CRTC price cap decision sets new service categories, endorses SIPs

The CRTC’s price cap ruling is a lengthy and complex document bursting with detail. It’s not surprising then that the commission took the unusual step of hiring an outsider, Ottawa communications lawyer Chris Taylor, to help with the writing of Telecom Decision 2002-34, Regulatory framework for second price cap period. The 232-page document is divided into 11 sections and four appendices, covering everything from quality of service to services, baskets and pricing constraints to service improvement plans. The CRTC has expanded the number of baskets and service groups to eight from the previous three sub-baskets. During the price cap hearings, the major intervenors (ILECs, CLECs and consumer groups) all put forward their individual proposals for altering the structure of the regime. The commission did not adopt any suggestion in its entirety, but borrowed from several to arrive at the final product. The productivity offset will apply to the residential market outside of high-cost serving areas (HCSAs), but not the business market. Other capped services, which includes non-forborne competitive segment services, will also be subject to the offset. The CRTC has set up two categories of competitor services. The first covers essential services, such as co-location, local network interconnection, and wireless access services. These will be priced at Phase II costs and a 15 per cent markup (down from the 25 per cent hike permitted in the old regime). Category I services will fall under the productivity offset provisions. All other, non-essential services will be placed in Category II. These include voice mail, NSF charges, remote call forwarding, and others. Pricing is done on a case-by-case basis and does not fall under the productivity offset rules. For the first time, ILECs are required to grant the new entrants Digital Network Access (DNA) service. It will be priced in the same manner as essential services. The commission rejected a call from Distributel that Centrex tie trunk terminations be classified as a competitor service. Bell Canada, Telus Communications Inc., and Aliant Telecom Inc. all had their Service Improvement Plans (SIPs) accepted, with some modifications. SaskTel’s was rejected by the CRTC. The commission had dealt with Manitoba Telecom Services’ plan earlier (NL, Jan. 14/02). Under capital cost criteria for unserved areas, the CRTC granted Aliant, Bell, and Telus $25,000 for both permanent and seasonal premises. A customer contribution of $1,000 was factored into this. The schedule of the $1,000 payment is to be the same as set out in Order 2000-1096, the SIP of Northern Telephone Ltd. Large construction charges, deemed as anything over $10,000, may be collected through an installment plan. The commission has asked the three ILECs to submit an outline for a collection scheme by July 2. SaskTel noted that it had no unserved areas, but did have 200 customers with less-than-full service. Most of these subscribers are in the Garson Lake and Descharme areas and in the region north of the 54th parallel. The provincial telco had proposed spending $4 million to rollout satellite service to these areas. SaskTel stated that it was prepared to delay deployment until it could find more cost-effective technologies. Under its original proposal, it would be spending $20,000 per line to offer full service. The CRTC agreed that the $20,000 cost was too high and rejected the SIP. It has directed the provincial telco to study the market for cheaper technologies and submit a new SIP when appropriate. All tariffed rates under the price cap ruling went into effect on June 1. Some will be applied retroactively. Other issues, such as the SaskTel SIP, a consumer bill of rights, and payphone rates, will be considered at future proceedings.

CRTC price cap decision sets new service categories, endorses SIPs

News | June 3, 2002

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