ARCHIVED - Telecom Commission Letter - 8652-C12-200312265
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LetterFile No. 8652-C12-200312265 Ottawa, 20 July 2005 By: E-Mail Mr. Terry Connolly Director, Regulatory Affairs TELUS Communications Inc. 21 - 10020 -100 Street NW Edmonton , AB T5J 0N5 Re: Follow-up to 14 November 2003 letter concerning Portfolio Expenses Further to the Commission interrogatories dated 14 November 2003 regarding portfolio expenses, TELUS Communications Inc. (TELUS) is requested to submit its responses to the attached questions by 5 August 2005 . Yours sincerely, Original signed by Yvan Davidson Senior Manager Competitor Services and Costing c.c.: Trichur Krishnan Attachment Background
1. In response to interrogatory TELUS(CRTC)14Nov03-1 Phase II Costing Information Requirements, TELUS identified the activities that it considered appropriate for inclusion as portfolio expenses (i.e., the management of a portfolio of services). In its response, TELUS identified several portfolio level activities including portfolio product management, facility rental and settlements, maintenance and provisioning, market management, network operations, information technology and other miscellaneous portfolio level activities. In response to interrogatory TELUS(CRTC)14Nov03-3 Phase II Costing Information Requirements, TELUS further provided an estimate of the portfolio expense factor using Bell Canada's portfolio factor equation and TELUS' 2002 expense data. • Using the format provided in Attachment 1 of response to interrogatory TELUS(CRTC)14Nov03-2 Phase II Costing Information Requirements, provide a revised table of 2002 expenses by category where portfolio expenses are split into: (i) marketing-related portfolio expenses: "expenses directly related to the development and management of marketing/promotional/sales programs associated with a common group of retail and/or Competitor services, which cannot be attributed (as direct/indirect expenses) to any specific service within that group"; and (ii) Other. Under these revised definitions, the marketing-related portfolio expenses are to include the activities such as portfolio product management, market management (and their associated Information technology and support activities), while Other expenses are to include the remaining activities previously identified as portfolio expenses. It is noted that the expenses reported under this Other expense category should exclude any maintenance/provisioning, facility rental and settlements, and network operations expenses that are attributable and thus causal to individual services (which should be reclassified and reported under the Direct/Indirect cost category). • Provide a calculation of TELUS' marketing-related portfolio expense loading factor (i.e., dividing the total marketing-related portfolio expenses by the total direct/indirect expenses) based on the revised total 2002 marketing-related portfolio expense estimate provided in response to part (a) above. • In response to interrogatory Aliant(CRTC)14Nov03-1 Phase II, Aliant Telecom indicated that if it were deemed appropriate to include portfolio factors in Phase II studies, then such factors should be developed and applied in a consistent manner by all parties. Comment on the development and use of a revised marketing-related portfolio loading factor that is based on the marketing-related portfolio expense definition provided in response to 1(a) above and consistent with that adopted for Bell Canada, MTS/Allstream, Aliant Telecom, and SaskTel in Primary inter-exchange carrier processing charges review , Telecom Decision CRTC 2004-72, 9 November 2004, and Competitor Digital Network Services , Telecom Decision CRTC 2005-6, 3 February 2005. • Provide revised responses to parts a) and b) above, using 2003 data, if available. For each of the activities provided under the Other category identified in response to part a) above (e.g., maintenance, provisioning, facility rental and settlements, and network operations), explain how the Phase II cost is determined in the context of individual service filings, and if the proposed costing approach constitutes a change from that outlined in the company's proposed May 2002 Phase II manual, provide a description of each costing methodology change, with supporting rationale Date Modified: 2005-07-20 |
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