CRTC sets three-year term for foregone toll revenue compensation regime

The CRTC has finally set up a time frame for compensating telcos for foregone toll revenues resulting from an expanded local calling area. After proceedings that began last fall, the commission has determined that the regime will be equal to three years' worth of foregone revenues.The matter arose when the regulator issued Telecom Decision 2002-56, setting the framework for expanding local calling areas (LCAs). At the same time, the CRTC set up a public proceeding to determine the length of the compensation period (NL, Sept. 23/02). Some municipalities urged a short compensation time frame, while the telcos wanted a longer duration (NL, Oct. 21/02). Earlier this month, in Telecom Decision 2003-27, the CRTC settled on the three-year term. The lawyer acting on behalf of the City of Ottawa is sanguine about the final ruling. "I'm never really surprised when the commission confirms a preliminary view. I was obviously disappointed that they didn't accept our argument that three years is too long," Anthony Keenleyside of McCarthy Tétrault LLP tells Network Letter. "It's the old story of half a loaf. We've gone from a perpetual surcharge to a surcharge that lasts three years, so the fact that we've made that kind of progress is a significant victory. It would have been nicer if they'd dropped it to a shorter period of time but they just weren't prepared to do that." Ottawa had raised questions about what services would be included in the calculation of foregone toll revenues and other LCA implementation issues. The city wanted the CRTC to consider those matters in the proceeding, but that request was not granted. "The commission agrees that these are implementation issues that can be dealt with as part of an application for expanded LCA," the ruling states. "However, the commission expects stakeholders to make every reasonable effort to resolve issues associated with compensation for foregone toll revenue, in an expeditious manner." Keenleyside concedes that, with some goodwill, Bell Canada and Ottawa will be able to iron out their technical differences. He is troubled by the lack of action on the broader philosophical questions.As an example, he raises the matter of operator-assisted toll calls. The telcos could maintain that those revenues should be included for compensation, while the city believes they should not, since the operator would still be available for other assistance. The failure to act on this now could have future repercussions. "What it means in effect is now we have to go to Bell and say, 'here's our view of those questions, what's your view?' and if Bell doesn't agree, we're back in front of the commission and I don't think that should be part of the formal application for expanded local calling," Keenleyside explains. "I think that's something that should be resolved in advance because it obviously has an impact on the revenues to be collected." Microcell Telecommunications Inc., the only wireless CLEC, had filed a review and vary application over 2002-56, questioning several assumptions the CRTC had made. It did not believe that CLEC rate changes would match ILEC rate changes, that competitors could calculate their foregone toll revenue, and that CLEC clients would benefit from LCA expansion by ILECs. The commission agreed, releasing Telecom Decision 2003-28 at the same time it issued the time frame ruling. It said CLECs may be permitted to opt out of the compensation plan on a one-time-only basis. But if a CLEC accepts compensation for one geographic area, it cannot opt out of the regime in another part of the country. Similarly, once a CLEC opts out, it cannot opt in later. Companies like Bell and Telus Communications Inc., which operate as ILECs in one part of Canada and CLECs in others, will have the opt-out provision apply only to the CLEC territory.

CRTC sets three-year term for foregone toll revenue compensation regime

News | May 20, 2003

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