Telecom Commission Letter Addressed to Philippe Gauvin (Bell Canada)

Ottawa, 19 November 2018

Our reference:  1011-NOC2018-0214

BY EMAIL

Mr. Philippe Gauvin
Assistant General Counsel
Bell Canada
Floor 19, 160 Elgin Street
Ottawa, ON  K2P 2C4
bell.regulatory@bell.ca

Re: Review of the price cap and local forbearance regimes, Telecom Notice of Consultation 2018-214 Footnote1 – Requests for information

Dear Mr. Gauvin

Pursuant to paragraph 39 of Telecom Notice of Consultation 2018-214, attached are requests for information from the Commission.

Responses to these requests for information are to be filed with the Commission by 19 December 2018. The responses must be received, not merely sent, by that date.

Sincerely,

Original signed by

John Macri
Director, Policy Framework
Telecommunications Sector
c.c.: Christine Brock, CRTC, (873) 353-5852, christine.brock@crtc.gc.ca

Attach (1)

Requests for information addressed to Bell Canada et al.Footnote2

  1. As of 19 November 2018, on Bell Canada’s website, Home Phone Lite service is advertised at the following monthly rates, excluding municipal and 9-1-1 service fees (see https://www.bell.ca/Home_phone/Products/Home_phone_Lite):
    • $31.17 in Newfoundland and Labrador;
    • $31.56 in Prince Edward Island;
    • $31.27 in Nova Scotia;
    • $31.18 in New-Brunswick;
    • $38.85 in Quebec; and
    • $44.31 in Ontario.
    1. Explain how this service is different from the forborne stand-alone primary exchange service (PES) which is capped at $31.78 according to Table 5 of Bell Canada et al.’s intervention.
    2. At paragraphs ES3 and ES4 of its intervention, Bell Canada et al. stated:

      (…) today we have a plethora of rates for residential PES in regulated areas – some differing only slightly – for the same service provided to identical customers who simply happen to reside in different exchanges (even within the same rate band).  Such a result is illogical, burdensome to administer and above all is confusing and very difficult to explain to our customers.

      Our pricing proposal is predicated on the need to be able to simplify and harmonize our rate structure and offer reasonable, uniform and easy-to-understand rates to our customers across our serving territory, similar to what we are able to offer in our forborne exchanges.

      Reconcile the Home Phone Lite service rate structure with Bell Canada et al.’s statement that different rates for residential PES in regulated areas in different exchanges makes it burdensome to administer, confusing and difficult to explain to customers.

  2. At paragraphs 29 and 30 of its intervention, Bell Canada et al. proposed that the rates for all lines, both individual and party-line, be aligned at the proposed regulated price ceiling within a reasonable period.
    1. Provide the monthly annual increase to the residence party-line rate over a three-year transition period in the same format (i.e. with the same columns) as Table 6 of Bell Canada et al.’s intervention.
    2. Indicate the percentage and number of party-line customers that are currently capable of obtaining individual line service.
    3. The company is not proposing to remove the service from existing customers, but rather to transition the rates to align with individual line service. Since there are differences between the level of service for individual line and party-line services (e.g. many services are not available to customers with party-line service), explain, with supporting rationale, why it would be fair to charge the same rate for both services.
  3. Refer to Table 7 of Bell Canada et al.’s intervention where the net impact of the subsidy loss and the revenue increases for the years 2018 to 2023 resulting from the proposed permissible price increases for residential PES in regulated areas was provided. Provide a breakdown of the information by company, including any supporting calculations and assumptions.
  4. At paragraphs 22 to 28 of its intervention, Bell Canada et al. proposed to increase rates for regulated residential PES to the highest approved rate of $38.34. These increases would be phased in over time with annual increases limited to the lesser of i) 1/3 of the difference between the existing rate and the regulated target price or ii) $2.50 for the large incumbent local exchange carriers (ILECs) and $4.00 for the small ILECs. Bell Canada et al. also proposed that following a three-year transition period, the rate element constraint would be either i) inflation for those rates that would be at the proposed price ceiling or ii) $2.50 (large ILECs) and $4.00 (small ILECs) for the rates that would require a longer transition period, until all regulated rates are aligned at the price ceiling.
    1. Justify why a higher rate element constraint should be granted to the small ILECs given that the majority of their rates are comparable to the large ILECs.
    2. Explain, with supporting rationale, why the same flexibility should be allowed in non-high-cost serving areas rather than inflation as proposed by Telus Communications Inc. at paragraph 43 of its intervention.
    3. Assume that Bell Canada et al.'s proposal above is adopted with the following changes:
      • the price ceiling is set at $35.00 rather than $38.34;
      • the maximum allowable increase per year is $1.50 for all ILECs; and
      • the rate element constraint for rates at $35.00 and over is inflation.
      1. Provide, with supporting rationale, Bell Canada et al.'s views on this approach.
      2. Assuming that the Commission retains the price ceiling for stand-alone PES in forborne areas, provide Bell Canada et al.'s views on whether the price ceiling should be allowed to increase in the same manner to $35.00.
      3. Based on this approach, reproduce Tables 6 and 7 of Bell Canada et al.'s intervention, broken down by company, with supporting calculations and assumptions.
  5. Refer to paragraph 55 of Bell Canada et al.’s intervention where it submitted that the annual loss of the subsidy under the existing price cap framework would qualify as an exogenous factor.
    1. Provide evidence, with supporting rationale, that the amount would be material for each company.
    2. Has each company recovered its investment in copper loop facilities in its serving territory? If not, what amount (in dollars) has not been recovered? Provide all calculations and assumptions.
    3. Provide a list of any other services that are sharing the copper loop facilities (e.g. Internet) along with the associated revenues and costs.
    4. Indicate whether a portion of the costs associated with the copper loop facilities have been attributed to other services using the facilities. If not, provide Bell Canada et al.’s views as to why these costs should not be attributed to these other services.  
  6. In its intervention, Bell Canada et al. proposed eliminating the requirement to provide equal access where mobile wireless service is used to meet the obligation to service. At paragraph 85 of its intervention, Bell Canada et al. indicated that decoupling local and long distance services is technically impractical for mobile wireless service.
    1. Describe any options available to offer equal access for mobile wireless services. Provide the estimated costs for each of these options.
    2. If the obligation to provide equal access was eliminated, identify what options would be available to mobile wireless customers to access other long distance service providers.
  7. At paragraphs 117 and 123 of its intervention, Bell Canada et al. proposed that, given the extensive adoption of wireless services and since mobile wireless service is now a basic telecommunications service, the Commission should modify the local forbearance framework, specifically the residential and business competitor presence tests. They submitted that the tests should be modified to grant local forbearance if, in addition to the ILEC, there are other independent facilities-based telecommunications service providers, whether wireline or wireless service providers, offering local exchange services and capable of serving at least 75% of the number of residential local exchange service lines that the ILEC is capable of serving in a particular exchange.
    1. Identify which residential and business local exchanges would become eligible for forbearance under Bell Canada et al.’s proposed competitor presence tests, where each company serves as an ILEC. If the information is not available, provide separately the estimated number of eligible residential and business local exchanges by company based on the proposed competitor presence tests.
    2. According to the Commission’s 2017 Communications Monitoring Report,Footnote3 mobile wireless services are available to 99.4% of the Canadian population. Provide the Bell Canada et al.’s views, with supporting rationale, on setting the threshold for customers capable of being served by mobile wireless competitors at a higher level (e.g. 95% or even 100%).
    3. Provide a response to part a) above assuming that the wireless competitor presence threshold is set at i) 95% and ii) 100%.
  8. Provide the total number of residential network access services in forborne exchanges that were served by each company as of 30 June 2018.
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