Bell Canada presses CRTC to speed up retail tariff approval process

Bell Canada is pressing the CRTC to dramatically speed up its process of approving retail tariff applications by adopting a system of automatic interim approvals. The telco filed a Part VII application with the commission on November 8 that would reduce wait times on routine filings to no more than 60 days, and says adequate protections already exist to render longer processes unnecessary.In its filing, Bell says the current system is far slower than similar regulatory regimes around the world at approving telecom applications. Mirko Bibic, chief of regulatory affairs at Bell Canada, cites the company’s managed Internet telephony (MIPT) offering for large business customers as an example of how long the current system can take. He notes that the company made its initial application for a tariff covering that service on May 10 this year. Interim approval was granted for the tariff 81 days later on July 30. Bell has still not received the final tariff. The example is typical, he says, of delays in the system. According to Bell’s filing, between September 2003 and September 2004, Bell filed 84 tariffs, which took an average of 110 days for final rulings. By contrast, in 1984, the company filed 345 tariffs, which took an average of 38 days for final rulings. Even as recently as 1999, when competition was fully introduced to the marketplace, the commission took an average of just 55 days to deal with 102 Bell tariff applications."(What if) we want to implement a price decrease in order to be more competitive? The delay isn’t helpful to the service provider, nor to the customer. To the extent customers want to take advantage of a service like MIPT, or something else – whatever that might be – customers don’t want to wait. There’s no virtue in delay in and of itself. Unfortunately, we may be suffering from that a little bit in the way the current model is being administered," says Bibic. "We’re falling behind in two regards. At a high level we’re falling behind in the regulatory model and framework that we have in this country as compared to our trading partners. And, we’re also falling behind in how, procedurally, regulatory models are implemented, or administered, whatever model any country happens to have. We need to be better at both. We need to have a better regulatory framework and we need to administer whatever model we have more efficiently, and more sanely. On the former, there’s a new model. We’re calling for a policy review. On the latter, administering the model, well, we have a model now that we have to live with, and it should be administered more efficiently. And, of course, whatever new model we end up having ought to be administered efficiently, as well." Under Bell’s proposed model, tariff applications would be classified into one of two groups. For one group, consisting of price increases, decreases and rate structure changes for services subject to pricing constraints under the price cap regime, as well as for services for which there are no upward pricing constraints, new customer service arrangements (CSAs) and new bundles, among others, the commission would have 10 days to decide whether to defer consideration of or deny the tariff. After 10 days, if the commission took no action, the application would be deemed to have interim approval. The commission would have 60 days from the initial application date to give final approval or deny the tariff. If it did neither, the tariff would be deemed to be approved on the sixty-first day after the initial application. While proposed automatic approval in the absence of action may put some CLECs on guard, worried about potential abuses, Bibic says existing safeguards would be sufficient to protect against interim approval of tariffs that don’t meet the rules. "We know what the price of imputation tests are. We know what the price cap rules are. Given that, there is no reason why we couldn’t make a filing and have the commission take 10 days to decide whether the filing raises broader policy issues that need to be scrutinized more carefully, or at first blush seem to clearly breach either the imputation test or the price cap rules. In those circumstances, the filing could be deferred for further scrutiny. But, otherwise, if it does neither one of those there’s no reason why the commission couldn’t have a first pass at it in 10 days, and, if we don’t hear back from them, then the tariff application becomes effective on an interim basis, and then the commission would have that extra 50 days until day 60 to issue final approval or to deny outright." Teresa Griffin-Muir, VP of regulatory affairs at MTS Allstream Inc., says most of Bell’s competitors will agree that something should be done about regulatory lag, but expresses concerns about Bell’s proposal, and whether tariffs are the most appropriate starting place to re-tool the system. She argues that Bell has often encountered difficulty with CSA tariff filings, in particular, since it has occasionally filed them improperly, and that concentrating on tariffs would serve Bell well, but not necessarily the entire industry. "There are some things in (the application) that, theoretically, sound good. Practically, if you look again at the CSA process, past practices on the part of Bell Canada, it does raise certain questions as to how workable this is in practice. A lot of harm to the marketplace is caused by letting something proceed and trying to correct it after the fact," Griffin-Muir tells Network Letter. She says that, in general, the CRTC has been relatively expeditious in dealing with tariff filings. She argues that there are more pressing issues, such as broader policy discussions around CDNA and other big issues that need to be streamlined before looking at tariffs. "I would say, in general, because the commission has a fixed date, when there are no issues associated with the tariffs, it’s generally a process that works pretty well. Everybody would have some criticism that they can bring forward of any process, but if we’re looking at all the different processes – just having a date where they’re supposed to respond by, I think, has encouraged them to respond and it’s really controversial tariffs that kind of get put aside and, unfortunately, perhaps put aside too long. So, if we want to look at processes more broadly, I don’t know whether we would start with tariffs as the number one place." Ted Chislett, president of Primus Telecommunications Canada Inc., echoes Griffin-Muir’s concerns with Bell’s application, saying that the proposed measures are in the context of administrative reform – which most parties agree is needed – but that this specific request would seem to favour Bell over its competitors. "To me, I don’t think it can be looked at in isolation…to do that would be effectively creating an very unlevel playing field. This (would give Bell) get the fast track and the rest of us wouldn’t. I think, in general, we’d like to see ways to try to speed things up. We’d like to put a process in place for all items, not just for Bell’s retail tariffs." Call-Net Enterprises Inc. senior VP of regulatory and strategic partnerships Jean Brazeau agrees with his CLEC counterparts that the application holds great promise for Bell, but little to offer competitors. He questions the need for changes in the way the commission deals with retail tariff applications, and repeats Muir-Griffin’s assertion that much of Bell’s trouble is self-made. "In reading Bell’s…submission, you see that their analysis really overlooks how their own behaviour is responsible for a lot of the delays. By not filing the information that the commission has asked for, or for filing cost studies that don’t quite meet the process that the commission has put in place. They’re a little guilty of creating a lot of the delays that they’re now complaining about." Brazeau says that the CRTC would be better off focusing on larger issues where competitors have been waiting for decisions, sometimes for years."The application relates only to retail rates. What about the wholesale rates? We’ve been waiting two years for a CDNA decision. We’re still fighting Ethernet. We’re still fighting ADSL. We still have big issues with quality of service from the access services we buy from the incumbents…They are saying, ‘No, we don’t need to address those issues. The current regime is fine.’ Well yeah! With all of these issues, it takes the commission two, three years to deal with them. So, they’re happy with that. They get one more damned monopoly. This is what it’s all about. This application is really back-door forbearance. Sure, the commission needs to be more efficient, but the real question is at what cost. The cost of having less competition, less choice and less value for customers? I don’t think so." Officials from Canada’s other large ILEC, TELUS Corp., were unable to respond in time for this article, but a spokesperson notes that the company is already on record supporting regulatory reform to speed decision-making. At the 2004 Canadian Telecom Summit on June 16, TELUS president and CEO Darren Entwistle told an audience: "The pace of technological change creates a heightened urgency for having tariff decisions as soon as is practicable. The Telecommunications Act sets out a 45-day limit for the CRTC to either approve or deny a proposed tariff, unless they make public, written reasons explaining why they have not done so. This was supposed to encourage the CRTC to dispose of tariffs in a timely fashion. Unfortunately, more often than not, the CRTC has issued a form letter and missed the deadline." Parties have 30 days to respond to Bell’s application.

Bell Canada presses CRTC to speed up retail tariff approval process

News | November 11, 2004

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