Telecom Commission Letter Addressed to François-Philippe Lessard (Groupe Maskatel LP)
Ottawa, 21 November 2018
Our reference: 8740-M22-201809008 and 8740-G1-201308312
Mr. François-Philippe Lessard
Chief Executive Officer
Groupe Maskatel LP
770, boulevard Casavant Ouest
Saint-Hyacinthe (Québec) J2S 7S3
Re: Groupe Maskatel LP Tariff Notice 73: Local and Regional basic service – Exogenous factor reversal and rate increase
On 22 October 2018, the Commission received an application from Groupe Maskatel LP (Maskatel) under Tariff Notice 73 in which the company proposed modifications to its General Tariff Item 2.1 to revise its residential service monthly rate.
Paragraph 28(1)(a) of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure provides that the Commission may request parties to file information or documents where needed.
Maskatel is requested to provide comprehensive answers, including rationale and any supporting information, to the attached questions by 30 November 2018.
Original signed by
Director, Dispute Resolution & Regulatory Implementation
c. c. Joseph Cabrera, CRTC, 819-934-6352, email@example.com
Request for Information – Groupe Maskatel LP Tariff Notice 73
In its application, the company noted that Téléphone Guèvremont inc. (Guèvremont), Maskatel’s predecessor company, had filed Tariff Notice 63, dated 4 June 2013, proposing a monthly rate increase of $0.29 for residential primary exchange service, effective 20 June 2013, to recover its costs associated with implementing local competition. The application was approved on an interim basis on 19 June 2013, with final approval on 8 July 2013.
Maskatel noted that in TRP 2011-291, the Commission determined, among other things, that effective 1 June 2011, in the regulated HCSAs of all large and small ILECs where subsidies have not yet been eliminated and monthly rates are below $30, these rates can be increased, subject to an annual cap equal to one third of the difference between the current rate and the lesser of $30 or the amount required to eliminate subsidy.
Maskatel stated that, as a result of TRP 2011-291, Guèvremont proposed to increase its rate by $1.75 in TN 62. Maskatel noted that, at the time, Guèvremont had incorrectly calculated the annual increment required to reach $30 as $1.75 by erroneously including the Bell Message Relay service rate of $0.13 in its starting rate, whereas, the starting rate should have been $24.62. It noted that the correct calculation would have yielded $1.79. TN62 was approved on an interim basis on 19 June 2013, with final approval on 8 July 2013.
Maskatel noted that since 2013, neither Guèvremont nor itself had applied for additional increases to its rates based on TRP 2011-291, which allowed it two remaining rate increases to reach $30.
In TN 73, Maskatel is proposing an increase of $1.82, representing half of the $3.63 remaining to reach the rate of $30. Maskatel also proposed to eliminate the $0.29 exogenous adjustment at the same time, effective 6 November 2018. These changes would result in a revised maximum residential service rate of $ 28.32.
Finally, Maskatel requested that the Commission ratify pursuant to section 25 (4) of the Telecommunications Act (the Act) a change to the maximum residential service rate to $ 28.32 as of 20 June 2018.
- In TRP 2011-291, the Commission limited the amount that could be applied in each year to reach $30 over a three-year period as described above, and stated that this constraint would apply in any given year. Given that these pricing rules were maintained in TRP 2013-160, explain why Maskatel has proposed an increase of $1.82 which exceeds the ongoing yearly constraint of $1.79.
- Paragraph 25(4)(a) of the Telecommunications Act allows the Commission to ratify the charging of a rate by a Canadian carrier otherwise than in accordance with a tariff approved by the Commission, if the Commission is satisfied that the rate was charged because of an error or other circumstance that warrants the ratification.
- Explain why Maskatel’s ratification request regarding a rate that it had not charged should not be considered as retroactive rate making, which is not allowed.
- Explain why Maskatel has not, instead, included in its application the company’s plan for crediting or rebating customers the $0.29 per month they should not have been paying since 20 June 2018, as requested in Commission staff’s letter of 1 October 2018.
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