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Telecom Decision CRTC 2003-54
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Ottawa, 13 August 2003
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Part VII application by Shaw Communications Inc. requesting a proceeding to consider the rates for Type B, C and D conduit provided by TELUS Communications Inc.
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Reference: 8661-S9-01/01
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In this decision, the Commission varies that part of Order CRTC 2000-13,
18 January 2000, in which it approved the elimination of the distinct rates for TELUS Communications Inc.'s (TCI) Type B, C and D conduit and directs TCI to issue revised tariff pages reinstating the definitions and rates for Type B, C and D conduit given final approval in Access to telephone company support structures, Telecom Decision CRTC 95-13, 22 June 1995, effective 17 February 2000.
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1.
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The Commission received an application pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, dated 20 December 2001, from Shaw Communications Inc. (Shaw) requesting that the Commission initiate a proceeding to consider rates for access to Type B, C and D conduit owned by TELUS Communications Inc. (TCI) and effective immediately, make TCI's rates for Type B, C and D conduit interim, pending completion of the proceeding to establish appropriate rates for these services.
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2.
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Comments were received from TCI, Delta Cable Communications Ltd. (Delta Cable), on behalf of itself and Coast Cable Communications Ltd. (Coast Cable), and the Canadian Cable Television Association (CCTA) on 21 January 2002. TCI filed comments in response to the CCTA's comments on 31 January 2002. Shaw submitted reply comments on 11 February 2002.
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Background
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3.
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The Commission, in British Columbia Telephone Company, Tariff For The Use Of Support Structures By Cable Television Licensees, Telecom Decision CRTC 78-6,
28 July 1978, approved different rates for Type A and B conduit for BC TEL (now TCI). Conduit supplied, installed, owned, and maintained entirely by and at the expense of BC TEL was classified as Type A. Conduit supplied, owned, and maintained by and at the expense of BC TEL, but installed by BC TEL at the expense of the developer was classified as Type B. The Commission stated that in approving different rates, it was satisfied that the costs of providing support structure services and the value of these services to the cable licensees differed depending on the support structures employed.
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4.
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The Commission approved the introduction of rates for Type C and D conduit in Telecom Order CRTC 81-206, 7 May 1981, and Telecom Order CRTC 83-228, 8 April 1983, respectively. Conduit owned and maintained by and at the expense of BC TEL, but supplied and installed by BC TEL at the expense of the developer was classified as
Type C. Type C conduit applied only in the area formerly served by Okanagan Telephone Company. Conduit owned and maintained by BC TEL, but supplied and installed by and at the expense of the developer was classified as Type D. Subsequently, the Commission approved periodic rate increases in BC TEL's conduit rates in a number of decisions.
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5.
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The Commission, in 1993, initiated a review of the use and sharing of costs of telephone company support structures in Review of the use and sharing of costs of telephone company support structures, Telecom Public Notice CRTC 93-50, 17 August 1993. In Access to telephone company support structures, Telecom Decision CRTC 95-13,
22 June 1995 (Decision 95-13), the Commission set out the basic principles regarding access to the support structures, including poles, strand and conduit, of a number of telephone companies, including BC TEL (the telephone companies). The Commission, in Decision 95-13, approved a uniform national monthly rate of $2.25 per 30 metres for conduit and directed the telephone companies to issue tariff pages implementing the decision.
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6.
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The Commission, in Decision 95-13, noted that BC TEL's existing tariffs for conduit included different rates for each of Type A, B, C and D conduit. The Commission approved the monthly rate of $2.25 per 30 metres only in relation to Type A conduit in BC TEL's territory. The Commission directed BC TEL to file proposed revised tariffs for its Type B, C and D conduit, and to provide its justification for each of the rate levels proposed. In the meantime, the Commission granted final approval to the following monthly rates for Type B, C and D conduit, which had been granted interim approval in Telecom Order CRTC 94-996, 26 August 1994:
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$1.61 per 30 metres per cable per month;
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$0.69 per 30 metres per cable per month; and
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$1.12 per 30 metres per cable per month.
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7.
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BC TEL, in response to the Commission's direction in Decision 95-13 to file proposed revised tariffs, filed Tariff Notice 3336 (TN 3336) on 24 July 1995. In TN 3336, BC TEL requested that the Commission approve the elimination of the distinction with respect to its Type B, C and D conduit and adopt a uniform monthly rate of $2.25 per 30 metres per cable for all of its conduit. In support of its proposal, BC TEL argued that, based on the framework established in Decision 95-13, it considered that costs were no longer a material consideration and a uniform rate should apply to all four categories of its duct facilities. The CCTA objected to this argument and submitted that BC TEL should not be permitted to charge the same amount for conduit that it gets free from a developer as it does for conduit that it pays for and installs itself.
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8.
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In Telecom Order CRTC 96-1484, 18 December 1996 (Order 96-1484), the Commission considered that the uniform rate proposed by BC TEL in TN 3336 may not be appropriate and deferred its disposition of TN 3336. The Commission determined that it would be appropriate to investigate the current demand for BC TEL's Type B, C and D conduit and the circumstances associated with the provisioning of each type before disposing of the proposal in TN 3336.
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9.
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The Commission, in Order 96-1484, also considered comments by interested parties on the tariff pages issued by the telephone companies to implement Decision 95-13. In their comments, a number of interested parties submitted that particular terms and conditions in some of the tariff pages did not correctly implement Decision 95-13. The cable companies and their associations also noted the considerable variations in the wording in the tariffs and expressed a desire for uniform wording for tariffs nation-wide.
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10.
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In Order 96-1484 the Commission corrected certain erroneous interpretations of Decision 95-13 reflected in the tariffs the Commission had directed the telephone companies to issue in Decision 95-13. The Commission, in Order 96-1484, directed the telephone companies to issue revised tariff pages reflecting both the monthly rates established in Decision 95-13 and its determinations with respect to the correct interpretation of that decision. The Commission also established a consultative process between the Stentor Resource Centre Inc. (Stentor), on behalf of most of its members, including BC TEL, Télébec, Québec-Téléphone and TELUS Communications (Edmonton) Inc., the Competitive Telecommunications Association (the CTA) and the CCTA, on behalf their members, to develop a mutually acceptable model support structure agreement and model support structure tariff. The Commission directed Stentor to report back to the Commission on behalf of those who participated in the consultative process. Stentor and its member companies undertook, concurrently with the consultative process, to develop and file with the Commission proposed common support structure tariffs.
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11.
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Stentor, pursuant to Order 96-1484, on 17 April 1997, filed with the Commission a Joint Report on the outcome of the consultations. The Joint Report included a Model Support Structure Tariff (the Model Tariff) and Model Support Structure License Agreement (SSA). The Model Tariff included the uniform national monthly rate for Type A conduit approved in Decision 95-13 as well as the definitions and rates for Type B, C and D conduit that applied in BC TEL's operating territory.
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12.
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Stentor, pursuant to its undertaking to concurrently develop and file proposed common support structure tariffs, on 4 June 1997, filed Tariff Notice 485 (TN 485), on behalf of a number of telephone companies including BC TEL, to give effect to the results of the consultations. TN 485 proposed a National Services Tariff and SSA that would migrate support structure services from the telephone companies' tariffs to the National Services Tariff. TN 485 did not include the provisions and rates for Type B, C and D conduit in BC TEL territory that had been included in the Model Tariff. Rather, TN 485 included a single monthly rate of $2.25 per 30 metres per cable for conduit and a single definition of conduit:
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A reinforced passage or opening in, on, over or through the ground or watercourses capable of containing communications facilities and includes main Conduits, laterals to poles and into buildings, underground dips, short sections of Conduit under roadways, driveways, parking lots and similar Conduit installations but excludes Manholes, central-office vaults or other access points and Conduit entering the central-office vault.
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13.
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Stentor, in TN 485, proposed that all related existing tariffs, licences, agreements or contracts be superseded by the National Services Tariff and SSA and notified the Commission that coincident with the filing of TN 485 or shortly thereafter the telephone companies would be filing to remove support structure services from their respective tariffs.
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14.
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BC TEL, on 4 June 1997, filed Tariff Notice 3637 (TN 3637) seeking Commission approval of revisions to its General Tariff, withdrawing support structure services, to be superseded by the National Services Tariff and SSA upon Commission approval of
TN 485. In TN 3637 BC TEL also requested that the proposed tariff set out in TN 3336 be subsumed into the proceeding to consider TN 485 and that BC TEL's rates for
Type A, B, C and D conduit be withdrawn effective the date of approval of TN 485.
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15.
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The Commission, in Rates set for access to telephone companies' support structures, Order CRTC 2000-13, 18 January 2000 (Order 2000-13), approved the National Services Tariff and SSA, subject to a number of specific amendments that are not relevant to this application. The Commission directed that tariff pages and SSA pages be issued within 30 days in accordance with its prescribed changes. The Commission also approved, effective coincident with the date on which the tariff pages issued pursuant to that order came into effect, a number of Tariff Notices for the withdrawal of support structure tariffs including TN 3637.
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16.
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The National Services Tariff CRTC 7400 - Item 901, Support Structure Service, came into effect as of 17 February 2000.
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17.
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Shaw, shortly after the release of Order 2000-13, notified Commission staff of its concerns with regard to the matter of TCI's rates for Type B, C and D conduit. In response, Commission staff initiated discussions between the parties, including Shaw and TELUS Communications (B.C.) Inc. (TCBC) (now TCI), in an attempt to resolve the issues related to these rates without the need for Commission intervention. Commission staff participated in these discussions. Parties were not successful in resolving the issues. Shaw subsequently filed its application with the Commission.
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The application
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18.
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In its application, Shaw requested that the Commission initiate a proceeding to consider rates for access to Type B, C and D conduit owned by TCBC, now TCI.
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19.
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Shaw submitted that the issue of appropriate rates for Type B, C and D conduit provisioned by TCI had been outstanding since Decision 95-13. Shaw submitted that it was clear from Order 96-1484 and the subsequent record of the proceeding that led to the approval of the National Services Tariff in Order 2000-13 that the monthly rate of $2.25 per 30 metres was only intended to apply to TCI's Type A conduit. Shaw argued that the final rates approved for Type B, C and D conduit in Decision 95-13 had remained in place.
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20.
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Shaw further argued that a monthly rate of $2.25 per 30 metres for Type B, C and D conduit was not just or reasonable as required by the Telecommunications Act (the Act). Shaw submitted that the much lower rates previously approved for access to Type B, C and D conduit reflected the fact that TCI's capital investment in Type B, C and D conduit was considerably less for Type B than for Type A and almost negligible for Type C and D. Shaw argued that, based on the previous tariff filings, the most recent available costing information established a prima facie case that a monthly rate of $2.25 for Type B, C and D conduit was neither just nor reasonable. Shaw further argued that, even had the Commission intended, in Order 2000-13, to approve the withdrawal of the tariff rates for Type B, C and D conduit thereby implying a single rate for all types of conduit, it did not have sufficient costing evidence before it in that proceeding to do so.
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Comments on the application
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CCTA
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21.
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The CCTA stated that it concurred with Shaw that in approving TN 485 and TN 3637 the Commission approved a monthly rate for Type A conduit of $2.25 per 30 metres, but did not confirm the elimination of the BC TEL classification of duct facilities.
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22.
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The CCTA submitted that, in the alternative, if the Commission considered that it had approved, in Order 2000-13, the withdrawal of the previously approved tariffs for Type B, C and D conduit, this would be an appropriate case for the Commission to review and vary Order 2000-13, effective the date of the Order, on the grounds that there was substantial doubt as to the correctness of the decision. The CCTA argued that there was ample evidence that any such approval by the Commission in Order 2000-13 was inadvertent, thereby raising a substantial doubt as to the correctness of the decision.
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23.
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The CCTA argued, alternatively, that any such approval was prima facie inconsistent with the requirement in section 27(1) of theAct that all rates be just and reasonable and as such constitutes an error of law, raising a substantial doubt as to the correctness of the decision.The CCTA noted that no costing evidence was provided with respect to Type B, C and D conduit in the proceeding leading to Order 2000-13. The CCTA argued that without the specific evidence on the costs and demand associated with the various types of conduit, which the Commission acknowledged in Decision 95-13 and Order 96-1484 to be necessary to a determination of just and reasonable rates, there was no basis on which to conclude that the appropriate rate for these types of conduit should be the same as the rate for Type A conduit.
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24.
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The CCTA referenced the Commission's statement in Guidelines for review and vary applications, Telecom Public Notice CRTC 98-6, 20 March 1998 (Public Notice 98-6) that it would normally only entertain applications for review and vary within six months of the date of the original decision. The CCTA submitted that to restrict the availability of an appropriate remedy merely because more than six months has passed since the date of the original decision would be particularly unfair in circumstances such as those where Commission staff had urged the parties to negotiate a solution prior to Shaw seeking Commission intervention. The CCTA noted that parties eventually reached an impasse, resulting in Shaw filing its application to the Commission.
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Delta Cable
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25.
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Delta Cable supported Shaw's application. Delta Cable quantified the impact of a monthly rate of $2.25 per 30 metres for all conduit on the cost of operations for both Delta Cable and Coast Cable. Delta Cable filed TCI invoices, dated 25 September 2001, that provided a breakdown by metres of Type A, B, C and D conduit rented for the period
1 October 2001 to 31 December 2001. Based on the invoices, Delta Cable stated that for it and Coast Cable a monthly rate of $2.25 per 30 metres for Type B, C and D conduit increased their costs by approximately $66,000.00 per year.
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TCI
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26.
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TCI submitted that there was not substantial doubt as to the correctness of Order
2000-13 and the Commission should not entertain Shaw's application. TCI submitted that in Order 2000-13 the Commission had dealt with the issue of appropriate rates for Type B, C and D conduit and had approved, on a final basis, a uniform national monthly rate of $2.25 per 30 metres for all conduit.
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27.
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TCI's submission in response to Shaw's argument that TCI's capital investment in Type B, C and D conduit was considerably less for Type B than for Type A and almost negligible for Type C and D was that as the material cost of the conduit itself was relatively low and the costs incurred by TCI were apportioned over fewer ducts per running metre in subdivision conduit than main way conduit, the proportionate costs of conduit identified as Type B, C and D did not differ significantly from the costs associated with the conduit identified as Type A. TCI also noted that there was no physical difference as between the various types of conduit.
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28.
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TCI argued that the evidence demonstrated that the withdrawal of the separate rates for Type B, C and D conduit in Order 2000-13 had not been inadvertent. TCI further argued that the Commission determinations in Order 2000-13 were clear and unambiguous in relation to the approval of TN 485 and TN 3637 and that the Commission had specifically stated in Order 2000-13 that the record was sufficient for it to reach conclusions on the outstanding issues, including the matter of rates for access to conduit in British Columbia. TCI argued that the Commission's findings and determinations in Order 2000-13 and earlier decisions and orders were clearly in keeping with the uniform rating approach endorsed by the Commission in Decision 95-13.
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29.
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TCI argued, with respect to the timeframe in which Shaw filed its application, that it should not be open to parties to challenge the correctness of a Commission decision some two years following the issuance of the decision in question, absent exceptional circumstances. In this regard, TCI noted the Commission's statement in Public Notice 98-6 that given the public interest in regulatory certainty, review and vary applications should generally be filed within six months of the Commission's original decision. TCI submitted there has not been any fundamental change in circumstances since the date of Order 2000-13, nor any other exceptional circumstances that would justify entertaining an application to review and vary Order 2000-13 at this late date.
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30.
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TCI submitted that it would be an exceedingly difficult and costly process to determine where the particular types of conduit existed and to implement an appropriate tracking system on a forward going basis. TCI stated that it had not maintained a billing record of cable metres per conduit type since mid-2000 and had no primary record that would identify conduit as either Type A, B, C or D. TCI stated that "[a]ny bills that continue to reflect different conduit 'types' simply reflect the preservation of the bill 'format' (and apply the uniform rate to all conduit), but do not reflect updated information regarding conduit 'types.'
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31.
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TCI submitted that the Act does not empower the Commission to retroactively adjust or change rates once such rates have been approved by the Commission on a final basis. Further, TCI submitted that, as a matter of regulatory policy, rates approved on a final basis should not be subject to retroactive adjustment. In support of this submission, TCI cited 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 (Order 2001-137), in which the Commission stated the following:
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18. The Commission considers that modifying rates retroactively, which have previously granted final approval, would create uncertainty as to the finality of Commission decisions.
