ARCHIVED - Telecom Commission Letter - 8663-N51-200608979

Letter

Ottawa, 5 February 2007

File No: 8663-N51-200608979

BY E-MAIL

Ms. Molly Slywchuk
Manager, Regulatory Affairs
NorthernTel Limited Partnership
25 Paget Street, Box 4000
New Liskeard , Ontario
P0J 1P0

regmat@ntl.nt.net

Dear Ms. Slywchuck:

Re: Implementation plan for facilities-based local competition

On 1 December 2006 , the Commission received NorthernTel, Limited Partnership's (NorthernTel) cost recovery plan of Local Number Portability (LNP) and Local Competition start-up and on-going costs, associated with facilities based local competition in its serving territory.

Pursuant to the Telecommunications Act (the Act), the Governor in Council issued a direction, Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives (the Policy Direction) , to the Commission.   The Policy Direction came into effect on 14 December 2006 .

The Policy Direction can be found at:

http://canadagazetteducanada.gc.ca/partII/2006/20061227/html/sor355-e.html

Subject to subsection 11(3) of the Act, the Policy Direction requires that the CRTC rely on market forces to the maximum extent feasible and regulate, where there is still a need to do so, in a manner that interferes with market forces to the minimum extent necessary to meet the policy objectives of the Act.

The Policy Direction applies to NorthernTel's application.   Accordingly, NorthernTel and other parties may want to address the Policy Direction in the following process.

NorthernTel is requested provide its response to the attached questions by 20 February 2007 .   Interested parties will have until 2 March 2007 to provide comments on NorthernTel's response to the attached questions and NorthernTel will have until 12 March 2007 to reply further responses.

Sincerely,

'Original signed by S. Bédard '

Suzanne Bédard
Senior Manager, Tariffs
Telecommunications

Attach.

cc:   Martin Brazeau, CRTC, (819) 997-3498
        Mike Cawood, CRTC, (819) 997-3485
        Jessie Gasteiger, ExaTEL, jesse@vianet.ca
        David Palmer, Bell Aliant and Bell Canada , bell.regulatory@bell.ca

ATTACHMENT

NorthernTel Limited Partnership cost recovery plan for facilities-based local competition - Interrogatories

1.   Refer to Table 1 - LNP and Local Competition Annual Cash Flows , of NorthernTel's cost recovery plan.

a)   Identify the source and vintage of data, and any assumptions used to derive the annual cash flows.   If factors were used to restate the costs, provide the factors.

2.   In paragraph 6 of its cost recovery plan, NorthernTel proposed that the Commission allow the company to recover LNP and Local Competition start-up costs through an exogenous factor and a Local Competition Recovery Charge to the competitor.   The company submitted that it should have the flexibility to apply the resulting rate increases at its discretion, and that both residential and business basic local service rates would be subject to the exogenous factor.

a)   Refer to Table 3 - PWAC for Study Period , of NorthernTel's cost recovery plan, and allocate the Present Worth of Annualized Costs (PWAC) amongst services, including services in the Other Capped Services category, such as Centrex Service, and amongst services on the basis of retail switched exchange service Network Access Service (NAS) with non-residence NAS weighted by a factor of 1.5.

b)   With reference to the response to question 2.a), explain, with supporting rationale, the detailed derivation of the maximum rate increases of $0.88 and $1.76 to Residential and Business basic local service, respectively.  

c)   Explain how the company plans to apply the rate increases in 2.b), and if the maximum rate increase was not applied, how the remaining costs would be recovered.

d)   With reference to the response to question 2.a), explain, with supporting rationale, the detailed derivation of the Local Competition Recovery Charges of $120.00 and $240.00 applicable to the competitor per residential NAS and business NAS, respectively.

e)   Assuming that no Local Competition Recovery Charge was applied to the competitors, provide with supporting data, the detailed derivation of the monthly increases to residential and business basic local service rates that would be required.

3.   On 15 September 2006 , TBayTel filed an implementation plan for facilities-based local competition with ExaTel Inc (ExaTel) [TBayTel's Plan] [1] .   On 16 October 2006 , Bell Canada filed comments on TBayTel's Plan.

a)   In its comments on TBayTel's Plan, Bell Canada submitted that the Commission should direct TBayTel to interchange intra-local interconnection region (intra-LIR) voice traffic with Competitive Local Exchange Carriers (CLECs) over shared-cost bill-and-keep trunks and to file tariffs for traffic imbalance service.

Discuss whether NorthernTel should interchange intra-LIR voice traffic with CLECs over shared-cost bill-and-keep trunks and file tariffs for traffic imbalance service.

b)   In its comments on TBayTel's Plan, Bell Canada submitted that the Commission should direct TBayTel to provide CLECs with the option of directing toll-terminating traffic onto the same bill-and-keep trunks used for the intra-LIR calls.

Discuss whether NorthernTel should provide CLECs with the option of directing toll-terminating traffic onto the same bill-and-keep trunks used for the intra-LIR calls.

c)   In its comments on TBayTel's Plan, Bell Canada submitted that TBayTel should be required to provide competitors Competitor Digital Network (CDN) services at the same terms and conditions established for CDN services for the large Incumbent Local Exchange Carriers, and that in accordance with Competitor Digital Network Services , Telecom Decision CRTC 2005-6, 3 February 2005, toll trunks and dedicated services leased by interexchange carriers from TBayTel should be eligible for CDN rates.

Discuss whether NorthernTel should be required to do the same.

[1]       TBayTel's Plan can be found in Follow-up to Decision 2006-14 - Implementation plan for facilities-based local competition (File Number 8638-C12-200608979 ), on the CRTC web site.