grand total of the current SIP.
- For the years 2000-2002, provide a table similar to Table 1 that breaks down the expenditures associated with approved projects into three categories: (i) the upgrade of major transmission systems; (ii) Call Management Services (CMS); and (iii) Internet access, as follows. Since there appears to be some change in scheduling, additional years have been added to the table. NAS refers to "network access services."
TABLE 1
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Year
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Major Transmission Systems Expenditures
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CMS Expenditures
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Internet
Expenditures
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Total Expenditures
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CMS NAS
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Internet NAS
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2000
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2001
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2002
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2003
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2004
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Total
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d. For the years 2003-2007, provide a table similar to Table 2 for expenditures associated with projects still to be assessed as follows:
TABLE 2
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Year
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Major Transmission Systems Expenditures
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CMS Expenditures
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Internet
Expenditures
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Total Expenditures
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CMS NAS
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Internet NAS
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2003
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2004
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2005
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2006
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2007
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Total
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e. Using data from above, provide a table similar to Table 3 setting out the grand total of expenditures, as follows:
TABLE 3
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TABLE
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Major Transmission Systems Expenditures
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CMS Expenditures
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Internet
Expenditures
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Total Expenditures
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CMS NAS
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Internet NAS
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Table 1 Totals
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Table 2 Totals
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Grand Total
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7. With reference to the revised SIP dated 28 June 2002, paragraphs 47 to 49, MTS stated that approximately 130 unserved customers per year would be provided with service under the capital criteria of $25,000 including a customer contribution of $1,000. Provide a table setting out the proposed capital expenditure for each of the years 2003 to 2007, along with a total. Indicate whether the total of the aforementioned capital expenditures has been included in the current revised SIP estimate of $67.03 million. If not, provide the new revised SIP estimate, in a format as follows:
Total capital expenditures for underserved customers:
Total capital expenditures for unserved customers:
Grand Total:
8. A) In paragraph 41 of its revised SIP, MTS proposed to use the high cost serving area (HCSA) subsidy to finance its SIP expenditures. In Decision 2002-34, the Commission approved the use of both a HCSA subsidy and a deferral account mechanism for cost recovery. Provide the company's views on whether it would be appropriate to include the cost of the upgrading of a major transmission system (e.g., Winnipeg - Radisson) in a deferral account rather than the HCSA subsidy.
B) Provide detailed calculations to support the Phase II cost for the grand total of MTS' SIP. Indicate the amounts that would be assigned to the HCSA subsidy and a deferral account discussed in MTS' response to A) above.
9. Refer to MTS' SIP, Extending Service to Unserved Premises, paragraphs 47 to 49:
- indicate the areas in the province where the company proposes to extend service to unserved premises; indicate what areas in the province will remain unserved;
- confirm that MTS will use the 100% take rate formula to calculate the aggregate cost of a locality to determine whether to provide service in that locality, as set out for the other telephone companies in Decision 2002-34; and
- confirm that MTS will use the installment plan for the customer contribution of $1000, as set out for the other telephone companies in Decision 2002-34.
10. Provide a table setting out the total amount of MTS' normal Construction Program for the years 1997-2001. Describe the improvements that MTS has made to its network over the period in question pursuant to its normal Construction Program.
11. Refer to Decision 2001-767:
- with reference to paragraph 10, indicate the results of the exploration for options for the current and future needs of remote and isolated communities and whether this can be supported without additional cost to MTS by additional funding from MKO or others;
- With reference to paragraph 13, provide a report to the Commission regarding the steps that have been taken to build and strengthen communications between MTS and the MKO communities regarding telecommunications services;
- With reference to paragraph 14, provide an indication that MKO users are satisfied with the corrections to quality of service problems in MKO satellite communities.
12. If the Commission were to approve the SIP, what impact would this have on the company-wide Quality of Service results?
13. A) Written notice of the town hall meetings held May 14 - 16 was dated less than a week before these meetings. How were these notices sent? On what dates were the newspaper advertisements for the town hall meetings in a) Norway House, Nelson House, and Pukatawagan and b) Red Sucker Lake, God's Lake, and Garden Hill published? What, if any, other means did MTS use to notify communities of the town hall meetings held?
B) Was a follow up meeting with MKO held to discuss the SIP and explore options for obtaining additional funds for future telecommunications needs? If so, provide minutes or a report. If not, advise whether such a meeting is planned for the future. If so, when is it expected to occur? Provide minutes or a report from this meeting. If such a meeting is not being planned, why will it not be held?
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