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19. In the Commission's view, this would potentially give rise to frequent changes in rates, after the fact, giving rise to further uncertainty.
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20. Accordingly, the Commission considers that, as a matter of regulatory policy, rates approved on a final basis should not generally be subject to adjustment.
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Reply comments
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32.
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Shaw reiterated its position that the issue of rates for Type B, C and D conduit had not been addressed in Order 2000-13 and the rates approved in Decision 95-13 had remained in place. Shaw disputed TCI's submission that the costs of the various types of conduit did not differ significantly. Shaw argued that TCI had not provided any compelling basis to justify an increase in the rates for Type B, C and D conduit or for concluding that an investigation of demand and provisioning information was no longer required. Shaw further argued that the underlying capital costs to the telephone companies of provisioning conduit remained material to the consideration of the appropriate rates for these facilities. Shaw submitted that in establishing a national rate for Type A conduit and some uniformity in the wording of support structure tariffs and agreements the Commission had not divorced support structure rates from costs in Decision 95-13. Shaw submitted, to the contrary, the Commission had expressly determined that rates should be based on Phase II costs.
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33.
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Shaw stated that it agreed with the CCTA that, in the alternative, if the Commission did approve the withdrawal of TCI's rates for Type B, C and D conduit in Order 2000-13, it would be appropriate for the Commission to review and vary Order 2000-13, so as to restore the rates for Type B, C and D conduit approved in Decision 95-13, effective
17 February 2000. Shaw further stated that it concurred with the CCTA that the only conclusion consistent with the record and the Commission's conclusions on the matter of rates for Type B, C and D conduit in Decision 95-13 and Order 96-1484 was that any approval must have been inadvertent. Shaw submitted that in light of the Commission's express determination in Order 96-1484 that an investigation of the demand and provisioning would be necessary to assess rates for these facilities, in the absence of any new evidence before the Commission in respect of this matter in the Order 2000-13 proceeding and the absence of any commentary on the issue in Order 2000-13, there was substantial doubt as to the correctness of any approval of the withdrawal of TCI's rates for Type B, C and D conduit in Order 2000-13.
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34.
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Shaw submitted that with respect to the timeframe for filing its application it had consistently pursued this matter in a timely manner. Shaw noted that it had intervened in respect of TN 485 and TN 3637 and, amongst other matters, had urged the Commission to initiate an investigation of provisioning and demand for Type B, C and D conduit referenced in Order 96-1484. Shaw stated that immediately following the release of Order 2000-13 it had spoken with Commission staff regarding the outstanding issue of rates for Type B, C and D conduit. Shaw further stated that at Commission staff's request it had contacted TCI in May 2000 to discuss the issues. Shaw submitted that TCI had been aware of Shaw's position from the outset and had not been prejudiced in any way by the delay. Shaw further submitted that, conversely, under TCI's approach, Shaw would have been severely prejudiced because it had attempted at the request of Commission staff to initially resolve this matter without Commission intervention. Shaw argued that in these circumstances it would be highly inequitable to bar a review and vary application simply because more than six months has elapsed since Order 2000-13 was issued.
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35.
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Shaw, in response to TCI's argument that it would be a difficult and costly process to implement a tracking system for the various types of conduit, filed a copy of a 25 September 2001 TCI invoice to Shaw that showed a breakdown of Type A, B, C and D conduit provided by TCI to Shaw. Shaw submitted that the invoice evidenced that TCI had maintained historical records of existing Type A, B, C and D conduit used by licensees, accurate to mid-2000, when TCI began recording all new conduit used by licensees as Type A conduit. Shaw stated that it was important to note that no new
Type B conduit has been placed since the beginning of 1981.
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36.
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Shaw submitted that TCI invoices since mid-2000 contained the information necessary to break out new Type A and D conduit leased since mid-2000. These invoices provided a project-by-project breakdown of any new conduit occupied by a licensee in the last billing period. Shaw submitted that it was a relatively simple matter to determine whether or not new conduit leased since mid-2000 was developer-supplied (Type D conduit) or
TCI-supplied (Type A conduit) in each of the itemized projects. Shaw stated that the attachments to the TCI invoices contain information entries such as 'NETWORK #' and 'LOC_NAM' that corresponded directly with network number and exchange information recorded on signed Underground Telephone Service Agreements between TCI and developers. Shaw submitted that TCI could add up the number of route metres recorded against each development related NETWORK # since mid-2000 to calculate the total number of route metres of Type D conduit occupied since mid-2000. Shaw submitted that it would be a relatively simple matter for TCI to review its developer agreements and invoices since mid-2000 to update its historical records for the period from mid-2000 to the present.
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37.
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Shaw submitted that the Commission has the authority to review and vary the rates established in Order 2000-13 effective 17 February 2000. Shaw submitted that as a matter of policy, rates approved on a final basis should not generally be subject to adjustment, however, in unusual or exceptional cases the Commission should adjust a final rate where a review and vary of the rate-setting decision is found to be appropriate. In Shaw's submission, exceptional circumstances in this case clearly merit retroactive reinstatement of the rates for Type B, C and D conduit approved in Decision 95-13.
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Commission analysis and determination
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38.
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The Commission agrees with TCI's interpretation of Order 2000-13 as approving the withdrawal of the distinct rates for Type A, B, C and D conduit and as applying a uniform monthly rate of $2.25 per 30 metres to all TCI conduit. The Commission accordingly turns to the issues raised by the request that it review and vary Order 2000-13.
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The timeframe for filing the application
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39.
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Pursuant to Public Notice 98-6, the Commission will not generally consider applications made pursuant to section 62 of the Act filed after six months of the Commission's original decision, other than in exceptional circumstances and where the Commission is satisfied that there were good reasons for the delay. The Commission considers that the latter criteria have been met in this case.
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40.
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The Commission notes that Shaw notified Commission staff within 15 days of the issue of Order 2000-13 and notified TCI in May 2000 of its concerns with regard to the matter of TCI's rates for Type B, C and D conduit. Commission staff initiated discussions amongst the parties that continued into 2001. The parties to those discussions were unable to reach an agreement, and as a result, Shaw filed this application to bring the matter formally before the Commission. The Commission considers that these circumstances justified Shaw's delay in filing its application.
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Substantial doubt as to the correctness of approving the withdrawal
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41.
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In Public Notice 98-6, the Commission indicated that it would exercise its discretion to review and vary a telecommunications decision under section 62 of the Act where an applicant demonstrates that there is substantial doubt as to the correctness of the original decision.
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42.
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The Commission notes that historically the support structure tariffs of BC TEL contained a tiered rate structure for various categories of conduit. The conduit classification reflected different installation arrangements between BC TEL and developers. For example, while Type A conduit was conduit supplied and installed entirely by and at the expense of
BC TEL, Type D conduit was conduit supplied and installed by and at the expense of the developer. The different rates for Type B, C and D conduit reflected the different circumstances surrounding the initial installation and the fact that BC TEL's per unit installation costs for these types of conduit were less than those for Type A.
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43.
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In Decision 95-13 the Commission approved distinct rates for Type B, C and D conduit on a final basis and directed BC TEL to file justification for further changes in the rate levels.
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44.
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The Commission notes that in this proceeding TCI submitted that a uniform rate for all of its conduit was in keeping with the uniform approach endorsed by the Commission in Decision 95-13. The Commission considers that its approval of the concept of uniform national support structure rates in Decision 95-13 related to facilities provisioned in a relatively similar manner by the telephone companies for which the national rate was approved. In relation to conduit, the Commission approved a national rate for conduit provisioned in a relatively consistent manner by all of the relevant telephone companies. The Commission notes that the conduit provisioned by BC TEL in a relatively consistent manner was its Type A conduit.
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45.
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In Order 96-1484 the Commission indicated it was not satisfied by BC TEL's argument that costs were no longer a material consideration with respect to the appropriate rates for Type B, C and D conduit, and determined that it would be appropriate to investigate the demand for Type B, C and D conduit and the specific circumstances under which each Type was provisioned, before considering the company's request that there be a uniform rate for all of its conduit.
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46.
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The Commission notes that Stentor, in asking the Commission to bring the issue of rates for BC TEL's B, C and D conduit into the scope of the proceeding to consider TN 485, did not provide any new evidence or argument in favour of the elimination of the various types of conduit. Moreover, although the Commission had determined that, in considering the appropriate rates for Type B, C and D conduit, it would be appropriate to investigate the demand and the specific provisioning circumstances for each type, neither Stentor nor BC TEL provided any such information, nor did it form part of the record of the proceeding leading to Order 2000-13. The distinct rates for Type B, C and D conduit were thus withdrawn in the absence of evidence that the demand for these facilities and the circumstances of their provisioning were sufficiently similar to those for Type A conduit to justify a uniform rate.
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47.
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The Commission finds that, in the absence of this information, it has never been demonstrated that a rate of $2.25 for Type B, C and D conduit is just and reasonable as required by section 27 of the Act. The Commission concludes that, in the circumstances, there is substantial doubt as to the correctness of its approval of the withdrawal of the distinct rates for Type B, C and D conduit and the approval of a uniform monthly rate of $2.25 per 30 metres for all types of TCI's conduit.
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48.
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The Commission notes that, based on information provided by parties to this proceeding, the withdrawal of the distinct rates for Type B, C and D conduit would significantly impact the cost of operations of the users of these facilities. Based on the 25 September 2001 TCI invoice filed by Shaw in this proceeding, the Commission estimates that a monthly rate of $2.25 per 30 metres for Type B, C and D conduit would increase Shaw's operating costs by approximately $1 million per year. Such a rate would likely increase the combined operating costs of Delta Cable and Coast Cable by approximately $66,000.00 per year. The Commission considers that the corresponding increase in the revenues TCI received would result from charging a rate that is not just and reasonable. It would appear from the record of this proceeding that TCI has not in fact been collecting the increased amounts.
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49.
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The Commission concludes that, in these circumstances, it is appropriate to vary its original decision insofar as Type B, C and D conduit is concerned.
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50.
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The Commission notes TCI's submission that it has no primary record that would identify conduit as Type A, B, C or D. However, TCI's submission that it has not maintained a billing record of cable metres per conduit type since mid-2000 suggests that it has such a record accurate to mid-2000.
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51.
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With respect to changes to in-service metres since mid-2000, the Commission notes
that the record of route metre changes attached to the invoices filed by Shaw and Delta Cable provides information such as 'NETWORK #' and 'LOC_NAM' that can be
cross-referenced with records such as TCI's Underground Telephone Service Agreements with developers and "As-built Maps." These records should enable TCI to identify the type of conduit occupied by licensees since mid-2000 and to implement a tracking system on a going forward basis. The Commission considers that reinstating separate billing for these facilities should not be an unduly difficult or costly process for TCI.
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52.
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The applicant in the present case has requested that the Commission's decision be effective, as of 17 February 2000, the date the withdrawal of the rates for Type B, C and D conduit came into effect.
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53.
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While the Commission remains of the view, set out in Order 2001-137, that "as a matter of regulatory policy rates approved on a final basis should not generally be subject to adjustment", it also considers that there are circumstances where to fail to make an exception would be to cause an injustice to an applicant. The Commission considers that such circumstances are present in this case. While the Commission also remains concerned about the uncertainty that retroactive rate adjustments can cause to carriers, this concern is attenuated in the present case by the fact that it was brought to TCI's attention in May 2000 that the rates for Type B, C and D conduit were at issue.
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54.
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Accordingly, the Commission varies that part of Order 2000-13 in which it approved the proposal in TN 3637 to eliminate the definitions and distinct rates for TCI's Type A, B, C and D conduit and introduce a uniform definition and monthly rate of $2.25 per 30 metres for all of TCI's conduit, so as to restore the definitions and distinct rates that were in place prior to that decision. The Commission directs TCI to issue forthwith revised tariff pages, reinstating the definitions and the rates for Type A, B, C and D conduit in its serving area in British Columbia given final approval in Decision 95-13, effective 17 February 2000.
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55.
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The Commission directs TCI to include the necessary justification for the rate levels proposed in the event that it files an application proposing rate changes for Type B, C and D conduit in its serving territory in British Columbia. Any such justification should
(a) provide the current demand for TCI's Type B, C and D conduit, (b) describe the specific circumstances under which each type is provisioned, and (c) explain why the circumstances which led to the separate conduit rates for Types B, C and D conduit would no longer apply.
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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: 2003-08-13
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