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Telecom Decision
Ottawa, 14 June 1990
Telecom Decision CRTC 90-12
BELL CANADA - PROVISION OF TELEPHONE DIRECTORY DATA BASE INFORMATION IN MACHINE-READABLE FORM
Table of Contents
I BACKGROUND
II DATA BASES - CONTENT AND USES
III SUBMISSIONS
A. Privacy Commissioner
B. Interveners
C. Bell's Reply
IV CONCLUSIONS
A. Legal Issues
1. Jurisdiction
2. Copyright
B. Undue Preference or Advantage
V OTHER ISSUES
A. Release of Further
B. Removal of SubscriberInformation from Tele-Direct Lists
VI IMPLEMENTATION
 
I BACKGROUND
In Bell Canada - Alex Market Trial, Telecom Decision CRTC 88-16, 30 September 1988 (Decision 88-16), the Commission precluded Bell Canada (Bell) from offering electronic Yellow Pages Services. The Commission stated that, while other parties could legally provide such services, Bell currently makes the contents of its telephone directory data bases available only to its affiliate, Tele-Direct (Publications) Inc. (Tele-Direct). The Commission noted that the provision of directory services in competition with Tele-Direct might be facilitated if Bell's telephone directory data base information were made available to other parties in machine-readable form. On 15 November 1988, the Commission issued Bell Canada - Provision of Telephone Directory Data Base in Machine-Readable Form, CRTC Telecom Public Notice 1988-46 (Public Notice 1988-46), initiating a proceeding to consider that question.
In Public Notice 1988-46, the Commission identified the following issues as being of particular interest:
(1) customer privacy and confidentiality, and the applicability of Article 11 of Bell's Terms of Service in the context of the provision of telephone directory data base information in machine-readable form;
(2) whether Bell should be required to provide non-confidential telephone directory data base information in machine-readable form on a general tariff basis;
(3) whether, to the extent permitted by Article 11, Bell should be required to provide confidential telephone directory data base information in machine-readable form on a general tariff basis;
(4) whether present contractual and other arrangements between Bell and Tele-Direct confer an undue preference on Tele-Direct; and
(5) possible amendments to Article 11 or to other Articles of the Terms of Service that may be required as a result of the provision of telephone directory data base information in machine-readable form.
Comments were received from the following interested parties: British Columbia Telephone Company (B.C. Tel); Canadian Business Telecommunications Alliance (CBTA); Classified Directory Publishers Inc. (CDP); Canadian Tire Acceptance Limited (CTA); Consumers' Association of Canada (CAC); Dialadex Communications Inc. (Dialadex); Director of Investigation and Research, Bureau of Competition Policy, Consumer and Corporate Affairs Canada (the Director); Directory Advertising Consultants Ltd. (DAC); Government of Ontario (Ontario); R.L. Polk and Co. Ltd. (Polk); and Southam Inc. (Southam). The Privacy Commissioner, while stating that he did not wish to become a party to the proceeding, filed a submission. Parties were invited to comment on that submission. Bell filed a reply.
II DATA BASES - CONTENT AND USES
Tele-Direct is a Bell affiliate that was established to produce directories and to sell Yellow Pages advertising. For regulatory purposes, Tele-Direct's revenues are considered integral to Bell. Presently, those revenues reduce Bell's revenue requirement by approximately $200 million per year. Operationally, Bell and Tele-Direct are closely linked. Subscriber listing information is fed by Bell directly into directory data bases maintained by Tele-Direct. Bell operators use the directory data base information in the provision of directory assistance service, while Tele-Direct uses it to sell directory advertising and to produce and distribute directories.
The release of directory information is governed by Article 11 of Bell's Terms of Service. Bell stated in the course of this proceeding that, when providing confidential information to Tele-Direct, it imposes by contract the restrictions set out in Article 11. That Article states, in part:
11.1 Unless a customer consents in writing or disclosure is pursuant to a legal power, all information kept by Bell Canada regarding the customer, other than the customer's name, address and LISTED TELEPHONE number, is confidential and may not be disclosed by Bell Canada to anyone other than: ...
a company involved in supplying the customer with telephone or telephone directory related services, provided the information is required for that purpose and disclosure is made on a confidential basis with the information to be used only for that purpose ...
As can be seen, the Terms of Service state that the subscriber's name, address and listed telephone number are not confidential information. Bell and Tele-Direct are not precluded from releasing this information. However, Bell stated that, as a matter of policy, Bell and Tele-Direct do place certain restrictions on the release of this non-confidential information.
