Bell says competitors trying to deny long distance payments to small companies

Rogers Communications Inc. and Quebecor Media Inc.’s reluctance to pay for routing long distance calls over Bell Canada’s network could deny smaller phone companies from interconnection payments, Bell says. In a submission to the CRTC Friday, Bell has accused Rogers and Quebecor of trying to create a competitive advantage for themselves by avoiding the fees associated with long distance phone calls routed over Bell’s network. According to information provided by Bell, small local phone companies like Ontera and NorthernTel receive up to 6.6 cents per conversation minute for long distance calls (the average is 1.1 cents per minute). Bell provides a “local transit service” to cable companies offering phone services in Ontario and Quebec, allowing the companies to route traffic to small local phone companies through Bell’s network. Rogers and Quebecor, both competitive local phone companies, have maintained that the CRTC should prevent Bell from introducing new charges of the companies when they route long distance calls over Bell’s network. “Bell Canada submits that granting Rogers et al's request will perpetuate a situation whereby are denied their legitimate toll interconnection charges and Bell Canada is placed at an unfair competitor advantage vis-à-vis those that utilize Bell's local transit service to transmit toll traffic to end-customers,” Jonathan Daniels, Bell’s vice-president of regulatory law, wrote in an Aug. 13 response to Rogers and Quebecor, filed with the CRTC. Bell said Rogers and Quebecor have “ignored the proverbial elephant in the room” in their correspondence with the CRTC by not mentioning the “toll termination regime” for small local phone companies. On June 4, Bell informed the CRTC that it would either block or apply a surcharge to unauthorized long distance traffic on its network that it had discovered from Rogers, Quebecor and Shaw Communications Inc. On July 13, the three cable companies, which operate as “competitive local exchange carriers” (CLECs), submitted a letter to the CRTC arguing that they should be allowed to route toll traffic, or long distance calls, over Bell’s network at their convenience. “The CLECs do not agree with Bell’s view that CLECs are not permitted to terminate toll traffic that is destined to over local transit trunks for various reasons,” the companies wrote. “The CLECs … strongly believe that Bell is being fully compensated for terminating local and toll traffic to the . As a result, it is difficult for the CLECs to understand why Bell would suggest that they must remove toll traffic that is destined to the from their transit trunks groups.” Dennis Béland, Quebecor’s senior director of regulatory affairs for telecom, told The Wire Report Tuesday that Bell’s Aug. 13 reply to the CRTC is the first time the company has offered a justification for its proposed plan to block the traffic or implement a surcharge on it. He said Rogers and Quebecor are still studying the implications of the so-called “toll termination regime.” In previous interview, Béland said Bell’s plan to apply a surcharge to unauthorized long distance traffic over its network amounted to an “open-ended threat.” In response to Bell’s letter, Rogers and Videotron filed a joint letter Monday arguing that the “threat” to block or impose a surcharge on long distance calls would violate section 25(1) of the Telecommunications Act and cause “irreparable harm” to their customer bases. Section 25(1) of the act says that “no Canadian carrier shall provide a telecommunications service except in accordance with a tariff filed with and approved by the Commission that specifies the rate or the maximum or minimum rate, or both, to be charged for the service.” But Bell said in its letter that Rogers and Quebecor have failed to offer any concrete evidence of the “irreparable harm” that would occur if the company blocked toll traffic or initiated a surcharge. The cable companies responded in their joint letter that “irreparable” refers to the nature of the harm, not the magnitude. “Accordingly, even the most minimal loss of goodwill and market share by the CLECs as a result of Bell’s unilateral blocking of end-user traffic would result in irreparable harm,” Rogers and Videotron wrote. Bell has set an Aug. 25 deadline to implement traffic blocking or surcharges, barring a CRTC decision that prevents it from doing so. The CRTC is expected to settle the matter Aug. 25. In an email to The Wire Report, Bell spokeswoman Jacqueline Michelis said the CLECs are avoiding paying CRTC-approved fees by routing toll traffic through Bell's local network. "By doing this, the CLECs are not paying the required subsidy to the ," Michelis said. "Bell is looking to the CRTC to establish regulatory symmetry by requiring CLECs to abide by the same rules as we do in order to terminate toll calls to ." Rogers and Videotron in their letter called on the CRTC for “interim relief” from a surcharge, arguing that, if they are not permitted to continue routing the long distance traffic, they would suffer more harm than Bell. “There is no doubt that the CLECs would suffer financial and other losses if they are blocked from terminating toll traffic to ,” Rogers and Videotron wrote. “They would be caused to breach contractual business arrangements with their end-users who in turn could simply switch services to Bell as a result.” Bell said in its Aug. 13 letter that it would “ensure a seamless transition so that end-customer ‘disruption’ is kept to a minimum” in the event that Bell is permitted to block long distance traffic or apply a surcharge. “We have every expectation that the CRTC will put a hold on any actions when it comes out with its ruling on the request for interim relief,” Béland said. jmigneault@thewirereport.ca

Bell says competitors trying to deny long distance payments to small companies

News | August 17, 2010

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