ARCHIVED - Order CRTC 2000-344

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Order CRTC 2000-344

Ottawa, 27 April 2000

Revised rate structure for Enhanced Exchange–Wide Dial Service

Reference: Bell Canada Tariff Notice 6312
The Commission approves, on a final basis, Bell Canada's application for lower rates and a revised rate structure for its Enhanced Exchange-Wide Dial Service in its Ottawa/Hull exchange.

1.

On 10 December 1998, Bell Canada filed Tariff Notice (TN) 6312 proposing to reduce the rates for Enhanced Exchange-Wide Dial Service (EEWD) and to simplify its rate structure. Bell Canada filed an imputation test with its application. Further, Bell Canada proposed an effective date of 1 January 1999 and requested interim approval if the Commission were unable to grant final approval by that date.

2.

In Telecom Order CRTC 98-1321, dated 23 December 1998, the Commission approved TN 6312 on an interim basis.

3.

MetroNet Communications Group Inc. filed interventions with the Commission on 18 December 1998 (received on 23 December 1998) and on 11 January 1999.

4.

In its second, letter MetroNet submitted that both the pricing and the timing of the proposed tariff were anti-competitive because Bell Canada's proposed three-year contract with the federal government will prevent local competition for government local voice business for the next three years.

5.

MetroNet stated that the tariff is unclear and that, in the company's understanding, the proposed tariff provides for a rate of $16.75 for each line if the total number of lines is greater than 120,000. MetroNet submitted that this is an anti-competitive rate structure since the customer would face a significant rate increase if a competitor were able to sign up enough Bell Canada lines to bring the customer's total remaining Bell Canada lines below the threshold for the lower rate.

6.

Further, MetroNet submitted that the rate of $16.75 is lower than the rate a competitor is required to pay for the lease of unbundled loops in rate bands B and C (the bands where federal government facilities are generally located). The monthly loop rates for bands B and C are $18.38 and $20.28 respectively. MetroNet submitted that since Centrex service consists of more than just the loop, it can only be concluded that either the proposed EEWD service is priced below cost or the unbundled local loops in Ottawa/Hull are priced significantly above cost.

7.

Bell Canada replied that, contrary to MetroNet's assumption, the rates for Centrex lines are not uniform for all lines. Bell Canada notes its rates are staggered (only the lines above the threshold of a band are priced at the lower rate) and therefore MetroNet's allegation that the rate structure is anti-competitive is also incorrect.

8.

Bell Canada also defended its imputation test by stating that the government EEWD service uses a significantly higher portion of remote line modules than the average loops in the corresponding rate band. Therefore, the loop costs for this service are lower than for average unbundled loops. Bell Canada submitted that its imputation test was in accordance with the Commission's directives in Telecom Decision CRTC 97-8, Local Competition, dated 1 May 1997.

9.

Bell Canada further stated that to qualify for EEWD service, the customer must guarantee a minimum of 75,000 lines. While it may be possible to provide service through the use of resold local loops, the company submitted that a service of such scale would more efficiently be provided through the use of facilities constructed by the service provider.

10.

The Commission notes that the proposed rate structure, like the existing one, is staggered. Under Bell Canada's regime, the customer would pay $19.50 per line for each of the first 104,999 lines, $17.75 per line for each of the next 15,000 lines and $16.75 for each line in excess of 120,000 lines.

11.

The Commission also notes that Bell Canada's economic study satisfies the imputation test and that the average revenue per line provides a mark-up over the incremental costs.

12.

Accordingly, the Commission approves TN 6312 on a final basis.
Secretary General


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