As well as the standard White and Yellow Pages directories, Tele-Direct offers a variety of products derived from Bell's directory data base information. These include various list services and the production of customized directories (listing non-confidential data only). As indicated in Bell's response to interrogatory Bell(CRTC)16Jan89-7 DDB, Tele-Direct also supplies listing information in machine-readable formats and will provide the entire data base in machine-readable form. However, stated Bell, Tele-Direct does not provide listing information for the support or development of competing products.
At present, Bell's policy is to release all of its telephone directory data base information to Tele-Direct, for its exclusive use in soliciting directory advertising and publishing directories. By contrast, Bell releases to others only certain telephone number lists containing only non-confidential information. Bell states that it provides such lists only on rare occasions (six times in the last three years). It is Bell's policy not to provide any listing information to companies involved in publishing competing telephone directories.
It is Bell's position that the present policies have resulted in the provision of high quality directories, while ensuring the protection of information that is confidential to the customer. Bell submitted that the widespread provision of telephone directory data base information would jeopardize customer privacy and threaten to erode the controls in Article 11 of the Terms of Service. In addition, it would result in significant erosion of the contribution revenues that flow from Tele-Direct to Bell, to the benefit of Bell's monopoly subscribers.
III SUBMISSIONS
A. Privacy Commissioner
The Privacy Commissioner urged the Commission not to allow the provision of directory data base information in machine-readable form under Bell's general tariff. The Privacy Commissioner submitted that, while it may not be necessary to consider a subscriber's name, address and listed telephone number confidential when they are listed in a paper directory, it may be prudent to consider such information confidential when it is stored in machine-readable form. The Privacy Commissioner stated that the storage of information in machine-readable form, because of the greater accessibility, transmitability and transformability of the information, leads to special privacy dangers that do not arise when information is available in a paper directory.
The Privacy Commissioner acknowledged that it is possible at present to transcribe the paper directory into machine-readable form, but submitted that directory information would be much more readily available if the contents of the data base were to be provided in that form through the general tariff. The Privacy Commissioner submitted that such information would be of interest to criminals and to law enforcement agencies, as well as to marketers. As a result, "the privacy dangers that are lurking here go beyond the increased nuisance intrusions into our homes through direct mail and telephone solicitations."
The Privacy Commissioner submitted that, if the Commission does not allow Bell to provide its directory data base information in machine-readable form, conditions must be established to ensure that Tele-Direct does not offer the information for sale. If the Commission does require the provision of telephone directory data base information in machine-readable form, the following conditions should be imposed:
(1) appropriate notification should be given to subscribers, by amendment to Article 11 or otherwise, that the public portion of customer information (name, address and listed telephone number) may be made available on a tariffed basis in machine-readable form unless the customer otherwise requests;
(2) subscribers should be granted, and informed of, a right to withdraw consent at any time, whereupon their information will be deleted from any tariffed machine-readable listing;
(3) no charge should apply when a subscriber opts not to be listed in a tariffed machine-readable listing;
(4) no additional charge should apply for listing in a tariffed machine-readable directory;
(5) no subscriber information, other than name, address and listed telephone number, should be included in any tariffed machine-readable telephone listing and, in particular, postal codes should not be included;
(6) Bell should maintain for public inspection a register of individuals or firms who have acquired tariffed machine-readable listings; and
(7) the provisions of Article 11.2 of Bell's Terms of Service, regarding liability for disclosure of customer information, should apply to customer name, address and listed telephone number when made available in a tariffed machine-readable listing.
B. Interveners
CAC opposed the offering of Bell's directory data base information in machine-readable form under a general tariff. CAC noted that the present contribution to Bell from Tele-Direct is roughly $200 million annually, or the equivalent of some $2.00 per subscriber per month. CAC argued that offering the directory data base information in machine-readable form pursuant to a general tariff would attract competition, thus eroding the contribution and resulting in local rate increases.
CAC argued that the provision of directory data base information would lead to greater invasion of subscribers' privacy from telephone marketing organizations. CAC also expressed concern with respect to Tele-Direct's present practices. CAC noted that subscribers can request that Bell not include the subscriber's name, address and telephone number on lists produced by Tele-Direct, but that subscribers have generally not been fully informed of this right. CAC submitted that the Commission should require that Bell inform subscribers of their rights in this respect and that the company should establish a mechanism, using billing inserts, whereby subscribers may opt out of any marketing lists.
B.C. Tel submitted that, before the Commission can require Bell to provide directory data base information in machine-readable form under a general tariff, it must determine that a service is already being offered and that telephone tolls, within the meaning of the Railway Act, are involved. B.C. Tel noted that, in the case of Bell Canada v. Challenge Communications Limited (Challenge Communications), the Federal Court of Appeal stated that "since [Bell] has offered the service, the Commission has the power and the duty to ensure that it be offered on a non-discriminatory basis". B.C. Tel concluded from this that a company must offer a service before the Commission can act.
