ARCHIVED -  Telecom Order CRTC 99-904

Telecom Order

Ottawa, 17 September 1999

Telecom Order CRTC 99-904

On 2 June 1999, Prince Rupert City Telephones (CityTel) filed an application under Tariff Notice (TN) 35, for approval of its final 1998 Carrier Access Tariff (CAT).

File Nos.: 8654-P2-01/98 and TN 35

1.In Regulatory Framework - Prince Rupert City Telephones, Telecom Decision CRTC 98-5, 4 May 1998 (Decision 98-5), the Commission established the regulatory framework for CityTel including the introduction of a CAT, effective 1 January 1998.

2.During the proceeding leading to Decision 98-5, CityTel filed forecast Phase III information for 1996 and 1997. Based on the forecast Phase III information and its settlement revenues, CityTel calculated hypothetical CAT rates of $0.0803 and $0.0802 for 1996 and 1997, respectively. CityTel did not file a 1998 Phase III forecast.

3.In Decision 98-5, the Commission approved an interim 1998 CAT of $0.0503 per minute for CityTel, which was based on CityTel's 1997 Phase III forecast, after adjusting for CityTel's 1 January 1998 $2.00 local rate increase and other determinations.

4.As contemplated in Decision 98-5, the Commission issued Prince Rupert City Telephones - 1998 Carrier Access Tariff, Telecom Public Notice CRTC 99-13, 12 May 1999 (PN 99-13), to finalize CityTel's 1998 CAT.

5.On 2 June 1999, CityTel filed TN 35, pursuant to PN 99-13 and Decision 98-5, seeking final approval for a 1998 CAT of $0.0509 per minute ($0.0315 for Contribution requirement and $0.0194 for Direct Toll charges).

6.There were no comments received from any party to this proceeding.

7.In PN 99-13, the Commission wished to ascertain that the assignment of certain expenses, such as billing, customer records, postage, bill printing, and centralized mail remittance related to cellular and terminal activities were addressed in the proposed Phase III procedures. The Commission notes that CityTel confirmed that these areas were addressed in the Billing and Collection Revenues study and that these changes were included in the 1998 Phase III results.

8.Further, the Commission is of the view that the studies and costing methodologies used to develop CityTel's 1998 Phase III results, as set out in its proposed Phase III Manual, are consistent with past assignment practices based on Phase III costing principles.

9.In response to an interrogatory, CityTel indicated that it could not meet the Commission's requirements associated with obtaining forbearance on cellular services, specifically the requirement associated with the setting up of a separate division for the provision of mobile wireless services, or the provision of mobile wireless services by an independent party. Accordingly, CityTel submitted that until such time as the company can meet the Commission's requirements for cellular forbearance, any surplus associated with the delivery of network cellular services should continue to reduce the company's Contribution requirement.

10.The Commission notes that CityTel calculated its 1998 CAT on the basis that the surplus from network cellular has been used to reduce the Contribution requirement. Accordingly, the Commission is of the view that the treatment of the network surplus is appropriate and is in accordance with Decision 98-5.

11.CityTel submitted that its Contribution requirement calculation is based on a shortfall of $1,302,129. The actual toll minutes for 1998 were 41,323,954 and resulted in a Contribution rate of $0.0315. The Direct Toll component is $801,869, with a corresponding rate of $0.0194. The Commission has reviewed the revenue and expense forecasts of CityTel and is of the view that the proposed 1998 final CAT rate of $0.0509 is reasonable.

12.In light of the foregoing, the Commission orders that:

(a) The proposed final 1998 CAT for CityTel of $0.0509 per minute, consisting of a Contribution component of $0.0315 per minute and a Direct Toll component of $0.0194 per minute is approved, effective 1 January 1998;

(b) CityTel is to issue forthwith revised tariff pages reflecting its final 1998 CAT;

(c) CityTel is to proceed with billing adjustments, as required;

(d) CityTel's Phase III Manual is approved; and

(e) CityTel is to file its proposed final 1999 CAT with supporting calculations and information, within 45 days of this Order, serving copies to all parties that were registered in the 1998 CAT proceeding.

Secretary General

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