MTS opposes unbundled loop rate increase, says prices should ‘go down, not up’

MTS Allstream says it will be forced to charge its customers a seven-per-cent per-month retroactive rate increase over 13 months should the CRTC’s decision on unbundled loops stand. “I think prices in the enterprise business marketplace typically go down, not up,” Chris Peirce, chief corporate officer of regulatory affairs for MTS Allstream, said in an interview. “Increases in costs are something we’d like to avoid. But again, as we pointed out, there are problems with the decision that are clear on the evidence.” In new comments filed with the commission June 7, MTS continued to side with Primus Telecommunications Canada Inc., requesting that the CRTC stay Bell Aliant and Bell Canada’s implementation of revised monthly rates associated with the incumbent telcos' unbundled loop service for smaller competitors. An unbundled loop is a wireline service that incumbent telcos provide to small competitors, allowing them to lease the lines that lead to customers’ homes. MTS wrote that the implementation of new rates would cause a one-time transfer of millions of dollars from competitors to Bell and lead to additional transfers every month. “If the Commission were to go ahead right now and allow Bell to claim these back charges—back to the date these proceedings began—then collectively competitors will be paying Bell millions of dollars,” Peirce added. “Then there will be the ongoing increases going forward to the future.” Primus, with suppport from MTS, has filed an application with the CRTC requesting a review of telecom decision 2011-24, issued in January, which set new rates for small competitor telcos to lease unbundled loops, making them retroactive to Dec. 14, 2009. In an application to the commission in January, Primus wrote that Bell’s rate increases ranged from 25 per cent to 156 per cent for competitors’ monthly unbundled loop charges. MTS wrote in its comments that the rates increases are “premature” because they have been met with opposition from applicants in Ontario and Quebec. “With their decision 2011-24, the rates would be going up and the retroactivity would apply,” Peirce said. “Bell, for instance, in the case of us and presumably in the case of Primus as well—they’re going to bill those retroactive amounts.” Primus told The Wire Report in a previous interview that that the unbundled loop rate increases would force it to track down customers as far as 13 months back to effectively implement retroactive charges. At a retail rate increase of seven per cent per month, a $50-per-month bill would incur an increase of $3.50 per month, which would amount to $45.50 in retroactive charges over 13 months. But Bell and Bell Aliant also take issue with commission decision 2011-24, calling for a review and saying the CRTC’s approved unbundled loop rate increases are too low. Bell is asking the CRTC to adjust the costs upon which the approved monthly recurring rates for the unbundled loops were based, and use those adjusted costs to determine the final rates. "Prior to the CRTC’s January 2011 decision, prices for unbundled local loops had not changed since 2001 despite significant increases to our costs,” Jacqueline Michelis, a spokeswoman for Bell, told The Wire Report last month. MTS wrote in its comments that the longer the CRTC waits to make a final decision on unbundled loop service, the longer Bell's new rates continue to apply. Primus wrote in its application that past interim charges “included a 75-day period during which the Bell companies had unilaterally suspended the proceeding.” It wrote that a group of competing companies has now come forward to request that the commission, when it makes a final determination, take into account the length of time that the proceeding is suspended. Peirce echoed Primus’ position, saying that Bell’s rates shouldn’t be retroactive due to delays in the proceeding. “One of the reasons the proceeding has taken so long has been Bell seeking numerous and lengthy delays,” Peirce said. “They shouldn’t be rewarded for that kind of behaviour.” Telus Communications Co. also submitted comments to the CRTC last week supporting Bell’s position. Telus wrote that the length of the interim period should not have any bearing on whether a retroactive adjustment is ordered because the Bell companies “do not benefit from any delay period after the rates are made interim.” "Primus’ position regarding the applicability of retroactive rates is completely incorrect because the Commission is fully empowered to order rates to be applied on a retroactive basis to the date for which rates had been made interim," Telus wrote. "Having said that, the Commission should examine the facts in each situation to determine to what extent the retroactivity should apply." Pierce said retroactive rates shouldn’t be imposed while the correctness of decision “is very much in question.” dgrenier@thewirereport.com

MTS opposes unbundled loop rate increase, says prices should ‘go down, not up’

News | June 16, 2011

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