|
|
Telecom Order CRTC 2003-494
|
|
|
Ottawa, 5 December 2003
|
|
|
Bell Canada
|
|
|
Reference: Tariff Notices 748, 748A and 748B (National Services Tariff)
|
|
|
Digital Network Access service
|
|
1.
|
The Commission received an application by Bell Canada, filed on behalf of itself, Aliant Telecom Inc., and MTS Communications Inc. (collectively the Companies), dated 13 September 2002 and amended on 27 September 2002 and 2 October 2002, to revise its National Services Tariff item 301, Digital Network Access (DNA), in order to identify the DNA rate band to which each wire centre or exchange had been assigned. The Companies' amended applications reflected corrections to the assignment of certain wire centres to DNA rate bands.
|
|
2.
|
The Companies' proposed revisions were filed pursuant to Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), which directed the incumbent local exchange carriers (ILECs) to file modified DNA tariffs which identified the DNA rate band to which each wire centre or exchange was assigned.
|
|
3.
|
The Commission received comments from Mr. François Ménard on 12 October 2002. Reply comments were received from the Companies on 24 October 2002.
|
|
|
Comments
|
|
4.
|
Mr. François Ménard opposed the Companies' application as filed. Mr. Ménard submitted that the tariff should include additional information specifying the criteria used by an ILEC to assign markets to each DNA rate band.
|
|
5.
|
Mr. Ménard submitted that the criteria should identify the differences in the costs of construction and network operations that would justify the assignment of a market to a specific DNA rate band. Mr. Ménard argued that when it becomes evident that a market meets the criteria for assignment to DNA rate band 1, it should not be necessary to make an intervention before the Commission to require the Companies to upgrade the DNA rate band of a market.
|
|
6.
|
Mr. Ménard further submitted that the Commission should ensure that the tariff would apply equitably to each market. Mr. Ménard alleged that Tariff Notice 748 described several markets that were similar in terms of demographic characteristics, levels of industrial development, and infrastructural costs to markets in DNA rate band 1, but were placed at an economic disadvantage since the Companies had assigned these markets to DNA rate band 3. Mr. Ménard argued that only by including the specific criteria in the tariff pages would the Companies have the incentive to apply DNA rate band 1 pricing to markets where competition has not yet become significant.
|
|
|
The Companies' reply
|
|
7.
|
The Companies opposed the inclusion of the criteria used to assign wire centres and exchanges to its rate bands in the tariff. The Companies submitted that Mr. Ménard's comments raised issues that were beyond the scope of Tariff Notice 748 and should have no bearing on the Commission's disposition of the application. The Companies further submitted that Tariff Notice 748 complied fully with the Commission's directive in Decision 2002-34.
|
|
8.
|
The Companies noted that the criteria used to determine the DNA rate band of a particular exchange have previously been defined. The Companies further noted that these criteria continue to be applied today. The Companies submitted that there would be no value in documenting the criteria in the tariff and that it would be unusual for the company to publicly document its rating principles for a retail service that is subject to competition in many markets.
|
|
9.
|
The Companies submitted that the cost-based rating approach advocated by Mr. Ménard had been found by the Commission to be appropriate for services that were deemed to be essential or in the nature of essential and are characterized as competitor services, such as Competitor DNA service. The Companies argued that such an approach was not appropriate for retail services, such as DNA, where the service costs were only one factor in determining the rate band for an exchange. The Companies submitted that other criteria, such as market and business factors, were equally important in determining the rate band for an exchange.
|
|
|
Commission analysis and determination
|
|
10.
|
The Commission notes that the concerns raised by Mr. Ménard in relation to Tariff Notice 748 are similar to the concerns that he raised in relation to Tariff Notice 777, in which Bell Canada proposed rate reductions to DNA service. In 2003 Annual price cap filing, Telecom Order CRTC 2003-349, 27 August 2003 (Order 2003-349), which disposed of Tariff Notice 777, the Commission noted that the function of the tariffs is to reflect the terms and conditions, including the rates, under which a service is offered. The Commission further noted that it examined the methodology and the justification for a particular rate structure in the context of economic studies filed in support of tariff filings to introduce a new service or a new rate structure and that this information is not set out in the proposed tariff pages. The Commission considered that it would not be appropriate to require Bell Canada to set out the methodology it used to assign wire centres to a specific rate band in the tariff for DNA service.
|
|
11.
|
Consistent with the Commission's determinations in Order 2003-349, the Commission reaffirms that it would not be appropriateto requirethe Companies to set out in the tariff the methodology used to assign wire centres to a specific rate band for DNA service.
|
|
12.
|
The Commission notes that, pursuant to its directive in Decision 2002-34, the ILECs are required to identify, in their DNA tariff, the DNA rate band to which each wire centre or exchange is assigned. The Commission further notes that in order to change the assignment of a wire centre or exchange to a different rate band, companies would be required to file an application with the Commission along with supporting rationale. The Commission considers that these requirements enable customers to determine the DNA rates that apply in specific locations and ensure that the DNA tariff applies equitably.
|
|
13.
|
Accordingly, the Commission finds that Tariff Notices 748, 748A and 748B fulfil the Commission's directives as set out in Decision 2002-34.
|
|
14.
|
In light of the above, the Commission approves the Companies' application. 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: http://www.crtc.gc.ca
|
Date Modified: 2003-12-05