ARCHIVED - Letter

Ottawa, 20 May 2011

Our reference: 8663-M4-201108548
8663-W2-201108548

BY EMAIL

M. Jean-Philippe Saia
President and CEO
Téléphone Milot Inc.
2640, rue Laflèche
C.P. 30
St-Paulin (Québec)
J0K 3G0
jean-philippe.saia@sogetel.com

Re: Local competition in small ILEC territories

Dear Mr. Saia:

In a letter dated 18 mai 2011, Cablovision Warwick Inc. (Warwick) informed the Commission and Téléphone Milot inc. (Milot) that it is interested in obtaining certain competitor local services from Milot, a small incumbent local exchange carrier (ILEC).

As set out in Revised regulatory framework for the small incumbent local exchange carriers, Telecom Decision CRTC 2006-14, 29 March 2006 (Telecom Decision 2006-14), each small ILEC, following a formal signed expression of interest from a company requesting to use competitor services within its territory, is to file an implementation plan with the Commission within 30 days.

Therefore, Commission staff requires Milot to file its implementation plan and other required information with the Commission, serving a copy to Warwick, no later than 20 June 2011.

Milot’s implementation plan must contain

• all information required by Telecom Decision 2006-14; and
• detailed information about costs and cost recovery as required in Appendix 1 and 2 to this letter.

In conjunction with filing its implementation plan, Milot is to file any required tariffs.

Milot is to ensure that its implementation plan addresses its proposed arrangements with Warwick and includes any other requirements needed to implement local competition in its territory.

Milot’s implementation plans will be treated as applications pursuant to section 22 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (Rules of Procedure).

The Commission will post Milot’s application on its website. Pursuant to the Rules of Procedure, Warwick may file an answer with the Commission within 30 days of the date that the application is posted on the Commission’s website and serve that answer on Milot. Any interested person may file an intervention with respect to the application within 30 days of the date the application is posted on the Commission’s website and serve that intervention on Milot. Milot may file, with the Commission, a reply to any answer or intervention within 10 days after the deadline for intervening in the proceeding and serve that reply on the respondent and the interveners to whom the applicant is responding.

Sincerely,

‘Original signed by S. Bédard’

Suzanne Bédard
Senior Manger, Tariffs
Telecommunications

cc: Louise Bégin, Téléphone Milot Inc., louise.begin@sogetel.com  
David Ouellette, Câblovision Warwick inc., service@cablovision.com
Laurie Ventura, CRTC, (819) 997-4589, laurie.ventura@crtc.gc.ca

Appendix 1

Milot is to include the following cost and cost recovery elements as part of its implementation plan:

1) The company’s total number of residential and business NAS, as of 1 June 2011.

2) The company’s ownership and affiliate structure, including the total residential and business NAS of all affiliated local exchange carriers and/or its parent company as of 1 June 2011.

3) A 10-year demand forecast using Table 1 in Appendix 2.

4) The names of the exchanges where local competition, LNP, and/or WNP will be implemented.

5) A list of all tariffs required by competitors, including:

a) a description of the service;

b) whether it is a new or an existing tariffed service;

c) a description of the required tariff changes, as applicable; and

d) the proposed effective date for the service introduction or tariff changes.

Note: proposed tariffs are to be filed with the implementation plan.

6) The following costing information:

a) Using Table 2 in Appendix 2, provide details of the cost cash flows associated with implementing local competition, LNP, and/or WNP in the company’s operating territory. The cost cash flows are to be broken down into start-up and ongoing costs, and also expressed as present worth of annual costs (PWAC) and annual equivalent cost (AEC), using a 5-year study period. If Milot has more than 3,000 total NAS, it should also include a sensitivity that reflects a 10-year study period.

Further, provide a breakdown of the start-up and ongoing costs into major capital and expense components. The response should also provide details on the functionality and activities associated with each of the major components, and the associated costing methodology and all assumptions ‒ including the source and vintage of data used, the cost increase factor(s), expense increase factor(s), and productivity increase factor(s) applied in the study period.

b) Further to the information required in 6. a) above, provide

i) the general cost study parameters and assumptions, such as cost of capital, cost of debt, debt equity ratio, tax rate, labour unit cost(s), and the study period used to derive the costs provided in Table 2; and

ii) details as to the schedule for the various elements of your plan.

7) A plan for cost recovery. Note that residential rates may not increase by more than $4 in any one year.[1] This amount would include any rate increases to recover exogenous adjustments for local competition and/or WNP costs, as well as any rate increases to recover subsidy lost due to the Commission’s determinations in Telecom Regulatory Policy 2011-291.

[1] See Regulatory framework for the small incumbent telephone companies, Decision CRTC 2001-756, 14 December 2001, and Revised regulatory framework for the small incumbent local exchange carriers, Telecom Decision CRTC 2006-14, 29 March 2006.

Date modified:

2011-05-20