Rate increases and upgraded service granted to Ontario independent telcos

The CRTC has taken steps to lure long distance competitors into smaller Ontario markets with a Dec. 4 ruling that requires independent telcos to reduce their reliance on subsidies by charging customers higher rates. The series of decisions are designed to bring the residential rate for delivering local phone service closer to the actual cost of delivering it for several independent telcos (see box). The orders follow up on the process begun with Telecom Decision 99-5, released in April last year. That ruling directed independent companies whose contribution requirement exceeded 25 per cent of their total revenue requirement to file proposals detailing how they intend to reduce their subsidy requirement to 25 per cent by 2002. All of the telcos, save Cochrane Public Utilities Commission, were granted increases in their rates. North Renfrew Telephone Ltd and Westport Telephone Co Ltd received residential rate increases only, on the grounds that their business service is compensatory and should not be subject to escalation. The other firms were directed to raise both residential and business rates. Local restrictions were applied to two of the companies. People’s Telephone Co of Forest Ltd will be increasing its residential rates by $5 in the Arkona and Forest exchanges, while the Aberarder exchange will see a jump of one dollar. The different rates reflect the fact that customers in Aberarder are currently paying $4 more each month than other subscribers, due to a larger local free calling area. Similar restrictions were placed on Amtelecom Inc. Most subscribers currently pay $19.85 a month for local service and will see that rise by $5.25 next month. But customers in the Manitoulin exchange are already shelling out $26.75 for local service. The CRTC suggests it would be unfair to impose an increase on those residents. The ruling on these orders came a few days after Decision 2000-745, the revisions to the contribution mechanism (NL, Dec. 4/00). That decision specifically exempted the independent telcos from the new regime. Next year the smaller companies will continue to receive funds via a per-minute charge rather than the revenue tax being imposed by the commission. During the year the commission will seek a mechanism to include the firms in the new system by 2002. That does not sit well with some competitors who suggest the CRTC is trying to have it both ways. "The commission decided that the independent telcos were allowed to re-balance their rates to recover costs. That rationale was multiplied to the contribution decision," Dawn Hunt, VP intercarrier relations at Rogers Wireless Inc told Network Letter. "Our position was ‘don’t perpetuate the problem, fix the problem.’ Now they’ve seen fit to essentially fix the problem in the independent telco territory, but not the rest of the country." The only company that did not seek a rate increase was the Cochrane PUC. Its filing related to the service improvement plan (SIP), which will enhance service for its customers. The changes will see 643 party-line subscribers upgraded to individual lines. All customers will have access to touch-tone service with local Internet access; calling features such as 911, voice relay for the hard of hearing and privacy protection; access of operator and DA service; LD access; and a copy of the local telephone directory. The approval of several other SIPs will benefit customers across Ontario. Northern Telephone Ltd will offer service for the first time to 369 clients, while an additional 4068 will move from party-line to single-line. Amtelecom will see 274 new customers, while 1273 will leave the party lines. North Frontenac Telephone Co Ltd will gain 175 new subscribers and will see 650 leave the party-lines. O.N. Telcom will offer service to 48 first-time subscribers and upgrade 159 from party-line to individual line. All of the firms that had their SIPs approved are required to file a list of exchanges scheduled for completion in the previous year and the number actually completed; the predicted and final numbers of subscribers with extended or upgraded service; their total capital investment for the previous year; projected upgrades and extensions for the upcoming year; and any changes to the yearly program along with supporting reasons. Four companies—Hurontario Tele-phones Ltd, Nexicom Telecommunications Inc, People’s and Amtelecom—asked for extended area service (EAS). The CRTC denied all four applications.

Rate increases and upgraded service granted to Ontario independent telcos

News | 12/20/2000 5:00 am EST

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