B.C. Tel also submitted that a charge must be directly related to the provision of a telephone service by the carrier before that charge can be considered a toll within the meaning of the Railway Act. B.C. Tel argued that there is no link between the provision of telephone service and the contract between Bell and Tele-Direct; therefore, no tolls are involved.
However, the company did provide comments on the issues identified in Public Notice 1988-46. With respect to privacy, B.C. Tel submitted that the customer's name, address and listed telephone number are publicly available and can therefore be released on a tariffed basis. With respect to the confidential information contained in the telephone directory data bases, B.C. Tel submitted that, to the extent that such information includes "personal information" as defined in the Privacy Act, the Commission is prohibited by that Act from ordering its disclosure.
B.C. Tel noted that Article 11 provides for the release of confidential information to entities involved in providing telephone directory services. However, B.C. Tel submitted that Bell should not be required to provide confidential information pursuant to a general tariff because of problems of enforceability, opportunities for abuse, and the limited and uncertain remedies available.
B.C. Tel submitted that the present contractual arrangement between Bell and Tele-Direct does not confer an undue preference on Tele-Direct. B.C. Tel contended that, while Tele-Direct may receive a preference, that preference is not undue because of the obligations imposed upon Tele-Direct (for example, to provide free directories to Bell customers) and because of regulatory initiatives taken by the Commission (for example, deeming Tele-Direct to be integral for revenue purposes).
Finally, B.C. Tel suggested revisions to the Terms of Service that it thought necessary should the Commission require a general tariff for the provision of directory data base information.
The remaining parties (CBTA, CDP, CTA, DAC, Dialadex, the Director, Ontario, Polk, Southam) generally supported the development of a general tariff for the provision of directory data base information. These parties noted that most of the information in question is already available in machine-readable form. They noted further that Tele-Direct itself makes available the entire contents of the directory data base in machine-readable form and that directory information is available in electronic form through Bell's ALEX Service. It was also noted that direct transcription of the printed directory to machine-readable form is technically feasible.
These parties disagreed in principle with the Privacy Commissioner's view that non-confidential information should not be released in machine-readable form. They argued that, if certain information is non-confidential and in the public domain, it is unreasonable and futile to limit its dissemination on the basis of technology used. Several parties submitted that, if Tele-Direct presently makes the contents of the directory data base available in machine-readable form, it would be preferable to have the provision of the data base subject to the controls of a general tariff.
These parties generally supported the notion that certain subscriber information should remain confidential. They submitted that subscribers who do not wish to have their names on a list provided under a general tariff can obtain an unlisted telephone number. CBTA suggested that the procedure whereby subscribers can advise Bell to exclude their listing from the data base for purposes other than the White Pages listing be identified in the telephone book. CBTA submitted that this would provide for more privacy than presently exists, since most subscribers are not now aware that exclusion is possible.
Ontario approved of the existing procedure whereby subscribers may be excluded from Tele-Direct lists, but also suggested that Bell be required to inform subscribers of the procedure. Ontario noted that non-confidential directory information in machine-readable form is currently available from Tele-Direct. Therefore, it is futile to attempt to protect personal privacy by prohibiting Bell from providing it on a general tariff basis. Ontario was also of the view that the proscriptions in Article 11 with respect to confidential data need not be changed.
CDP, the Director and Southam questioned the present classification of confidential and non-confidential information. CDP was of the view that any information explicitly disclosed in the production of directories (for example, business/residence/ government indicator) is in the public domain and hence not confidential.
The Director submitted that any information that is freely available in the public domain, and which also resides in Bell's data bases, should be non-confidential. As examples, the Director identified the subscriber's postal code, the business/residence/government indicator and the type-of-business indicator. The Director submitted that other data base elements may also fall into this category and suggested that the matter be considered in a separate proceeding. Southam was of the view that the majority of data elements in the data bases could be released under a general tariff item, as they did not appear to be the type of information that Article 11 seeks to protect.
All of these parties were of the view that the present arrangement between Bell and Tele-Direct accords Tele-Direct an undue preference vis-à-vis other suppliers of directory services. They noted that the agreement between Bell and Tele-Direct grants the latter the following exclusive rights:
(1) to use subscriber information for the compilation and publication of telephone directories;
(2) to use subscriber information for the purposes of soliciting and receiving contracts from interested parties for classified directory advertising; and
(3) to sell all items of directory advertising for all business subscribers of the telephone company.
It was the view of these parties that the granting to Tele-Direct of these exclusive rights constitutes a preference. They disagreed with Bell's claim that the preference was not undue because of the obligations that Tele-Direct assumes in its contract with Bell and because of the contribution that Tele-Direct provides. They further noted that, if the contents of the directory data bases were to be offered under a general tariff, Tele-Direct would continue to enjoy overwhelming advantages, including ownership of the Yellow Pages trademark and the ability to distribute the Yellow Pages with the White Pages directory to all Bell subscribers.
These parties disputed Bell's claim that provision of the directory data base information would substantially erode Tele-Direct's revenues. They noted that Bell had not provided any evidence in support of its claim. In addition, the parties submitted that Bell's revenues could increase with a general tariff in place. DAC noted that in California, where directory data base information is available under a general tariff, the telephone company's Yellow Pages revenues have continued to rise despite the emergence of a highly competitive directory industry.
Southam submitted that both Bell and Tele-Direct should be restricted from using the directory data bases to supply advertising services, including Yellow Pages, in electronic form. Southam pointed out that the Commission had ruled in Decision 88-16 that Bell should not offer electronic Yellow Pages. It urged the Commission to extend this ruling to all companies affiliated with Bell. Southam submitted that to do otherwise would allow Bell to do indirectly, through a closely related affiliate such as Tele-Direct, what it is not allowed to do directly. Southam argued that the evidence in this proceeding shows the close working relationship between Bell and Tele-Direct, and that the two companies should be considered one for the purpose of maintaining the separation between carriage and content embodied in the Bell Canada Act and in various Commission decisions.
C. Bell's Reply
Bell adopted the following definitions of the different market segments associated with this proceeding:
Level 1A: the provision of electronic White Pages on videotext services such as ALEX.
Level 1B: the provision of electronic Yellow Pages on videotext services such as ALEX.
Level 2: the provision of subscriber lists or listing information.
Level 3: the provision of directory information to competing hard copy directory providers.
Level 4: the sale of Yellow Pages advertising.
Bell submitted that any comments with respect to the level 4 market are beyond the scope of this proceeding. Bell provided no specific reply to such comments.
Bell was of the view that no general tariff offering for the provision of directory data base information is necessary; in any event, the contents of the data bases should only be offered to those participating in the market at level 1A. Bell submitted that a tariff for other markets is not supportable on either policy or legal grounds.
Bell cited several cases in which the Commission considered the issue of undue preference. Bell submitted that these cases illustrate a general Commission policy to modify tariffs or practices of regulated carriers in the provision of telecommunications services in competition with others (Bell's emphasis). In Bell's view, the Commission has recognized that Bell may participate in the level 1A market. Bell reasoned that, since the Commission has found this activity to be consistent with Bell's common carrier function, there is no legal impediment to the Commission ordering the provision of directory information to this market.
With respect to the provision of directory information to the other markets, Bell submitted that Parliament did not intend to grant the Commission the authority to review and possibly change the competitive structure of markets other than the telecommunications market. Bell also raised concerns with respect to the Commission's ability to require the filing of tariffs for services that the company does not currently offer, especially where those services may not be incidental to a telephone business. Bell submitted that the provision of the directory data base information to markets other than level 1A would not constitute a service "incidental to a telephone business" within the meaning of the Railway Act and would thus not be subject to the Commission's jurisdiction.
Bell also raised an issue with respect to Article 12.3 of the Terms of Service. That Article states:
12.3 The contents of the company's directories may not be published or reproduced in full or in part in any form without the company's written consent.
Bell submitted that the question of possible modifications to Article 12.3 raises legal issues as to the Commission's ability to override intellectual property rights that exist in the hands of a third party, such as Tele-Direct, that is not a company under the Railway Act. Bell submitted that Tele-Direct explicitly asserts copyright in the compilation of directories, data bases and the directories themselves, and that Tele-Direct opposes any amendment to Article 12.3 that would limit or prejudice the rights accorded it under the Copyright Act.
With respect to the privacy issue, Bell submitted that the use of listing information could not be effectively controlled pursuant to a general tariff. Bell stated that, while Tele-Direct does provide listing information, the provision of such information is limited by various criteria, including those set out in response to interrogatory Bell(CRTC)16Jan89-7 DDB. Bell argued that to offer directory data base information through a general tariff would inevitably lead to requests for information now considered confidential, and that it would become impossible to strike a proper balance between the interests of competing directory publishers and the privacy interests of subscribers. Bell expressed concern that directory publishers would seek this information under Article 11.1 of the Terms of Service. Bell argued that Article 11.1 must be narrowly construed if it is to afford any protection to subscribers.
