ARCHIVED -  Letter

Ottawa, 10 January 2012

File No.:  8740-S22-201116088

BY E-MAIL

Mr. Robert Hersche
Director of Regulatory Affairs
Saskatchewan Telecommunications
2121 Saskatchewan Drive
Regina, Saskatchewan
S4P 3Y2
document.control@sasktel.com

RE:  Tariff Notice 265 - Increase to HCSAs residential Primary Exchange Service

Dear Sir:

On 15 December 2011, the Commission received an application by Saskatchewan Telecommunications (SaskTel), under cover of Tariff Notice 265, in which the company proposed changes to its General Tariff – Basic Services, items 110.10 Network Access Service Discontinued and 110.12 Network Access Service.

The company proposed to change the rate structure of the above noted items and to increase the rates for customers in Bands E, F, and G pursuant to the price constraints established by the Commission in paragraphs 122 and 123 of TRP-2011-291¹.

Paragraph 28(1)(a) of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure provides that the Commission may request parties to file information or documents where needed.

SaskTel is requested to provide comprehensive answers, including rationale and any supporting information to the attached questions by 16 January 2012.  Consequently, this application along with any associated subsequent revisions will not be approved on an interim basis on the 15th calendar day following their receipt.  However, the Commission intends to dispose of this application, along with all associated subsequent revisions, within 45 business days of receipt of the filing.

Yours sincerely,

‘Original signed by S. Bédard’

Suzanne Bédard
Senior Manager, Tariffs
Telecommunications

Attach.

cc:  Nancy Webster Cole, CRTC (819) 934-6377, nancy.webstercole@crtc.gc.ca

[1]  Telecom Regulatory Policy CRTC 2011-291, Obligation to Service and other Matters (TRP 2011-291, 3 May 2011

Attachment

1.  In its application, SaskTel noted that in the context of its High Cost Service Area (HCSA) residential primary exchange service (PES) and SaskTel’s calculations of required subsidy amounts ‘monthly rates’ are calculated as the cumulative average monthly revenue per HCSA residential Network Access Service (either item 110.10 or item 110.12); Extended Area Service (Item 100.30); and Excess Mileage charges (Item 105.10).  The company further noted that the cumulative average monthly rental from these charges varies in the three HCSA bands (E, F, and G) due to a varying mix of customer services and therefore the rate increase required to move each band to an overall average of $30 over three years varies.

In TRP 2011-291 the Commission noted, in footnote 34, that the price ceiling established for monthly stand-alone PES includes Touch-Tone service and other permanent monthly charges associated with unlimited local calling (i.e., mileage charges, Extended Area Services, and Community Calling Services).  Additionally, in paragraph 124 of that TRP, the Commission determined that rates which are already at $30 or more will not be permitted to increase further until 1 June 2014.

Commission staff notes that the maximum monthly residence rate for Extended Area Service is $5.63 and the maximum monthly residence rate for Excess Mileage Charges is $4.91.  Commission staff notes that it appears a customer could be charged $24.06 for Network Access Service; $5.63 for Extended Area Service; and, $4.91 for Excess Mileage Charges, resulting in a maximum total monthly rate of $34.60 which exceeds the $30 price ceiling established by the Commission in TRP 2011-291¹.

In light of the above, SaskTel is requested to:

a)  provide calculations, and other information as needed, to demonstrate that the company’s proposed rate increases will not result in any single customer in Band E, F, or G, being charged more than $30 a month for standalone PES with the associated mandatory charges (total PES) or more than what they are currently charged if currently their total  PES rate is $30 or more;

or, in the alternative,

b)  file a revised proposal that would ensure no customer in Band E, F, or G would be charged more than $30 a month for total PES or more than what they are currently charged if currently their total PES rate is $30 or more.

[1]  Paragraph  123 ...if an ILEC decides to increase a residential PES rate, that increase will be subject to an annual price constraint equal to one third of the difference between the rate in effect as of the date of this decision and the $30 rate established in Telecom Decision 2007-27.  This constraint will apply in any given year.  However, if the amount required to eliminate subsidy in any given year is less than the annual price constraint, the annual increase is limited to the amount required to eliminate subsidy.  Any proposed rate increases are to be made effective no earlier than 1 June of each year.

Date modified:

2012-01-10