CRTC should deregulate deposit and disconnection policies for all local telephone providers

The country’s biggest cable companies have told the CRTC that it should deregulate deposit and disconnection policies in unregulated markets for all local exchange carriers (LECs), including incumbent providers. They say market forces are sufficient to ensure reasonable policies are developed, therefore eliminating the need for regulation. Bragg Communications (EastLink), Cogeco Cable Inc., Rogers Communications Inc., Shaw Communications Inc, and Quebecor Media Inc. (Vidéotron ltée) were responding to comments from the telephone companies (Bell Canada, Bell Aliant, SaskTel, Telebec and Telus) to an appeal the cablecos made of Telecom Decision 2009-424. This ruling asked the Commissioner for Complaints for Telecommunications (CCTS) services to develop an industry code for local telephone deposit and disconnections for all local telephone providers. The cablecos said this amounted to regulation of a social policy that had been deregulated for the past 12 years. “The cable carriers agree with Bell et al. and Telus that the evidence – based on the CLEC experience – is that market forces are sufficient to discipline disconnection and deposit policies and, as a result, ILEC disconnection and deposit policies should also be deregulated in forborne markets,” they write in their reply comments. The big five cablecos appealed 2009-424 in August, saying the commission can’t arbitrarily force this type of regulation on competitive local telephony providers without first giving them an opportunity to demonstrate why the new rule would negatively affect their business – in regulatory parlance, a show cause proceeding. Besides, they said, CLEC customer deposit and disconnection policies have been deregulated for 12 years and the commission didn’t provide any evidence as to why it needed to re-regulate in this area. They also noted that the purpose of the consultation that led to 2009-424 was to find ways to streamline existing deposit and disconnection regulations, not re-regulate these policies for CLECs. “The CLECs had no notice that their deposit and disconnection policies would be regulated as a result of the proceeding or of a case against them, and accordingly had no opportunity to respond to that case,” they wrote in their appeal. “This alone is sufficient to constitute a breach of the rules of procedural fairness and natural justice.” In comments to the cablecos’ applications, Bell et al. and Telus agreed there is a lack of evidence to support the regulation of deposit and disconnection policies for CLECs in deregulated markets. They also supported the cablecos argument that the CCTS should not be involved in regulating this matter. But the telcos argued that the CRTC must regulate the deposit and disconnection policies of all LECs in a symmetrical manner. They say if ILECs are regulated then so should the cable companies. An asymmetric regulatory measure must be based on evidence and a public policy rationale, neither of which exist in this case, the telcos said. “The commission’s determination of the cable carriers' application should impose the same regulatory measures for disconnection and deposit policies on all LECs in forborne markets,” Bell et al. wrote. “With respect to LEC disconnection and deposit policies in forborne markets, there is no persuasive evidence, in fact, no direct evidence at all, that regulatory measures are necessary. However, regardless of what determination the commission ultimately makes on the need for regulatory measures, that determination must be implemented in a symmetric and competitively neutral manner for all LECs in forborne markets to comply with the policy direction.” Perry Hoffman is an Ottawa-based freelance writer. He can be reached at perry@messagingmechanics.com.

CRTC should deregulate deposit and disconnection policies for all local telephone providers

News | October 1, 2009

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