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Telecom - Commission letter addressed to Stan Thompson (Northwestel Inc.)

Ottawa, 21 January 2021

Our reference: 1011-NOC2020-0367

BY E-MAIL

Mr. Stan Thompson
Chief Financial Officer & Vice-President
Northwestel Inc.
P.O. Box 2727
Whitehorse, Yukon Y1A 4Y4
regulatoryaffairs@nwtel.ca

Re: Review of the Commission’s regulatory framework for Northwestel Inc. and the state of telecommunications services in Canada’s North, Telecom Notice of Consultation 2020-367 – Request for information

Mr. Thompson:

Pursuant to the procedure set out in paragraph 57 of Review of the Commission’s regulatory framework for Northwestel Inc. and the state of telecommunications services in Canada’s North, Telecom Notice of Consultation CRTC 2020-367, 2 November 2020, attached is a request for information addressed to Northwestel Inc.

For the purposes of the record of this proceeding, Northwestel is requested to resubmit the following documents that were filed in the proceeding initiated by Review of the price cap and local forbearance regimes, Telecom Notice of Consultation 2018-214:

  1. “NWT(CRTC)19Nov18-3_TNC 2018-214_CONF”, which provides the methodology and assumptions used to develop PES costs based on the NBV approach;
  2. “NWT(CRTC)19Nov18-3_TNC_2018-214_ATT_2_CONF”, which provides Residential PES costs per NAS by cost category based on the NBV approach, disaggregated into costs for loop, COE and Operating expenses and Systems; and
  3. “NWT(CRTC)19Nov18-3_TNC 2018-214_ATT_3”, the cost study report which provides details of the cost components included under each of the capital and expense cost categories.

This request for information includes two attachments.

Responses must be filed with the Commission by 30 March 2021. Parties may file comments strictly limited to the new information provided in response to this RFI by 9 April 2021, and Northwestel may file reply comments with respect to this RFI by 16 April 2021.

As set out in section 39 of the Telecommunications Act and in Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, persons may designate certain information as confidential. A person designating information as confidential must provide a detailed explanation on why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure. Furthermore, a person designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Yours sincerely,

Original signed by:

Lisanne Legros
Director
Telecommunications Networks Policy

cc:       Suneil Kanjeekal, CRTC, (613) 668-6561, suneil.kanjeekal@crtc.gc.ca;
Nicolas Gatto, CRTC, (873) 353-9280, nicolas.gatto@crtc.gc.ca
Simon Wozny, CRTC, (873) 455-4630, simon.wozny@crtc.gc.ca
Nat Natraj, CRTC, (819) 953-5081, nat.natraj@crtc.gc.ca 

Attach. (2)

Attachment 1

Request for Information for Primary Exchange Service Study

Refer to the following responses from Northwestel in the proceeding initiated by Review of the price cap and local forbearance regimes, Telecom Notice of Consultation CRTC 2018-214 (TNC 2018-214):

  1. “NWT(CRTC)19Nov18-3 TNC 2018-214 CONF” - which provides  the methodology and assumptions used to develop PES costs based on the NBV approach;
  2. “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 2 CONF” - which provides Residential PES costs per NAS by cost category based on the NBV approach, disaggregated into costs for loop, COE and Operating expenses, and Systems; and
  3. “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 3” - the cost study report which provides details of the cost components included under each of the capital and expense cost categories.
  1. Refer to “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 2 CONF”, Tab #3 Att2 2019 NBV:
    1. For the Residential Primary Exchange service (PES) costs summarized in Tab #3 Att2 2019 NBV titled “Scenario B NBV Approach - Residential Primary Exchange Service” (the Scenario B cost summary), provide the model(s) that demonstrate how these results were calculated, including all of the associated unit costs, demand inclusions, associated formulas, and all relevant linked files.
    2. Provide the annual cash flows, identifying each of the NBV inputs used and the incremental capital investment required for growth and replacements, by asset class, relevant to the cost study provided in the Scenario B cost summary. Furthermore, provide, by year, the capital and expenses increase factors and the productivity improvement factor used to restate historic costs.
    3. Provide a revised Residential PES cost study which includes the Costs Causal to Service, for Scenario B as applicable, along with descriptions of the components included and explanations as to how they were calculated.
    4. Refer to row items “Outside Plant Equipment” and “Imputed capital copper loop portion” in the Scenario B cost summary. 
      1. Given the similarity in descriptions for these row items in “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 3”, which is the cost study report for the PES service, explain the difference, if any, in cost inclusions and calculations.
      2. Explain, with supporting rationale, why both line items are required, as Note 4 in the Scenario B cost summary suggests that the replacement capital of the copper loop is also being included in the row item “Imputed capital copper loop”.
      3. If changes are required to either of the line items indicated above, provide a revised Residential PES cost study, including all associated models and linked files, based on the NBV approach.
    5. In the column “Residential Service” of the Scenario B cost summary.
      1. Explain, with supporting rationale, why the row item “Monthly Equivalent Cost” in the Scenario B cost summary includes a mark-up.
      2. Refer to “Expenses Causal to Demand” row item “Other” and provide the breakdown of the major components included in this row item consistent with the cost categories provided in the study report.
      3. Refer to row item “Total Cost Impacts (PWACs): Excluding Imputed Capital Local Loop Portion”. Provide each of the aggregated cost categories (e.g. capital causal to demand, expense causal to demand) that are included in the above row item in the column “Present Worth within the study period”. If all the aggregated costs categories are not included in the above row item, then provide revised residential service PES costs for Scenario B, including all associated models and linked files.
  2. Provide the wireline demand for the Residential PES in High Cost Band H1 for each of the years 2019 to 2023 inclusive that were used in “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 2 CONF”.
  3.  Refer to “NWT(CRTC)19Nov18-3 TNC 2018-214 CONF”:
    1. The response to part a) of the above RFI indicates that the NBV of loop capital costs for Scenario B were based on 2016 data and all other cost inputs were based on 2011 costs restated to 2019.
      1. If more current information is now available to develop updated loop capital costs, or any other cost inputs, provide revised PES costs for Scenario B based on the available updated costs, and identify the updated costs and their vintage. The response must:
        1. provide the information requested in question 1 a) above for Scenario B based on the updated cost inputs identified in 3. a. i) above; and
        2. address the issues in questions 1 b) and 1 c) above for this scenario.
    2. Refer to the response to part (a) of “NWT(CRTC)19Nov18-3 TNC 2018-214 CONF”, where the company described the “Scenario B NBV Approach” in part a) of the response:
      1. Provide in an Excel format the methodology, assumptions, and detailed calculations used to estimate each of the loop capital costs and the replacement capital costs in each year of the study period. Explain what replacement capital represents in this context.
      2. Indicate in which line item in “NWT(CRTC)19Nov18-3 TNC 2018-214 - ATT 2 CONF”, Tab #3Att2 2019 NBV the loop capital costs and replacement capital were included.
      3. Provide the information requested in question 3 b) i and ii above for the “Scenario B NBV Approach” based on the updated cost inputs identified in 3. a. i) above.
  4. Refer to the Part 1 Application titled “Seeking Relief for all Residential Internet Customers in Response to COVID-19”, dated March 16 2020, where in paragraph 20, it is indicated that the additional margin from toll and custom calling features is less than #$10# per month per customer:
    1. Provide the exact margin for toll and custom calling features.
    2. For the custom calling features, provide the average revenues, average costs and margin per NAS per month indicating the vintage of the data used.
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