ILECs dismiss anti-competitive claims in bundling proceeding

Incumbent telephone companies are telling the CRTC it has no reason to worry that removing the general tariff bundling rules will lead to anticompetitive behaviour such as tying, predation or unjust discrimination. Their comments come as the proceeding looking into the ongoing appropriateness of the general tariff bundling rules and market trials heads into the final stretch. In a joint filing, Bell Canada, Bell Aliant, SaskTel and Télébec reject claims that they will engage in anticompetitive practices if the bundling rules are eliminated. With respect to predatory pricing, the companies state this is an unlikely activity. "Should ILECs engage in predatory pricing, they have no opportunity to successfully sustain price increases after the fact in order to recoup their losses; tariffs prevent any unapproved price increase for tariffed services, while forborne and non-telecom services would remain, in the presence of low barriers to entry, competitive enough to defeat any recoupment strategy," reads the submission. Predatory pricing is an area where MTS Allstream Inc. misses the boat, according to Telus Corp. "MTS Allstream implies without a hint of irony that aggressive undercutting of prices for forborne services is somehow a public policy problem, calling into question its familiarity with the Policy Direction and its understanding of the function of competitive markets," states Telus. The company further highlights a number of instances where it claims the Manitoba ILEC shows a lack of understanding of what is actually under examination in the proceeding or the trend towards lighter regulation as expressed by the Telecommunications Policy Review Panel and implemented by the Policy Direction. Telus points to MTS Allstream's contention that wholesale services would somehow be affected by changes to the general tariff bundling rules as erroneous. As well, the suggestion that tying could be used is irrelevant. "It is impossible for an ILEC to tie regulated services with any other products or services because the regulated services must be available on a standalone basis, in accordance with the applicable tariffs," reads Telus' comments. On the issue of unjust discrimination arising from the elimination of the bundling rules, Telus Corp. criticizes MTS Allstream Inc. for misinterpreting the relevant particular section of the Telecommunications Act. The western-based ILEC notes that this section is not a catch-all fairness provision, but one that is used to make sure there isn't any unjust discrimination between customers of the same service. "In this case, the first inquiry must be whether there is discrimination among one or more customers of the tariffed service or among one or more customers of a given mixed general tariff bundle," writes Telus. With final comments in and the record of the proceeding now closed, the CRTC will turn its attention to evaluating the parties' respective comments. Given the track record of the commission in recent months and the trend toward lighter regulation of the ILECs in general, it appears unlikely the commission will retain the general tariff bundling rules. Network Letter will have reaction on the new rules once they are released by the CRTC.

ILECs dismiss anti-competitive claims in bundling proceeding

News | 09/26/2007 5:05 pm EDT

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