ARCHIVED - Telecom Order CRTC 2003-348

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Telecom Order CRTC 2003-348

  Ottawa, 27 August 2003

Aliant Telecom Inc.

  Reference: Aliant Telecom Tariff Notice 80
Bell Canada Tariff Notice 776 (National Services Tariff)

2003 Annual price cap filing


In Regulatory framework for second price cap period, Telecom Decision
CRTC 2002-34, 30 May 2002 (Decision 2002-34), the Commission established the price regulation regime that is now applicable to the following incumbent local
exchange carriers (ILECs): Aliant Telecom Inc. (Aliant Telecom), Bell Canada,
MTS Communications Inc., Saskatchewan Telecommunications and
TELUS Communications Inc. (collectively, the ILECs).


In Decision 2002-34, the Commission directed that, starting in 2003, the ILECs were to file their annual price cap filings by 31 March. In a letter dated 25 March 2003, the filing deadline for the year 2003 price cap filings was extended to 2 May 2003.


The Commission received applications by Aliant Telecom and by Bell Canada, on behalf of Aliant Telecom, dated 2 May 2003 proposing tariff revisions for Aliant Telecom to meet its 2003 price cap commitment.

Aliant Telecom's applications


In their applications, Aliant Telecom and Bell Canada proposed revisions to the following tariff items:
  • Atlantic Provinces Telecommunications Council Regional Services Tariff, item 201,  Megalink Service;
  • Aliant Telecom General Tariff, item 503, Digital Switched Services; and
  • Bell Canada National Services Tariff, item 301, Digital Network Access (DNA) service.


In particular, Aliant Telecom and Bell Canada proposed the following tariff revisions:
  •  eliminate the $5.00 monthly rate per PSTN connectivity for the calling line ID option for  both Megalink service and Digital Switched service;
  • migrate Megalink service to the Aliant Telecom General Tariff; and
  • reduce the rates for DNA service - DS-1 access in all bands by approximately 18% for both the non-contracted and contracted options.


Aliant Telecom submitted that the proposed tariff revisions would ensure that the service basket index (SBI) would not exceed the service basket limit (SBL) for the other capped services basket.


Aliant Telecom requested that the proposed tariff revisions become effective on 1 June 2003.


Aliant Telecom filed imputation tests in support of the proposed rate changes.


Aliant Telecom submitted that the proposed tariff revisions complied with all of the pricing constraints set out in Decision 2002-34 and would ensure that it met its price cap obligations for 2003.


The Commission received no comments with respect to these applications.


Commission analysis and determinations


Costing issues


The Commission notes that for a new service or a rate decrease, the proposed rates must be supported and satisfy an imputation test. The Commission also notes that the imputation test is the accepted method, under the current regulatory regime, of determining whether the proposed rates would be anti-competitive.


The Commission finds that the proposed rates pass the imputation test.


Compliance with pricing constraints set out in Decision 2002-34


In Decision 2002-34, 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:
  • a basket constraint, operating through the SBL for that basket, which must be updated  annually by the rate of inflation less the productivity offset;
  • a rate element constraint limiting rate increases for a service to 10% per year; and
  • a provision, in order to prevent an ILEC from decreasing rates in more competitive areas and increasing rates in less competitive areas of the same band, that rates for other  capped services should not generally be permitted to be further de-averaged within a  band.


The Commission finds that the proposed tariff revisions comply with the basket constraint requirement that the SBI not exceed the SBL for the other capped services basket. As Aliant Telecom proposed no price increases to other capped services, the rate element constraint limiting rate increases for a service to 10% per year is not pertinent.


Accordingly, the Commission is satisfied that the proposed tariff revisions are consistent with the pricing constraints established in Decision 2002-34.


The Commission notes that Aliant Telecom's rates for DNA service are to remain interim pending completion of the proceeding initiated by Competitor Digital Network Access service proceeding, Telecom Public Notice CRTC 2002-4, 9 August 2002.


In light of the foregoing:
  •  the Commission approves on an interim basis the proposed rates for DNA service;
  • the Commission approves the proposed rates for Megalink service and Digital Switched service.


The revisions take effect as of the date of this order.

  Secretary General
  This document is available in alternative format upon request and may also be examined at the following Internet site:

Date Modified: 2003-08-27

Date modified: