AT&T Canada appeals price cap decision to Cabinet; seeks interim cuts of 50% in rates

The first appeal of the CRTC's price cap decision has been launched, as AT&T Canada Inc. today asked the Cabinet to change parts of the ruling. The CLEC raises the prospect that even more failures in the telecom sector could occur if the decision is allowed to stand. Chris Peirce, AT&T Canada's VP regulatory and government affairs, tells Network Letter the basis for the appeal is the sea change in policy objectives. The first price cap regime was established to foster competition; the second narrowed the focus to facilities-based competition. "They specifically altered their objective in this new regime from one of fostering competition to one of fostering facilities-based competition," he says. "So that change clearly justified for them the dismissal of our plea to have competitively neutral access to the network. In our view we are being forced to continue to subsidize the former monopolies in terms of what we have to pay for network access." There had been rumours for weeks that someone would seek to overturn provisions of Telecom Decision 2002-34(NL, June 18/02). The commission has already agreed to review the section of the ruling dealing with digital network access (see related story in this issue). AT&T Canada complains that it is paying 55 per cent of its direct costs back to the incumbent telcos. It further alleges that competitors are paying the ILECs far more than the actual costs of connecting to the networks. Peirce estimates that all CLECs have paid the incumbents $860 million for access, money that the competitors will never see again. The CRTC reduced the rates for four services: direct connect, 1-800 data dips, local loop charges and access tandem studies. The average reduction is 57 per cent. "So we're saying it's naïve in the extreme to think that the same is not true for all of those network services we need to access and certainly those for which we are currently paying retail rates," Peirce adds. "Our proposal to the commission had been you need to take all the network services that we need, put them all into this competitor services basket, give us cost-based access to all of those services, not just those narrow suite of services that you have thus far been prepared to offer cost-based access to." During the public hearings into the price cap regime, AT&T Canada advocated huge reductions in its access charges (NL, Oct. 22/01). That was rejected, but in its appeal the company is asking Cabinet to give it an interim decrease of 50 per cent in rates, with the final amount adjusted according to government findings. A news release put out by the telco says 11 competitors have gone out of business in the last 18 months. It raises doubts that the handful of CLECs still standing will continue to operate. Peirce underscores that sentiment. "To get any new money invested in competition in Canada, you can't have companies that are barely surviving. You have to have companies that are surviving and have an opportunity to prosper," he offers. "And if you want companies to have an opportunity to prosper, they have to have competitively neutral access to the network." Call-Net Enterprises Inc. says it is still considering its options. The deadline for appeals to Cabinet is tomorrow.

AT&T Canada appeals price cap decision to Cabinet; seeks interim cuts of 50% in rates

News | 08/27/2002 4:00 am EDT

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