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ARCHIVED - Telecom Commission Letter Addressed to W.N. Beckman (Saskatchewan Telecommunications)

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Ottawa, 19 November 2018

Our reference:  1011-NOC2018-0214

BY EMAIL

Mr. W.N. Beckman
Senior Director
Regulatory Affairs
Saskatchewan Telecommunications
2121 Saskatchewan Drive
Regina, SK S4P 3Y2
document.control@sasktel.com

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

Dear Mr. Beckman:

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 Saskatchewan Telecommunications (SaskTel)

  1. In Telecom Notice of Consultation 2018-214, the Commission asked parties to comment on whether any measures are necessary to compensate the incumbent local exchange carriers (ILECs) given that the local service subsidy will be eliminated, and if so, what measures would be appropriate. Further, any submission with respect to compensation for the loss of subsidy must be accompanied by sufficient supporting data, including evidence to demonstrate that compensation is necessary to ensure the recovery of the party’s investment and overall financial viability.

    At paragraph 16 of its intervention, SaskTel submitted that, in allowing increases to residential rates and price ceilings, the Commission should strive to find a balance which allows increases equal to the greater of inflation or 5% while not causing rate shock or affordability concerns to Canadians.

    1. Confirm that SaskTel wants to be granted the flexibility to increase rates in high cost serving areas (HCSAs) and the price ceiling in forborne areas annually by at least 5%.
    2. If so, provide the minimum annual revenue increases that would result from its proposal, including all calculations and assumptions.
    3. Justify the proposed compensation by demonstrating that it is necessary to ensure the recovery of SaskTel’s investment or overall financial viability.
  2. Refer to paragraphs 22 to 28 of Bell Canada et al.’sFootnote2 intervention where they proposed to increase rates for regulated residential primary exchange services (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 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) or $4.00 (small ILECs) for the rates that would require a longer transition period, until all regulated rates are aligned at the price ceiling.

    Assume that Bell Canada et al.’s proposal 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, the company's views on this approach.
    2. Provide the company's views on whether the price ceiling for stand-alone PES in forborne areas should be allowed to increase in the same manner to $35.00.
    3. Based on this approach, reproduce tables similar to Tables 6 and 7 of Bell Canada et al.'s intervention, with supporting calculations and assumptions.
  3. At paragraph 20 of its intervention, SaskTel submits that the Commission should allow companies to adjust service installation tariffs which currently allow installation of local wireline services at less than cost.
    1. Define “installation services”. List the specific tariff(s) and rate band(s) in question.
    2. If SaskTel is proposing rate changes to the specific tariff(s) in part a) above:
      1. Submit a cost study report to support the proposed new tariff rate(s); and
      2. Provide any proposed changes to the terms and conditions of those tariffs.
  4. At paragraphs 31 and 34 of its intervention, SaskTel 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 the company’s proposed competitor presence tests. If the information is not available, provide separately the estimated number of eligible residential and business local exchanges based on SaskTel’s 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 company’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%.
  5. Provide the total number of residential network access service in forborne exchanges that were served by the company as of 30 June 2018.
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