Bell seeks to double payphone rates to pay for upgrades

Bell Canada, Bell Aliant and Télébec are seeking the CRTC’s permission to double their standard payphone rates, proposing to bump the cost of a local payphone call to as much as $2. In a application filed with the commission this week, the BCE Inc. subsidiaries asked the commission to increase the maximum local payphone charge to $1 for calls paid for in coin or cash and to $2 for calls paid for with cash cards or debit cards. Payphone calls now cost 50 cents by cash or $1 by card. The Bell companies noted that they are not proposing to increase charges immediately but would “experiment and determine the optimal rates.” “The Companies do not want to witness another sharp decline in usage relating to rate increases like that seen in 2007 and so require flexibility in payphone rate setting,” the application said. The companies say the rate increases are needed to offset the cost of upgrading equipment to handle new, steel loonies the Royal Canadian Mint will introduce this spring. Bell says at least 95 per cent of payphone calls are made using coins and that not upgrading their systems to handle the new coins will result in “customer frustration … reduced payphone revenues and increased call volumes to the operator and the repair service numbers, for which the Companies do not receive compensation.” The proposed rate increases will help maintain the profitability of the companies’ payphone regime in the face of declining usage, Bell added. “Permitting the Companies to recover the costs associated with upgrading their payphones to accept the new one dollar coin through rate increases for local payphone calls will also assist the Companies in slowing down the decommissioning of payphones, as profitability will be more likely,” the application said. In statistics filed in confidence with the commission, Bell added that a number of payphones in Ontario and Quebec only bring in enough cash to cover the cost of keeping the line running. “These payphones do not generate sufficient revenue to cover other costs like those associated with repairs, cash collection, booth cleaning, directory placement, backbone network costs or vandalism clean-up,” the application said. “As a result, these payphones are essentially being subsidized by the rest of the payphone base. Consequently, many, if not all, of these phones will be subject to removal based on their negative contribution.” The companies noted that it would take between 30 and 36 months to upgrade their payphones to handle the new coins. Prior to rate increases in 2007, maximum payphone rates had been capped for most Canadian operators at $0.25 for more than 25 years. In a joint-response filed Thursday, the Public Interest Advocacy Centre (PIAC) and the non-profit group Canada Without Poverty (CWP) said they oppose Bell’s request and questioned the companies’ use of a “Part 1” application to seek the rate increases, which does not involve a public consultation. PIAC and the CWP said the Part 1 process would limit interveners to one written intervention that must be filed within 30 days. “PIAC expects to raise issues of social utility of payphones and ideally to introduce evidence of payphone use by the public, in particular those persons living on low income,” PIAC wrote. “However, commissioning and compiling this information will take more time than is allotted for intervention.” PIAC asked the commission to turn the Part 1 application into a telecom consultation, allowing more time for interventions, responses, and requiring Bell to answer commission questions. Interventions into the Part 1 application are due Feb. 17. news@thewirereport.ca

Bell seeks to double payphone rates to pay for upgrades

News | January 20, 2012

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