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Telecom Order CRTC 2003-92
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Ottawa, 27 February 2003
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Northwestel Inc.
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Reference: Tariff Notice 780
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Voice grade channels
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1.
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The Commission received an application by Northwestel Inc. (Northwestel), dated 27 November 2002, to revise Private Wire Service Tariff item 202, Voice Grade Channels, in order to:
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· increase the monthly charge for the first quarter mile for channels between buildings on different properties and on continuous properties from $20.00 to $23.00;
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· increase the monthly charge for each additional quarter mile or remaining fraction mile for channels between buildings on different properties and on continuous properties from $5.70 to $6.55; and
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· increase the monthly minimum charge for channels between buildings on different properties from $20.00 to $23.00.
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2.
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Northwestel submitted that the proposed rate increases were required to bring rates closer to the costs associated with providing voice grade channel service. Northwestel also submitted that the cost characteristics of a voice grade channel are similar to that of a single business line and that the estimated cost of a single business line could be used as proxy for the cost of a voice grade channel.
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3.
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On 20 December 2002, the Government of the Northwest Territories (GNWT) filed comments opposing the proposed rate increases. GNWT argued that the impact of the proposed rate increases would be significant in light of the increases for the same services granted by the Commission under Order CRTC 2001-663, 17 August 2001 (Order 2001-663).
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4.
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GNWT also submitted that no evidence was presented to establish that the cost of a single business line was comparable to the cost of a voice grade channel, and accordingly that no conclusions could be drawn from the information provided by Northwestel.
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5.
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On 8 January 2003, Northwestel responded to the comments filed by GNWT and noted that the period of time between Order 2001-663 and the proposed effective date of this application was 18 months.
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6.
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Northwestel also argued that, based on several factors, the cost of providing a single business line was a reasonable proxy for the cost of providing a voice grade channel. First, Northwestel argued that similar to the costs for a voice grade channel, single business line costs also vary by the length of facilities provided. Second, Northwestel argued that the average loop length of facilities provided for a single business line was similar to the average loop length of a voice grade channel. Third, Northwestel indicated that it included only the loop component cost of a single business line service when establishing its proxy voice channel cost.
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7.
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The Commission is of the view that the costs used to provide a proxy in this case are comparable and form the basis of a reasonable proxy. The Commission considers that for the purpose of considering this specific application, it is reasonable to rely on the proxy costs submitted by Northwestel.
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8.
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The Commission notes that the rates proposed by Northwestel are below the proxy costs associated with the service. The Commission, moreover, considers that the proposed rate increases are not excessive.
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9.
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In light of the above, the Commission approves Northwestel's application. The revisions take effect as of the date of this order.
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10.
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Northwestel is to issue revised tariff pages forthwith to reflect these changes.
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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: 2003-02-27