With respect to the question of undue preference, Bell noted the many obligations undertaken by Tele-Direct. Bell argued that the issue of discrimination cannot be viewed in isolation from Tele-Direct's obligations or from the substantial revenues that accrue to the benefit of subscribers. Bell submitted that section 340(2) of the Railway Act must be read in the context of discrimination within a class of customers. Bell argued that Tele-Direct is in a class by itself; that there can be no unjust discrimination because there are no other persons who perform the same obligations as Tele-Direct, or who are willing to perform them, as well as provide a subsidy of $200 million.
Bell noted that the Commission has stated that determinations of undue preference must be made in light of the public interest. Bell submitted that the benefits of increased sources of supply in the directory business remain in doubt, and that it is not obvious that subscribers receiving multiple directories or advertisers who feel they have no choice but to participate in them consider choice of supply a definite benefit.
Bell expressed concern that, should the Commission require a general tariff, the rates would not be sufficient to cover the subsidy erosion associated with increased competition in the directory service market. Accordingly, Bell argued that it would not be in the public interest to require the provision of directory data base information under its general tariff. Bell noted the information submitted by DAC that, in California, where there is full competition in the provision of directories, the telephone company has retained 80% to 90% of the market. Bell submitted that, in its case, a 10% to 20% loss of market share would represent a loss of $20 million to $40 million annually. Bell contended that it is difficult to envisage circumstances where telephone subscribers would be as well off as they are currently, if directory competition were introduced.
In reply to submissions concerning subscribers' general lack of awareness of the possibility of excluding their directory listing information from Tele-Direct's lists, Bell submitted that measures to promote the mechanism would lead to substantial expenses. Bell estimated that, if 3% of subscribers reacted to such a promotion, it would incur $1 million in start-up costs and ongoing costs of $350,000 a year. Bell argued that it has received very few complaints in this area and doubts that expenditures of this magnitude are necessary.
Bell also submitted that, should the Commission decide that a general tariff is warranted, a further opportunity should be allowed for parties to comment on any possible revisions to the Terms of Service.
IV CONCLUSIONS
A. Legal Issues
1. Jurisdiction
Both Bell and B.C. Tel argued that the Commission lacks the jurisdiction to require that tariffs be filed proposing rates for a service that a carrier does not as yet offer. Bell submitted that this is especially the case when the service in question may not be "incidental to a telephone business", so that a charge for it could not be considered a "toll" within the meaning of section 2(1) of the Railway Act. B.C. Tel argued that, in order to be considered a "toll", a charge made by a carrier must be directly related to the provision of telephone service by the carrier.
In assessing the merits of these arguments, the Commission must first consider whether the provision by Bell of its telephone directory data base information in machine-readable form constitutes a service, within the ordinary commercial sense of the term, currently being offered to Tele-Direct.
Generally speaking, the provision of commercially valuable information, in exchange for consideration, is understood to constitute the supply of a service, no less than the provision of physical property on a commercial basis represents the supply of goods. The Commission also considers that what would commonly be understood to be a service cannot be rendered otherwise by virtue of Bell's policy of supplying the entire contents of the directory data base to only a single customer, Tele-Direct. The Commission is of the view that Bell, in supplying Tele-Direct, for consideration, with up-to-date and accurate non-confidential subscriber listing information in machine-readable form, is providing Tele-Direct with a service within the ordinary commercial sense of the term. The ability to gain exclusive direct access to Bell information has inherent value to Tele-Direct. Tele-Direct uses Bell's subscriber listings information for a variety of lucrative commercial purposes, notably, the solicitation of Yellow Pages advertising and the compilation and sale of marketing lists.
Moreover, the record of this proceeding demonstrates that considerable pent-up demand exists for Bell to provide directory listing information pursuant to arrangements similar to those enjoyed by Tele-Direct. Indeed, Bell indicated that, in past instances, it has provided limited subscriber listing information, for consideration, to parties other than Tele-Direct.
The Commission is cognizant of the argument that, in providing Tele- Direct with non-confidential listings from its directory data bases, Bell is merely furnishing Tele-Direct with the "raw material" it requires to supply Bell with the directory services Tele-Direct is obliged to provide under the agreement. However, this argument overlooks the fact that Tele-Direct is at liberty under the agreement to utilize its exclusive access to Bell's non-confidential listing information for a variety of commer-cial purposes over and above the fulfilment of its contractual obligations to Bell.
