ARCHIVED - Telecom Commission Letter - 8678-C12-200605553

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File Number:   8678-C12-200605553

Ottawa, 6 October 2006  

By Electronic mail

Ms. Teresa Griffin-Muir
Vice President, Regulatory Affairs
MTS Allstream Inc.
45 O'Connor Street
Suite 1400
Ottawa , Ontario , K1P 1A4


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

Dear Ms. Griffin-Muir:

Attached are additional interrogatories associated with this proceeding.

A response to these interrogatories are to be filed with the Commission, and served on all the interested parties to this proceeding, by 11 October 2006 .

Yours sincerely,

Original signed by/

John Macri,
Director, Financial and Regulatory Affairs


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


Components of Price Cap Plans

3401    At paragraph 39 of its submission dated 10 July 2006 , MTS Allstream submitted that its residential network access lines (NAS) had declined since 2002.   At paragraph 41 of that submission, the company submitted that, given the significant importance of scale economies to the achievement of productivity growth, a reduction of at least 60% to the current value for the X-factor (3.5%) was justified, representing the contribution of overall economies of scale to productivity growth.   The company further submitted that its proposed 60% reduction to the value for the X-factor was highly conservative in light of the year-over-year decline in NAS. 

Assume that residential NAS were to decline at a different rate in the future.   Discuss the impact that this would have on the value the company has proposed for the X-factor, including, as appropriate, the proposed revised values for the X-factor if the decline in the number of residential NAS was, (a) half the amount the company had assumed in its proposal; and (b) two times the amount the company had assumed in its proposal. 

3402    Refer to paragraphs 36 through 39 of the company's submission, dated 10 July 2006 .

a)    Indicate whether these historical studies, which are based on historical data that precede the introduction of local competition, take into account the impact of local competition as a factor affecting productivity.   If so, explain how.   If not, provide the company's estimate of the additional impact of local competition on the magnitude of the proposed X-factor.  

b)   Provide, with supporting rationale, the company's view on the impact on productivity, if any, of more recent technologies (e.g., digital and Internet Protocol) used to provide telecommunications services.   Include the company's view on the impact that these more recent technologies may have on the magnitude of the proposed X-factor.

Date Modified: 2006-10-24
Date modified: