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ARCHIVED - Telecom Decision CRTC 2004-25

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Telecom Decision CRTC 2004-25

  Ottawa, 15 April 2004
 

Société en commandite Télébec - Contribution for the year 2001

  Reference: 8695-T78-200317885
  In this decision, the Commission denies a request by Société en commandite Télébec for additional contribution relating to the year 2001.

1.

The Commission received an application by Société en commandite Télébec (Télébec), dated 14 November 2003. Télébec requested $0.7 million of additional contribution relating to the year 2001.

2.

The Commission received no comments regarding this application.
 

Background

3.

In Competition in the provision of public long distance voice telephone services and related resale and sharing issues, Telecom Decision CRTC 92-12, 12 June 1992 (Decision 92-12), the Commission established the terms and conditions for long distance competition in the territories of the major telephone companies under its jurisdiction at that time. The terms and conditions established by the Commission in Decision 92-12 included a contribution mechanism whereby competitors were required to make contribution payments to the major incumbent telephone companies in order to help maintain local rates at affordable levels.

4.

In Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19), the Commission established a new regulatory framework for the major telephone companies under the Commission's jurisdiction at that time. The regulatory framework included a per-minute contribution mechanism, with a contribution rate determined for each incumbent telephone company by dividing their forecast contribution requirement for a given year by their forecast total originating and terminating minutes for that same year.

5.

In Regulatory framework for Québec-Téléphone and Télébec ltée, Telecom Decision CRTC 96-5, 7 August 1996 (Decision 96-5), the Commission determined that the basic regulatory framework set out in Decision 94-19 would also be applied to Télébec ltée, now known as Société en commandite Télébec, and Québec-Téléphone, now known as TELUS Communications (Québec) Inc. (TELUS Québec).

6.

In Changes to the contribution regime, Decision CRTC 2000-745, 30 November 2000 (Decision 2000-745), the Commission determined that a national revenue-based contribution regime would replace the existing per-minute contribution mechanism, effective 1 January 2001. The Commission calculated the interim 2001 revenue-percent charge based upon the interim 2001 national subsidy requirement, which included the final 1999 contribution requirements for Télébec and TELUS Québec. The Commission noted that the final 2001 revenue-percent charge would be calculated including the final 2001 contribution requirements for Télébec and TELUS Québec. The Commission also directed that new individual central funds should be established for Saskatchewan Telecommunications, Télébec and TELUS Québec to allow for the distribution of the monthly funds collected within the individual company territories. The Commission established interim 2001 distribution percentages that would be used to allocate the monthly funds collected, on a national basis, to the individual central funds.

7.

In Télébec final 2001 contribution requirement and rate, Order CRTC 2001-598, 26 July 2001 (Order 2001-598), the Commission approved a final 2001 contribution requirement of $27.3 million for Télébec, with a corresponding contribution rate of $0.0372.

8.

In Re: Decision CRTC 2000-745 - Final 2001 percentages for the distribution of contribution revenues collected, Decision CRTC 2001-546, 31 August 2001 (Decision 2001-546), the Commission established the final 2001 distribution percentages to be used to allocate the monthly funds collected to the individual central funds.

9.

In Subject: Decision CRTC 2000-745 - Final 2001 revenue-percent charge for contribution set at 4.5%, Decision CRTC 2001-617, 1 October 2001 (Decision 2001-617), the Commission established the final 2001 revenue-percent charge at 4.5%.
 

Télébec's application

10.

Télébec noted that the Commission approved a final 2001 contribution requirement for the company of $27.3 million in Order 2001-598. Télébec also noted that, in Decision 2001-546, the Commission established the final 2001 percentages for the distribution of contribution revenues, taking into account Télébec's and TELUS Québec's final 2001 contribution requirements approved in Order 2001-598.

11.

Télébec submitted that, while its approved final 2001 contribution requirement was $27.3 million, it only received $26.6 million during 2001, resulting in a $0.7 million shortfall. In Télébec's view, the $0.7 million shortfall was not in the spirit of the contribution mechanism established in Decision 2000-745.
 

Commission analysis and determination

12.

The Commission notes that the regulatory framework approved in Decision 94-19 did not provide for a reconciliation between actual and forecast toll minutes or contribution requirements. Therefore, a company would receive more or less contribution than was approved in any given year if the actual toll minutes were more or less than the forecast toll minutes.

13.

Given that the regulatory framework approved in Decision 96-5 for Télébec was the same basic framework as set out in Decision 94-19, the Commission, in Decision 96-5, did not provide for a reconciliation between actual and forecast toll minutes or contribution requirements. As such, the actual contribution received by Télébec could be either more or less than the forecasted contribution requirement due to the difference between actual and forecast toll minutes.

14.

The Commission notes that, in Decision 2000-745, it only changed the manner in which the contribution funds were collected for 2001, from a per-minute based mechanism to a revenue-based mechanism. For 2001, the manner in which the contribution funds were distributed did not change, nor was a reconciliation process introduced.

15.

The Commission notes that the 4.5% revenue-percent charge, finalized in Decision 2001-617, was based upon the 2001 contribution requirements for all of the companies involved, including Télébec's final 2001 contribution requirement approved in Order 2001-598, and all forecasted contribution-eligible revenues. The Commission also notes that, in Decision 2001-617, it stated that it was of the view that any over- or under-collection of subsidy would not be material.

16.

The Commission considers that, based upon its statement in Decision 2001-617 concerning over- or under-collection, it is clear that the Commission was aware that the telephone companies could receive more or less subsidy than forecast/approved and that the actual amount of subsidy received depended upon the funds collected.

17.

The Commission notes that, similar to Télébec, all of the other telephone companies received their proportionate share of the total contribution collected in 2001. Therefore, also similar to Télébec, all of these telephone companies received proportionately less contribution than was forecast/approved. The Commission also notes that 2001 was the last year for a possible over- or under-collection to occur.

18.

In light of the above, the Commission denies Télébec's request for additional contribution relating to the year 2001.
  Secretary General
  This document is available in alternate format upon request and may also be examined at the following Internet site: www.crtc.gc.ca

Date Modified: 2004-04-15

Date modified: