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Ottawa, 26 August 2008
Re: Disposition of certain pending wholesale service applications
By letter dated 22 June 2007, the Commission deferred further consideration of certain applications related to wholesale services (previously referred to as competitor services), pending the completion of the proceeding to review Phase II costing issues. In that letter, the Commission expressed the view that the costs under review for the services in question contained significant expense components and therefore raised issues that might be materially affected by the Commission’s determinations as a result of the proceeding to review Phase II costing issues. The tariff applications involving wholesale service cost reviews that were deferred in this letter are set out in Attachment 2.
In Telecom Order 2007-430, the Commission approved Competitor Digital Network (CDN) link service rates for Bell Aliant Regional Communications, Limited Partnership (Bell Aliant), Bell Canada, Saskatchewan Telecommunications (SaskTel), and TELUS Communications Company (TCC) on an interim basis. In paragraph 46 of that Order, the Commission stated that it would not be appropriate to dispose of these service rates on a final basis pending the outcome of the Commission’s determinations in two proceedings, the proceeding to review the Phase II costing issues initiated by Telecom Public Notice 2007-4 and the proceeding to review the regulatory framework for wholesale services initiated by Telecom Public Notice 2006-14. These CDN link tariff applications are also set out in Attachment 2.
The Commission notes that the proceeding to review the regulatory framework for wholesale services concluded with the issuance of Telecom Decision 2008-17. In that Decision, the Commission set out a restructured regulatory framework for wholesale services, including a new wholesale service classification and associated pricing principles. The Commission notes that pursuant to this Decision the wholesale services related to the tariff applications identified in Attachment 2 continue to be mandated.
With respect to the proceeding to review the Phase II costing issues, the Commission notes that it issued Telecom Decision 2008-14. In that Decision, the Commission rendered its determinations with respect to the appropriate expense inclusions and the associated approaches and methodologies to estimate causal expenses for inclusion in regulatory economic studies, and initiated a follow-up proceeding to review the revised costing methodologies and documentation to be filed by Bell Aliant, Bell Canada, MTS Allstream Inc. (MTS Allstream), SaskTel, and TCC (collectively, the incumbent local exchange carriers (ILECs)) pursuant to Telecom Decision 2008-14. The Commission further indicated that its determinations with respect to the treatment of expenses would come into effect following the ILECs’ proposed submissions required by that Decision.
On 25 August 2008, the Commission issued Telecom Order 2008-237. In that Order, the Commission concluded that each ILEC’s expense methodologies as documented in its revised Regulatory Economic Studies Manual (revised Manual) reflected the determinations of Telecom Decision 2008-14 and were appropriate.
Having completed this follow-up proceeding, the Commission expects each ILEC to rely on its revised Manual for developing regulatory economic studies in support of tariff applications. The Commission further considers that the cost reviews associated with the applications identified in Attachment 2 contain significant expense components which may be materially affected by the Commission’s determinations in Telecom Decision 2008-14.
In light of the above, each ILEC is requested to submit revised cost studies for the wholesale services related to the tariff applications identified in Attachment 2 in accordance with its revised Manual along with associated proposed tariff pages.
The Commission notes that on 14 March 2008 Yak Communications (Canada) Inc. (Yak) brought an application requesting that the Commission review and update costs associated with the Billing and Collection Service (BCS) processing charge rates of each ILEC within 30 days from the date of the Commission’s decision in the Phase II follow-up proceeding. Subsequently Bell Canada, Bell Aliant, and SaskTel brought an application to defer consideration of Yak’s application, which the Commission denied in a letter dated 11 July 2008. In its letter, the Commission also indicated that the process for considering Yak’s 14 March 2008 application would be established at the conclusion of the Phase II follow-up proceeding.
On 15 May 2008, the Commission received a Part VII application from Bell Canada on behalf of itself, Bell Aliant, SaskTel and Télébec, Limited Partnership (Bell Canada et al.). Bell Canada et al. requested that the Commission review and vary Telecom Decision 2008-17 to reclassify BCS from the Interconnection to the Conditional Mandated Non-Essential service category and to provide flexibility to establish a mark-up greater than 15% for BCS. Consistent with Bell Canada et al.’s application, BCS will continue to be a tariffed service if the relief requested is granted. The Commission considers that the BCS processing charges contain significant expense components which may be materially affected by Telecom Decision 2008-14 and that further process on this issue would be appropriate.
With regard to the cost review of the wholesale services identified in Attachment 2 and the Yak application, each ILEC is to file updated cost studies as requested above, and BCS processing charge cost studies, in accordance with its revised Manual by 27 October 2008, serving a copy on all parties to the applications listed in Attachment 2. Parties may file comments, serving a copy on the relevant ILECs, by 17 November 2008. ILECs may file reply comments, serving a copy on the party that submitted comments, by 1st December 2008. Where material is to be filed by a certain date, the material must actually be received, and not merely sent, by that date.
With respect to filing proposed tariff pages for BCS, further process will be established after the Commission issues its determinations on Bell Canada et al.’s application to review and vary the wholesale service classification of BCS.
Original signed by Alan Rosenzveig
Robert A. Morin
Attachment: Distribution List
Tariff Notice Applications
Bell Aliant email@example.com
Tariff Notice Applications
1. Tariff applications involving wholesale services deferred by Commission letter dated 22 June 2007
Aliant Telecom Inc. (now Bell Aliant) Tariff Notice 213 8740-A53-200613423
2. CDN link tariff applications not approved on a final basis in Telecom Order 2007-430
Bell Aliant Tariff Notice 82 8740-B54-200705502
Date Modified: 2008-08-26