Telus 2010 Annual Report Download - page 133

TELUS 2010 annual report . 129
FINANCIAL STATEMENTS & NOTES: 4
The major categories of telecommunications services provided by
TELUS Communications Company partnership that are subject to rate
regulation or have been forborne from rate regulation are as follows:
Regulated services
.Residential wireline local services in incumbent local exchange carrier
regions in non-forborne exchanges
.Business wireline local services in incumbent local exchange carrier
regions in non-forborne exchanges
.Competitor services
.Public telephone services
.Miscellaneous other revenue
Forborne services (not subject to rate regulation)
.Residential wireline services in incumbent local exchange carrier regions
in forborne exchanges(1)
.Business wireline services in incumbent local exchange carrier regions
in forborne exchanges(2)
.Non-incumbent local exchange carrier services
.Long distance services
.Internet and television services
.International telecommunications services
.Interexchange private line services(3)
.Certain data services
.Cellular, enhanced specialized mobile radio digital (ESMR digital)
and personal communications services digital (PCS digital)
.Other wireless services, including paging
.Sale of customer premises equipment (CPE)
(1) Forborne on exchanges where two or more competitors, including wireless service
providers, are offering or providing similar services.
(2) Forborne on exchanges where one or more competitors, including wireless service
providers, are offering or providing similar services.
(3) Forborne on routes where one or more competitors are offering or providing services
at DS-3 or greater bandwidth.
(b) Price caps form of regulation
The CRTC has adopted a form of price cap regulation as the means
by which it regulates the prices for the Company’s telecommunications
rate regulated services. A four-year price regulation regime commenced
on June 1, 2002, with the issuance of the CRTC’s Decision 2002-34; on
December 16, 2005, the CRTC issued Decision 2005-69 that extended
that price cap regime, without changes, for a period of one year to
May 31, 2007. The CRTC conducted a review of the existing price cap
regulation, which included an oral hearing, with the CRTC issuing its
decision in this matter on April 30, 2007. The decision was consistent
with the Company’s current accounting policies.
(a) General
The provision of telecommunications services by the Company through
TELUS Communications Company partnership and the TELE-MOBILE
COMPANY partnership is subject to regulation under provisions
of the Telecommunications Act. The regulatory authority designated
to implement the Telecommunications Act is the CRTC, which is
established pursuant to the terms of the Canadian Radio-television and
Telecommunications Act.
Pursuant to Part III of the Telecommunications Act, the CRTC may
forbear, conditionally or unconditionally, from regulating the rates for
certain telecommunications services, or certain classes of telecommuni-
cations service providers, where the CRTC finds that the service or
class of service provided by the telecommunications service provider
is subject to competition sufficient to protect the interests of customers.
TELUS Communications Company partnership has, for example,
been granted forbearance from regulation in relation to its entire port-
folio of wireless and paging services. In the latter half of 2007, TELUS
Communications Company partnership was granted forbearance in
relation to the setting of rates for a number of its wireline telecommunica-
tions services that are currently provided within 96 residential and 47
business exchanges where it was determined that there was significant
competition for such services to protect the interests of customers.
Previously forborne services, including interexchange voice services,
wide area network services and retail Internet services, remain forborne.
TELUS Communications Company partnership also operates as a
forborne telecommunications service provider when it provides telecom-
munications services (primarily business local exchange service) outside
of its traditional incumbent serving territory (Alberta, British Columbia
and parts of Quebec) and, as such, all of its services are not subject to
rate regulation.
The fact that a portion of the Company’s operations remain subject
to rate regulation does not result in the Company selecting accounting
policies that would differ from generally accepted accounting principles.
Less than one-quarter of the Company’s revenues are from Wireline
segment regulated services and subject to CRTC price regulation;
none of the Company’s Wireless segment revenues are currently subject
to CRTC regulation.
4REGULATION OF RATES CHARGED TO CUSTOMERS
Summary review of rate regulation impacts on Company operations
and revenues