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Telecom Decision CRTC 2003-46
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Ottawa, 10 July 2003
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Withdrawal of the 800/888 Carrier Access: Multi-Carrier Selection Capability development charge per query
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Reference: Aliant Telecom Tariff Notice 57
Bell Canada Tariff Notice 6708
MTS Tariff Notice 492
TCI Tariff Notice 505
TCBC Tariff Notice 4188
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In this decision, the Commission approves the withdrawal of the 800/888 Carrier Access: Multi-Carrier Selection Capability development charge per query, effective 1 June 2002, for the following incumbent local exchange carriers (ILECs): Aliant Telecom Inc., Bell Canada, MTS Communications Inc., and TELUS Communications Inc.
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The Commission directs the ILECs to settle the accounts of all customers affected by a rate elimination approved in this decision including rebates, if applicable, forthwith.
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1.
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The Commission received applications from each of the following incumbent local exchange carriers (ILECs) which proposed revisions to their respective tariffs in order to withdraw the 800/888 Carrier Access: Multi-Carrier Selection Capability (MCSC) development charge - per query:
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· Aliant Telecom Inc. (Aliant Telecom) Tariff Notice (TN) 57, dated
21 November 2002:
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- Island Telecom Inc., Carrier Access Tariff, item 200;
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- Maritime Tel & Tel Limited, Carrier Access Tariff, item 200;
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- NBTel Inc., Carrier Access Tariff, item 800.11; and
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- NewTel Communications Inc., Interconnection with Interexchange
Carriers, item 299.3.
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· Bell Canada TN 6708, dated 15 November 2002: Access Services Tariff for
Interconnection with Carriers and Other Service Providers, item 70.
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· MTS Communications Inc. (MTS) TN 492, dated 25 November 2002:
Supplementary Tariff - Access Services for Interconnection with Carriers and
Other Service Providers, item 70.
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· TELUS Communications Inc. (TCI) dated 14 November 2002:
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- TCI TN 505, Carrier Access Tariff item 220.3; and
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- TELUS Communications (B.C.) Inc. (TCBC) TN 4188, Carrier Access
Tariff item 73.
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2.
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The ILECs requested withdrawal of the 800/888 MCSC development charge stating that the costs associated with the development of the 800/888 MCSC feature had now been recovered.
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3.
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The Commission received comments from AT&T Canada Corp. and AT&T Canada Telecom Services Company (collectively, AT&T Canada) on 16 December 2002. Reply comments were received from Bell Canada, on behalf of itself, Aliant Telecom and MTS (collectively, the Companies) and TCI, each on 27 December 2002. Further comments were received from AT&T Canada on 14 January 2003.
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AT&T Canada's comments
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4.
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AT&T Canada stated that it agreed with the ILECs' proposal to withdraw the 800/888 MCSC development charge tariffs. AT&T Canada submitted that the MCSC development charge was determined based on a six-year study period and a forecast of 800/888 query demand for this six-year period. AT&T Canada indicated that based on the query demand information furnished in the proceeding leading to CRTC approves application to reduce toll-free look-up service charge, Order CRTC 2001-500, 29 June 2001, nearly all of the query demand that had been forecast in the 800/888 MCSC development cost study had been reached by the end of 1999. AT&T Canada further submitted that, accordingly, the 800/888 MCSC development charge should not have continued beyond January 2000. AT&T Canada estimated that it had overpaid the 800/888 MCSC development costs by at least one million dollars.
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5.
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AT&T Canada submitted that even if the 800/888 MCSC development rate were to be charged for the full term of the six-year study period, the ILECs had left this tariff in place beyond this six-year period and had over-charged the competitors. AT&T Canada noted that the 800/888 MCSC development charges were given interim approval on 20 February 1996 and submitted, therefore, based on the six-year period, that they should have been withdrawn on 20 February 2002.
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6.
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AT&T Canada noted that it had sent letters on 25 November 2002 to MTS, Aliant Telecom, Bell Canada and TCI requesting refunds for the 800/888 MCSC development charge commencing January 2000.
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7.
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AT&T Canada stated that it was concerned that there were no checks in the existing process to ensure that tariffs levied for the purpose of cost-recovery were withdrawn in a timely manner. AT&T Canada requested that the Commission establish transparent, auditable procedures such that similar tariffs would be withdrawn in a timely manner without the competitors having to monitor and request withdrawal of such services.
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ILECs' reply
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8.
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The Companies noted that AT&T Canada supported the withdrawal of the MCSC 800/888 development charge, and requested that the Commission approve their applications as filed on a final basis.
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9.
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The Companies submitted that no requirement was established for tracking the actual capital and expenses incurred in developing and supporting the 800/888 MCSC service. The Companies stated that any expenditures for this service caused by increased demand beyond that estimated in the economic study would not have been tracked. The Companies indicated that they did not know with certainty when all the costs had been recovered. The Companies stated that once they became aware that the costs might have been fully recovered they requested withdrawal of the service.
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10.
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The Companies argued that the 800/888 MCSC development charge remained a legal tariff approved by the Commission on a final basis unless and until the Commission approved its withdrawal. The Companies stated that they expected to receive payments for the services from AT&T Canada and other customers according to the existing tariff until the Commission approved the withdrawal of the 800/888 MCSC development charge. The Companies submitted that consistent with the Commission's findings in CRTC denies application by Call-Net and AT&T Canada for a refund of amounts paid for direct connection service, Order CRTC 2001-137, 14 February 2001, rates approved on a final basis should not generally be subject to retroactive adjustment.
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11.
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TCI noted that AT&T Canada agreed with its applications to withdraw the 800/888 MCSC development charges. TCI stated that the Commission had not specified a true-up mechanism for the 800/888 MCSC development charge based on actual query demand and actual costs incurred by the ILECs in order to ensure full and appropriate recovery.
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12.
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TCI submitted that the development charges were given interim approval on 20 February 1996 and, therefore, based on a six-year period, should have been withdrawn on 20 February 2002.
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13.
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TCI also submitted that the Commission was not permitted to set rates retroactively, thereby creating new obligations in respect of past transactions, when rates were approved on a final basis as in the case of the 800/888 MCSC development charge.
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14.
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TCI indicated that AT&T Canada had withheld payments for this service since May 2002.
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15.
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TCI submitted that there was no need for the Commission to establish general transparent, auditable procedures as AT&T Canada had requested. TCI submitted that the Commission had processes and regulatory procedures in place to ensure proper application of its approved tariffs including their timely withdrawal in accordance with the Commission's determinations. TCI submitted that the Commission could implement tracking mechanisms for such purposes when they were deemed necessary and appropriate.
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AT&T Canada's supplemental comments
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16.
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AT&T Canada stated that it agreed with TCI that the Commission could not set rates retroactively thereby creating new obligations in respect of past transactions. AT&T Canada noted however that in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), the Commission had made all ILECs' tariffed rates interim effective 1 June 2002, including the 800/888 MCSC development charge. AT&T Canada requested that the Commission order withdrawal of the 800/888 MCSC development charge tariffs, effective 1 June 2002.
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Commission analysis and determinations
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17.
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In Telecom Order CRTC 95-574, 19 May 1995, the Commission determined that the recovery period for the 800/888 MCSC development costs would be six years based on the total 800/888 query demand for the six-year period. The Commission notes that in that order it did not require the ILECs to track the actual capital and expenses incurred in developing and supporting the 800/888 MCSC service.
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18.
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The Commission notes that both TCI and AT&T Canada agreed that the 800/888 MCSC development charges were given interim approval on 20 February 1996 and that, therefore, based on the six-year period, should have been withdrawn on 20 February 2002. The Commission further notes that AT&T Canada agreed with TCI's submission that the Commission could not set rates that were approved on a final basis retroactively since this would create new obligations in respect of past transactions.
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19.
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The Commission notes that while AT&T Canada initially argued for the withdrawal of the 800/888 MCSC development charge retroactive to January 2000, it subsequently requested withdrawal of this charge effective 1 June 2002, coincident with the date that rates were made interim pursuant to Decision 2002-34.
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20.
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In light of the above, the Commission considers it appropriate to withdraw the 800/888 MCSC development charge effective 1 June 2002. Accordingly, the Commission approves the withdrawal of the 800/888 MCSC development charge per query for Aliant Telecom, Bell Canada, MTS and TCI, retroactive to 1 June 2002.
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21.
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With respect to AT&T Canada's request that the Commission establish transparent, auditable procedures that would allow for the timely withdrawal of tariffs levied for the purpose of cost-recovery, the Commission notes that there is currently no general requirement for tracking procedures for the purpose of cost recovery. The Commission considers that, should a tariff be approved for recovery of development costs in the future, tracking procedures could, if warranted, be established on a case-by-case basis.
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22.
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The Commission directs the ILECs to issue revised tariff pages forthwith reflecting the above changes, with an effective date of 1 June 2002.
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23.
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The Commission directs the ILECs to settle the accounts of all customers affected by this rate elimination approved in this decision including rebates, if applicable, forthwith.
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Secretary General
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This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2003-07-10