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ARCHIVED - Telecom Order CRTC 2004-236

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Telecom Order CRTC 2004-236

  Ottawa, 16 July 2004
 

TELUS Communications (Québec) Inc.

  Reference: Tariff Notices 359, 359A and 359B
 

Other capped services for the 2002 annual price cap period

1.

The Commission received an application by TELUS Communications (Québec) Inc. (TELUS Québec), dated 22 September 2003 and amended on 16 April 2004 and 26 May 2004, to modify General Tariff item 5.01.01, ProxiRéseau service and item 5.01.10, High Capacity Digital Network service. Specifically, the company proposed to:
 
  • reduce the monthly rates of ProxiRéseau service for transmission speeds of 1024/1536 kilobits per second by amounts ranging from 19.7% to 20.6%; and
 
  • reduce the monthly rates for various components of High Capacity Digital Network service by amounts ranging from 20.0% to 41.2%.

2.

In support of its application, TELUS Québec provided a cost study to demonstrate that the proposed rates exceeded the associated costs.

3.

TELUS Québec indicated that the proposed revisions would ensure that the service basket index (SBI) would not exceed the service basket limit (SBL) for the other capped services basket.

4.

TELUS Québec requested that the proposed revisions be made effective 1 August 2002.

5.

The Commission received no comments with respect to the application.
 

Background

6.

In Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002 (Decision 2002-43), the Commission applied a number of basket and rate element constraints to services in certain service baskets, in order to provide customers of those services with price protection. The pricing constraints that 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 incumbent local exchange carrier (ILEC) from decreasing rates in more competitive areas and increasing rates in less competitive areas of the same band, that the rates for other capped services should not generally be permitted to be further de-averaged within a band.

7.

In Société en commandite Télébec and TELUS Communications (Québec) Inc. 2002 annual price cap filings, Telecom Decision CRTC 2003-57, 22 August 2003 (Decision 2003-57), the Commission approved on an interim basis TELUS Québec's proposed tariff revisions for ProxiRéseau service and High Capacity Digital Network service, but found that the proposed rate reductions were insufficient for TELUS Québec to comply with the basket constraint on other capped services. Consequently, the Commission directed TELUS Québec to file tariff revisions to comply with the basket constraint on other capped services for the 2002 annual price cap period.

8.

In Decision 2003-57, the Commission concluded that TELUS Québec should file cost studies and imputation test results or alternate costing support, whichever was appropriate depending on the type of service, when filing tariff applications to introduce a new service or to propose implicit or explicit rate reductions to an existing service.
 

Commission analysis and determination

9.

The Commission is satisfied that TELUS Québec's cost study, filed with its application, demonstrates that the proposed rates exceed their associated costs.

10.

The Commission notes that with TELUS Québec's proposed tariff revisions, the SBI does not exceed the SBL for the other capped services basket. As TELUS Québec proposed no rate increases, the rate element constraint limiting rate increases to 10% per year is not pertinent.

11.

The Commission also finds that the proposed tariff revisions would not further de-average the rates for other capped services within a band.

12.

Consequently, the Commission finds that the proposed tariff revisions are in compliance with the Commission's directive in Decision 2003-57 and its determinations in Decision 2002-43.

13.

The Commission notes that a determination has not yet been issued on TELUS Québec's 2003 price cap filing. As a result, rates in the other capped services basket must remain interim in order for TELUS Québec to apply the basket constraint equal to inflation less productivity, for the 2003 price cap period, to this basket of services.

14.

In light of the foregoing, the Commission approves on an interim basis the proposed revisions. The revisions take effect as of 1 August 2002.
  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: 2004-07-16

Date modified: