ARCHIVED - Telecom Decision CRTC 2003-40

Telecom Decision CRTC 2003-40

Ottawa, 20 June 2003

Télébec and TELUS Québec - Rates for unlisted number service

Reference: 8638-C12-74/02

In this decision, the Commission directs the Société en commandite Télébec and TELUS Communications (Québec) Inc. to amend their respective tariffs to implement a rate of $2.00 for residential subscribers of Unlisted Number Service.

Introduction

1.

In Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002 (Decision 2002-43), the Commission considered that the personal privacy concerns identified in Telecom Order CRTC 98-109, 4 February 1998 (Order 98-109) were equally of concern to subscribers in the serving territories of Société en commandite Télébec (Télébec) and TELUS Communications (Québec) Inc. (TELUS Québec) as they were in the territories of TELUS Communications Inc., Saskatchewan Telecommunications, MTS Communications Inc., Bell Canada, and Aliant Telecom Inc. (the incumbent local exchange carriers (the "ILECs")).

2.

Consequently, in Decision 2002-43, the Commission directed Télébec and TELUS Québec to show cause, by 30 August 2002, why they should not be subject to the Commission's determination set out in Order 98-109, which capped the monthly Unlisted Number Service (UNS) rate at $2.00 for residential subscribers of the ILECs subject to price cap regulation. The Commission notes that Télébec and TELUS Québec currently charge the monthly rate of $4.25 and $4.45 respectively for the service.

Télébec's reply

3.

Télébec opposed the Commission's preliminary view that its residential UNS rate should be reduced from $4.25 to $2.00. Télébec argued that the notable penetration rate of residential UNS subscribers supported the company's position that the current rate of $4.25 is appropriate and need not be reduced.

4.

Télébec further argued that should the Commission require a UNS rate reduction, the loss of revenues associated with the $2.25 rate decrease should qualify as an exogenous adjustment to be incorporated into Télébec's Price Cap Index (PCI) and Sub-Basket Limit (SBL) calculations.

TELUS Québec's reply

5.

TELUS Québec accepted the Commission's preliminary view that its residential UNS rate should be reduced from $4.45 to $2.00, effective 1 August 2002.

6.

TELUS Québec argued that the loss of revenues associated with the $2.45 rate decrease should qualify as an exogenous adjustment to be incorporated into its PCI and SBL calculations. TELUS Québec proposed that the exogenous adjustment be proportionately attributed across its clients both within and outside the high cost serving areas.

Commission analysis and determination

7.

Consistent with its view in Order 98-109, the Commission considers that the increased availability of listing information in electronic form poses a threat to the personal privacy concerns of residential subscribers. Moreover, the Commission considers that an effective way for subscribers to control dissemination of their listing information is to subscribe to UNS. Furthermore, the Commission considers that local competition will take time to fully develop in the territories of Télébec and TELUS Québec and that the Commission should not, in the more immediate term, rely on market forces alone to address concerns associated with the rates for UNS.

8.

The Commission notes that TELUS Québec accepted the Commission's preliminary view that its residential UNS rate be reduced from $4.45 to $2.00.

9.

The Commission also notes that Télébec did not address any of the determinations in Order 98-109 to justify why it should not be required to reduce its residential UNS rates to $2.00.

10.

The Commission further notes that an argument similar to Télébec's in support of the maintenance of the existing UNS rate based upon the penetration rate of residential UNS subscribers was dismissed by the Commission as part of Order 98-109. The Commission does not consider it reasonable to rely upon penetration rates alone to establish that UNS rates are appropriate and need not be reduced.

11.

Accordingly, the Commission does not consider that Télébec has provided sufficient evidence to justify a disparity in UNS rates from those established in Order 98-109.

12.

Regarding Télébec's and TELUS Québec's request that the loss in revenue associated with the decrease in UNS rates be recoverable through an exogenous factor adjustment, the Commission notes that in Decision 2002-43, it established the criteria for considering an exogenous factor adjustment. In particular, the Commission determined that an event must have a material impact as measured against the total company to warrant an exogenous factor adjustment.

13.

The Commission considers the annual loss of revenues associated with the decrease in UNS rates for Télébec and TELUS Québec to be limited as measured against the total company. Accordingly, the Commission does not consider that the loss of revenue impact to the companies to be sufficiently material to warrant an exogenous factor adjustment.

14.

In light of the above, the Commission directs Télébec and TELUS Québec to reduce their UNS rates to $2.00, effective the date of this decision. Furthermore, the Commission denies Télébec's and TELUS Québec's request that the loss of revenues associated with the decrease in UNS rates be recoverable through an exogenous factor adjustment. The Commission directs Télébec and TELUS Québec to re-file their respective 2002 basket indices from Other Capped Services to exclude UNS and to include UNS in the group of Services with Frozen Rates.

15.

The Commission directs Télébec and TELUS Québec to issue revised tariff pages forthwith to reflect these changes.

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