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Telecom Order CRTC 2003-167
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Ottawa, 30 April 2003
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Bell Canada
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Reference: Tariff Notices 6744 and 6744A
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Rate schedules for primary exchange (local) service and Megalink service
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1.
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The Commission received an application by Bell Canada, dated 16 April 2003 and amended on 17 April 2003, to revise General Tariff items 70, Rate Schedules for Primary Exchange (Local) Service and 5201, Megalink Service, in order to meet its price cap obligations with respect to services in the other capped basket, pursuant to 2002 Annual price cap filing, Telecom Decision CRTC 2003-15, 18 March 2003 (Decision 2003-15) and 2002 Annual price cap filing - Erratum: Telecom Decision CRTC 2003-15, Telecom Decision CRTC 2003-15-1, 15 April 2003.
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2.
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In its application, Bell Canada proposed to:
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- decrease the monthly rate for Equivalent service from $3.85 per line per month to $2.95 per line per month for all rate bands except band G; and
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- reduce the rates charged for the public switched telephone network (PSTN) connectivity component of Megalink service under both the monthly rate and the minimum contract period options by up to $3.00 per month per connectivity.
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3.
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Bell Canada noted that, in Decision 2003-15, the Commission had directed the company to file tariff revisions for services in the other capped services basket further to those approved in Decision 2003-15. Bell Canada stated that the tariff revisions in this application would ensure that its price cap obligations are met with respect to services in the other capped services basket.
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4.
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The Commission notes that for a new service or a rate decrease, the proposed rates must be supported by and satisfy an imputation test. The Commission considers that the imputation test is the accepted method, under the current regulatory regime, of determining whether the proposed rates would be anti-competitive.
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5.
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The Commission finds that the proposed rates for the PSTN connectivity component of Megalink service and Equivalent service pass the imputation test.
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6.
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In Regulatory framework for second price cap, Telecom Decision CRTC 2002-34, 30 May 2002, the Commission applied a number of constraints to the rates for services in the other capped services basket, in order to provide customers of those services with price protection. They include:
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- a basket constraint, operating through the service basket limit (SBL) for that basket, which must be updated annually by the rate of inflation less the productivity offset;
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- a rate element constraint limiting rate increases for a service to 10% per year; and
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- a provision, in order to prevent an incumbent local exchange carrier from decreasing rates in more competitive areas and increasing rates in less competitive areas of the same band, that rates for other capped services would not be permitted to be further de-averaged within a band.
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7.
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The Commission finds that the proposed tariff revisions comply with the basket constraint requirement that the service basket index not exceed the SBL for the other capped services basket. As Bell Canada proposed no price increase, the rate element constraint limiting rate increases for a service to 10% per year is not pertinent.
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8.
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The Commission also finds that the proposed tariff revisions comply with the Commission's prohibition, set out in Decision 2002-34, against further de-averaging of rates for other capped services within a band.
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9.
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Accordingly, the Commission is satisfied that the proposed tariff revisions are consistent with the pricing constraints established in Decision 2002-34.
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10.
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The Commission notes that rebates will be provided to all affected customers to reflect the change in rates retroactive to 1 June 2002.
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11.
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The Commission approves on an interim basis, effective 1 June 2002,Bell Canada's application.
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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: www.crtc.gc.ca
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Date Modified: 2003-04-30