ARCHIVED -  Letter

Ottawa, 1 March 2012

File No.: 8740-T69-201115106

BY E-MAIL

Michelle Duguay
Senior Regulatory Advisor – Tariffs
Telecommunications Policy and Regulatory Affairs
TELUS Communications Company
michelle.duguay@telus.com

Re: Tariff Notice 567 - Interrogatories

Dear Ms. Duguay:

The Commission received an application by TELUS (Quebec) on 21 November 2011, under cover of Tariff Notice 567, in which the company proposed revised rates for interconnection services, such as direct connection, access tandem connection and toll-free carrier identification services, and for primary interexchange carrier processing charges, in the province of Quebec.

To complete their analysis of the cost studies submitted in support of the proposed revised rates, Commission staff is submitting the interrogatories appended hereto. The company must file its responses to the interrogatories no later than 16 March 2012.

Interested parties may file comments with respect to the responses of TELUS Quebec no later than 27 March 2012.  TELUS Quebec will have until 3 April 2012 to file its final reply, serving copies on all other parties which have filed comments.

All submissions are to be made in accordance with the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure, SOR/2010-277.

Yours sincerely,

Original signed by:

Yvan Davidson

Senior Manager, Competitor Services and Costing
Telecommunications

c.c.: Marc Pilon, CRTC, (819) 997-4535, marc.pilon@crtc.gc.ca

Appendix

c.c.: Distribution List

Distribution List:

regulatory.affairs@telus.com
reglementa@telebec.com, amercie@telebec.com
bell.regulatory@bell.ca, regulatory@distributel.ca
iworkstation@mtsallstream.com

TELUS QUEBEC - INTERROGATORIES

IXSP (Interexchange Service Provider) Processing Charges

1. Explain why the proposed rate is nearly 8 times higher than the equivalent rate for TELUS Alberta.  Provide a detailed response, with supporting rationale, including a comparison of the underlying key assumptions made for calculating the TELUS Alberta and TELUS Quebec service costs.
2. Refer to Table 5 of the economic study:
   
   a) Provide a breakdown of the service provisioning expenses by major activity, with a description of each activity; and
   
   b) For each major service provisioning activity, provide the costing methodology used and the associated assumptions, with the supporting rationale; and
   
   i.   For each cost based on or developed using explicit time estimates, provide the time estimates and the labour unit costs; and specify the vintage of the data, the data source and the adjustments made to convert the unit costs for 2011.  
   
   ii.   For each service provisioning cost developed using the unit costs, provide the unit costs or cost factors, specifying the data source and the vintage of the data. Also, explain whether productivity improvement factors and cost increase factors were applied to establish the current 2001 costs, with supporting rationale, specifying the factors used.

DIRECT CONNECTION

1. Refer to pages 2, 8 and 9 of the document "Service de raccordement direct Québec 2011 – Aide à la décision économique":
   
   a) Provide a breakdown of the total per-minute cost in cost per call attempt per minute and cost per CCS cost per minute.  Show how the cost per CCS and the cost per call attempt are converted into a per-minute cost. Provide the detailed calculations.
   
   b) For the TELUS Alberta and Quebec territories, provide the list and values of the parameters that went into the LSCS-STR model to calculate the specific costs for each of these territories, with supporting rationale for the major differences between Alberta and Quebec.
   
   c) For the three major cost elements, i.e. the spectrum peripheral model (SPM), the speech links and the digital trunk controller, provide:
   
   i) The unit cost (including installation charges), specifying the vintage of the data;
   
   ii) Provide explanations regarding the retrospective application of the productivity improvement factors and the capital cost increase factors used to establish the current unit cost for 2011, with supporting rationale, specifying the factors used;
   
   iii) The working fill factor (utilization) and the life estimate; and
   
   iv)The present worth of annual costs (PWAC) of each major component.
   

ACCESS TANDEM CONNECTION

1. Were the CPU upgrade costs for the DMS-500 included? If so, provide a detailed breakdown of the costs, the vintage of the costs and the PWAC value.
   
   
2. Refer to the operating expenses in the document "Service de transit d’accès Québec 2011, Aide a la décision économique," 21 November 2011, pages 2 and 13:
   
   a) Provide the capital cost of the single-line access service included in the file of Public Notice 2011-119 used to calculate the percentage, identifying the source of the document in this file and the rate band used, with supporting rationale concerning the choice of rate band. Also provide the maintenance expenses related to the capital costs of the above-mentioned single-line access service.  Specify the source of the data.
   
   b) Refer to the percentage of capital of the average switching cost used by the company (based on the ABC model). Identify the vintage of the ABC data and the TELUS region to which they correspond.  In addition, confirm that the average switching costs represent the average of all the rate bands; if they do, explain why this average would be representative of the switching costs relative to the total cost of services for the rate band chosen above.
   
   c) Also, provide explanations regarding the retrospective application of the productivity improvement factors and cost increase factors used to establish the current unit cost for 2011, with supporting rationale, specifying the factors used.
   
   
3. Refer to pages 2, 8 and 9 of the document "Service de transit d’accès Québec 2011 – Aide à la décision économique":
   
   a) Provide a breakdown of the total cost per minute in cost per call attempt per minute and cost per CCS cost per minute.  Show how the cost per CCS and the cost per call attempt are converted into a per-minute cost.  Provide the detailed calculations.
   
   b) For the TELUS Alberta and Quebec territories, provide the list and values of the parameters that went into the model to calculate the specific costs for each of these territories, with supporting rationale for the major differences between Alberta and Quebec.
   
   c) For the two major cost elements, i.e. the spectrum peripheral model (SPM) and the speech links, provide:
   
   i) The unit cost (including installation charges), specifying the vintage of the data;
   
   ii) Provide explanations regarding the retrospective application of the productivity improvement factors and the capital cost increase factors used to establish the current unit cost for 2011, with supporting rationale, specifying the factors used;
   
   iii) The working fill factor (utilization) and the life estimate; and
   
   iv)The PWAC of each major component.
   
   e) Explain the difference in the per-minute switching costs between access tandem connection and direct connection, with supporting rationale.

Date modified:

2012-03-01