Regulation & Policy: Waiting for telecom discounts? Don’t hold your breath

Incumbent local exchange carriers (ILECs) have gained significant pricing flexibility in local residential services, but not in the business market, as a result of new rules laid out by the CRTC at the end of April. The commission detailed its new price cap regime (Telecom Decision 2007-27) on April 30 - a new system of regulating telephone companies' pricing.The commission noted in its decision that since parties to the public proceeding that helped form the new rules didn't provide enough evidence regarding the need to change the way business services are priced, the CRTC decided to deal with this at a later date. Rate deaveraging was one of the main topics of discussion during the public hearings, and while it's now allowed in the residential market, it's not in place for business services."Deaveraging" refers to the prices ILECs can set in various locations. Under the new rules, ILECs can lower rates in certain cities without having to lower them in all cities of the same size. But since deaveraging doesn't apply to business services, companies in Calgary will be charged the same price for basic service as those in Vancouver, for example.The CRTC said it would "conduct a follow-up proceeding to consider whether the prohibition on further rate deaveraging should be removed for these services." By press time, the commission had yet to unveil details about that future proceeding.Bell boots bundles into high gearIn a move apparently designed to speed up the CRTC's handling of an application filed nearly two years ago on bundling in the business sector, Bell Canada and Bell Aliant Regional Communications have filed another application, this time requesting that the commission take a broader look at the issue of bundling tariffed and non-tariffed services. Under the current rules, bundles that include regulated and unregulated services must pass an imputation test, ostensibly to ensure fair pricing. But "these bundling rules constrain the companies' flexibility to offer customers the services they seek, when they seek them, from their provider of choice," reads Bell's application. "They limit competition, introduce unnecessary costs and delays, and prevent customers from enjoying the benefits of bundling." Bell Canada's chief of regulatory affairs Mirko Bibic said the commission has been slow to deal with the previous application. "The environment has changed dramatically since 2005 from a regulatory philosophy point of view," he said. "We thought it was time, especially with the policy direction, to forge ahead with that concept but for a broader swath of bundles."The policy direction he mentioned comes from Industry Minister Maxime Bernier, who wants the CRTC to take a lighter regulatory approach to the telecom market.The application essentially asks the CRTC to adopt the Telecommunications Policy Review Panel's recommendation in this regard, Bibic explained: "If you've got a bundle that includes regulated and unregulated services, as long as the price of the bundle is at least the price of the sum of its regulated components, then there's no reason to for us have to file anything ." The review panel, convened earlier this year, provided many suggestions for regulating the telecom sector.Competitors rail against wholesale non-complianceSeveral competitive telecommunications service providers have told the CRTC that incumbent telephone companies should be ordered to comply with a number of orders regarding ADSL and Ethernet services issued by the commission on January 25. Bell Canada, Bell Aliant, Telus Corp. and SaskTel have all appealed the orders, noting that the rulings run counter to Bernier's policy direction and the services in question are currently being considered in Telecom Public Notice 2006-14 - a review of the wholesale services and essential facilities framework. But competitors said that it shouldn't matter that the ADSL and Ethernet services fall under the review in PN 2006-14. According to the Canadian Association of Internet Providers' (CAIP) submission to the CRTC, the proceedings that led to the orders were already closed prior to the policy direction coming into force, so the orders can't be considered matters before the commission.Telus admitted in its submission to the CRTC that the policy direction doesn't apply; nonetheless, the incumbent carrier said the commission should have taken the spirit of Bernier's decree into account when it made the January 25 rulings. "The policy direction constitutes a fundamental change in circumstances and establishes new principles," Telus wrote.Higher Centrex prices loomThe CRTC approved on May 18 Telus' request to raise its Centrex rates in Alberta and BC by between 5% and 10%. The rate increases were previously approved on an interim basis, but Telecom Order 2007-177 approved them on a final basis. MTS Allstream Inc. objected to the rate increases as well as contract terms and conditions, termination fees and the waiving of termination fees. But in each case, the commission sided with Telus and approved all of the changes.

Regulation & Policy: Waiting for telecom discounts? Don’t hold your breath

News | May 24, 2007

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