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Telecom Order CRTC 2003-352
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Ottawa, 27 August 2003
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TELUS Communications Inc.
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Reference: TCI Tariff Notice 102
Former TCI Tariff Notices 513 and 514
Former TCBC Tariff Notices 4193, 4194, 4195 and 4196
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2003 Annual price cap filing
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1.
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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., Bell Canada, MTS Communications Inc., Saskatchewan Telecommunications and TELUS Communications Inc. (TCI)
(collectively, the ILECs).
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2.
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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.
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3.
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The Commission received applications by TCI dated 2 May 2003 proposing tariff revisions to meet its 2003 price cap commitment.
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TCI's applications
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4.
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In its applications, TCI proposed revisions to the following tariff items:
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· former TCI General Tariff, item 425, Exchange service; and item 500,
Digital Network Access (DNA) service;
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· former TELUS Communications (B.C.) Inc. General Tariff, item 410, Signal
transmission service; item 470, Integrated service digital network - Primary rate
interface (ISDN-PRI); item 32, Exchange rates; and item 447, DNA service; and
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· TCI General Tariff, item 503, Inter-office digital channels.
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5.
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In particular, TCI proposed the following tariff revisions to services in the single and multi-line business local exchanges services basket:
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· In Alberta, TCI proposed the following rate increases to Business individual line
service:
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-increase the rates for sub-bands A1, A2, B1 and B3 by
between 1.5% and 1.8%;
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-increase the rates in sub-bands C1, C2 and F7 by 4.8% to
align these rates with the rate for sub-band C3;
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-increase the rates for bands D, E, F and G, with the exception
of the rate for sub-band F7, by between 3.2% and 5.2% to
bring the rates to $53.00; and
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-increase the Local business contract option (LBCO) individual
business line rates where the corresponding monthly business
individual line rates have been increased.
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· In British Columbia, TCI proposed the following rate increases:
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-increase the Business individual line service rates in band C and sub-bands
B3 to B7 and F3 by between 1.3% and 1.6%;
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-increase the Business individual line service rates by 2% in bands D, E, F
and G, with the exception of the rates in sub-bands D4, E4, F3, F4 and G4
that will remain unchanged;
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-increase the Business individual line service rates for sub-bands D4, E4, F4
and G4 by 10% to bring these rates closer to other rates in the
corresponding bands;
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-increase the Business individual line measured service rates in bands C, D,
E, F and G, with the exception of the rates in sub-bands E3 and G3 that will
remain unchanged, by between 4.5% and 10% to bring these rates closer to
the corresponding flat rates for Business single line individual service;
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-increase the Multi-line small business service rates and the Information
system access (ISA) service for small business rates in sub-bands D4, E4,
F4 and G4 by 5.1% in order to align these rates with the corresponding
Multi-line standard service rates and ISA standard service rates; and
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-increase the LBCO individual business line rates where the corresponding
monthly Business individual line rates are increased.
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6.
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TCI submitted that the proposed tariff revisions would ensure that the service basket index (SBI) would not exceed the service basket limit (SBL) for the single and multi-line business local exchange services basket.
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7.
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TCI proposed the following tariff changes to services within the other capped services basket:
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For British Columbia,
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· increase the rates for Signal transmission service by 10%; and
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· decrease the PSTN connectivity rates for the contract options of ISDN-PRI
service in rate bands A1 to B8 by between 3.0% and 23.0%; decrease the
monthly rates for inward numbers by 51%; and amend the ISDN-PRI, DS-1
access component of the tariff in order to explicitly identify the existing approved
rates that are currently shown by referencing the DNA tariff;
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and for Alberta and British Columbia,
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· decrease the monthly rates for DNA - DS-1 and DS-3 access in rate bands 1
and 2 for Alberta and in rate bands 0 and 2 for British Columbia by between
5.8% and 43.7%; and
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· decrease the rates for Inter-office digital channels for DS-0, DS-1 and DS-3 by
between 2.7% and 4.0%.
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8.
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TCI submitted that the proposed tariff revisions would ensure that the SBI would not exceed the SBL for the other capped services basket.
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9.
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TCI requested that the proposed tariff revisions become effective on 1 June 2003.
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10.
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TCI filed imputation tests in support of the proposed rate changes.
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11.
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TCI 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.
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12.
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The Commission received no comments with respect to these applications.
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Commission analysis and determinations
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Costing issues
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13.
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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 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.
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14.
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The Commission finds that the proposed rates pass the imputation test.
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Compliance with pricing constraints set out in Decision 2002-34
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15.
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In Decision 2002-34, the Commission applied a number of constraints to the rate for services in the single and multi-line business local exchange services basket and the other capped services basket, in order to provide customers of those services with price protection.
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16.
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The pricing constraints which apply to services in the single and multi-line business local exchange services basket include:
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· a basket constraint, operating through the SBL for that basket, which must be
updated annually by the rate of inflation;
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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 ILEC from decreasing rates in more
competitive areas and increasing rates in less competitive areas of the same band,
that rates for business local exchange services should not generally be permitted
to be further de-averaged within a band.
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17.
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The Commission notes that the proposed increases to the monthly rates for services in the single and multi-line business local exchange services basket do not exceed 10%. The Commission finds that the proposed tariff revisions comply with the basket constraint requirement that the SBI not exceed the SBL for the single and multi-line business local exchange services basket.
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18.
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The pricing constraints which apply to services in the other capped services basket include:
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· a basket constraint, operating through the 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 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.
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19.
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The Commission notes that the proposed increases to the components of Signal transmission service do not exceed the rate element constraint of 10%. 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.
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20.
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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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21.
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The Commission notes that TCI'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.
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22.
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In light of the foregoing:
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· the Commission approves on an interim basis the proposed rates for DNA
service and Inter-office digital channels;
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· the Commission approves the proposed rates for Business individual line
services, Business individual line measured service, Multi-line small
business service, Information system access service for small business,
LBCO individual business line service, Signal transmission service, and
ISDN-PRI service.
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23.
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The revisions take effect 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: 2003-08-27