Amtelecom files review and vary request with CRTC over subscriber rebates

An Ontario independent telco thinks the CRTC is targeting it unfairly and is seeking to overturn a ruling on residential rates. Amtelecom Inc. is appealing two recent judgments from the commission that, it says, damage the company’s ability to recoup network upgrade costs. In the review and vary application, the tiny ILEC says there are two broad grounds for raising doubts about the wisdom of Telecom Decision 2001-756 and Telecom Order 2002-230. One is that the rulings are inconsistent with previous commission statements and principles; the other suggests errors in law. Decision 2001-756 came out last winter and set a regulatory framework for 39 small independent telcos (NL, Dec. 18/01). Order 2002-230 was issued three months ago and applies only to Amtelecom (NL Update, June 10/02). The Aylmer ON-based telco says the new rules undercut enhancements it wants to make under its service improvement plan (SIP). Order 2002-230 requires the company to return money the CRTC says customers overpaid. But the firm argues that those higher rates were approved by the commission in 2000, when it endorsed an increase of $5.25. "Decision 2001-756 and Order 2002-230, taken in tandem, have effectively changed the SIP ground rules for Amtelecom in mid-stream," the firm writes in its submission, "and dashed the company’s legitimate expectations regarding its ability to recover its SIP-related revenue requirement through an explicit CRTC-approved SIP-related local rate increase granted by the commission. "Doubly damaging, the impugned decisions confound Amtelecom’s legitimate expectations that its contribution revenue requirement would be kept totally separate and insulated from its SIP-related revenue requirement and revenues over the life of the SIP program," the filing adds, accusing the commission of mixing SIP apples with contribution oranges. The telco says the public notice that began the proceeding that resulted in 2001-756 did not make any reference to SIPs or related expenses. As a consequence of the two rulings, the company must dip into its SIP-specific local rate increase to offset the CRTC’s clawback of contribution subsidy. The four errors in law which Amtelecom say occurred are: the failure to provide notice that rate increases dedicated to funding SIPs would be applied to any other rate hikes; the CRTC fettered its discretion by denying Amtelecom’s proposed rate increase without taking into account the firm’s situation; the commission has not provided the telco with just and reasonable local rates; and the CRTC breached fairness requirements by not giving adequate reasons for denying the price hikes. The company maintains it is in this fight not for itself, but all other ILECs as well. "If not varied, Order 2002-230 and Decision 2001-756 will stand as inconsistent and incorrect precedents for other local exchange telephone companies that will in future undertake CRTC-mandated SIPs," Amtelecom writes. "Understandably, these companies will be loathe to embark upon SIP initiatives if the fundamental ground rules for financing and cost recovery established by the commission at the outset of the program are not maintained intact by the commission throughout the multiyear SIP and applied in a clear, consistent and certain fashion over the term of the program." Amtelecom says its local customers will be greatly hurt if the decisions are allowed to stand. Since the company provides service in high-cost areas, it will be unable to provide subscribers with upgrades and service expansion without higher rates. The independent telco has filed the appeal within the required period for 2002-230, but has exceeded the appeal period for 2001-756 by two months. But the company asserts the linking of the two rulings provide the extraordinary circumstances that would permit such an application.

Amtelecom files review and vary request with CRTC over subscriber rebates

News | September 10, 2002

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