Having determined that Bell is currently providing Tele-Direct with a service within the ordinary commercial sense of the term, the Commission must next consider whether the service in question is one contemplated by the definition of "toll" in section 2(1) of the Railway Act. The Railway Act defines "toll", in relevant part, as:
any toll, rate or charge ... for the use or lease of a telephone system or line or any part thereof, for the transmission of a message by telephone, for installation and use or lease of any instruments, lines, or apparatus attached to, or connected or interconnected in any manner whatever with, a telephone system, for any services provided by the company through the facilities of a telephone system or for any service incidental to a telephone business.
B.C. Tel has argued that the arrangements set out in the agreement between Bell and Tele-Direct do not involve the charging of tolls, since the charges in question are not directly related to the provision of telephone service by the carrier.
Having examined the definition, the Commission concludes that Bell's provision of subscriber listing information can reasonably be characterized under the fifth head of the definition as the provision of a service "incidental to a telephone business".
The Commission has been called upon to interpret the fifth head of the definition of "toll" on several occasions. The Commission's approach has been to consider the extent to which the service in question engages fundamental elements of the telephone system or the relationship that the service in question bears to the essential nature of the telephone business. The greater the degree to which the service in question involves components or facilities fundamental to the provision of telephone services and the more closely related the services may be to those generally provided by telephone systems, the more likely is the service to be one contemplated by the definition of "toll" in the Railway Act.
With regard to the first consideration, the Commission notes that the subscriber listing information stored in Bell's directory data bases is used and relied upon by the company in the normal course of its business as a provider of telecommunications services to the public. The directory data bases are fundamental elements of Bell's telephone system and their use is vital to the efficient administration and operation of the company's telephone business. Many of the significant aspects of Bell's provision of telephone services, including installation, maintenance, customer billing, directory assistance and the provision of directories, stem from the use of the directory data bases. These functions are made possible or are facilitated by Bell's ability to enter, store and retrieve subscriber information using its data bases. Therefore, when the company provides telephone directory data base information in machine-readable form to Tele-Direct, Bell furnishes a service that directly engages a fundamental element of its telephone system, an element fundamental to the offering of services to its subscribers.
With regard to the second consideration, the Commission notes that the availability of the listing information and the ease with which it may be accessed is a major determinant of the value of a telephone system. In recognition of this, and in order to ensure that the telephone system is used fully and effectively, subscribers are entitled under the Terms of Service to receive both White and Yellow Pages directories, thereby maximizing the system's value to subscribers. The rates charged by Bell for Primary Exchange Service include, as part of the service, the subscriber's White Pages directory listing and, if applicable, a Yellow Pages directory listing. The compilation and maintenance of up-to-date and accurate subscriber information in the data bases are essential to Bell's telephone business. The provision of directory data base information in machine-readable form is closely related to, and a technological extension of, the directory information services generally provided by telephone companies to their subscribers through directories and directory assistance services. As these services are essential to the effective use of the telephone system, the Commission considers that the provision of directory data base information in machine-readable form bears a close relationship with the essential nature of the telephone business.
In light of the above, the Commission concludes that the service under consideration in this proceeding engages fundamental components of the company's telephone system and, further, that the provision of directory data base information is a service closely related to essential directory services generally provided by the company. Accordingly, the Commission concludes that the service is properly characterized as "incidental to a telephone business" as contemplated by the definition of "toll".
In light of the above, it is not, strictly speaking, necessary to consider the argument that the Commission lacks the jurisdiction to require that a general tariff be filed proposing rates for a service not presently offered by a carrier. The Commission would point out, however, that it is not persuaded that Challenge Communications is authority for the proposition advanced by B.C. Tel, i.e., that a company must already offer a service before the Commission can act.
2. Copyright
Bell submitted that Tele-Direct asserts a claim to copyright in both the Yellow and White Pages directories. However, the tariff under consideration in this proceeding would not govern the provision of hard copies of the directories prepared by Tele-Direct, nor would it provide for the copying or reproducing of those directories. Rather, it would make available certain information contained in the telephone company directory data bases so that, for example, other suppliers could assemble their own directories. The Commission is unaware of any authority that would found a claim of copyright in information such as that contained in the telephone directory data bases, nor has Bell advanced such an authority.
B. Undue Preference or Advantage
In Decision 88-16, the Commission precluded Bell from offering electronic Yellow Pages. Tele-Direct, however, is permitted to offer this service. The Commission noted in Decision 88-16 that only Tele-Direct has access to the telephone directory data bases and that the provision of electronic directory services by others would be facilitated if they could obtain access to listing information contained in those data bases. Therefore, a central issue in this proceeding is whether or not Bell is conferring an undue preference on Tele-Direct with respect to the provision of directory data base information in machine-readable form and, if so, the appropriate remedies to remove the preference.
