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Letter
Our File No: 8652-T42-01/01 - 8652-C12-200312265
Ottawa, 14 November 2003
To: Attached Distribution List
Re: Follow-up to 14 July 2003 letter requesting Phase II costing information
By letter dated 11 September 2003 and revised by letter dated 17 September 2003, Bell Canada, Aliant Telecom Inc., and MTS Communications Inc. (collectively, the Companies), provided responses to information requested by Commission staff related to average working fill factors, portfolio expenses and cost and productivity increase factors. Also, by letters dated 11 September 2003, TELUS Communications Inc. (TELUS) and Saskatchewan Communications (Sasktel) provided responses to information requested by Commission staff related to average working fill factors, portfolio expenses and cost and productivity increase factors.
The Companies, TELUS, and Sasktel are also requested to provide responses to the attached interrogatories, serving abridged copies on all parties. The response to these interrogatories are due by 9 January 2004.
Yours sincerely,
Scott Hutton
(Acting) Director General
Competition, Costing and Tariffs
Telecommunications
c.c.: Yvan Davidson CRTC (819) 953-5414
Leon Shufelt CRTC (819) 994-9988
Aliant
1. In TELUS(CRTC)14Jul03-C, Telus indicated that their portfolio level expenses included: Portfolio Product Management, Facility Rental and Settlements, Maintenance and Provisioning, and Other. Category level expenses included Market Management, Network Operations, and Other. Wireline level expenses included Network Operations, Information Technology and Strategic Business Unit Common.
In Appendix 1 to their September 11, 2003 letter responding to the Commission staff's 14 July 2003 letter, Bell Canada identified that their portfolio level expense includes Network Management, Network Provisioning, Manage Markets, Manage Sales, Projects and Solutions Management, Other Business Office Activities, Monitor & Control Network, Operator Service Planning, and SSI activities.
a) Provide the following information: i) the types of activities/functions considered appropriate for inclusion as Portfolio expense (i. e. the management of a portfolio of services), ii) a detailed rationale for each activity/function included explaining why it is relevant to portfolio management, iii) a comprehensive list recommending the types of activities/functions considered appropriate for inclusion in Variable Common Costs, and iv) a detailed rationale for each activity/function included as to why it is relevant to Variable Common Costs.
b) Provide recommendations for determining retail and non-retail portfolio expense factors and identify what service categories are included in each factor where the retail factors would be separately identified for: i) forborne services, ii) non-forborne large business (define), and iii) non-forborne other.
c) Provide recommendations for the number of years of data to use in the development of the various factors discussed above.
2. Provide a complete summary of 2002 operating expense amounts using the categories Direct/Indirect, FCC, and VCC in a format similar to the response to interrogatory TELUS(CRTC)12Oct01-11, Attachment 2. Specifically identify portfolio expenses as a subcategory within Direct/Indirect and provide a detailed description of all expense amounts included in VCC.
Bell Canada
1. In TELUS(CRTC)14Jul03-C, Telus indicated that their portfolio level expenses included: Portfolio Product Management, Facility Rental and Settlements, Maintenance and Provisioning, and Other. Category level expenses included Market Management, Network Operations, and Other. Wireline level expenses included Network Operations, Information Technology and Strategic Business Unit Common.
a) Provide the following information: i) the types of activities/functions considered appropriate for inclusion as portfolio expense (i. e. the management of a portfolio of services), ii) a detailed rationale for each activity/function included explaining why it is relevant to portfolio management, iii) a comprehensive list recommending the types of activities/functions considered appropriate for inclusion in Variable Common Costs, and iv) a detailed rationale for each activity/function included as to why it is relevant to Variable Common Costs.
b) Provide recommendations for determining retail and non-retail portfolio expense factors and identify what service categories are included in each factor where the retail factors would be separately identified for: i) forborne services, ii) non-forborne large business (define), and iii) non-forborne other.
c) Provide numerical examples of the factors discussed in b) using 2002 data from Bell Canada's ABC system.
d) Provide recommendations as to how many years of data to use in the development of the various factors discussed above.
2. Provide a complete summary of 2002 operating expense amounts using the categories Direct/Indirect, FCC, and VCC in a format similar to the response to interrogatory TELUS(CRTC)12Oct01-11, Attachment 2. Specifically identify portfolio expenses as a subcategory within Direct/Indirect and provide a detailed description of all expense amounts included in VCC.
3. On page 12 of 14 of the Attachment to the letter of September 11, 2003, Bell Canada identified the percentage for non-retail of "Manage Markets", based on 2002 expenses, of the amount spent on this activity for retail markets. Provide a detailed derivation of this percentage explaining how the information was gathered to determine this percentage.
4. On page 10 of 14 of the Attachment to it's letter of September 11, 2003, Bell Canada defined the non-retail market: ".as the Carrier Services Group (CSG) market." Provide a detailed derivation of the expense amount used for Demand and Service-Driven expenses for Non-Retail services in the denominator of the equation for the Portfolio Loading Factor for Non-Retail Services. Identify all functions/activities that were used in the derivation of this expense amount.
MTS
1. In TELUS(CRTC)14Jul03-C, Telus identified that their portfolio level expenses include: Portfolio Product Management, Facility Rental and Settlements, maintenance and Provisioning, and Other. Category level expenses include Market Management, Network Operations, and Other. Wireline level expenses include Network Operations, Information Technology and Strategic Business Unit Common.
In Appendix 1 to their September 11, 2003 letter responding to the Commission staff's 14 July 2003 letter, Bell Canada identified that their portfolio level expense includes Network Management, Network Provisioning, Manage Markets, Manage Sales, Projects and Solutions Management, Other Business Office Activities, Monitor & Control Network, Operator Service Planning, and SSI activities.
a) Provide the following information: i) the types of activities/functions considered appropriate for inclusion as portfolio expense (i. e. the management of a portfolio of services), ii) a detailed rationale for each activity/function included explaining why it is relevant to portfolio management, iii) a comprehensive list recommending the types of activities/functions considered appropriate for inclusion in Variable Common Costs, and iv) a detailed rationale for each activity/function included as to why it is relevant to Variable Common Costs.
b) Provide recommendations for determining retail and non-retail portfolio expense factors and identify what service categories are included in each factor where the retail factors would be separately identified for: i) forborne services, ii) non-forborne large business (define), and iii) non-forborne other.
c) Provide recommendations as to how many years of data to use in the development of the various factors discussed above.
2. Provide a complete summary of 2002 operating expense amounts using the categories Direct/Indirect, FCC, and VCC in a format similar to the response to interrogatory TELUS(CRTC)12Oct01-11, Attachment 2. Specifically identify portfolio expenses as a subcategory within Direct/Indirect and provide a detailed description of all expense amounts included in VCC.
Sasktel
1. In TELUS(CRTC)14Jul03-C, Telus identified that their portfolio level expenses include: Portfolio Product Management, Facility Rental and Settlements, maintenance and Provisioning, and Other. Category level expenses include Market Management, Network Operations, and Other. Wireline level expenses include Network Operations, Information Technology and Strategic Business Unit Common.
In Appendix 1 to their September 11, 2003 letter responding to the Commission staff's 14 July 2003 letter, Bell Canada identified that their portfolio level expense includes Network Management, Network Provisioning, Manage Markets, Manage Sales, Projects and Solutions Management, Other Business Office Activities, Monitor & Control Network, Operator Service Planning, and SSI activities.
a) Provide the following information: i) the types of activities/functions considered appropriate for inclusion as portfolio expense (i. e. the management of a portfolio of services), ii) a detailed rationale for each activity/function included explaining why it is relevant to portfolio management, iii) a comprehensive list recommending the types of activities/functions considered appropriate for inclusion in Variable Common Costs, and iv) a detailed rationale for each activity/function included as to why it is relevant to Variable Common Costs.
b) Provide recommendations for determining retail and non-retail portfolio expense factors and identify what service categories are included in each factor where the retail factors would be separately identified for: i) forborne services, ii) non-forborne large business (define), and iii) non-forborne other.
c) Provide recommendations as to how many years of data to use in the development of the various factors discussed above.
2. Provide a complete summary of 2002 operating expense amounts using the categories Direct/Indirect, FCC, and VCC in a format similar to the response to interrogatory TELUS(CRTC)12Oct01-11, Attachment 2. Specifically identify portfolio expenses as a subcategory within Direct/Indirect and provide a detailed description of all expense amounts included in VCC with rationale.
TELUS
1. In Appendix 1 to their September 11, 2003 letter responding to the Commission staff's 14 July 2003 letter, Bell Canada identified that their portfolio level expense includes Network Management, Network Provisioning, Manage Markets, Manage Sales, Projects and Solutions Management, Other Business Office Activities, Monitor & Control Network, Operator Service Planning, and SSI activities.
a) Provide the following information: i) the types of activities/functions considered appropriate for inclusion as portfolio expense (i. e. the management of a portfolio of services), ii) a detailed rationale for each activity/function included explaining why it is relevant to portfolio management, iii) a comprehensive list recommending the types of activities/functions considered appropriate for inclusion in Variable Common Costs, and iv) a detailed rationale for each activity/function included as to why it is relevant to Variable Common Costs.
b) Provide recommendations for determining retail and non-retail portfolio expense factors and identify what service categories are included in each factor where the retail factors would be separately identified for: i) forborne services, ii) non-forborne large business (define), and iii) non-forborne other.
c) Provide recommendations as to how many years of data to use in the development of the various factors/expenses discussed above.
2. Provide a complete summary of 2002 operating expense amounts using the categories Direct/Indirect, FCC, and VCC in a format similar to the response to interrogatory TELUS(CRTC)12Oct01-11, Attachment 2. Specifically identify portfolio expenses as a subcategory within Direct/Indirect and provide a detailed description of all expense amounts included in VCC.
3. a) Provide the 2002 operating expense amounts for each activity identified for portfolio expense, category expense, and network expense.
b) Develop a portfolio expense factor using the data provided in a).
c) Using the portfolio loading factor equation provided by Bell on page 10 of 14 in the Attachment to their September 11, 2003 letter, determine a portfolio factor using 2002 expense information. Also, using the equations provided by Bell in Appendix 2 of their September 11, 2003 letter, determine a separate portfolio factor for retail and non-retail services. It may be necessary to prorate Maintenance & Provisioning activities and facility rentals to determine separate retail and non-retail factors. Provide complete details outlining the derivation of all factors. As well provide the loading factors currently developed and used for those portfolios that do not contain homogenous units of demand.
4. In TELUS(CRTC)14Jul03-D, Page 1 of 3, Telus identified that it does not have generic PIFs for Phase II studies. Identify the PIF Telus intends to use in Phase II studies with respect to retail services, and provide details on how the PIF is determined.
DISTRIBUTION LIST
Ms. Lourdes Clancy
Manager - Regulatory Matters
Aliant Telecom Inc.
Saint John Brunswick Sq., Flr. 10
Saint John, NB E2L 4K2 Fax: (506) 694-2473
Mr. David Palmer
Director, Regulatory Matters
Bell Canada
105, rue Hôtel-de-Ville
6ième étage
Hull, QC J8X 4H7 Fax: (819) 770-7638
Mr. Roy Bruckshaw
Director - Regulatory Affairs
MTS Communications Inc.
333 Main Street - MP19C
PO Box 6666
Winnipeg, MB R3C 3V6 Fax: (204) 775-2560
Ms. Candice Molnar
General Manager
Sasktel - Regulatory Affairs
2121 Saskatchewan Drive
12th Floor
Regina, SK S4P 3Y2 Fax: (306) 791-1457
Mr. Deo Mathura
Director, Regulatory Complaints and Tariffs
TELUS
Floor 21
10020 100 Street NW
Edmonton, Alberta T5J 0N5 Fax: (780) 493-5380
Date Modified: 2003-11-14
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