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Telecom Order CRTC 2003-27
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Ottawa, 15 January 2003
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Téléphone Guèvremont inc. - Final 2001 Carrier Access Tariff and Network Access Tariff
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Reference: Tariff Notice 29
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In this order, the Commission approves, Téléphone Guèvremont inc.'s final 2001 Carrier Access Tariff which consists of a contribution rate of $0.00 per minute and a direct toll rate of $0.0132 per minute and final 2001 Network Access Tariff of $11.9581 per quarter mile.
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1.
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The Commission received an application by Téléphone Guèvremont inc. (Guèvremont) dated 23 July 2002, for approval of its final 2001 Carrier Access Tariff (CAT) and Network Access Tariff (NAT).
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2.
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The methodology for the calculation of the CAT and NAT rates for the small incumbent local exchange carriers (ILECs) was determined in Regulatory framework for the independent telephone companies in Quebec and Ontario (except Ontario Northland Transportation Commission, Québec-Téléphone and Télébec ltée), Telecom Decision CRTC 96-6, 7 August 1996 (Decision 96-6) and was modified in Review of contribution regime of independent telephone companies in Ontario and Quebec, Telecom Decision CRTC 99-5, 21 April 1999 (Decision 99-5).
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3.
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Guèvremont proposed the following contribution and direct toll amounts, total number of originating and terminating toll conversation minutes, including direct access line (DAL) minutes, and calculated the associated rates for its 2001 CAT:
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Amount
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Conversation + DAL Minutes
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Rate/Minute
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Contribution
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$0.00
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22,288,528
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$0.00
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Direct toll
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$284,570
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21,488,528
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$0.0132
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4.
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Guèvremont proposed the following network component amount and total number of quarter mile segments and calculated the associated rate for its 2001 NAT:
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Amount
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Quarter mile segments
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Rate/Quarter mile
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Network component
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$122,212
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10,220
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$11.9581
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5.
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The Commission received no comments with respect to this application.
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Commission analysis and determination
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6.
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In determining the final CAT rates, based on the methodology determined in Decisions 96-6 and 99-5, the Commission examined the reasonableness of the amounts required and the number of originating and terminating toll conversation minutes and DAL minutes.
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7.
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The Commission notes that Guèvremont reported the total number of originating and terminating toll conversation and DAL minutes transported by long distance providers, Bell Canada, Maskatel inc. (Maskatel), and Télécom Québec for 2001, as follows:
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Conversation minutes
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21,488,528
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DAL minutes
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800,000
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Total
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22,288,528
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8.
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The Commission considers the 2001 minutes to be consistent with previous years' estimates and it notes that Bell Canada, Maskatel and Télécom Québec did not comment.
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9.
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The Commission considers the reported number of minutes to be reasonable and approves the number of conversation and DAL minutes as proposed by Guèvremont, for the purpose of calculating its contribution and direct toll rates.
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10.
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In Order CRTC 2000-785, 16 August 2000, the Commission adjusted the company's proposed 1998 contribution amount to reflect imputed interest revenue at a rate of 13 % for an interest-free loan of $3.5 million made by Guèvremont to an affiliated company. The Commission also indicated that it would re-evaluate the regulatory treatment of this loan should it remain outstanding beyond 31 December 2000.
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11.
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In Telecom Order CRTC 2002-238, 14 June 2002, the Commission noted that, although the deemed interest for this loan had been appropriately recognized in the calculations of the 1999 and 2000 CATs, it would again review the regulatory treatment of this loan in Guèvremont's 2001 CAT application.
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12.
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The Commission finds it is necessary, given the special circumstances of this case, to again assess the regulatory impact of the interest on this outstanding loan. The Commission notes that Guèvremont's audited financial statements showed that an interest-free loan of $6,781,638 was outstanding as of 31 December 2001. The company stated that interest on this loan, calculated at a rate of 13 %, had been included in its Phase III results for 2001, thereby reducing the contribution amount to zero.
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13.
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The Commission is concerned that a loan of such magnitude to an affiliated company is not consistent with Guèvremont's obligation as a regulated company to ensure that the interests of its customers and the payers of its CAT in 2001 are suitably protected.
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14.
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The Commission is also concerned that such a burden on the company may affect the service to customers in the future. The Commission is therefore initiating a monitoring plan to ensure that the company's ongoing financial position is adequate to meet the customers' needs and ensure the continued operations of the company.
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15.
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The Commission directs Guèvremont to provide the following on a quarterly basis:
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i) a year-to-date income statement;
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ii) an end-of-period balance sheet; and
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iii) a year-to-date statement of cash flow.
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16.
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The Commission directs the company to file a report of year-end 2002 results within 60 days of this order and to file subsequent quarterly reports within 45 days of the end of each quarter.
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17.
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The Commission finds that Guèvremont's calculation of the proposed 2001 contribution requirement is in accordance with Commission directives in Decision 99-5 and Order 2000-785. Therefore, the Commission approves Guèvremont's proposed 2001 contribution requirement of $0.00 with a corresponding rate of $0.00 per conversation minute.
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18.
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The Commission finds that Guèvremont's calculation of the proposed 2001 direct toll component is in accordance with Commission directives in Decision 99-5. Therefore, the Commission approves Guèvremont's proposed 2001 direct toll component of $284,570 with a corresponding rate of $0.0132 per minute.
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19.
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In order to determine the final NAT rates, the Commission has considered the dollar amounts required and the distance, measured in quarter miles, of the dedicated and DAL circuits provided for their customers on behalf of other telecommunications carriers.
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20.
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The Commission finds that Guèvremont's calculation of the proposed 2001 network component is in accordance with Commission directives in Decision 99-5. Therefore the Commission approves Guèvremont's proposed 2001 network component of $122,212 with a corresponding rate of $11.9581 per quarter mile.
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21.
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The Commission directs Guèvremont to:
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a) issue revised tariff pages within 15 days as of the date of this order and to proceed with billing adjustments forthwith; and
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b) re-file its 2001 actual Phase III results to reflect the Commission's determinations within 30 days as of the date of this order.
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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: 2003-01-15