ARCHIVED - Telecom Order CRTC 2004-329

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Telecom Order CRTC 2004-329

  Ottawa, 30 September 2004

TELUS Communications Inc.

  Reference: Tariff Notices 117, 117A, 117B and 117C

Amalgamation of Analogue private line service


The Commission received an application by TELUS Communications Inc. (TCI) dated 19 August 2003, and amended on 5 March, 4 May, and 6 May 2004, to introduce TCI General Tariff item 522, Analogue private line service, and amalgamate the following into this tariff:
  • the former TCI General Tariff items:

-item 350, Interexchange foreign exchange service;


-item 355, Interexchange off-premise service;


-item 360, Interexchange private line service;


-item 365, Interexchange tie trunk service;


-item 385, Channels for data transmission;


-item 615, Local channel service (outside Edmonton);


-item 620, Local channel conditioning (outside Edmonton);


-item 625, Local channel service (inside Edmonton);


-item 630, Local channel conditioning (inside Edmonton);

  • the former TELUS Communications (B.C.) Inc. General Tariff items

-item 104, Extension line mileage - voice;


-item 104-A, Extension line mileage - data;


-item 106, Interexchange line mileage - voice;


-item 106-A, Interexchange line mileage - data;


-item 124, Foreign exchange service - voice;


-item 124-A, Foreign exchange service - data;


-item 159, Tie trunk and tie line service;


-item 368, Data service;


-item 400, Private line service - voice/local channels; and


-item 400-A, Private line service - data/local channels.


TCI stated that the amalgamated tariff would align and clarify the terms and conditions pertaining to the provision of analogue private line service in Alberta and British Columbia (B.C.). TCI submitted that the amalgamated service should be assigned to the Other Capped Services basket, as this would be consistent with the current classification of analogue private line services. TCI argued that as its proposal was revenue neutral on an overall basis, an imputation test was not needed.


The Commission received no comments with respect to TCI's applications.

The application


TCI proposed the following changes to the amalgamated service:

Align the rating methodology for four-wire channels


TCI proposed to adopt the "doubling the mileage" rating methodology in Alberta for four-wire local channels, instead of the current methodology in the tariff that doubles the rate. TCI noted that this rating methodology was consistent with the one used for four-wire channel customers in B.C. TCI noted that adoption of this methodology would result in the same charge to its customers.

Create private line local serving areas


TCI proposed to create and define private line local serving areas (PLLSAs) for multi-exchange service areas in B.C. based on the current Extended Area Service (EAS) tables in the General Tariff. TCI submitted that the existing linkages meant that every time there was a boundary change made within the EAS table, the rating of analogue private line services was impacted and customer circuits needed to be re-rated. TCI submitted that defining a separate PLLSA table would effectively freeze the boundaries, such that future EAS boundary changes would not impact the rating of analogue private line services in B.C. TCI submitted that any exchange not defined as part of a PLLSA would be considered a single exchange for the purposes of rating analogue private line services.

Grandfathering certain services


TCI proposed to grandfather the following services currently provided in Alberta or B.C.:

-Interexchange (IX) channel between Alberta and B.C.;


-IX channel from either Alberta or B.C. to Northwestel's operating territory;


-Local tie trunk service;


-IX tie trunk service;


-IX off-premise service; and


-Foreign exchange service.


TCI indicated that these services would no longer be available for new installations, moves or changes. TCI stated that the terms and conditions associated with the proposed grandfathered services had not been transferred to the amalgamated tariff, since they related to new installations for these services and were therefore irrelevant.


TCI indicated that there had not been any new demand for these services for over a year and that the customer base had declined as customers migrated to service alternatives. TCI stated that on 10 September 2003, it notified existing customers and customers primed by other telecommunications companies of its intention to grandfather the analogue private line services listed above.

Remove references to local channel facilities provided on continuous property


TCI proposed to remove references to continuous property service in its analogue private line service tariff. TCI submitted that a tariff for such service was not required since the Commission had forborne from regulating the rates for local channel facilities on continuous property in Attachment of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 82-14, 23 November 1982 (Decision 82-14). TCI submitted that in Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19) the Commission had confirmed the determinations of Decision 82-14.

Incorporate the local channel conditioning equipment charges into the local channel conditioning tariff in Alberta


TCI proposed to eliminate local channel conditioning tariffs for Alberta and references to conditioning equipment in the local channel tariffs, and to recover the costs for providing this service by increasing the local voice-grade channel rate by $0.25. TCI submitted that there was a lesser need to offer local channel conditioning, as network and provisioning practices had evolved and loop lengths had become shorter, due to the use of remote switches, channel banks and digital loop carriers. TCI submitted that its proposed modifications would align the treatment of local channel conditioning equipment in Alberta with the treatment used in B.C.


TCI submitted that the overall financial impact resulting from its proposal was revenue neutral, and that the rate element constraint limiting rate increases to 10 percent per year had been met.

Provisions to waive termination charges


TCI proposed to include in the terms and conditions associated with IX private line service a provision to waive termination charges. TCI indicated that it would waive termination charges if a customer migrated to another TCI or TCI affiliate service, where the committed revenues were equal to or greater than those remaining under the original contract. TCI submitted that it had made a similar proposal in TCI Tariff Notice 511, which had not yet been disposed of by the Commission.

Commission's analysis


The Commission considers that TCI's proposal would simplify the application of the tariffs for Analogue private line service in Alberta and B.C.


The Commission notes that the demand for the analogue private line services that TCI proposed to grandfather has declined, alternatives to these services are available, and that it received no comments from TCI's existing subscribers. Accordingly, the Commission considers that TCI's proposal to grandfather certain analogue private line services is reasonable.


With regard to TCI's request to remove references to local channel facilities provided on continuous property, the Commission notes that TCI referenced determinations in Decision 82-14 that pertained to a proposal to extend the scope of the definition of terminal equipment to include the connection of private communication systems. In Decision 82-14, the Commission concluded that, in order for a given configuration of equipment to be considered terminal equipment, it must be restricted to operate within a single building, or the portion thereof owned or leased by the subscriber, or between buildings of the portions thereof which are owned or leased by the subscriber, provided these buildings are on continuous property and are within the same exchange.


In Decision 94-19, the Commission referred to the above-noted conclusions in Decision 82-14 and noted that these configurations would be subject to the Commission's determinations, specifying that it was appropriate for the Commission to forbear from the sale, lease and maintenance of the services in the Competitive terminal - other and the Competitive terminal - multi-line and data broad service categories.


The Commission considers that, on the basis of its determinations in Decision 82-14 and Decision 94-19, it has forborne from regulating analogue private line services on continuous property. Accordingly, the Commission considers that TCI's proposal to remove such references from its analogue private line service tariff is appropriate.


The Commission notes that for a new service or a rate decrease to an existing service, the proposed rate must be supported by, and satisfy, an imputation test. Since TCI's proposal is neither a new service nor a rate decrease, the Commission agrees that an imputation test is not required.


The Commission notes that the services that TCI proposed to amalgamate were assigned to the Other Capped Services basket in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34). Accordingly, the Commission considers TCI's proposal to assign the amalgamated service to the Other Capped Services basket to be appropriate.


In Decision 2002-34 the Commission applied a number of constraints to the rates for services in the Other Capped Services basket, in order to provide customers of those services with price protection. The pricing constraints which apply to services in the Other Capped Services basket include:
  • a basket constraint, operating through the service basket limit 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 percent per year; and
  • a provision, in order to prevent an incumbent local exchange carrier from decreasing rates in more competitive areas and increasing rates in less competitive areas of the same band, that rates for other capped services should not generally be permitted to be further de-averaged within a band.


The Commission agrees that TCI's proposal is revenue-neutral and therefore would not impact the service basket index for the Other Capped Services basket. The Commission also considers that the proposed tariff revisions comply with the Commission's prohibition against further de-averaging rates for services within a band.


The Commission notes that in Telecom Order CRTC 2004-172, 27 May 2004, it approved a 10 percent increase to TCI's local voice-grade channel rates. The Commission notes that customers who do not require local channel conditioning would experience an increase in their local channel rates that would not be off-set by a reduction in local channel conditioning charges. The Commission therefore considers that TCI's proposal would result in an increase in the local voice-grade channel rates beyond 10 percent, which would contravene the rate element constraint on services in the Other Capped Services basket. Accordingly, the Commission finds that it would be inappropriate to approve TCI's proposal to increase the rate for local voice-grade channel service by $0.25 at this time.


The Commission notes that in Telecom Order CRTC 2004-248, 23 July 2004, the Commission denied the provision regarding the waiver of termination charges that was proposed in TCI Tariff Notice 511. Accordingly, the Commission finds that TCI's request to include a similar provision in the proposed tariff is inappropriate.

Commission's determinations


In light of the above, the Commission approves TCI's proposed tariff provisions, with the exception of:
  • TCI's proposal to incorporate its local channel conditioning equipment into its local voice-grade channel rates; and
  • TCI's proposal to include a provision to waive termination charges when a customer migrates to another TCI or TCI affiliate service where the committed revenues are equal to or greater than those remaining under the original contract.


The revisions take effect as of the date of this order. TCI is to issue forthwith revised tariff pages reflecting the exceptions noted above.
  Secretary General
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Date Modified: 2004-09-30

Date modified: