CRTC reviewing price cap, rate forbearance regimes

The CRTC is initiating intertwining reviews of two regimes, one which governs local exchange service price caps and the other on rules around exclusion from rate regulation in areas with sufficient competition. The regulator put out a request for comment Tuesday asking whether any changes should be made to the price cap regime for residential services and if any modifications are needed to allow forbearance from rate regulation for local residential and business services. The price cap regime was designed to maintain reasonable prices for customers by setting a ceiling for prices that can be charged by the incumbent local exchange carrier (ILEC) on services like landlines. Currently, while rates in non-high-cost service areas are frozen, ILECs in those areas are allowed to raise the price with inflation every year. For the rate forbearance regime, the CRTC said it will consider the tests required to prove sufficient competition in an area, and whether it should modify those tests to include competitive alternatives to voice services, including fixed wireless and mobile wireless technologies. The commission also asked if compensation should be given to incumbent local exchange carriers (ILEC) when the local service subsidy is phased out, which the CRTC said Tuesday would occur over three years through semi-annual reductions starting on the first day of 2019. The commission said it was looking to repurpose the fund for internet purposes in its December 2016 basic services decision, and put out a notice of consultation on the matter last year. The local service subsidy was created to subsidize residential telephone services in high-cost areas by having telecoms with more than $10 million in annual revenues contribute to the National Contribution Fund, which distributes the funds to ILECs in those areas. The ILECs who benefited from the subsidy told the regulator during the consultation that the fund’s elimination would mean rates for residential local exchange services in high-cost areas would no longer be just and reasonable, the CRTC said. The deadline to submit interventions is September 10.

CRTC reviewing price cap, rate forbearance regimes

Brief | June 26, 2018

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CRTC reviewing price cap, rate forbearance regimes

Brief | June 26, 2018

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