CLEC meltdown prompts CRTC to ensure customers don’t lose phone service

The collapse of more CLECs has prompted the CRTC to re-examine the requirements it places on telcos to ensure continuity of service. Some changes may be made at the administrative level, while others may require approval from the commissioners themselves. The issue was triggered by the failure of Norigen Communications Inc, following by a few weeks the bankruptcy of Axxent Inc. Consumers were told they had a very short time-one month in the case of Axxent, and a few days for Norigen-to find a new service provider. "What we had as a goal here was to make sure that nobody was without dial tone in some manner," Bob Cawood, the CRTC's acting director of competition told Network Letter. "So what we did was we asked the business process working group, which is a working group of CISC , to review the migration processes between a failing LEC and a new LEC of a customer." Cawood drew up a list of issues facing the industry, and the business working group immediately began studying them. Some issues may be better handled through other parts of the commission, he adds, while still others may fall under the jurisdiction of other government agencies. Acting CRTC chair David Colville is on record as stating that new rules should be in place by the fall. Whether a full public process will be undertaken is unclear at this point. "Four more meetings have been set for this month," Cawood notes, "so that by the end of the month there will be a report that will come to the commission which will indicate processes that could be shortened, processes that could be improved." One of the major concerns of subscribers was that they wouldn't be allowed to continue using their previous numbers after they were switched to another carrier. Business customers in particular complained that switching to a new number would result in increased costs, such as advertising and having business cards being reprinted, and problems with connecting calls to the new number. Number portability was one of about 15 issues on Cawood's list, along with quality of service, staffing and confidentiality. The commission is also assessing how well carriers respond to service disruptions. In particular, the regulator wants to ensure a service provider handles complaints from a CLEC as readily as it handles internal complaints. Several of the concerns raised by displaced customers have been handled by the client services bureau of the commission. Beyond that, Cawood says he personally dealt with about 100 customer complaints. The timing of the bankruptcies also caused additional problems. By the summer, most telcos had already received approval for construction plans and had begun to deploy their upgraded networks. "Most LECs that have a construction program do it in the summer time and if you need permission to do that you apply for it back in the spring," Cawood explains. "So if all of a sudden on the 15th of July somebody comes to you and says 'I've got 50 people in that building that I need facilities to because they want to come to us as a carrier' and we don't have facilities into that building, then your spring planning session disappeared. Because you want to get them there as short as possible. It's not that easy to just tell a municipality that 'I want to dig up your street to get some facilities in there'." The CRTC veteran sees similar problems with harmonizing technology from a failed LEC to a new carrier. He points out that one of the bankrupt telcos used a system that permitted it to lease four loops from Bell Canada but provide service to 24 customers. There is no guarantee that whoever picks up those clients will be able to offer the technology. Norigen assets popular There has been no shortage of bidders for the Norigen assets. PricewaterhouseCoopers Inc (PwC) has been named interim receiver for Norigen, the same role it played in the Axxent failure. Greg Prince, VP financial advisory services for the company, tells Network Letter offers have been flooding in. "There's some telcos, some that are established some that aren't established, just starting up," he reports. "There's some financial players. There's some private investor groups. There's a real broad cross section. I don't think I could categorize it in one area." The cut-off date for submissions was Sept. 11 but Prince says it is not written in stone. "If they met that deadline they'll be looked at and if they didn't then they may or they may not be looked at," he states. "We're still looking at all the offers and the permutations and combinations of putting various offers and pieces of the puzzle together. If someone comes in with a cracking good offer that blows everybody else out of the water, then we certainly reserve the right to look at that." Under the terms of the court order that appointed PwC as interim receiver, the auditors do not need court approval for any single sale under $2.5 million or any aggregate sale of $10 million. Lender endorsement is required no matter what the dollar amounts are. An Aug. 17 filing from PwC to creditors reveals that Norigen owes its lenders $93 million. Unsecured creditors are on the hook for an additional $8 million. Prince had expected to have a better idea about the disbursal of assets by late last week. But the actual sales could take much longer, depending on the wishes of the purchaser. He notes that some aspects of the Axxent sale were completed in a matter of days, while others took weeks to conclude. Getting on to the court docket should not pose a problem, he adds. PwC will likely get a court date within one or two weeks of requesting it. For more on this story, see the Sept. 18/01 edition of affiliate publication Report on Wireless.

CLEC meltdown prompts CRTC to ensure customers don’t lose phone service

News | 09/24/2001 4:00 am EDT

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