File Number: 8678-C12-200605553
Ottawa, 24 May 2006
Mr. Brian Armstrong
Director, Regulatory Affairs
2121 Saskatchewan Drive , 12 th Floor
Regina , Saskatchewan
Re: Review of Price Cap Framework: Telecom Public Notice CRTC 2006-5 - Initial Interrogatories
Dear Mr. Armstrong:
Pursuant to the procedures set out in Review of p rice cap framework , Telecom Public Notice CRTC 2006-5, dated 9 May 2006 , attached are interrogatories associated with this proceeding.
Reponses to these interrogatories are to be filed with the Commission, and served on the interested parties to this proceeding, by 10 July 2006 . Responses are to be received, and not merely sent, by this date.
Original signed by
Director, Financial and Regulatory Matters
c.c.: B. Noakes, CRTC (819) 997-4429
INTERROGATORIES TO SASKATCHEWAN TELECOMMUNICATIONS
Components of Price Cap Plans
101 Provide the company's comments on the continued appropriateness of using the chain weighted Gross Domestic Product - Price Index (GDP-PI), as published by Statistics Canada, as the measure of inflation for the next price cap period. Should the company consider that another inflation measure would be more appropriate, provide detailed information, including studies, to support the company's view. Indicate to which basket or sub-basket the inflation factor should apply and how it should operate within the company's proposed pricing constraints.
102 Provide the company's comments on the continued appropriateness of using the 3.5% productivity factor (X-factor). Should the company consider that another productivity level would be more appropriate, provide detailed information, including studies, to support the company's view. Indicate to which basket or sub-basket the productivity factor should apply and how it should operate within the company's proposed pricing constraints. To the extent that the company proposes that the X-factor should not apply to certain baskets and/or sub-baskets, indicate which baskets and provide justification.
103 Under the current price cap regime, an exogenous factor (Z-factor) adjustment is permitted for inclusion in the price cap formula for events or initiatives which satisfy the following conditions:
• they are legislative, judicial or administrative actions which are beyond the control of the company;
• they are addressed specifically to the telecommunications industry; and
• they have a material impact on the company.
a) Comment on the continued appropriateness of including a Z-factor adjustment in the price cap formula for the next price cap period.
b) Should the conditions for inclusion of a Z-factor be modified? If so, provide, with supporting rationale, any proposed modifications.
Services, Baskets and Pricing Constraints
201 Provide, for each residence primary exchange service (e.g., single line, party-line, touch tone, etc.) and for each of the years 2003 to 2006:
a) all rates in effect as at 1 January of each year, as well as rates proposed to be effective 1 June 2007; and
b) the tariff notices/applications resulting in rate revisions. Include a brief description of those applications.
202 Provide the average monthly bill at existing rates for residence individual line subscribers by rate sub-bands, if applicable, and overall by band, broken down into the following components:
a) basic exchange access;
b) mandatory extended flat-rate calling;
c) 9-1-1 service and message relay; and
d) optional services.
203 Provide, with supporting rationale, the company's view on:
a) the continued application of a pricing constraint equal to inflation less the productivity offset (I-X) to ILEC services assigned as Category I Competitor Services, with the exception of Category I services identified as exempted in Appendix 1 to Regulatory framework for second price cap period , Telecom Decision CRTC 2002-34, 30 May 2002; and
b) the application of a pricing constraint equal to I-X to all ILEC services assigned as Category II Competitor Services.
204 A) Provide the company's proposed basket and sub-basket structures as well as pricing and individual rate element constraints. Provide the underlying objectives the company intends to achieve with the proposed basket structure.
Date Modified: 2006-05-24
B) Provide the rationale used to develop the basket structure and pricing constraints, including the expected development of local competition. Where local competition is expected to develop slowly, indicate how the proposed regime will provide customers with the appropriate price protection and comparable service offerings.
C) Provide a mapping of the services between the existing basket structure and the proposed basket structure.