Section 340 of the Railway Act states, in part:
340(2) A company shall not, in respect of tolls or any services or facilities provided by the company as a telegraph or telephone company,
(a) make any unjust discrimination against any person or company;
(b) make or give any undue or unreasonable preference or advantage to or in favour of any particular person or company or any particular description of traffic, in any respect whatever; or
(c) subject any particular person or company or any particular description of traffic to any undue or unreasonable prejudice or disadvantage, in any respect whatever;
and where it is shown that the company makes any discrimination or gives any preference or advantage, the burden of proving that the discrimination is not unjust or that the preference is not undue or unreasonable lies upon the company.
340(3) The Commission may determine, as questions of fact, ... whether there has, in any case, been unjust discrimination, or undue or unreasonable preference or advantage, or prejudice or disadvantage, within the meaning of this section...
The Commission established its approach to section 340(2) in Challenge Communications Ltd. v. Bell Canada, Telecom Decision CRTC 77-16, 23 December 1977. In that decision, the Commission noted that two essential elements must exist in order to found a successful claim pursuant to this section: (1) discrimination, preference or advantage; and (2) the absence of justification therefor. The Commission stated, among other things, that: the term discrimination refers to differential treatment by the company of different persons who are under substantially similar conditions; sections 340(2)(a), (b) and (c) all relate to the comparative treatment by the company of different persons who may consequently benefit or suffer from such treatment; the terms advantage and disadvantage refer to the nature, extent and result of favourable or unfavourable treatment by the company; and, section 340(2)(b) is all-encompassing in terms of its prohibition of any undue or unreasonable preference or advantage in any respect whatever.
At present, a variety of parties offer directory services in competition with Tele-Direct. However, these parties are at a significant disadvantage in relation to Tele-Direct because of the latter's exclusive access to Bell's subscriber data bases. As a result of that access, Tele-Direct's directories are virtually 100% accurate and up-to-date. Tele-Direct also has immediate notice of any new subscriber seeking service. In effect, Tele-Direct has detailed notice of potential customers for its advertising and listing services in advance of any of its competitors. Advance notice provides Tele-Direct with an opportunity to approach potential advertisers ahead of its competitors, thus improving its chances of securing advertising dollars destined for the directory medium.
In light of the above, the Commission finds that Bell has conferred a preference or advantage on Tele-Direct with respect to the provision of electronic and other directory services by granting Tele-Direct the exclusive right, as specified in the agreement between Bell and Tele-Direct, to use subscriber information collected by Bell for the purposes of selling directory advertising and producing and distributing directories.
Having determined that Bell has conferred a preference or advantage on Tele-Direct, the Commission must consider, as a question of fact, whether or not the record of this proceeding establishes that the preference or advantage is undue or unreasonable. That consideration must be made in light of the public interest, and requires an assessment of whether the benefits arising from allowing others to obtain the directory data base information would equal or outweigh the associated disadvantages. In assessing the public interest in this matter, the Commission has found it appropriate to categorize subscriber information into two subsets: (1) the listing of all residential subscribers, and (2) the listing of all non-residential subscribers.
With respect to the non-residential listings, benefits of allowing parties other than Tele-Direct to obtain Bell's directory data base information would stem, for example, from the expansion of competition in the provision of directory services. As indicated above, a variety of parties offer directory services in competition with Tele-Direct. However, these parties are at a significant disadvantage in relation to Tele-Direct because of the latter's exclusive access to Bell's directory data bases in their entirety. If Bell's directory data base information were made available in machine-readable form under general tariff to all parties, competition would be more vigorous. An increase in directory competition would benefit business subscribers in many ways. For example, they would have access to a wider variety of advertising media. In addition, those who advertise in directories would receive better service and advertising rates might well decrease.
The Privacy Commissioner and several interveners argued that availability of directory data base information was undesirable because subscriber privacy would be eroded. Other parties noted that the transcription of the printed directory into machine-readable form is becoming a technically viable prospect and that Tele-Direct already provides access, on a limited basis, to all subscriber listing information contained in the data bases. These parties argued that it is pointless to restrict access to Bell's data bases, since the information is becoming available from other sources.
In the Commission's view, unlimited general tariff availability of Bell's directory data base information in machine-readable form would significantly increase the quality and availability of subscriber information, thereby increasing concerns about subscriber privacy. The paper directory, while in unlimited circulation, is less current than the directory data bases. Furthermore, the transcription of the paper directory into machine-readable form, while technically feasible, is an expensive and relatively inaccurate process.
The concerns expressed in this proceeding with respect to subscriber privacy relate primarily to residential subscribers. No party expressed concerns over the privacy of non-residential subscribers. On balance, the Commission is not persuaded that the provision of residential directory data-base information in machine-readable form pursuant to a general tariff would be of benefit to residential subscribers. In the Commission's view, such a tariff would primarily benefit telemarketers, pollsters and the like, who aim their activities at this market. It is unlikely that most residential subscribers would regard increased exposure to those activities as a benefit.
Bell argued that the release of the directory data base information is not in the public interest because it would lead to significant erosion of Tele-Direct's revenues, which contribute to the subsidization of basic local rates. The subsidy from Tele-Direct is presently in the order of $200 million per year. By far the largest source of Tele-Direct's revenue is non-residential advertising, and it is this source of income that Bell submits would be threatened by competitive directory suppliers.
In the Commission's view, Bell has exaggerated the threat of revenue erosion. The Commission does not agree with Bell's assumption that advertising expenditures are more or less fixed and that increased competition will merely spread those expenditures over more suppliers. For example, electronic Yellow Pages may well be a lucrative new source of advertising revenues. Moreover, even with increased competition, it is highly likely that Tele-Direct would continue to be the dominant directory supplier because of the intrinsic advantage it has as the supplier of directory services to the telephone company. Tele-Direct's Yellow Pages directory is delivered along with the White Pages to all telephone subscribers. Because the Yellow Pages directory reaches virtually the entire population, it has a strong appeal to business advertisers. In addition, Tele-Direct's position in the market place is well secured through its ownership of the "Yellow Pages" name, which several interveners noted as one of the most widely recognizable of all tradenames.
In light of the above, the Commission concludes that the benefits of providing non-confidential non-residential listing information in machine-readable form pursuant to a general tariff would outweigh any disadvantages. Accordingly, the Commission determines as a question of fact that the preference that Bell confers on Tele-Direct is undue with respect to the provision of such non-residential listings, in contravention of section 340(2) of the Railway Act. In order to remedy that undue preference, the Commission finds that Bell should be required to provide such non-residential listing information in machine-readable form pursuant to a general tariff.
However, based on the record of this proceeding, the Commission also concludes that no net benefits would arise from making residential listing information more generally available, and that it would not be in the public interest to make residential listing information in machine-readable form available under a general tariff. The Commission therefore finds that Bell does not at present confer any undue or unreasonable preference or advantage on Tele-Direct in granting the latter exclusive access to this information in machine-readable form.
In the public interest, the Commission expects Bell to ensure that the release of residential listing information is subject to the considerations and criteria referred to by the company in this proceeding.
V OTHER ISSUES
A. Release of Further Information
Several parties requested that information in addition to the subscriber's name, address and listed telephone number be provided through a general tariff. These parties identified additional information elements (for example, business categorization) the provision of which would be desirable and would not likely raise any privacy concerns. The Commission is of the view that the record of this proceeding is not sufficient to permit findings with respect to the relative merits of allowing the provision of further specific information elements. The Commission considers it appropriate to examine this matter in a further proceeding.
B. Removal of Subscriber Information from Tele-Direct Lists
Bell stated that subscribers may request that their names be used only for the production of White and Yellow Pages directories. However, several parties submitted that subscribers are generally unaware of this option.
Bell submitted that it would be expensive to make subscribers aware of the option and that, since few complaints have been received, such action is not required. However, in the Commission's view, the lack of complaints may simply be evidence of the fact that subscribers are unaware of Tele-Direct's use of their names and related information. The Commission therefore concludes that it would be appropriate for the company to describe the option in the front pages of its telephone directories.
VI IMPLEMENTATION
Bell is directed to file, by 13 August 1990, proposed general tariff pages providing for the offering of non-confidential non-residential subscriber listing information, and ongoing updates to that information, in machine-readable form.
The Commission intends to commence a proceeding to consider whether information pertaining to non-residential subscribers, other than name, address and listed telephone number (for example, type of business, service address), should also be made available in machine-readable form pursuant to a general tariff. To this end, the Commission directs Bell to file, by 14 July 1990, a report describing, element by element, the information pertaining to non-residential listings contained in its data bases. Bell is directed to provide, for each element of information, any reasons why it should not be made available pursuant to a general tariff. A copy of the report is to be served on all parties to this proceeding, also by 14 July 1990. Following the filing of this report, the Commission will determine the appropriate procedures to be followed in the proceeding.
Bell is also directed to revise its telephone directories to provide in the front pages of those directories, instructions as to how subscribers may be excluded from lists other than White and Yellow Pages directories. Bell is directed to file, by 23 July 1990, the proposed wording and intended placement of this announcement.
Rosemary Chisholm
Acting Secretary General
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