ARCHIVED - Telecom Order CRTC 2004-322

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Telecom Order CRTC 2004-322

  Ottawa, 23 September 2004

Aliant Telecom Inc.

  Reference: Tariff Notice 125

Service Charge Convenience Billing


The Commission received an application by Aliant Telecom Inc. (Aliant Telecom), dated 27 February 2004, to revise General Tariff item 255, Standard Service Charges, in order to introduce Service Charge Convenience Billing.


Aliant Telecom stated that Centrex business customers in Nova Scotia with more than 10,000 Centrex accesses could subscribe to Service Charge Convenience Billing for a monthly rate of $0.90 per Centrex access as an alternative to paying the standard service charges applicable for normal business activities including subsequent additions, moves and changes that would encompass no more than 30 accesses. Aliant Telecom noted that major projects outside of normal business activities of 31 accesses or more would be charged the standard service charges.


Aliant Telecom specified that if a customer selected this alternative it would be for all of its Centrex accesses and not a partial quantity, and that the customer would have to commit to a one year minimum contract period.


Aliant Telecom indicated that service charges were incidental to the provision of access and expected that the introduction of Service Charge Convenience Billing would have no impact on the level of service activity.


Aliant Telecom submitted an imputation test in support of the proposed rate.


The Commission received no comments with respect to the application.

Commission's analysis and determination


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


The Commission notes that Aliant Telecom's imputation test results were based on the hypothesis that the proposed flat-rate model would have no impact on the level of service activity. However, the Commission notes that, in general, other flat-rate models, such as those associated with long-distance and extended area service, have resulted in increased usage after implementation. Therefore, the Commission is concerned that if the service order activity increases after the introduction of the tariff for Service Charge Convenience Billing, Aliant Telecom's costs would be higher than those submitted in its imputation test. Consequently, the Commission is not persuaded that the proposed rate for Service Charge Convenience Billing satisfies the imputation test.


In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002, the Commission determined that should an incumbent local exchange carrier seek to further de-average rates for uncapped services, it should provide its rationale as part of its application.


The Commission notes that Aliant Telecom proposed to offer the Service Charge Convenience Billing option to Centrex business customers in Nova Scotia with more than 10,000 accesses. The Commission considers that the proposal would in effect limit the availability of Service Charge Convenience Billing to Centrex business customers in Rate Band A only. Consequently, the Commission finds that Aliant Telecom's proposal would result in further rate de-averaging of service charges. The Commission considers that Aliant Telecom did not provide sufficient rationale for further rate de-averaging.


In light of the above, the Commission denies Aliant Telecom's application.
  Secretary General
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Date Modified: 2004-09-23

Date modified: