Bell gets interim approval on wholesale local voice tariff

Competitive telecommunications service providers will soon only have to pay wholesale rates to offer local residential telephony using Bell Canada and Bell Aliant's network rather than retail rates. Filed with the CRTC just last month, the commission moved quickly to provide interim approval of the ILEC's wholesale local service and features (WLSF) tariff, which could pave the way for more telephony competition at the retail level. The tariff application wasn't unexpected. Mirko Bibic, chief of regulatory affairs at Bell, announced during the wholesale and essential services public hearing in October that the company would be seeking approval for WLSF. In an interview with Network Letter at the time, he said the wholesale business is a critical part of the company's strategy. "If you're going to lose a customer, you might as well lose who's going to be on your network because then you're going to get some revenue," Bibic explained. The tariff is aimed at a specific type of provider, but is available to other competitors as well. "The primary target market for this service is resellers," Bell writes in an email to Network Letter. ", this service can be ordered by facilities-based competitors as well, and thus could be used by them in areas where they do not have facilities." The tariff reads similar to a customer specific agreement (CSA) used for large enterprise contracts. There are minimum limits imposed for some things and maximums for others, and penalties are assessed against the provider using Bell's network if those thresholds aren't met. The provider has to sign a three-year service contract, renewable on one-year terms thereafter, and by the end of the first year, it must have a minimum of 5,000 residential customers. If the provider doesn't meet that minimum standard then it is assessed a penalty equal to the total shortfall multiplied by $16.54 multiplied by three. A provider that only reaches the 4,000 customer mark at the end of year one would have to pay Bell $49,620, for example. The WLSF tariff is largely limited to urban areas where the commission has already deregulated local residential service: only 20% of customers can be located in non-forborne areas. If the provider exceeds that limit, the general tariff rates as opposed to wholesale rates will apply for the number of customers over that 20% threshold. "Such an approach is consistent with these types of commercial wholesale arrangements which ensure a well-balanced distribution of customers," Bell writes. The provider will also be subjected to a one-time $25 charge for every customer that switches from Bell or Bell Aliant to the provider. However, there are incentives for the provider to bring in new customers. Bell and Bell Aliant will pay the provider $50 for every new customer it signs up who wasn't previously a customer. But to receive the credit, the provider must maintain a three-month rolling churn rate of less than 15%. "We needed a limit on churn to avoid situations where ordered services in and out just to get the $50 credit," writes Bell. "We believe that the 15% churn is reasonable and consistent with market demands." While there appears to be many restrictions placed on the provider leasing the network from Bell and Bell Aliant, industry insiders believe the WLSF tariff is an honest effort by the two ILECs to put a reasonable offer on the table for companies looking to offer telephony.

Bell gets interim approval on wholesale local voice tariff

News | December 14, 2007

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