Search

ARCHIVED - Telecom Order CRTC 2004-170

This page has been archived on the Web

Information identified as archived on the Web is for reference, research or recordkeeping purposes. Archived Decisions, Notices and Orders (DNOs) remain in effect except to the extent they are amended or reversed by the Commission, a court, or the government. The text of archived information has not been altered or updated after the date of archiving. Changes to DNOs are published as “dashes” to the original DNO number. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats by contacting us.

Archived

This page has been archived on the Web.

 

Telecom Order CRTC 2004-170

  Ottawa, 27 May 2004
 

Saskatchewan Telecommunications

  Reference: Tariff Notices 61 and 62
 

2004 Annual price cap filings

1.

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

2.

The Commission received applications by SaskTel, dated 31 March 2004, proposing tariff revisions to meet its 2004 price cap commitment.
 

SaskTel's applications

3.

In its applications, SaskTel proposed revisions to the following tariff items:
 
  • General Tariff - Basic Services,
 

- item 110.34, Microlink service; and

 

- item 110.44, Digital Network Access (DNA).

4.

SaskTel proposed the following tariff changes to services within the other capped services basket:
 
  • increase the non-contracted and contracted monthly rates for Microlink service 2B channels by approximately 10%, and withdraw the D channel packet link component associated with Microlink service; and
 
  • reduce the DNA DS-1 contracted monthly access rates in Band 2 by between 1.89% and 10.8%.

5.

SaskTel noted that there are currently no customers using the D channel packet link component associated with Microlink service and the company anticipates no future demand.

6.

SaskTel filed an imputation test in support of its proposed rate reductions to DNA service.

7.

SaskTel 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. SaskTel also submitted that the proposed rate increases meet the 10% individual rate element constraint.

8.

SaskTel requested that the proposed tariff revisions become effective on 1 June 2004.

9.

SaskTel also requested approval of an exogenous factor adjustment to compensate the company for a shortfall in its deferral account. SaskTel submitted that this shortfall was due to revenue losses that have accrued as a result of the Commission's policy-related changes to the rates for competitor services. SaskTel requested that the Commission approve its proposal for an exogenous factor adjustment coincident with its price cap filings.

10.

SaskTel submitted that the proposed tariff revisions complied with all the pricing constraints set out in Decision 2002-34 and would ensure that it met its price cap obligations for 2004.

11.

The Commission received no comments with respect to these applications.
 

Commission analysis and determination

 

Costing issues

12.

The Commission notes that for a new service or a rate decrease, the proposed rate 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.

13.

The Commission finds that the proposed rates for DNA service pass the imputation test.
 

Compliance with pricing constraints set out in Decision 2002-34

14.

The pricing constraints which apply to services in the other capped services basket 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 business local exchange services should not generally be permitted to be further de-averaged within a band.

15.

The Commission notes that SaskTel included its proposed exogenous factor adjustment in the calculation of the SBLs. The Commission notes that the amounts in the deferral account are currently under review in Review and disposition of deferral accounts for the second price cap period, Telecom Public Notice CRTC 2004-1, 24 March 2004. The Commission further notes that additional information will be required in order to analyze and validate the revenue loss information provided by SaskTel. As such, the Commission is not prepared to render a decision on SaskTel's proposal for an exogenous factor adjustment at this time.

16.

The Commission notes that SaskTel's proposal to increase its Microlink service rates presumed the coincident approval of its proposed exogenous factor adjustment. As noted in the preceding paragraph, the Commission is not prepared to render its decision on SaskTel's proposed exogenous factor adjustment at this time. Consequently, the Commission considers that it would be premature to render a decision on SaskTel's proposal at this time. Nevertheless, the Commission is satisfied that, in the absence of SaskTel's proposed exogenous factor adjustment, the proposed rates reductions to DNA service are sufficient to ensure SaskTel's compliance with the basket constraint requirement that the SBI not exceed the SBL for the other capped services basket.

17.

The Commission finds that the proposed tariff revisions to DNA service comply with the Commission's prohibition against further de-averaging rates for other capped services within a band.

18.

Accordingly, the Commission finds that the proposed tariff revisions to DNA service are in accordance with the Commission's determinations in Decision 2002-34.

19.

The Commission notes that SaskTel'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.

20.

In light of the foregoing, the Commission approves on an interim basis the proposed tariff revisions to DNA service. The revisions take effect as of 1 June 2004.

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: 2004-05-27

Date modified: