Bell Canada’s streamlined forbearance application under fire from competitors

Bell Canada’s application to streamline retail rate forbearance applications has come under heavy fire from the competitive telcos and other interested parties, something that wasn’t entirely unexpected. Old battle lines have been drawn with members of the defunct Stentor Alliance and the Coalition for Competitive Telecommunications backing the Bell application. Competitors, though, tell the CRTC in comments to Bell’s Part VII that the application is simply seeking virtual deregulation, and that comparing the practices of international jurisdictions such as the United States and the United Kingdom to the Canadian situation doesn’t pass a litmus test of comparing apples to apples (see article on pages 5 and 7 for a detailed argument on the merits of implementing an automatic tariff approval methodology). In a detailed critique of Bell’s Part VII, MTS Allstream Inc. highlights what it says are inaccuracies in Bell’s portrayal of an increasingly longer tariff approvals process. It also points out that the comparison of the Canadian telecommunications regulatory framework to other international jurisdictions doesn’t provide any concrete evidence as to a more efficient and effective system. MTS Allstream recognizes that there have been delays in dealing with certain retail tariff applications, but suggests that the timelines provided by Bell Canada in its November 8 application are misleading. It writes that Bell fails to take into account the former Bell Nexxia tariff filings, which were subsequently deemed to be illegal by the commission, and tariff filing amendments in its calculation. MTS Allstream concludes that for the most part tariff applications are dealt within the 45-day time frame as prescribed by section 26 of the Telecommunications Act. There are bigger fish to fry, writes MTS Allstream, noting that tariff proceedings are the least likely to suffer delays compared to other proceedings of greater significance to the development of sustainable competition. "Indeed, it is in respect of such proceedings that Bell and TELUS Corp. in particular have engaged in protracted regulatory gaming that has led to delays in commission decisions. In turn, these delays have had and continue to have adverse impacts on both the development of competition and on the timeline for approval of individual tariff applications," the company writes its December 8 comments. Quebecor Media Inc. (QMI) agrees with MTS Allstream that the CRTC should concern itself with more significant regulatory matters that can take substantially longer than the 110 days Bell cites in its application. "This has been true in cases related to interconnection disputes, winback violations, cost study revisions for essential facilities, and many more. These matters can have a far larger proportional impact on a new entrant’s business prospects than retail tariff filings have on an ILEC’s business prospects, and hence should not be forced to take a back seat due to the imposition of artificial timelines for ILEC retail tariff approval," writes QMI. The Independent Members of the Canadian Association of Internet Providers (IMPCAIP) is concerned that speeding up the retail tariff approval process is inappropriate in light of the protracted timelines associated with disposition of the ILECs’ wholesale tariffs. IMCAIP suggests that the commission must first address wholesale tariffs and pricing before granting ILECs the ability to streamline retail tariff filings. "There is a further concern for those members of IMCAIP who make use of services, such as DNA, Ethernet access, and ADSL access, in order to provision non-Internet related services. Under Bell Canada’s proposal, an incumbent carrier could introduce or expedite a change to the retail tariffs for these services, while at the same time impede a reseller’s ability to compete in the market by not making an equally expeditious effort to file a tariff for the underlying wholesale services/facilities," highlights the group. A number of competitors support the view that approval of Bell’s application will lead to virtual deregulation of incumbents’ retail services. Reiterating comments made to Network Letter last month, Call-Net Enterprises maintains that the application is about "backdoor" forbearance. "…Bell Canada’s proposal could unnecessarily strip competitors and the public of the right and opportunity to fully test contentious tariff filings through Bell Canada’s proposal to shift onus on interested parties to demonstrate that a tariff filing should be denied. Moreover, the mechanism of the proposal could result in ‘virtual’ or ‘backdoor’ forbearance," Call-Net writes in its comments. Taking aim at Bell’s illustration of practices in other international jurisdictions, Call-Net suggests that this comparison serves no purposes, doesn’t shed any light on better ways of regulating dominant players and only highlights the differences among the various systems of telecommunications services regulation. The company points out that Bell’s description of the United Kingdom’s regulation of British Telecom (BT) through OfCom only tells half the story in that streamlined treatment of BT’s retail tariffs are offset by stringent regulation of wholesale and access. "In light of the foregoing, Call-Net submits that Bell Canada’s application tells less than half the story - omitting that rigorous regulation of BT’s access and wholesale services now appears to be a pre-condition to not only continuing streamlined treatment of its retail tariffs but more importantly preconditions to avoid future divestiture of its retail and wholesale operations. Call-Net (and undoubtedly other competitors) would readily concede to streamlined treatment of the ILECs’ retail tariffs if they in turn would concede to divestiture of their wholesale/access and retail operations," writes the company. A number of the application’s opponents also take issue with Bell’s proposal to include customer specific arrangements (CSAs) and bundling in Group A services - those which would be granted interim approval after 10 days and final approval after 60 days. They question whether the commission will have enough time to determine if the tariff filing meets all the associated rules and guidelines. Primus Telecommunications Canada and Yak Communications Inc., in a joint filing, point out that ILECs have already been known to skirt the rules and there is no reason to believe they won’t in the future. The companies highlight CSAs that were the subject of Telecom Decision 2003-63 and a bundling dispute between Aliant Telecom and EastLink where the commission found Aliant to be offering services packages that were actually bundles, thus requiring commission approval (Telecom Decision 2004-21). Other competitors raise the issue of trying to repeal a CSA or bundle that may have better prices or more features than previously offered after it is already in service. Writing on behalf of UTC Canada, Johnston & Buchan LLP lawyer, Laurence Dunbar notes that a case in point was dealt with in Telecom Decision 2004-20. The controversial decision allowed illegal agreements to stand because they were already in service. "Bell Canada’s proposal for a 10 day period prior to automatic interim approval will therefore place the commission in a position where it is forced to make snap judgments on the reasonableness of tariffs and then be faced with the uncomfortable prospect of facing customer ire if the tariff is subsequently overturned. "Bell Canada’s application will ensure that such errors benefit Bell - rather than its customers or competitors. Given the ILECs’ dominance in the local market, it makes little sense to err on the side of speed - rather than on the side of public policy," writes Dunbar.

Bell Canada’s streamlined forbearance application under fire from competitors

News | December 22, 2004

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