CRTC widening of promotions suspension hailed by CLECs, decried by ILECs

The CRTC’s decision to expand its review of winback promotions is being regretted by ILECs, but the competitors say they need a successful resolution from the proceeding in order to operate on a level playing field. On March 13, the commission announced it was amending Telecom Public Notice 2003-1, which was to review winback promotions (NL Update, Jan. 20/03). The modified announcement, Telecom Public Notice 2003-1-1, extends that examination to all promotional activity. "Telus is of the view that this extension of the moratorium is not necessary," Jim Peters, executive VP corporate affairs and chief corporate counsel of the western ILEC, tells Network Letter. "We don’t think that it makes sense in today’s competitive environment. "An example I would use is that Telus has the circumstance of being both an ILEC and a CLEC. And when we’re competing with Bell Canada in Ontario and Quebec we think it inappropriate that Bell be constrained in how it competes with us. If Telus is able to get a customer by satisfying that customer, that we meet its needs and have got something that is of value to that customer; if Bell can come along and win that customer back, that’s fair ball." That claim cuts no ice with Call-Net Enterprises Inc. Ian Scott, VP government affairs for the CLEC, recalls reading a newspaper article in which the ILEC alleged it was operating with one arm tied behind its back. He wishes he had been asked to comment for the story. "My response would have been, ‘well, I’ll trade you. I’ll take one arm tied behind my back and 100% of the customers in my pocket.’ Any time they want to trade," he states. "I always have this discussion with people. It’s so cute for them to make this argument. It is not a natural competitive market." Sheridan Scott, chief regulatory officer for Bell Canada, is surprised that the moratorium has been expanded to include promotions to existing clients. As a result of the public notice, the company has had to withdraw a plan that would offer additional Smart Touch services free of charge for two months while customers decided if they wanted to subscribe to the full package. "It is quite a significant distinction between what they did in the previous public notice, where they indicated they would be freezing winback promotions, which are of course promotions aimed at our competitors’ customers," she explains to NL. Call-Net president Bill Linton has remarked that recent actions by the CRTC have been friendlier to the competitors (NL, Feb. 10/03). All sides agree that this notice fits that pattern. But they disagree as to whether that’s a good thing. "Certainly I think it’s a continuation of Call-Net’s attempts to get regulatory protection, a type of protection that Telus doesn’t believe is necessary and a type of protection that Telus isn’t seeking itself when it goes into markets where it’s a CLEC," Peters offers."The commission has positioned it as something that is related to the issue of local competition," Sheridan Scott explains. "I guess I would ask myself the question as to whether one can see causality between our offering promotions to our own customers and the state of local competition." Ian Scott scoffs at that notion. "The reality here is that the regulator is just beginning to come to terms with what are overwhelming advantages of incumbency," he says. "So when talk about ‘it’s not fair and it’s a distortion of the competitive market,’ they are absolutely ignoring the fact that the biggest distortion and the primary distortion is that they start off with 100% of the customers and a monopoly." Comments to the commission on PN-2003-1-1 must be filed by March 28, with modifications or new replies due by April 14.

CRTC widening of promotions suspension hailed by CLECs, decried by ILECs

News | March 24, 2003

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