SaskTel hands tied on promoting value-added services, company says

A Sasktel official is expressing frustration in the wake of an early August decision by the CRTC not to forbear voice messaging services in the province as requested by the telco (Telecom Decision 2004-54). John Meldrum, VP corporate counsel and regulatory affairs, tells Network Letter that the decision fits within a regulatory continuum that sees the ILEC’s hands tied when it comes to offering promotions on value-added services. That, he says, is directly affecting the company’s bottom line. On August 5, the commission ruled with respect to Sasktel’s December 2003 request for forbearance on voice messaging that the telco’s application was deficient, and turned it down. Specifically, commissioners singled out a lack of information in the original filing regarding costs customers might incur when switching voice messaging providers, and the absence of estimates of competitor market share. While SaskTel will likely fill in the blanks pointed to by the regulator in a re-drafted application, Meldrum expresses frustration with the length of time the process has taken. "It was fully within their power to ask interrogatories, and decide that there was sufficient competition to forbear. Instead of doing that, they just decided to kick it out and say it was deficient and force us to file it (again) or appeal," he says. He fears the new application will take a year to 18 months to deal with, during which time Sasktel will also face the continued ban on non-winback promotions. The restrictive regulatory environment, he says, is denying customers the opportunity to take advantage of promotion-priced value-added services from Sasktel. The combined effect of recent rulings, says Meldrum, is to prevent the company from adding to its bottom line by attracting subscribers to new features. "Certainly, in terms of not being able to do promotions, we made close to three-quarters of a million dollars a year on promotions because it gives people an opportunity to try this service. They like it, they keep it, they pay for it. What’s interesting is that if you look at the calculations for the local subsidy, I think they’re supposed to be something like $60 per year. Well, we’re below the $60 but they’ve denied us the opportunity to get up to the $60. You just sit there scratching your head, going, ‘your decisions don’t even hang together. On the one hand you say to us, well, when we do the calculations on local subsidy, you should have X dollars worth of revenue. Yeah, we realize you don’t have X dollars as a revenue, but we’re not going to give you the tools to get to that ." Meldrum says the situation in Saskatchewan is particularly frustrating since local competitors - the parties that decisions such as those on promotions and voice messaging are supposed to protect - show no signs of entering the provincial market. "We could have this thing regulated 10 years from now if people don’t get going…It does all tie back into that agenda which is: ‘you’re not getting forbearance, and you’re not doing promotions. You’re not doing anything. Just sit there and lose some market share.’" As long distance revenues fall, he says, restrictions on signing customers up to higher value features are particularly harmful. He predicts that if the situation continues unchanged, that even the Saskatchewan government may become involved. "There’s certainly a lot of talk about the neccessity of review at the commission. We certainly fully endorse that. I guess at some point it may become a political issue in Saskatchewan, a federal/provincial issue, because the extent to which they start to take decisions that have greater economic impact than those that have already occurred, I don’t think our shareholder will just sit and let that happen. No way."

SaskTel hands tied on promoting value-added services, company says

News | 09/01/2004 4:00 am EDT

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