ARCHIVED - Letter

Ottawa, 28 May 2010

Our Reference: 8740-B54-200908543
                     8740-B2-200908569

BY E-MAIL

Mr. Denis E. Henry
Vice-President – Legal, Regulatory and Government Affairs
And Chief of Privacy
Bell Aliant Regional Communications, Limited Partnership
160 Elgin Street, 19th Floor
Ottawa, Ontario K2P 2C4
regulatory@bell.aliant.ca

Mr. Mirko Bibic
Senior Vice-President – Government and Regulatory Affairs
Bell Canada
160 Elgin Street, 19th Floor
Ottawa, Ontario K2P 2C4
bell.regulatory@bell.ca

Dear Sirs:

Re: Bell Aliant Tariff Notice 269 and Bell Canada Tariff Notice 7205 – Proposed unbundled local loop rate increases

Bell Aliant Regional Communications, Limited Partnership and Bell Canada (collectively, the Bell companies) are requested to respond to the interrogatories provided in the attachment in accordance with the process established in the Commission letter dated 12 March 2010.

A copy of each interrogatory response must be served on all other parties by 21 June 2010. The responses must be received, not merely sent, by this date. Copies of the documents should also be sent to thomas.hui@crtc.gc.ca.

Yours sincerely,

Original signed by

Yvan Davidson
Senior Manager – Competitor Services and Costing
Telecommunications

c.c.: Thomas Hui, thomas.hui@crtc.gc.ca

Distribution List

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Attachment

Unbundled Loop Monthly Rates

1. Refer to the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205:

a) On page 7 of the response, the Bell companies stated the following in their cost studies using copper cable Net Book Values (NBV):

“During the 5 year study period, if the copper cable in a particular asset class had reached the end of its average remaining life, capital cash flows based on cost new were included in the economic study for the in-service demand forecast in the following year”.

Describe the methodology and assumptions used by the Bell companies to develop the replacement capital cash flows with supporting rationale.

b) For each company, for each band and for each year of the study period, provide the estimated copper cable NBVs and copper cable depreciation expenses under the costing assumptions used to develop the cost per loop per month provided in Tables 6 of Attachments 1 and 2 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205.

c) On page 8 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205, the Bell companies indicated that they have modified their cost studies to reflect the in-service percentage of loops provisioned using remote technology. Confirm that these in-service percentages of loops provisioned using remote technology are the same as those provided in the response to The Companies(CRTC)12Aug09-1 f) TNs 269 & 7205. If not, provide the in-service percentages of loops provisioned using remote technology used in the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 and explain why different in-service percentages of loops provisioned using remote technology were used, with supporting rationale.

d) In Attachments 2, 3 and 4 of the response to The Companies(CRTC)25May07-402 PN 2007-4, Bell Canada provided the percentage of plant investment located in access network / transport network for each copper cable asset account.

i. If available, for each company, for each of the following copper cable asset accounts, provide the most current percentages of copper cable plant investment in access network, specifying the vintages of these percentages:

 Copper aerial cable
 Copper underground cable
 Copper buried cable
 Copper submarine cable
 Copper building cabl

ii. Provide a table comparing the percentages of copper cable plant investment in access network by copper cable plant asset account identified in Attachments 2, 3 and 4 of the response to The Companies(CRTC)25May07-402 PN 2007-4 and those provided in response to d) i) above. Explain with supporting rationale the changes in the percentages, if any.

iii. Indicate whether the copper cable NBVs used by the Bell companies in the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 include only the plant investment located in the access network. If yes, provide the methodology used by the Bell companies to exclude the NBV associated with those copper plant investments not located in the access network, with supporting rationale. If not, provide revised Tables 6 in Attachments 1 and 2 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 that include only the copper cable NBVs in the access network using the percentages provided in response to part d) i) above as the basis for estimating the copper cable NBVs in the access network.

e) Provide revised Tables 6 in Attachments 1 and 2 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 that reflect the application of expense increase factors and productivity improvement factors to expense cash flows and the application of capital increase factors and productivity improvement factors to capital cash flows excluding the NBV cash flows over the study period. The revised tables should provide a breakdown of the Capital Causal to Demand – Outside Plant Equipment into copper feeder cable, copper distribution cable (excluding in-building cable), copper distribution in-building cable, drop wire and structure capital cost.

2. In Tables 4 and 5 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205, the Bell companies provided the Average Remaining Life (ARL) of each copper cable asset account used in their copper cable NBV cost studies.

In Attachments 2, 3 and 4 of the response to The Companies(CRTC)25May07-402 PN 2007-4, Bell Canada provided its 2005 depreciation studies where the ARL for different copper cable asset accounts were estimated.

a) Indicate whether the Bell companies have updated their depreciation studies for copper cables; if so, provide the revised studies and updated ARLs for different copper cable asset accounts.

b) Provide a table comparing the ARLs identified in Attachments 2, 3 and 4 of the response to The Companies(CRTC)25May07-402 PN 2007-4, with those identified in Tables 4 and 5 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 and with those provided in response to part a) above (if update provided), with explanations for major differences in ARLs.

c) Refer to The Companies(CRTC)23Dec09-3 TNs 269 & 7205 where the Bell companies provided the plant retirements, additions, and plant in service for copper cable for each of the years 2006, 2007 and 2008 on an aggregate, pre-restructuring basis:

i. Consistent with the above response, provide plant retirements, additions and plant in-service for copper cable for the year 2009.

ii. For each of the years 2006, 2007, 2008 and 2009, provide the copper cable NBV and the annual copper cable depreciation expenses reflecting the company’s books. Further, provide NBV calculations for the years 2007 to 2009 showing the impact of each of copper capital additions, retirements and depreciation expenses.

iii. Comment on the extent to which the copper cable additions for the years 2006 to 2009 provided in response to The Companies(CRTC)23Dec09-3 TNs 269 & 7205 and to part i) above, were the result of the Bell companies’ Fibre-to-the-Node (FTTN) initiatives. Further, comment on the extent to which the copper cable additions were made in the distribution plant.

iv. Comment on the anticipated life estimates of the new copper cable investments.

v. In light of the magnitude of copper cable plant retirements and additions in each of the years 2006 to 2008 relative to the copper cable NBV, and the ARLs provided in Bell Canada’s 2005 depreciation studies, comment on the use of the ARLs proposed in Tables 4 and 5 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 in the Bell companies’ copper cable NBV cost studies, with justification.

d) Provide revised Tables 6 in Attachments 1 and 2 of the response to The Companies(CRTC)23Dec09-2 TNs 269 & 7205 for each of the following change in assumptions:

i. ARL is equal to the ARL provided in the companies’ most recent depreciation studies.

ii. ARL is 8 years.

3. In the response to The Companies(CRTC)23Dec09-7 TNs 269 & 7205, the Bell companies indicated that a sample of copper cable installation projects was extracted from the SAP database.

a) For each company, provide a list of the last 5 copper cable installation projects in green-field localities (i.e., localities where there was previously no existing telecommunication access network) and the last 5 copper cable installation projects in brown-field localities (i.e., localities where there was existing telecommunication access network) from the SAP database. If the Bell companies are unable to distinguish between green-field and brown-field localities, provide a list of the last 10 copper cable installation projects.

b) For each company, for each of the localities identified in response to part a) above:

i. Specify whether the copper cables are installed as feeder cables, distribution cables or both.

ii. Provide the gauge(s) of copper cables installed.

iii. Specify whether the copper cables are installed as a result of growth or as a replacement for existing cables.

iv. For copper cables that are installed as replacement cables, indicate whether the existing copper cables are replaced as part of the Bell companies’ FTTN initiatives.

v. Provide the approximate number of Network Access Services (NAS) to be provisioned in the locality.
vi. Indicate whether the loops will be made available to CLECs, with supporting rationale.

4. On 4 February 2010, Bell Canada Enterprise announced that Bell Canada will begin its three-year plan to deploy high speed Fibre-to-the-home (FTTH) across the Québec City region in 2010 and in all new urban and suburban housing developments in Ontario and Québec beginning in the second half of 2010.

For localities where FTTH is deployed, indicate whether unbundled local loops will be made available to CLECs with supporting rationale.

5. In response to The Companies(CRTC)23Dec09-6 a) TNs 269 & 7205 (where the Bell companies were asked to provided the copper cable unit costs for each company, for each band, for each copper feeder and distribution construction type, for each copper cable size and gauge under each construction type), the Bell companies provided in Attachment 1 of the response a table of total per meter copper cable unit costs by copper feeder and distribution construction type, cable size and gauge.

Confirm that the total per meter copper cable unit costs provided in Attachment 1 of The Companies(CRTC)23Dec09-6 TNs 269 & 7205 apply to both Bell companies and for all bands. If yes, explain with supporting rationale why the numerical example provided in The Companies(CRTC)23Dec09-7 d) TNs 269 & 7205 indicated that the 200 pair 24 gauge copper distribution aerial cable unit cost in Band B is different from that in Band F. If not, provide revised response to The Companies(CRTC)23Dec09-6 a) TNs 269 & 7205 that provides a breakdown of the copper cable unit costs by band; with supporting rationale for the unit cost differences across bands.

6. In Table 2 of the response to The Companies(CRTC)23Dec09-7 TNs 269 & 7205, the Bell companies provided the average distribution cable length excluding building cable for each band using cable length data from the Bell companies’ IPAIRS database (2004 vintage).
In Table 3 of the response to The Companies(CRTC)23Dec09-4 TNs 269 & 7205, the Bell companies provided the estimated proportion of copper cable that is in each of the feeder and distribution plant for each company for each band based on the Bell companies’ IMAP database and a formula specified on page 5 of the response.

In Tables 8 and 9 of Attachment A of the Bell companies’ 2 June 2009 cost submission, the Bell companies provided the average loop length for each company for each band.

a) For each company, for each band, calculate and provide the proportion of copper cable associated with each of the feeder and distribution plant using the average loop lengths provided in Tables 8 and 9 of Attachment A of the Bell companies’ 2 June 2009 cost submission and the average distribution loop lengths excluding building cable from the Bell companies’ IPAIRS database (2004 vintage). Comment on this approach to calculate the proportion of copper cable plant related to feeder and distribution.

b) For each company, for each band, provide a comparison of the proportion of feeder and distribution cable provided in response to part a) above as opposed to those provided in Table 3 of the response to The Companies(CRTC)23Dec09-4 TNs 269 & 7205. Explain with supporting rationale the differences in the proportions, if any.

c) Provide revised Tables 6 in Appendices 1 and 2 of Attachment 1 to the 2009 cost submission that use the proportion of feeder and distribution cable provided in response to part a) above to estimate the copper feeder cable costs and the copper distribution cable costs.

7. In Tables 1 and 2 of the Attachment to The Companies(CRTC)23Dec09-15 TNs 269 & 7205, the Bell companies provided the Service Provisioning – Outward Order OE unit costs.

a) For each of Res PES, Bus PES, Centrex and CLEC Loops, provide the list of activities included in the Outward Order OE unit costs and supporting rationale for the inclusion of each of the activities.

b) Identify and justify any differences in the list of activities provided in response to part a) above between Res PES, Bus PES, Centrex and CLEC Loops.

c) Provide supporting rationale as to why Outward Order OE unit costs for Res PES and CLEC Loops are higher than those for Bus PES and Centrex.

d) Provide revised Tables 6 in Appendices 1 and 2 of Attachment 1 to the 2009 cost submission using Outward Order OE unit cost for Bus PES as a proxy for Res PES and CLEC Loops.

8. In the response to The Companies(CRTC)23Dec09-16 b) TNs 269 & 7205, the Bell companies indicated that a certain percentage of the Copper Maintenance is attributable directly to ADSL. Provide the methodology and assumptions, including the vintage of the data, used by the Bell companies to estimate this percentage, with supporting rationale.

Service Charges Related Interrogatories

9. Refer to the response to The Companies(CRTC)23Dec09-20 Tables 1 and 2.

The Bell companies submitted that the CLEC forecast demand split between residence and business used to determine weightings provided in Tables 1 and 2 was based on the actual residence and business share of all CLEC loops ordered in the months of September, October and November 2007. Explain whether the companies have more recent data on the CLECs’ business/residence demand split; if so, provide revised weightings based on the latest available data. If not, explain why not.

10. a) For each of ILECs and CLECs, for each of residence and business, provide the assumed number of loops installed per order in the study, if any.
b) For any of the proposed per order activities, identify any associated costs (by activity or sub-activity) that were derived by multiplying the per loop unit cost times the average number of loops per order (e.g. premises visit costs).
c) Provide separately for ILECs and CLECs, for residence and business, the average number of loops installed per order, and provide the vintage and source of the information used to derive these averages.

