Jousting continues between ILECs and Yak over billing and collection

Parties responding to a Yak Communications Inc. application to reduce incumbent telco rates for billing and collection services have roundly panned the dial-around provider’s Part VII (NL, Dec. 21/06). And one interested party has taken the extra step of criticizing CRTC staff for even allowing the application to proceed at all. The Part VII was initially stalled in procedural wrangling, but the commission ruled on December 8 that it would proceed with examining the application. Yak requested the commission reduce billing and collection rates across Canada to $0.01 per record as an interim measure while the incumbent carriers conduct and file new cost studies to set new, permanent rates. Bell Canada, representing itself, Bell Aliant and SaskTel (the Companies) refused to comment directly on the application per se, asking the commission instead to determine the appropriate procedure to deal with Yak’s Part VII. "Commission staff’s decision to proceed at this time with the Yak application is contradictory and, more generally, inappropriate," Bell notes in its comments. "It therefore was inappropriate for staff to conclude that Yak’s request should be addressed under the existing rules and service classification but that consideration of the Companies’ arguments regarding the regulatory status of the services in question should not be addressed in this proceeding. Staff’s recommendation is an attempt to pre-determine issues before the commission in the proceeding."Bell cites three reasons why the regulatory status and treatment of billing and collection services is the central issue in dealing with Yak’s application: the current rating treatment of these services is inconsistent with current market conditions; the current regulatory treatment of billing and collection services is out of step with other jurisdictions, particularly the United States; and there is serious doubt that these services are even telecommunications services as defined in the Telecommunications Act. MTS isn’t opposed to conducting new cost studies, but strongly objects to Yak’s proposed interim rate. The Manitoba ILEC states that there is no basis for a common rate of $0.01 per record given the varying cost structures of the incumbent carriers. MTS notes that it is charged a per-call record processing fee that is significantly greater than $0.01. "For this reason alone, the commission should deny Yak’s request to reduce the per call record processing charge on an interim basis to $0.01 per billing record," writes MTS. Telus asks the commission to dismiss Yak’s application because it doesn’t provide credible justification for imposing an interim processing rate of $0.01 for all incumbent carriers. The company adds that Yak’s Part VII doesn’t provide evidence that new cost studies are required. "Simply put, Yak’s estimates are not actually about the billing and collection service, and certainly are not about Telus’ billing and collection service. Yak, therefore, has put nothing on the record from an evidentiary perspective about Telus’ cost to provide billing and collection service," says Telus in its comments.Telus also states that Yak’s request for the imposition of an interim rate is contrary to case law, particularly a 1989 Supreme Court of Canada case involving Bell Canada wherein it stated that the purpose of interim rates are for allaying financial instability during a lengthy regulatory process."Yak’s request would fundamentally undermine financial stability for the regulated companies affected by the interim order. This would be so because, based on past commission precedent, the interim rates in question could remain in place for a potentially indeterminate amount of time. As well, there is the possibility of a large retroactive re-rating – if Yak’s estimates have any credibility."It is this last point to which Telus is particularly sensitive, given its own recent application to have three recent decisions ordering retroactive rate changes for competitor services (NL Nov. 24/06) revised so that it doesn’t have to fork out an estimated $20 million to competitors. The company submits that the commission should only change the rates for billing and collection services on a prospective basis, and only after new cost studies have been conducted. In reply comments filed earlier this month, Yak dismisses the arguments of SaskTel and Bell concerning the regulatory status of billing and collection services as not being relevant to this application. Yak also objects to Telus’ argument that time alone is an insufficient reason to conduct new cost studies. "The particular cost studies at issue were filed a very long time ago (i.e., approximately twelve years ago), and this extended time duration is indeed a relevant factor to consider in any determination as to whether new cost studies are appropriate," writes Yak. The company agrees with Telus and MTS that costs will differ from incumbent to incumbent, but also states that they should be substantially similar as they involve the same functions in all ILECs, namely collecting call records, screening them electronically, formatting them and printing them on a paper bill. Yak also notes that Telus’ argument concerning Yak’s proposal for interim rates being contrary to a Supreme Court of Canada decision is patently unreasonable."If Telus’ argument was to be accepted it would mean that the commission should never impose interim rates where there could be a lengthy proceeding to determine final rates, particularly where the re-rating could be large. Such a conclusion is precisely the opposite of what was intended by the Supreme Court of Canada," says Yak. "The commission has the power to make rates interim, and to set new interim rates. This is both consistent with past Commission practice and the Bell Canada decision."

Jousting continues between ILECs and Yak over billing and collection

News | January 19, 2007

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