ARCHIVED - Telecom Commission Letter - 8678-C12-200605553

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File Number:   8678-C12-200605553

Ottawa, 8 August 2006

By Electronic mail

Ms. Natalie MacDonald
Director, Regulatory Matters
EastLink Telephone
6080 Young Street , 8 th Floor
Halifax , NS B3K 5M3


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

Dear Ms. MacDonald:

In Review of price cap framework , Telecom Public Notice CRTC 2006-5, 9 May 2006 , the Commission initiated a proceeding to establish the price cap regime that will go into effect in 2007, in the operating territories of Bell Aliant Regional Communications, Limited Partnership, Bell Canada, MTS Allstream Inc., Saskatchewan Telecommunications and TELUS Communications Company.

The state of competition will have a direct impact on the development and implementation of the next price cap framework. As a major competitor in the operating territory of Bell Aliant Regional Communications , Limited Partnership, EastLink Telephone has in its possession information which the Commission considers necessary for this proceeding.   Accordingly, EastLink Telephone is requested, pursuant to paragraph 37(1)(b) of the Telecommunications Act ,   to provide responses to the interrogatories set out in the attachment to this letter.

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


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

Attachment Page 1 of 2

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 (Decision 2006-15); 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  A)      Provide the company's current pricing strategy for residential local exchange services provided on a standa-lone 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)      Does the price of the ILEC's standa-lone local service influence the company's overall price of a bundle containing such a service? If so, please discuss and provide examples.  

1203    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.

Attachment Page 2 of 2

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.

1204     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

1301      In Decision 2006-15, 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 EastLink's view on a similar transitional measure with respect to the prohibition on rate de-averaging based on, among other things, a percent 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: