Bell shuttering wholesale local telephony offering

The wholesale telephony business wasn’t what it was cracked up to be, according to Bell Canada and Bell Aliant as the companies ask CRTC to destandardize its wholesale local service and features (WLSF) service. Noting the service no longer meets “business objectives”, Bell et al. say in an application that they will continue to offer the service to existing customers, but would no longer accept new wholesale customers if the application is approved. “Existing WLSF customers will see no change to their rates, terms and conditions for WLSF as a result of this application,” reads the application. The companies want the service destandardized by May 27, 2009. To much fanfare – in the telecom regulatory world anyway – Bell announced plans to offer competitive providers a wholesale local telephony option at the wholesale services and essential facilities proceeding about 18 months ago. The announcement was designed to show the commission that Bell was willing to let competitors use its network on a wholesale basis. The service was officially introduced in 2007. In an October 2007 interview with Network Letter, senior VP of regulatory and government affairs Mirko Bibic said it was better to have a customer on a wholesale basis than not have the customer at all. “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.” One of those carrier customers was Yak Communications, a subsidiary of Globalive Communications. Ed Antecol, VP of regulatory affairs and carrier services at Yak, tells Network Letter that while Bell won’t be signing up new customers if its application is approved, Yak will continue to add retail customers for the length of the contract. Bell had previously tried to convince the commission to immediately deregulate the WLSF service, which was heavily criticized by Yak and other competitive providers. In comments to that Bell application, Yak said it wouldn’t have invested the money to acquire customers based on the cost structure of the WLSF service if it was going to be deregulated a year after being introduced. “Yak would not have invested substantial resources in acquiring a local service base using WLSF had Yak contemplated that immediate forbearance was imminent. Rather, it would have waited for forbearance and negotiated other terms including transition assistance provisions,” read Yak’s comments. The destandardization scenario is a much better outcome for Yak, says Antecol. Had Bell been successful in getting immediate forbearance for WLSF, the Globalive subsidiary would have been severely affected. “First of all it would have shortened the time available to us to have the service, but it would have taken away our ability to move our base without penalty for volumes,” Antecol explains. “So this option leaves us completely untouched.” While Yak can continue to use the service to build a retail local telephony customer base, the company will at some point have to renegotiate access to Bell’s network because the WLSF service is slated to be deregulated in less than three years. The essential services decision classified the WLSF service as non-essential and subject to phase out within three years of March 3, 2008. The Bell application could have broader implications as well, according to Antecol. Reselling Bell’s local service will be much more difficult for new entities because they won’t be able to take advantage of the lower wholesale rates. As well, the pressure is now off Telus Corp. to create its own version of WLSF. And while a competitor can resell local service from MTS Allstream or another ILEC, there are footprint issues when considering these regional alternatives.

Bell shuttering wholesale local telephony offering

News | 03/06/2009 8:48 pm EST

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