ARCHIVED - Telecom Order CRTC 2003-149

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Telecom Order CRTC 2003-149

Ottawa, 11 April 2003

La Compagnie de Téléphone de St-Victor

Reference: Tariff Notice 23

Residential and business primary exchange services


The Commission received an application by La Compagnie de Téléphone de St-Victor (St-Victor), dated 22 November 2002, to revise its General Tariff item 2.1.3, Rate Schedules for Primary Exchange Service and Extended Area Service, in order to increase the monthly rates as follows:

- residential individual line from $17.63 to $19.63;

- business individual line from $38.38 to $39.15;

- business push button line from $39.40 to $40.19; and

- business PBX line service from $45.62 to $46.43.


The Commission received no comments with respect to the application.


In Regulatory framework for the small incumbent telephone companies, Decision CRTC 2001-756, 14 December 2001 (Decision 2001-756), the Commission grouped services into four separate service baskets each with their own pricing constraints. The Commission assigned residential primary exchange service (PES) to the first service basket and business PES, including both single and multi-line, to the second service basket.


In Decision 2001-756, the Commission determined the small incumbent local exchange carriers (ILECs) could increase monthly residential PES rates to $22.75, where residential PES rates were between $18.75 and $22.74. For those small ILECs whose residential PES rates were below $18.75, the Commission limited the monthly residential PES rate increase to a maximum of $4.00 per year.


In Decision 2001-756, the Commission determined that, in the absence of any exogenous factors, the rates for residential and business PES would be permitted to increase each year by no more than inflation. The Commission noted that it expected that rate increases on any individual rate element in these two baskets of services should generally be proposed once in a 12-month period.


In Decision 2001-756, the Commission also determined that the Gross Domestic Product Implicit Chain Price Index (GDP-PI) published by Statistics Canada was to be used by the small ILECs and directed that the GDP-PI inflation factor be measured using year-to-year changes for the purposes of calculating the inflation factors.


In Telecom Order CRTC 2002-268, 4 July 2002, the Commission approved an application by St-Victor for a residential individual line monthly rate increase of $1.00 and inflationary increases to its rates for business individual line, business push button line and business PBX line services effective the date of the order. Accordingly, the Commission would generally not consider a further rate increase to the above services with an effective date prior to 4 July 2003.


The Commission notes, however, that in Decision 2001-756, it determined that unused portions of a possible rate increase for any given year could be accumulated and requested in a following year.


The Commission notes that St-Victor did not request the allowable $4.00 rate increase in 2002 for its residential individual line service.


In light of the above, the Commission considers it reasonable to make an exception to its general policy of one rate increase per 12-month period, by allowing St-Victor to raise its rate for residential line service by $2.00 as of the date of this order.


The Commission notes that Decision 2001-756 became effective 1 January 2002 and the majority of small ILECs received annual rate increases for business services between 1 January 2002 and 1 April 2002.


The Commission further notes that St-Victor did not receive a business PES rate increase until 4 July 2002, which resulted in forgone revenue for the company. Accordingly, the Commission considers it reasonable to make an exception to its general policy of one rate increase per 12-month period, by allowing St-Victor to raise its rates for business PES by the rate of inflation as of the date of this order.


The Commission notes however that, for business services, St-Victor utilized an inflation rate of 2% in the calculation of its permissible inflationary rate increases. The Commission also notes that the GDP-PI inflation factor to be used for the purposes of calculating the permissible rate increases due to inflation, for the year 2002, was 1.24%. Accordingly, the Commission considers that the increases proposed by St-Victor for business services should be reduced to reflect the inflation rate of 1.24%.


In light of the above, the Commission approves the monthly residential individual line rate of $19.63, as proposed by St-Victor. Further, the Commission approves a monthly rate of $38.86 for business individual line service, $39.89 for business push button line service and $46.19 for business PBX line service. The revisions take effect as of the date of this order.


St-Victor is to issue a revised tariff page forthwith to reflect these changes.

Secretary General

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Date Modified: 2003-04-11

Date modified: