Bell thrwarting migration of DND services, Telus charges

Telus Corp. lashed out at Bell Canada this week, accusing the rival incumbent telecom provider of intentionally frustrating the migration of the Department of National Defence's telecommunications services."Bell Canada claims that it has been blameless in the customer migration," Telus tells the CRTC. "To the contrary, Bell Canada has purposively acted to frustrate the migration on numerous occasions. In response to practical solutions put forth by Telus and the customer to facilitate a smooth migration, Bell Canada has often refused to cooperate and a series of behaviors emerged as Telus approached project deadlines."In its comments, Telus details several instances it believes demonstrates Bell's desire to thwart the migration process. It refers to the restoration of IP services, which now take 48 hours rather than the two to four hours Telus believes is required. It also points to Bell's decision to install new circuits for DVACs rather than re-use the ones already installed."The only plausible reason for Bell's behavior in each of these examples is to delay the migration and thus extract economic penalties from the customer," Telus argues.The network transition difficulties came to light this summer after two military bases suffered telecom outages. Telus won the contract from Bell in 2007 and the migration was to have been completed by June 2008. But problems forced an extension until December 15, and it's now clear that DND will need to use Bell's network beyond that date.With a deadline looming and negotiations having failed to produce an agreement acceptable to DND and Bell, Public Works and Government Services Canada (PWGSC) - the government agency that handles all federal government contracts - filed an appeal with the CRTC on behalf of DND saying the rates Bell proposed to charge after December 15 were unreasonable and were against the Telecommunications Act.Bell has said in filings to the commission that it wants what it considers fair compensation for the ongoing use of its network. It says it's not required to offer DND a contract that differs from the current customer specific agreement (CSA), which includes a minimum contract period and minimum revenue guarantees.The company has also suggested an alternative CSA that has a minimum two-year term rather than five years under the current CSA, but will no longer offer DND the opportunity to continue on month-to-month as it has been since Telus won the contract. As well, Bell assures that it won't cut off service and will continue to offer high-quality services to DND."Such quality assurance commitments on Bell Canada's part require commitment on PWGSC's part too, at least in the form of a firm term matching the time for which PWGSC forecasts requiring services," the company tells the CRTC. "Bell Canada's staff and resources should not be expected to be set on standby, in case PWGSC should require services for two years plus an optional third year, while PWGSC has the benefit of terminating the relationship on a monthly basis."Implications for the broader competitive landscapeTelus says there are also bigger issues at play that could have a negative impact on future competition in the enterprise segment, if PWGSC's application isn't granted. The western-based ILEC notes that unreasonable terms during a transition could cast a pall over the competitive landscape of enterprise telecommunications."Anti-competitive behavior and unreasonable terms and conditions for customer migrations in the enterprise segment present a huge cost and risk profile for new suppliers. The transitional challenges to alternative suppliers in the enterprise space are already sufficiently high and the CRTC, if it does not take action in this case, will dampen customer interest in putting their business to competitive tender," reads the company's December 15 comments.Bell agrees there are broader implications for the enterprise competitive landscape, but says the negative impact will come from granting the government department's application. Incumbent suppliers of enterprise contracts would become "insurers of last resort, by shouldering the burden of protecting customers from competing suppliers unable or unwilling to honour their contractual commitments to customers by meeting promised migration deadlines."Montreal-based Bell also notes that if the commission were to grant the PWGSC application, it would interfere in a properly functioning market. The incumbent supplier would no longer have the "discretion to develop and manage its retail service offerings" or negotiate renewals with customers."Specifically, by interfering with commercial negotiations relating to forborne services, the Commission would introduce regulatory distortions in markets that it has already found are competitive," Bell writes.

Bell thrwarting migration of DND services, Telus charges

News | December 18, 2008

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