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Telecom Public Notice
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Ottawa, 11 January 1989
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Telecom Public Notice CRTC 1989-1
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RESALE AND SHARING OF PRIVATE-LINE VOICE SERVICES
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In Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985 (Decision 85-19), the Commission determined that users would benefit in a variety of ways from resale and sharing. However, the Commission also found that, under the rate structures at that time, rates for Message Toll Service (MTS) and Wide Area Telephone Service (WATS) substantially exceeded their costs. Conse quently, the Commission was concerned that allowing resale and sharing to provide MTS/WATS could result in uneconomic entry and a significant erosion of MTS/WATS revenues. As a result, the Commission concluded that, on balance, resale and sharing to provide MTS/WATS was not in the public interest at that time.
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Since the discrepancy between rates and costs for non-MTS/WATS interexchange services was not as significant, the Commission did determine that resale and sharing to provide interexchange voice services other than MTS/WATS would be in the public interest. However, the Commission noted that rates for some such individual services might not be costrelated. In such cases, that discrepancy could also contribute to uneconomic entry. Accordingly, the Commission allowed the carriers to restructure their rates prior to permitting resale and sharing.
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The Commission gave effect to its findings on resale and sharing by developing rules, which it issued in Tariff Revisions Related to Resale and Sharing, Telecom Decision CRTC 87-2, 12 February 1987 (Decision 87-2). These rules govern the resale and sharing of the services of Bell Canada (Bell), British Columbia Telephone Company (B.C. Tel), Northwestel Inc. (Northwestel), Terra Nova Telecommunications Inc. (Terra Nova), CNCP Telecommunications (CNCP) and Telesat Canada (Telesat). The Decision 87-2 rules permit resale and sharing to provide all data and non-interconnected voice services. Those rules also permit the sharing of interconnected private line voice services, as well as their resale when individual circuits are dedicated to the end-user.
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In relaxing the restrictions on resale and sharing, the Commission provided businesses with opportunities to obtain cost savings and innovative service features, while at the same time protecting against significant erosion of MTS/WATS contribution.
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The Commission notes that a number of circumstances have changed since Decisions 85-19 and 87-2 were issued. For example, the rate relationships within the interexchange service categories of Bell and B.C. Tel have been substantially altered. In particular, there have been major reductions in MTS rates in the order of 30% since 1 January 1987 for both Bell and B.C. Tel. In addition, the Commission recently approved two new subscription-based services, Teleplus and Between Friends, which afford subscribers an opportunity to reduce their MTS charges even further. Moreover, in addition to the restructu ring of private line rates announced in CRTC Telecom Public Notice 1986-42, 3 July 1986, the Commission has recently approved increases in the rates for certain Bell and B.C. Tel private-line services. These rate actions, taken together, have had the effect of significantly reducing the rate differentials between MTS/WATS and private line services.
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Further, the Commission has now begun to receive Phase III results, which provide the Commission with better information than was available during the proceeding resulting in Decision 85-19.
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Given the foregoing changes in the regulatory environment since the issuing of Decision 85-19, the Commission seeks comment on whether it is appropriate to modify its rules in Decision 87-2 applying to the resale and sharing of private line services. The Commission does not intend at this time to review its prohibitions on resale and sharing of WATS to provide voice service.
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The Commission hereby seeks comment on the following issues:
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(1) whether it is appropriate to modify the current rules governing resale and sharing and, if so, the nature and extent of any such modifications;
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(2) the advantages and disadvantages of permitting the resale for joint use of private line services;
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(3) whether any restructuring of rates for Monopoly Toll and Competitive Network services should be undertaken prior to any changes to the rules governing the resale and sharing of private line services and, if so, the nature and extent of such restructuring (the Commission will consider only the need to restructure interexchange service rates; the issue of rate rebalancing is outside the scope of this proceeding); and
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(4) whether some form of contribution payment or other regulatory mechanism should be applicable to resale and sharing and, if so, the nature and extent of that contribution payment or other regulatory mechanism.
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Procedure
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The procedure to be followed in connection with this proceeding is as follows:
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(1) Bell, B.C. Tel, CNCP, Northwestel, Terra Nova, and Telesat (the carriers) are joined as parties to this proceeding.
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(2) Other persons wishing to participate in this proceeding must notify the Commission of their intention to do so by writing to Fernand Bélisle, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, by 10 February 1989.
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(3) The Commission will issue a list providing the names and mailing addresses of the carriers and other parties by 27 February 1989.
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(4) Any party wishing to submit comments in this proceeding must submit them to the Commission, with a copy to the carriers and all other listed parties, by 13 March 1989.
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(5) Any party wishing to submit reply comments in this proceeding must submit them to the Commission, with a copy to the carriers and all other listed parties, by 9 May 1989.
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Fernand Bélisle
Secretary General
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