GATINEAU – While everybody else was requesting an extension to the 90-day deadline to file a R&V with the CRTC over its decision on wholesale internet access rates, Telus quietly filed its own application on November 13th.
It requests the Commission to vary some determination of the Telecom Order 2019-288.
The following excerpts are highly technical. Mature audiences only.
To determine the rates Telus must charge its resellers, the Commission relies on Phase II costing methodology, but Telus argues, however, “the effectiveness of Phase II hinges on adhering to and implementing the underlying principles of this methodology. If properly implemented, Phase II costing should lead to compensatory rates for facilities providers and maintain their incentive to continue to invest in their facilities.”
The Telus submission says the first error the Commission made happened “when it ignored cost causality by applying an incorrect attribution factor to Telus’ submitted costs. This attribution factor arbitrarily reduced Telus’ costs for provisioning the wholesale service by ‘attributing’ a significant portion of the incurred costs to other services.”
In other words, if the equipment is used for other purposes, only the portion used to provide high-speed services should apply. So, in the case of Telus it “reduces the appropriate allocation of access costs to the wholesale HSA service by 41%. The attribution factor was applied in error as it bears no resemblance to company and service-specific costs that are causal, incremental and prospective. The Commission should vary TO 2019-288 to allow 100% of the access costs to be attributed to the wholesale HSA service.”
The second error the CRTC made according to Telus was when “the Commission misinterpreted the labelling and use of a custom cash-flow timing parameter contained within the confidential electronic files submitted by Telus. As outlined in the Regulatory Economic Studies Manual, a discounted cash flow methodology is used for the calculation of proposed service rates.”
As well, by ordering retroactive payments to competitors, which the CRTC decision also forced, Telus argues that the Commission destabilized the regulatory environment by not requiring to the independent resellers to issue retroactive credits to its customers. “They are a windfall to the owners of reseller ISPs, with no corresponding benefit to their customers,” reads Telus’ application.
To oversimplify, rates are set by applying a markup to the costs of providing the service and Telus, again on retroactivity, states that the markup that had been set at 40% in 2010 was changed to 30% in Decision 2019-288. Telus argues that such changes should only apply in the future not to the past.
Telus also mentions it has filed a Petition to the Governor in Council, too.
