Telecom Commission Letter addressed to Ms. Céline Laporte (Groupe Maskatel LP)

Ottawa, 17 November 2017

Our reference: 8740-M22-201709528

BY EMAIL

Ms. Céline Laporte
Vice-president, Strategies, Marketing and Sales
Groupe Maskatel LP
770 Casavant Boulevard West
Saint-Hyacinte, Québec  J2S 7S3
celinelaporte@maskatel.qc.ca

RE: Tariff Notice 71 – Rate Increase

Dear Ms. Laporte:

On 5 October 2017, the Commission received an application from Groupe Maskatel LP, under Tariff Notice 71 (TN 71) with respect to its General Tariff, in which the company proposed to change the maximum rate range allowed for basic residential service.

Commission staff is continuing its analysis of this application.

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

Groupe Maskatel must provide comprehensive answers, including rationale and any supporting information, to the attached questions by 30 November 2017.

Yours sincerely,

Original signed by

Michel Murray
Director, Dispute Resolution & Regulatory Implementation
Telecommunications Sector

c.c.: Joanne Baldassi, CRTC, 819-997-3498, joanne.baldassi@crtc.gc.ca

Enclosure: (1)

Questions

In paragraph 18 of Telecom Decision CRTC 2012-37, Téléphone Guèvremont inc. – Implementation of local competition for Cogeco Cable Inc., the Commission approved the local competition implementation plan for Téléphone Guèvremont, which later became Groupe Maskatel LP. In paragraph 17 of the decision, the Commission noted that an exogenous adjustment would give Guèvremont the flexibility to increase rates to recover its local competition start-up costs and approved an exogenous adjustment of $45,000 per year over a period of five years.

In paragraph 18 of the decision, the Commission noted that if Téléphone Guèvremont chose to take advantage of the exogenous adjustment by filing a tariff application to increase rates, its application should include a proposed cost recovery methodology that (i) complied with the regulatory framework and policies in place at the time of filing, and (ii) was consistent with previous decisions regarding the implementation of local competition for other small ILECs.Footnote1

In Telecom Decision CRTC 2012-425, Téléphone Guèvremont inc. – Application to review and vary Telecom Decision 2012-37 regarding implementation of local competition, the Commission approved an exogenous adjustment for Guèvremont of $47,000 per year over a period of five years to recover their local competition start-up and ongoing costs.

On 4 June 2013, Téléphone Guèvremont submitted for approval, in TN 63, a revised page of its General Tariff in order to introduce a paragraph dealing with the reimbursement of the costs of implementing local competition (exogenous factor) which could be charged. In Appendix 1 of TN 63, Téléphone Guèvremont indicated that, as of 1 May 2013, the reimbursement amount had been set at $0.29 per residential subscriber per month. The Commission approved the application, effective 20 June 2013.

In TN 71, Groupe Maskatel proposed to increase the maximum rate range for basic residential service from $26.50 to $26.79, the $0.29 monthly increase per residential subscriber corresponding to the exogenous factor reimbursement set out in Telecom Decision CRTC 2012-425 and in Telecom Regulatory Policy CRTC 2013-160, Regulatory framework for the small incumbent local exchange carriers and related matters.

  1. Since the Commission already approved exogenous factor reimbursement application in TN 63, please explain why a second application for the same exogenous factor was filed in TN 71.
  2. Confirm if the $0.29 rate increase per residential subscriber per month was already applied following the approval of TN 63 and provide any relevant details on this increase.
  3. TN 71 did not provide any information about the method used to calculate the cost recovery. Please provide an analysis of the company’s proposed approach that (i) complies with the regulatory framework and policies in place at the time of Telecom Decision CRTC 2012-37, and (ii) is consistent with previous decisions regarding the implementation of local competition for other small ILECs. This includes demonstrating that the proposed approach respects the Commission’s decision in paragraph 42 of Telecom Order 99-239 that the revenue requirement costs should be allocated between Capped and Uncapped services and among Capped services on the basis of retail switched exchange service NAS with non-residence NAS weighted by a factor of 1.5.
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