11. In the mapping information provided in response to The Companies(CRTC)23Dec09-20, the Order Issuance activity in the 2009 cost study corresponds to the Order Processing activity in the 2001 cost study.

a) Provide the methodology along with supporting assumptions, data sources and vintage of data used to derive the time estimates and occurrence rates for Order Issuance activity in Tables 3 to 6 of The Companies23Dec09-20. If the time estimates have been based on a sample, provide details on the sample size and an assessment of the accuracy of the sample.

b) In response to The Companies(CRTC)26Jan01-1, the Bell companies identified the following sub-activities for the Order Processing activity: query address, credit check, establish due date, keying order information collected and inform
customer of rates and charges. Identify the major Order Issuance sub-activities included in the 2009 cost study and identify the differences with those assumed in the 2001 study, with rationale. Further describe the adjustments made to the time estimates and occurrence rates, if any, to remove any related time or sub-activity that is retail in nature, quantifying each adjustment.

c) Provide a breakdown of the time estimates and the occurrence rates for each of the sub-activities identified in part b) above, if available. Explain any differences in the time estimates and occurrence rates by major sub-activity in the 2009 study compared to the 2001 study.

d) Provide an explanation for the difference in the assumed occurrence rates between the ILEC and the CLEC for the Order Issuance activity.

e) Indicate the number of orders that would be issued to fulfill a CLEC order associated with the connection of loops for its end-customers, for each of the following scenarios:

i. Three loops for the same end-customer involving three different locations;

ii. Three loops for different end-customers involving three different locations; and,

iii. Three loops at the same location for the same end-customer.

12. In the mapping information provided in response to The Companies(CRTC)23Dec09-20, the Bell companies submitted that the Answer Inquiries activity in the 2009 cost study corresponds to both the Receive Inquiries - Escalations and Receive Inquiries - General activities in the 2001 cost study. In The Companies(CRTC)26Jan01-1, the Bell companies identified the following sub-activities for the Receive Inquiries - Escalations and Receive Inquiries - General activities: pre-order Information, query to order, miscellaneous and re-directed calls.

a) Identify the major Receive Inquiries sub-activities included in the 2009 cost study and identify the differences with those assumed in the 2001 study, with rationale. Further describe the adjustments made to the time estimates and occurrence rates, if any, to remove any related time or sub-activity that is retail in nature, quantifying each adjustment.

b) Provide a breakdown of the time estimates and the occurrence rates for each of the major Receive Inquiries sub-activities identified in response to part a) above, if available. Explain any differences in the time estimates and occurrence rates, by major sub-activity, in the 2009 study compared to the 2001 study.

13. In the mapping information provided in response to The Companies(CRTC)23Dec09-20, the Bell companies submitted that the Engineering Circuit Design activity for CLEC orders corresponds to the CLEC Circuit Design activity for loops in the 2009 cost submission. In The Companies(CRTC)26Jan01-1, the Bell companies identified the following sub-activities included in the Engineering Circuit Design activity for CLECs were identified: manual circuit design (ISAA kickouts); manual circuit design (ACE/MCCDS kickouts); connecting link assignments; and, processing of discrepancies.

a) Identify the major Circuit Design sub-activities included in the 2009 cost study and identify the differences with those assumed in the 2001 study, with rationale. Further describe the adjustments made to the time estimates and occurrence rates, if any, to remove any related time or sub-activity that is retail in nature, quantifying each adjustment.

b) Provide a breakdown of the time estimates and the occurrence rates for each of the major Circuit Design sub-activities identified in part a) above, if available. Explain any differences in the time estimates and occurrence rates, by major sub-activity, in the 2009 study compared to the 2001 study.

14. In response to The Companies (CRTC)23Dec09-20 part b), the Bell companies submitted that the ILEC Dispatch activity and the CLEC Order Processing and Dispatch activities were order driven in 2001 but are loop driven in the 2009 cost submission. Explain with supporting rationale why each of these changes in classification (from per-order to per-loop) is required.

15. Refer to the response to The Companies (CRTC)23Dec09-20 where the Bell companies submitted that to estimate “truck roll” time required to fulfill a loop order, the Bell companies extracted from the Employee Coaching Record (ECR) tool the average time recorded to perform this activity by Bell Canada and Bell Aliant – Central region technicians for the months of August, September and October 2008 for each of ILEC and CLEC loop orders.

a) For each of ILEC and CLEC, for each of business and residence, describe the methodology and assumptions used to determine the average truck roll time from the ECR tool, including how the average time is calculated and whether items such as technician non-productive time (e.g., lunch, meetings, training) are included. The response should explain how a truck roll is defined in order to
calculate the average time (i.e. given that a truck roll may involve multiple orders and locations). If certain non-productive time is included, provide justification for these inclusions; if these items were excluded from the average, describe the adjustments made to remove the non-productive time.

b) On page 10 of the above-noted response, the Bell companies submitted that the average truck roll time included the time needed to perform jack installations on ILEC orders when required. Explain whether a customer premises visit may include other activities (e.g., work related to the Bell companies’ DSL service or telephone service or WireCare Plan, queries related to retail services) that are not related to the loop service. If so, for each of these activities, identify the adjustments made to the time estimates and occurrence rates to exclude them.

c) For each of ILEC and CLEC, for each of business and residence, revise the estimate of the truck roll time used to fulfill a loop order by using the average time recorded in the ECR tool to perform this activity by Bell Canada and Bell Aliant - Central region technicians for the months of August, September, and October 2009.

d) Revise the costs provided in the rows labelled “Visiting Customer premises” in Tables 3 to 6 to reflect the revised estimate developed in c) above.

16. Refer to Visiting Customer Premises data in Tables 3 to 6 provided in the response to The Companies (CRTC)23Dec09-20.

a) For each of ILEC and CLEC, explain with supporting rationale the difference in the time estimate for a Bell Canada business premise visit as compared to a Bell Canada residence premise visit.

b) For each of ILEC and CLEC, explain with supporting rationale the difference in the time estimate for a Bell Canada residence visit as compared to a Bell Aliant -Central residence visit.

c) Explain with supporting rationale the difference in the occurrence rates for the business Visiting Customer Premises visit activity between the ILEC and the CLEC.

d) For each of Bell Canada and Bell Aliant-Central, for each of ILEC and CLEC, for each of residence and business, identify and describe all sub-activities performed by the technician at the customer premises that is included in the Visiting Customer Premises activity; further provide the associated time estimates and the occurrence rates for these sub-activities, if any available.

17. Refer to The Companies (CRTC)23Dec09-20 part c), regarding Other (Additional work at the customer premises for NID).

a) Confirm that the costs for Other (Additional work at the customer premises for NID) are costs for additional work caused by cable cuts.

b) Provide a description of the various functions performed by the technician that are included in this additional work.

c) Explain with supporting rationale the differences in the occurrence rates for the Other (additional work at customer premises for NID) activity between the ILEC and the CLEC.

18. In the response to The Companies (CRTC)23Dec09-20, part iii), the Bell companies identified an external component to both the activation and assignment activities. For each of the external assignment and external activation activities, describe the functions included in these activities, indicate who performs them and when the practice of outsourcing these activities began.

19. Provide the assumptions, data sources (if applicable) and vintage of estimates used by Bell Canada Field Services SMEs in developing each of the following time estimates and occurrence rates.

a) For ILECs, separately for business and residence:

i. the occurrence rates and the average time estimates for assignment activities;

ii. the occurrence rates for internal activation activities;

iii. the average jack installation time used for the downward adjustment to the truck roll time; and,

iv. the occurrence rates for additional work at the customer premises for NID.

b) For CLECs, separately for business and residence:

i. time estimates for circuit design;

ii. the occurrence rates and the average time estimates for the answer inquiries–general activities;

iii. the occurrence rates and the average time estimates for the answer inquiries–escalation activities; and,

iv. occurrence rates for residential and business loop orders.

c) For ILECs and CLECs, separately for business and residence:

i. the occurrence rates and the average times estimates for Jumper wire work activities;

ii. the occurrence rates and the average time estimates for dispatch/control centre activities; and,

iii. the average time estimates for internal activation activities.

20. Refer to the response to The Companies (CRTC)23Dec09-20, part c.

With regard to the activation activity, the Bell companies stated that where manual intervention is required, the associate performing the activation for a customer’s line ensures that the dial tone, Smart Touch features and voicemail accounts are provisioned according to the customer’s order request. Confirm that any costs associated with the associate’s time in dealing with the SmartTouch features or voicemail have been excluded from the unbundled loop activation costs provided in Table 3 to 6 of the response. If not, explain why not, and provide the associated time estimates and occurrence rates that have been used to derive these costs.

 

Date modified:

2010-05-28