ARCHIVED - Telecom Order CRTC 2004-247

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Telecom Order CRTC 2004-247

  Ottawa, 23 July 2004

Saskatchewan Telecommunications

  Reference: Tariff Notice 65

Unserved Premises Improvement Tariff




In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), the Commission approved, for all the large incumbent local exchange carriers (ILECs) with the exception of Saskatchewan Telecommunications (SaskTel), service improvement plans (SIPs) that mitigated high installation service charges to residential customers for high-cost projects to provide local telephone service. For example, Bell Canada charges a flat $1,000 to the customer for a service project costing up to $25,000. In high-cost serving areas (HCSAs), Bell Canada is compensated for its Phase II SIP-related costs from the national contribution fund; in non-high-cost serving areas, Bell Canada is compensated for such costs from its deferral account.


In the proceeding leading to Decision 2002-34, SaskTel submitted that it had no unserved localities in its territory. Accordingly, the company did not include any capital expenditure projections for unserved localities in its proposed SIP.


On28 March and 6 August 2003, two SaskTel customers complained to the Commission that they had to pay more than $1,000 for the provision of local telephone service to their residences.


In light of these complaints, the Commission addressed four interrogatories to SaskTel on 30 March 2004. The company's responses to these interrogatories were to address, among other things, whether it would be in the public interest to introduce a special tariff or a SIP, in the company's territory similar to that of the other ILECs so that SaskTel's residential customers would pay a flat $1,000 for high-cost projects costing up to $25,000 to provide residential telephone service.


On 6 April and 4 May 2004, SaskTel provided its responses to the Commission's interrogatories.



Proposed tariff


The Commission received an application by SaskTel, dated 4 May 2004, to introduce General Tariff - Basic Services item 105.16, SaskTel Unserved Premises Improvement Tariff.


SaskTel submitted that its proposed tariff was similar to the SIP tariffs of other ILECs and provided a comparable cap of $1,000 on construction costs of up to $25,000 to provide local telephone service to a residential premise. SaskTel indicated that, where costs exceeded $25,000, the customer would have to pay the excess amount over and above $25,000 in addition to the $1,000 to a maximum of $10,000. SaskTel further indicated that in the case of the $1,000 or maximum $10,000 fee, customers could pay these fees by making instalment payments.


SaskTel submitted that it was not filing a cost study with this tariff since, at this time, it was not proposing that this tariff be implemented as part of a SIP, which would have permitted the company to obtain compensation through the national contribution fund in HCSAs. The company was of the view that the demand for this tariff would be limited and the costs of developing a reliable cost study would outweigh the value of the benefits that might be obtained through a SIP. SaskTel, however, wished to retain the right to apply to the Commission and have this tariff included as a SIP should the demand for it prove to be greater than expected.


SaskTel noted that, consistent with its existing Tariff item 105.15 entitled Extra Provisioning Charges, the proposed tariff would apply in Saskatchewan's agricultural areas. SaskTel proposed that Tariff item 105.16 be assigned to the other capped services basket, consistent with Tariff item 105.15, which is a similar service.


The Commission received no comments with respect to this application.

Follow-up to Decision 2002-34


SaskTel stated that it had previously informed the Commission that it had approximately 200 underserved residential customers in the Far North. SaskTel noted that, in the proceeding leading to Decision 2002-34, it had proposed a SIP which would have relied upon the deployment of satellite earth station technology to bring service up to the level of the basic service objectives established in Telephone service to high-cost serving areas, Telecom Decision CRTC 99-16, 19 October 1999.


SaskTel noted that in Decision 2002-34, the Commission:
  • denied SaskTel's SIP proposal for underserved premises; and
  • directed SaskTel to monitor the marketplace for faster, less expensive products that would likely be available in the near future, and to submit a new plan when appropriate.


On the latter point, SaskTel stated that it was continuing to monitor the situation but had not yet identified a more cost-effective alternative to that which it had proposed initially.

Commission analysis and determination


The Commission considers that SaskTel's proposal sets out a plan that ensures that future customers faced with provisioning projects costing up to $25,000 will pay a maximum of $1,000. Further, for projects costing between $25,000 and $34,000, the customer will pay the difference between the cost of the project and $25,000 plus $1,000, to a maximum of $10,000. For example, for a project that costs $34,000, the customer would pay $10,000, the maximum allowable in this tariff. The Commission notes that this tariff, including the option of the customer paying applicable fees in instalment payments, is similar to the SIP tariffs of the other large ILECs.


The Commission notes the company did not file a cost study with this tariff, as it was not proposing that this tariff be implemented as part of a SIP. The Commission finds this proposal acceptable under the circumstances.


Consistent with its treatment of similar tariffs for the other large ILECs, the Commission finds SaskTel's proposal to assign this tariff item to the other capped services basket to be appropriate.


The Commission approves SaskTel's application and directs the company to assign the service in question to the other capped services basket. The revisions take effect as of the date of this order.


With respect to SaskTel's comments concerning improving the level of service to underserved residential subscribers, the Commission notes SaskTel's commitment to finding more cost-effective alternatives than those proposed at the time of the proceeding leading to Decision 2002-34. The Commission expects SaskTel to continue to monitor the marketplace for new products that will help provide better service to underserved residential subscribers, and to submit a new plan for Commission approval when appropriate, as directed in Decision 2002-34.
  Secretary General
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Date Modified: 2004-07-23

Date modified: