Lift local service promotion tariff filing suspension, Bell Canada tells the CRTC

Bell Canada says that it has been more than two years since the CRTC disallowed incumbent telephone companies from filing tariffs for local service promotions, and it’s about time the suspension was lifted. In a Part VII application filed with the commission on March 11 seeking an expedited resolution, the country’s largest ILEC says there are three reasons why the commission should lift the suspension: promotions are good for competition even in monopoly markets; the commission has a legal obligation to consider tariffs; and three unresolved access issues have been settled. Bell says the fact that the suspension on local promotions by ILECs has been in effect for more than two years – its origin begins with Tariff Notice 6711, filed by Bell in November 2002 – has become what can be considered an effective and outright ban on promotions by incumbent telephone companies. Mirko Bibic, chief regulatory officer at Bell Canada, tells Network Letter that the CRTC has to get rid of the ban, and lift it as soon as possible. "Allow ILECs to file tariffs for promotions if they feel they need to implement a promotion in order to respond to competition and stimulate demand amongst the consumer base, and consider those tariff applications like other tariff applications would be considered, as the commission has an absolute obligation to so legally under the Telecommunications Act," he tells NL. The ban on local service promotions from ILECs was imposed two years ago following a proceeding launched by Telecom Public Notice 2003-1. It prevented all incumbent telephone companies from filing tariffs for promotional offerings targeting customers of its competitors. The commission said at the time that the weak state of competition in the local residential services market required measures to allow competitive telcos to gain market share. The scope of the promotions suspension was expanded with PN 2003-1-1, which banned promotions for not only competitor customers, but also customers of the incumbent telephone company. "Significantly, the scope of the Suspension was expanded to capture considerations of all applications for ILEC promotions in the local wireline market, irrespective of whether the promotion was targeted at ILEC customers or customers of their competitors. The Suspension thus operates as a blanket prohibition on promotions regardless of the type of promotion, irrespective of whether the promotion is targeted to the residential or business local wireline market, whether it is targeted at specific geographic segments, or whether it passes an imputation test," reads the company’s March 11 application. Bibic points out that the commission just recently reaffirmed that promotions are legitimate business practices in both monopoly and competitive markets, highlighting Broadcasting Decision 2004-494. In that ruling, the CRTC determined that promotions from Rogers Cable to multiple dwelling units weren’t contrary to the public interest. "…There’s no way that (decision) can’t apply in telephony – even if you accept that telephony is a monopoly market because they say even in monopoly markets, promotions are okay," Bibic says. "In stark contrast to the Commission’s pre-existing, pro-promotion policy, the policy underlying the Suspension appears to rest on a contrary presumption, namely that all promotions offered by a dominant service provider in its home territory are inappropriate and contrary to public interest," the company writes in its application. The company states that the CRTC erred in imposing what Bell considers an outright ban on promotions from ILECs. "It is now clear the Commission violated principles of natural justice and procedural fairness by imposing what has become a de facto Suspension, before it had provided all affected parties with an opportunity to make submission on the appropriateness of the Suspension and without actually hearing interested parties on this critical issue," Bell writes in its comments. Says Bibic: "(The CRTC has) a legal obligation under the Telecommunications Act to exercise its powers to consider tariffs. The suspension doesn’t even allow for tariffs to be filed, let alone be considered." Key to the commission’s decision to impose the suspension on local services promotions from incumbent telephone companies was the existence of barriers to entry for competitive providers into the local market. Additionally, there were three unresolved access-related issues. Those were access to municipal rights of way, access to support structures and access to multiple dwelling units. But since the imposition of the ban, Bibic says these unresolved access related issues have been settled. "In fact earlier this week – fortuitous timing – the Ontario Energy Board issued a decision which ordered electricity distributors in Ontario to grant access to their poles to competitors, including cable companies," he says. "So because of the policy of the commission, because of the errors in law and because the resolution of these access-related issues, and frankly changes in the competitive dynamics in the market place in two years, it’s time to lift the suspension," Bibic states.

Lift local service promotion tariff filing suspension, Bell Canada tells the CRTC

News | March 16, 2005

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