ARCHIVED - Telecom Procedural Letter Addressed to Distribution List

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Ottawa, 20 January 2016

Our reference: 8638-C12-200805906


Distribution List

Re: CRTC Informational Sessions on Telecommunication Services Costing Principles & Concepts

Dear Sir/Madam

The Canadian Radio-television and Telecommunications Commission (the Commission) is dedicated to ensuring that the needs and interests of Canadians are at the centre of the Canadian communication system. To this end, the Commission is committed to ensuring that its processes are as transparent as possible and that they allow Canadians to actively and meaningfully participate in Commission proceedings.

With respect to telecommunications, one of the key duties of the Commission is to ensure that rates for non-forborne retail and wholesale telecommunication services are just and reasonable. On the wholesale side, this duty is critical to developing and sustaining a competitive marketplace that offers innovative and affordable services for Canadians.  

To assist Canadians who have an interest in rate setting proceedings for telecommunication services, the Commission will be hosting one-day information sessions on Telecommunication Services Costing Principles & Concepts as more fully discussed below.

The Commission’s general approach to setting rates for telecommunication services is based upon the use of incremental costing, which is then supplemented by a markup to establish the appropriate rate. Pursuant to the Commission’s approach, company-specific costs are generally used in the calculation of costs, which are incremental, forward-looking and causal to the provision of the service.

All Incumbent Local Exchange Carriers (ILECs) and Cable Carriers generally have to provide a cost study in support of proposed service rates. The cost study uses costing principles and concepts approved by the Commission.

The Commission relies on the cost study filed in support of the proposed rate to ensure that the rates eventually approved are (i) based on the costing principles and conceptsFootnote 1 approved by the Commission and (ii) are just and reasonable.  Furthermore, as most company-specific costing information included in the cost studies is necessarily confidential, competitors and interveners rely on the Commission to do the necessary due diligence to ensure that the approved rates are just and reasonable.

Large ILECsFootnote 2 have documented, in their respective company-specific Regulatory Economic Studies Manual (ILECs Manual) Footnote 3, the costing principles and concepts approved by the Commission. In Telecom Regulatory Policy 2015-326Footnote 4, the Commission determined that the existing company-specific incremental costing approach remains the appropriate approach for rate-setting for mandated wholesale services.

Cable Carriers rely on the costing principles and concepts documented in ILECs’ Manuals when conducting cost studies that are to be filed in support of their proposed rates for wholesale services.

Recently, many Small Incumbent Local Exchange Carriers (SILECs) have filed cost studies in support of their proposed Direct Connect rates. SILECs also rely on the costing principles and concepts documented in ILECs’ Manuals.

As more and more companies are filing cost studies in support of their proposed rates, the Commission intends to provide an informational session to improve the efficiency and effectiveness of the rate setting process by enhancing knowledge in the following areas:

Accordingly, the objective of the session is to provide high-level training. Participants are not to use the session to discuss the merits of past Commission determinations or matters that are currently before the Commission.

Who will benefit from attending the session (i.e. Target Audience)?

(e.g. SILECs and Cable Carriers)

The targeted audience is therefore primarily those with some familiarity with cost studies and who have participated, or have an interest in participating, in Commission proceedings involving costing issues.

An outline of the information to be presented during the one-day session is provided in Attachment 2. This information will serve to assess whether the informational session would be beneficial for you.

When and where will the one-day sessions be held?

When: One session on 2 March 2016 and a second session on 3 March 2016 (additional sessions may be provided based on demand)
Where: CRTC, 1 Prom. du Portage, Gatineau, QC J8X 4B1

Registration for the session:

Please confirm your attendance by sending an email to by 1 February 2016 indicating the number of anticipated participants, names and contact information.

In order to conduct an efficient informational session, we may organize each one-day session by:

By 15 February, we will inform all participants of their respective scheduled one-day informational session (being 2 or 3 March 2016).

If you have any questions, please don’t hesitate to contact Lyne Renaud at 819-953-5414 or Mohammed Omar at 819-934-6378.


Original signed by

Chris Seidl
Executive Director,
Telecommunications Sector
c.c.: Lyne Renaud, CRTC, 819-953,5414,
Mohammed Omar, CRTC, 819-934-6378,

Attach. (2)

Distribution List


Bell Canada & Bell Aliant;

TELUS Communications Company;

Saskatchewan Telecommunications;

MTS & Allstream

Rogers Communications Partnership;

Shaw Cablesystems G.P.;

Vidéotron G.P.;

Cogeco Cable Inc.


Canadian Cable Systems Alliance Inc.;



Télébec, société en commandite


Northern Frontenac Telephone Corporation;

NRTC Communications

WTC Communications;

Mornington Communications Cooperative Ltd.;

Brooke Telecom Co-operative Ltd.;

Gosfield North Communication Co-operative Ltd.;

Hay Communications Co-operative Ltd.;

Huron Telecommunications Co-operative Ltd.;

Lansdowne Rural Telephone Company;

Nexicom Telephones, a Division of Nexicom Inc.;

Nexicom Telecommunications, a Division of Nexicom Inc.;

Quadro Communications Co-operative Inc;

Tuckersmith Communications Co-operative Ltd.;

Cochrane Telecom Services;

Roxborough Telephone Company Ltd.;

La Compagnie de Téléphone Upton Inc.;

La Compagnie de Téléphone de St-Victor

Téléphone de St-Ephrem;                          

Téléphone Milot Inc.;

Sogetel Inc.;

Téléphone de Lambton;

Téléphone de Courcelles;


NorthernTel , société en commandite;

Globalstar Canada Satellite Co.;

Gogo Connectivity Ltd.;

O.N. Tel Inc.;


Bruce Telecom;

Internet Access Solutions Ltd.;

Vaxination Informatique;

Primus Telecommunications Canada Inc.;

Distributel Communications Ltd.;

Iristel Inc.;

TekSavvy Solutions Inc.;;

Primus Telecommunications Canada Inc.;

Globalive Wireless Management Corp. (WIND);

Innovation, Science and Economic Development Canada;

Competition Bureau;;;

Canadian Network Operators Consortium Inc. (CNOC);;

Independent Telecommunications Providers Association;

Association des Compagnies de Téléphone du Québec;

The SSI Group of Companies;

Public Interest Advocacy Centre and the Consumers’ Association of Canada (PIAC);

Dwayne Winseck
School of Journalism and Communication, Carleton University;

Ron Murch
Haskayne School of Business, University of Calgary;

Jason Panter
Office of the Vice President, Education and Training, Aurora College;

Benjamin Klass;

Proposed Outline for Costing Principles & Concepts Session

  1. Background
  1. Cost Study Process
  1. Cost Study Review


Footnote 1

As set out in Decision 79-16 and in subsequent Commission determinations

Return to footnote 1

Footnote 2

Bell Canada & Bell Aliant, TELUS Communications Company, Saskatchewan Telecommunications, MTS and Allstream Inc., and Télébec, Société en commandite (Télébec ou l'Entreprise)

Return to footnote 2

Footnote 3

ILECs manuals are available on Commission’s Website at:

Return to footnote 3

Footnote 4

Review of wholesale wireline services and associated policies, Telecom Regulatory Policy CRTC 2015-326, 22 July 2015

Return to footnote 4

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