In this decision, the Commission finalizes the assignment of tariffed services to the service baskets established in Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002.
Introduction
1. In Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002 (Decision 2002-43), the Commission directed Société en commandite Télébec (Télébec) and TELUS Communications (Québec) Inc. (TELUS Québec) to file, by 1 October 2002, a complete list of all tariffed services with a proposed classification of each service by basket, sub-basket or service grouping.
2. On 1 October 2002, Télébec and TELUS Québec filed a list of their tariffed services and a proposed classification of each service by basket, sub-basket or service grouping.
3. The Commission received no comments with respect to Télébec's and TELUS Québec's proposed service classifications.
Background
4. In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), the Commission established the price regulation regime applicable to Aliant Telecom Inc., Bell Canada, MTS Communications Inc., Saskatchewan Telecommunications and TELUS Communications Inc. (collectively, the large incumbent local exchange carriers or the large ILECs). In that decision, the Commission established service baskets to which it assigned, on a preliminary basis, the large ILECs' tariffed services. In Appendices 1 and 2 to Decision 2002-34, the Commission provided each large ILEC with a detailed listing by tariff number, item number and service description of their telecommunication service offerings for each service basket, sub-basket and service grouping. Moreover, the Commission initiated, in Decision 2002-34, a follow-up proceeding to allow parties the opportunity to comment on the service assignments set out in Appendices 1 and 2.
5. In Follow-up to Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34 - Service basket assignment, Telecom Decision CRTC 2003-11, 18 March 2003 (Decision 2003-11), the Commission finalized the assignment of all tariffed services to the service baskets established in Decision 2002-34 for each of the large ILECs.
6. In Decision 2002-43, the Commission determined that Télébec and TELUS Québec would be subject to a price regulation regime, including baskets and pricing constraints, very similar to that established for the large ILECs in Decision 2002-34. While the Commission determined in Decision 2002-34 that the mark-up incorporated in the large ILECs' rates for Category I competitor services would be reduced from 25% to 15%, in Decision 2002-43 the Commission did not mandate a similar mark-up reduction on the rates for Télébec's and TELUS Québec's Category I competitor services.
Commission analysis and determinations
7. The Commission notes that Decision 2002-43 did not provide Télébec and TELUS Québec with detailed listings of their telecommunication service offerings by basket as was the case for the large ILECs in Decision 2002-34. However, the Commission did direct Télébec and TELUS Québec to consider both the figure depicting the basket structure and the short basket descriptions that were provided in Decision 2002-43, as well as Appendices 1 and 2 of Decision 2002-34, when developing their proposed classifications.
8. The Commission notes that the lists of tariffed services provided by Télébec and TELUS Québec were not complete or accurate. Notably, several tariffed services were not classified at all while others did not correspond with the tariff item and/or service description contained in their published tariffs. The Commission further notes that Télébec's and TELUS Québec's proposed lists of telecommunication service offerings by basket submitted in this proceeding do not correspond with the list of services by basket filed with their required 2002 annual price cap filings.
9. The Commission notes that it is necessary to finalize the classification of Télébec's and TELUS Québec's services to baskets, sub-baskets and service groupings in order to assess whether rate changes proposed are within the basket constraints and are in compliance with the rate element constraints that were established in Decision 2002-43.
10. As noted above, the price regulation regime established in Decision 2002-43 for Télébec and TELUS Québec is very similar to that established for the large ILECs in Decision 2002-34. The Commission notes that unless a consistent approach is used to assign a service to a basket, different pricing constraints could be used to assess a rate proposal for the same service provided by both the large ILECs and Télébec and TELUS Québec. Accordingly, the Commission is of the view that the classification of services to baskets should be consistent across all companies in Canada subject to the same price regulation regime. The Commission has thus drawn on its determinations in Decision 2003-11 in order to review Télébec's and TELUS Québec's list of tariffed services by basket.
11. The Commission approves Télébec's and TELUS Québec's proposed classification of services made in the context of this proceeding, amended per its determinations in Decision 2003-11, and as set out in Appendices 1 and 2 to this decision.
12. The Commission's determinations with respect to the assignment of competitor services to Category I or II and the pricing constraints applicable to these services are set out in Appendix 1 to this decision. The Commission's final classification of other tariffed services to the various baskets, sub-baskets and service groupings established in Decision 2002-43 is set out in Appendix 2.
Secretary General
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