Bell considers further appeal and raising phone rates, after failing to sway CRTC

Bell Canada says it will decide soon whether to take its case for contribution relief to a higher authority, or accept the CRTC’s denial of its plea to amend the new subsidy regime which came into effect Jan. 1. On March 15, the commission released Order 2001-219 which rejected the telco’s Part VII application asking that the 4.5 per cent revenue charge be reduced in the first year to ease the financial burden on carriers. Bell is also looking at whether it’s realistic to try to recoup the entire charge from its customers. Carriers are allowed to pass on the charge, although the CRTC forbids them listing it as a separate line item on bills. "It’s a 4.5 per cent tax on all our revenues. So then the question becomes will it be possible in the market to actually recoup that tax from those customers who are paying us the revenues?" Robert Farmer, Bell’s VP of regulatory matters tells Network Letter. "It’s always a tough question and a great deal of judgement is required on it. But now we feel we don’t have any other options, or at least that option we did have has been closed to us. We’re going to be taking a more careful look at that." Bell had been the first company to file a review and vary over the CRTC’s contribution decision, 2000-745. Teaming up with wireless carriers Microcell Telecommunications Inc and Rogers Wireless Inc, the telco asked that the rate be reduced from 4.5 per cent to 2.7 per cent for wireline carriers and 1.5 per cent for wireless companies (NL, Dec. 20/00). Bell estimated the 4.5 per cent fee would cost wireless companies $200 million this year, with Bell Mobility paying about a quarter of this amount. Wireless companies currently pay about $15 million annually in contribution. "The commission notes that Bell’s proposal provides a more favourable transition for itself and for the WSPs at the expense of others, most notably local subscribers outside of Bell’s territory and other telecommunications service providers," the CRTC ruled in Order 2001-219. "Bell’s proposal undermines the balance achieved by the commission when it decided to implement a revenue-based collection mechanism that would benefit all Canadians." Dropping the assessment rate to 2.7 per cent would not drive up Bell’s local phone rates significantly, the regulator said, but rates in non-Bell regions could rise dramatically. The CRTC is allowing all companies under price cap regulation to recover the subsidy fee this year. Farmer chalks up the CRTC’s decision to a difference of opinion. "We’re just saying we’re trying to correct what we thought was the imbalance and they’re coming back and saying ‘no, it’s the balance we wanted’," he says. This is the second major blow to the ILECs seeking modification of the contribution ruling. Earlier the Federal Court of Canada denied Telus leave to appeal the CRTC decision (NL, Feb. 26/01). Telus was seeking changes on different grounds than Bell and the wireless carriers.

Bell considers further appeal and raising phone rates, after failing to sway CRTC

News | March 26, 2001

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