Will late be better than never for payphone rate petition?

Somewhat regretful it didn't press the issue of payphone rates further during the price cap proceedings last year, the Public Interest Advocacy Centre (PIAC) has joined with two other consumer groups to petition the federal cabinet to overturn the CRTC-approved 100% increase in the price of local pay telephone calls and refer the matter back to the commission with directions. "When we got to the discussions about payphone rates, didn't seem to be a real option so we didn't spend much time on it," says John Lawford, counsel for PIAC. "We didn't alert all these folks like we usually to and say ‘If you don't show up and put a submission in then there's a big risk.' And now in retrospect there was a big risk." That risk was realized when the CRTC, as part of the price cap framework for large incumbent local exchange carriers (Decision 2007-27), approved the flexibility for all ILECs to increase the charge for a local cash call up to 50 cents, the first such increase for most ILECs in 25 years. Considering the payphone rate hike was such a small part of a larger decision it's understandable that it was somewhat overlooked. Indeed, Lawford says heavy payphone users didn't even know about the decision until the rates were actually doubled on June 2, and it was then that the general public began contacting PIAC and other consumer groups with more vigour. PIAC is joined in its petition by the National Anti-Poverty Organization and Union des consommateurs. With the option of lobbying the commission now exhausted, the consumer groups are forced to take the more unfamiliar route of appealing to the government. Lawford is hopeful their voices will not fall on deaf ears. "We have some inkling the rank-and-file MPs might have more static from their constituents about payphone rates going up than they can ignore," he says. "I know, at a certain level, that the government is concerned about poverty issues and certainly other opposition parties seem to be onside with this one. We'll just have to keep on speaking to the minister's office and hopefully they'll take it seriously." At its heart, the payphone rate hike situation is a poverty issue. The main objection to the increase from the consumer groups is that those who are least able to afford the new rate just happen to be the poorest Canadians who use, and rely on, payphones the most. Although the main argument from the incumbents was that if the rate increase was not approved they would have to remove payphones from less profitable areas, none of the ILECs submitted financial evidence detailing the revenues and expenses associated with operating payphones, so the commission had no empirical evidence to base its decision on. However, according to Lawford, payphone pricing and access shouldn't be completely based on revenue. "To some extent you'd expect payphones to be subsidized by people who pay cell phone and local service rates because it's a way to get into the phone network when you don't have a cell phone and don't have a home phone nearby," he says, adding, "It's a social service so maybe there's a little bit of noblesse oblige they have to take a loss to be in the phone business." PIAC supports its claims with a new survey of 1127 Canadians it commissioned from Pollara last month. The survey found that 93% of Canadians agree that pay telephone service is "a necessary and important part of the telephone network," and 75% of Canadians felt the new 50 cent payphone rate is too high. Of course, the survey results and social responsibility argument likely isn't going to change the stance of the ILECs. Lawford is expecting their replies to the petition to be issued soon, but just the same he his hoping some more consumer and social groups will come forward with their submissions on the matter, particularly if they have specific testimonials from Canadians whose lives have been negatively affected by the rate hike. "It's all well and good to put a poll in there that says people don't like to pay 50 cents for a payphone call," says Lawford, "it's quite a different thing to have people say, ‘Now I don't make calls for work and I don't go to the doctor as much, et cetera,' which...I suspect will happen to a certain extent."

Will late be better than never for payphone rate petition?

News | August 9, 2007

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