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Ottawa, July 24, 2013

Our reference: 8638-C12-200805906

BY EMAIL

Distribution

RE: Update of Regulatory Economic Studies Manual

Dear Madam, Sir:

In accordance with the update process documented in paragraph 4.3 of the Regulatory Economic Studies Manual (the manual), Commission staff have updated the manual to reflect costing-related determinations made by the Commission since the manual was last revised in July 2009, up to and including October 2012. The changes have been made to the common manual component describing the general framework for conducting regulatory economic studies, as well as the general appendices to the manual. Please review to ensure that the updates are appropriately worded. The proposed changes are highlighted in “track changes”.

The major changes are summarized below:

Sections 2.2 and 3.4.3.2, Appendix B, Appendix D, and the Glossary of Commonly Used Terms have been updated and Appendix E-1 has been created to reflect Review of the use of company-specific working fill factors and the recovery of past introduction costs not fully recovered, Telecom Regulatory Policy CRTC 2009-274, 14 May 2009, where the Commission reviewed the methodologies used to estimate company-specific working fill factors and the recovery of past introduction costs not fully recovered;

Section 2.3 has been created and Section 2.0 and Appendix D has been updated to reflect Review of the large incumbent local exchange carriers’ support structure service rates, Telecom Decision CRTC 2010-900, 2 December 2010, where the Commission reviewed the large incumbent local exchange carriers’ support structure service rates, and Follow-up to Telecom Decision 2010-900 - Service pole rate and markup issues, Telecom Decision 2011-406, 4 July 2011, where the Commission addressed the remaining service pole rate and markup issues;

Section 2.4 (formerly Section 2.3) has been updated to reflect Obligation to serve and other matters, Telecom Regulatory Policy CRTC 2011-291, 3 May 2011, where the Commission, in part, made modifications related to the local service subsidy regime; and

Section 3.6 has been updated and Appendix D-1 has been created to reflect Confidentiality of information used to establish wholesale service rates, Telecom Regulatory Policy CRTC 2012-592, 26 October 2012, where the Commission established more extensive disclosure guidelines for cost information filed in support of wholesale service applications and in response to requests for information.

We have also updated the attached manual with some miscellaneous changes as explained below:

i) The title of company-specific Appendix R has been changed to “Description of Cost Inclusions for Price Floor Test” to match the title used by the ILECs for their respective company-specific Appendix R.

ii) Sections 3.4.3.4 and 3.4.3.5 have been modified to reflect that inputs must be updated in Appendix V only.

We would appreciate receiving your feedback on the proposed changes to the manual by no later than 26 August 2013.

Furthermore, we would like to take this opportunity to standardize the format and content of Table 9 – Working Fill Factors in Appendix V. An Excel spreadsheet containing the format of this table for each company is attached. Please include Table 9 in the standardized format with your next filing of company-specific appendices and provide the information in the cells highlighted in yellow, if available.

Please contact myself or Greg Milosek (gregory.milosek@crtc.gc.ca) at (819) 953-4720 should you have any questions regarding the above matter. We thank you in advance for your co-operation.

Yours sincerely,

Original signed by

Lyne Renaud
Director, Competitor Services & Costing
Telecommunications

c.c.: Mohammed Omar, CRTC, 819-934-6378, mohammed.omar@crtc.gc.ca
Thomas Hui, CRTC, 819-953-0631, thomas.hui@crtc.gc.ca
Greg Milosek, CRTC, 819-953-4720, gregory.milosek@crtc.gc.ca

Distribution List

Bell Aliant Regional Communications, Limited Partnership regulatory@bell.aliant.ca;
Bell Canada bell.regulatory@bell.ca
MTS Inc. and Allstream Inc. (MTS Allstream) iworkstation@mtsallstream.com;
Saskatchewan Telecommunications (SaskTel) document.control@sasktel.com;
Télébec reglementa@telebec.com;
TELUS Communications Company (TELUS) regulatory.affairs@telus.com

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