CRTC initiates public consultation on use of price cap deferral accounts

The CRTC has initiated a public consultation on the use of about $100 million set aside by the incumbent telcos in their deferral accounts as part of the 2002 price cap decision (Telecom Decision 2002-34). The deferral accounts total approximately $200 million, but half of that amount is allocated for other uses. The consultation (Telecom Public Notice 2004-1) seeks comments on what to do with money that has been accumulated in the deferral accounts over the first two years of the second price cap period. The telecom regulator moved on this issue after it received an application from Bell Canada, which wants to use the funds to expand the reach of its DSL footprint into rural regions of Ontario and Quebec (NL, Dec. 8/03). Late last year, however, the commission suspended the application pending a public proceeding seeking greater input on how to clear the deferral accounts. The CRTC notes in PN 2004-1 that parties interested in using their deferral accounts should use the public policy objectives as set out by the commission in the price cap rulings as guidelines in preparing their submissions. The objectives are: To render reliable and affordable services of high quality, accessible to both urban and rural area customers; To balance the interests of the three main stakeholders in telecommunications market (i.e., customers, competitors and incumbent telephone companies); To foster facilities-based competition in Canadian telecommunications markets; To provide incumbents with incentives to increase efficiencies and to be more innovative; and To adopt regulatory approaches that impose the minimum regulatory burden compatible with the achievement of the previous four objectives. Bell is likely to recycle arguments it used in its original application as justification for access to the funds. "We would increase our footprint by about 2%, which is not enormous but given the government’s objective of complete access by 2005, which seems unlikely, and also the Ontario and Quebec governments want to do that as well, we think it’s a good use of the money that’s in the deferral account, which of course came from the customers in Ontario and Quebec as well," Lawson Hunter, executive VP of BCE Inc., explained to Network Letter in December 2003.

CRTC initiates public consultation on use of price cap deferral accounts

News | 03/31/2004 5:00 am EST

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