ILECs allowed to draw down from deferral account for TTY upgrade

The head of the Public Interest Advocacy Centre (PIAC) disagrees with a recent CRTC decision that allows MTS Allstream, TELUS Corp. and Bell Canada to take draw downs from their deferral accounts to upgrade their payphones with teletypewriter (TTY) devices. The CRTC mandated in July 2004 that incumbent telcos had to offer more payphone service to the deaf from 2004 to the end of 2010 (NL, July 20/04). The commission agreed last month that they could recover some of the costs of installing TTY devices through draw downs from the companies deferral accounts (Telecom Decision 2005-23). "I’m disappointed that the commission has seen suited to require contributions for this exercise solely from the consumers rather than any other stakeholders in the industry. And we are particularly concerned that the commission had characterized the exercise as an exogenous adjustment," PIAC executive director and general counsel Michael Janigan tells Network Letter. "But even of greater concern is what appears to be an exogenous adjustment to a price cap of one service has been turned into an exogenous adjustment for the price cap for residential price service." He notes, "A pay phone service is not under the local residential service cap, and is a separate item whatever adjustment they may wish to make to the price even of the service…and effectively it’s difficult to explain how you can have an exogenous adjustment for one price cap and use it to be an exogenous adjustment to another price cap." The commission, however, determined that the TTY device upgrades fit the criteria for an exogenous adjustment – namely that the legislative, judicial or administrative actions are beyond the control of the company, that they are addressed specifically to the telecommunication industry, and that they have a material impact on the utility segment of the company. The commission is of the view that the requirement for the companies to put TTY units in their payphones "meets the first two exogenous factor criteria, since they are legislative, judicial or administrative actions which are beyond the control of the company, and they are addressed specifically to the telecommunications industry," reads the CRTC decision. "Given the magnitude of the costs associated with this initiative, the commission is of the view that the companies’ costs of upgrading pay telephones with TTY units are significant and material in relation to each company. Accordingly, the commission finds that the proposals meet the three criteria for exogenous treatment."The regulator’s decision is not surprising as it had indicated to Aliant Telecom Inc., Bell Canada, MTS Allstream, Saskatchewan Telecommunications, Société en commandite Télébec and TELUS that they could file a request for an exogenous fact to recover the costs of upgrading their pay phones with TTY units. In granting the approval, however, the CRTC reduced Bell Canada’s and MTS Allstream’s installation costs by 50%. The move was made because there was a large discrepancy in the estimated installation costs provided by those two companies and that submitted in the process by TELUS. The CRTC set the following annual draw down amounts: $4.687 million for Bell Canada, $329,000 for MTS Allstream, $794,000 for TELUS Alberta and B.C., and $58,000 for TELUS Quebec. "We have not scrutinized the particular amounts. Our preference was, of course, to have a proceeding that would determine the revenues and expenses for that particular service with a view to setting rates accordingly," notes Janigan. "The commission elected not to do that, so we have no idea whether these amounts are fair or whether or not the services themselves are able to make the appropriate financing." He adds that "presumably the end result will be positive for those customers who are suffering from a hearing disability. But it is increasingly troubling the idea that we have set just and reasonable rates through a price cap, and then claw back the money for whatever appears to be the popular thing of the day to do."

ILECs allowed to draw down from deferral account for TTY upgrade

News | 05/10/2005 4:00 am EDT

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