ARCHIVED - Telecom Commission Letter - 8678-C12-200605553

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Letter

File Number:  8678-C12-200605553

Ottawa, 8 August 2006

By Electronic mail

Mr. Dennis Béland
Director, Regulatory Affairs
Quebecor Media Inc
465 McGill Street
5 th Floor
Montréal, QC   H2Y 4A6

Email: regaffairs@quebecor.com

Re:    Review of price cap framework, Telecom Public Notice 2006-5

Dear Mr. Béland:

Pursuant to the procedures set out in Review of price cap framework, Telecom Public Notice CRTC 2006-5, 9 May 2006, attached are interrogatories associated with this proceeding.

Responses to these interrogatories are to be filed with the Commission, and served on all the interested parties to this proceeding, by 6 September 2006.

Yours sincerely,

(Original signed by)

John Macri,
Director, Financial and Regulatory Affairs
Telecommunications

Attachment

cc:          Bob Noakes, CRTC, 819-997-4429 bob.noakes @CRTC.gc.ca

Attachment

Services, Baskets and Pricing Constraints

1201            A)       For each of the years 2005 to 2007, provide the following information:

i)        the number of actual or projected subscribers of stand-alone primary exchange service (PES) per applicable local forbearance region (LFR) as defined in Forbearance from the regulation of retail local exchange services, Telecom Decision CRTC 2006-15, 6 April 2006); and

ii)       the number of actual or projected subscribers of bundles of services that contain PES per applicable LFR.

B)         For each of the years 2008 to 2010, provide the information requested in A) above to the extent available.   If not available, provide your best assessment of the market conditions for these services for the specified timeframe.

1202            Paragraph 6 of QMI's submission describes Competitor Services as being a matter ancillary to the price cap mechanism.   Further, paragraph 7 of QMI's submission states the following:

.the present proceeding focuses strictly on the structure and pricing constraints of the price cap framework and does not address the ancillary matters which formed a significant part of Decision 2002-34.

A )         Refer to the third bullet in paragraph 22 of Public Notice 2006-5 which indicates that the issue of pricing constraints for baskets of services is within the scope of this proceeding. Given that the Commission has not specifically excluded the issue of pricing constraints on competitor services, provide with supporting rationale, QMI's view on the following:

i)        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; and

ii)       the application of a pricing constraint equal to I-X to all ILEC services assigned as Category II Competitor Services.

B)         If in its response to part (a) above QMI confirms that the I-X pricing constraint would continue to be appropriate for Competitor Services, comment on the continued appropriateness of using the 3.5% productivity factor for Category I Competitor Services.   Should QMI consider that another productivity level would be more appropriate for Category I Competitor Services, provide detailed information, including studies, to support this view.  

1203            a)    Provide the company's current pricing strategy for residential local exchange services provided on a stand-alone basis and in bundles.

b)     Provide any documentation (i.e., reports including market reports and consultant studies or analyses, competitive and/or pricing analyses, pricing models, etc.) used to support this strategy.

c)    Discuss how the price of ILEC stand-alone local service influences the overall price of a bundle, containing such a service, offered by the company.   Provide examples.

1204              At paragraph 33 of its submission, the Companies noted the following:

Some competitors have entered the market at one price point, and have changed their prices as others have entered.   Though price decreases are more typical, price increases too have been observed.

At footnote 41, the Companies more specifically noted the following:

For example, since Vidéotron entered the market in January 2005 it has increased the price of its residential line by $1.00 per month and is now charging between $16.95 and $22.95 per month, compared to its initial price of between $15.95 and $21.95.   Vidéotron has also made changes to the price of its five-feature package and to its optional long distance packages.   In Atlantic Canada, EastLink has increased the prices of its service bundles numerous times since it started offering service, and has also increased the price for second lines offered to residential customers.

a)    Explain with supporting rationale the market conditions that led to the price increases of the applicable services referenced above.

b)    Comment, with substantiating data, on whether such price increases can be linked to specific services in the bundle.

1205              Indicate whether the company currently offers local business services.   If so, specify the types of services offered, where they are offered and the number of lines. If not, indicate whether the company plans to offer such services within the next 5 years.   Specify the types of services to be offered, and where the company plans to offer them.

Rate De-averaging

1303               In Forbearance from the regulation of retail local exchange services , Telecom Decision CRTC 2006-15, 6 April 2006, paragraph 488, the Commission indicated that it was '' .prepared to consider applications from an ILEC requesting the removal of the local winback rule in a relevant market when the applicant ILEC can demonstrate that it has lost 20 percent of its market share in that relevant market.''

Provide QMI's view on a similar transitional measure with respect to the prohibition on rate de-averaging based on, among other things, a per cent market share loss in that relevant market.   Identify, with supporting rationale, the percentage market share loss level to justify this transitional measure.

Date Modified: 2006-08-08
Date modified: