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Telecom Public Notice
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Ottawa, 28 March 1991
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Telecom Public Notice CRTC 1991-17
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MARKETING OF CELLULAR SERVICE
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I BACKGROUND
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In the proceeding leading to Cellular Radio - Adequacy of Structural Safeguards, Telecom Decision CRTC 87-13, 23 September 1987 (Decision 87-13), the Commission examined the relationship between Bell Canada (Bell) and British Columbia Telephone Company (B.C. Tel) and their respective cellular affiliates. This examination was undertaken in light of the Commission's previous findings that cellular affiliates should conduct their activities at arm's length from the regulated activities of the telephone company and should not be cross-subsidized by those regulated activities. The Commission's examination included a consideration of issues related to the joint marketing and advertising of cellular services by telephone companies and their cellular affiliates. The Commission also considered the question of the referral of customers by telephone companies to their cellular affiliates.
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During the proceeding leading to Decision 87-13, Bell stated that its policy with respect to customer inquiries concerning cellular service was to respond that it did not provide such service, without identifying either Bell Cellular Inc. (Bell Cellular), its cellular affiliate, or Cantel Inc., the company designated by the federal government to provide a national cellular service. B.C. Tel stated that its policy was to identify both its affiliate and Cantel Inc. In Decision 87-13, the Commission determined that either reference to both cellular providers, in a neutral fashion, or to neither, was reasonable. With respect to joint marketing and advertising, the Commission indicated that the marketing and promoting by a telephone company of particular products and services offered by its cellular affiliate would raise concerns. However, in light of the stated intentions of the companies not to engage in joint activities with their affiliates related to the marketing of cellular products and services, the Commission determined that it was not necessary at that time to impose additional safeguards with respect to joint marketing and advertising.
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On 7 January 1991, Rogers Cantel Inc. (Cantel), formerly Cantel Inc., applied to the Commission for interim and final orders requiring Bell to cease using the sales facilities and staff of its Phonecentres/Teleboutiques (Phonecentres) for the promotion and sale of the products and services of Bell Cellular. Cantel submitted in its application that such conduct is contrary to Decision 87-13 and to section 340(2) of the Railway Act.
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In its application, Cantel alleged that Bell's promotion of the services of Bell Cellular consists of the following activities:
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1. the display of Bell Cellular coverage maps, agent signs and other cellular product information in the Phonecentres;
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2. sales representations and promotions by Phonecentre personnel regarding the Bell Cellular network, without any mention of Cantel's services;
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3. entering into cellular telephone service subscription agreements as agent of Bell Cellular, on Phonecentre premises; and
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4. activation of portable cellular telephones on Bell Cellular's network, on-site at the Phonecentres.
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By letter to Bell and Cantel dated 15 January 1991, the Commission established procedures for further submissions with respect to Cantel's application. The Commission also requested that Bell provide certain information with respect to the promotion and marketing of cellular services. The Commission stated that it would issue a decision with respect to the interim relief requested after the receipt of submissions.
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In its response, Bell stated, among other things, that it had initiated a market trial involving two models of cellular telephones. Bell confirmed that Phonecentre personnel will arrange for activation on the network of Bell Cellular.
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By letter dated 5 February 1991, the Commission issued a decision with respect to Cantel's application for interim relief. Based on the submissions of Cantel, Bell and Bell Cellular, the Commission concluded that Bell was engaging in joint marketing and promotion of Bell Cellular's services, contrary to Decision 87-13. The Commission granted Cantel's request for interim relief and ordered Bell, on an interim basis, to cease promoting Bell Cellular by means of its Phonecentre facilities and personnel.
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In its letter of 5 February 1991, the Commission noted that the cellular telephone market has evolved in the four years since the proceeding that culminated in Decision 87-13. The Commission concluded that a public proceeding was warranted to examine the marketing of cellular service by the companies under its jurisdiction.
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Since Decision 87-13 was issued, the number of telephone companies regulated by the Commission has increased. The Commission wishes to examine the appropriateness of safeguards such as those in Decision 87-13 as they relate to the marketing of cellular services by the telephone companies or their affiliates, and by Cantel. Accordingly, the Commission seeks comment on the following issues:
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1. the need for safeguards with respect to the marketing of cellular services;
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2. the appropriateness of existing safeguards and whether new or additional safeguards should be established;
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3. the nature of any new or additional safeguards; and
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4. whether all companies should be subject to the same safeguards, or whether safeguards should reflect the particular circumstances of each cellular service provider.
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II PROCEDURE
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1. In addition to Cantel and Bell, the following are joined to this proceeding: AGT Limited, AGT Cellular Limited, Bell Cellular, B.C. Tel, B.C. Cellular Ltd., The Island Telephone Company Limited, Maritime Telegraph and Telephone Company Limited, MT&T Mobile Inc., The New Brunswick Telephone Company Limited and Newfoundland Telephone Company Limited.
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2. Other parties wishing to participate in this proceeding (interveners) must file a written notice of intention to participate with the Commission by 1 May 1991. The Commission will issue a complete list of parties and their mailing addresses.
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3. The mailing addresses to be used in connection with this proceeding are:
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Mr. Allan J. Darling
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
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and
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Mr. Laurence J. E. Dunbar
Johnston and Buchan
Counsel for Cantel Inc.
Suite 1500
275 Slater Street
Ottawa, Ontario
K1P 5H9
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4. Cantel's application and related documents may be examined at the offices of the CRTC in the following locations:
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Room 201
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Hull, Quebec
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Suite 1007
Bank of Commerce Building
1809 Barrington Street
Halifax, Nova Scotia
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Complex Guy-Favreau
200 René-Lévesque Blvd. West
6th Floor
East Tower
Montréal, Quebec
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275 Portage Ave.
Winnipeg, Manitoba
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Suite 1380
800 Burrard Street
Vancouver, British Columbia
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A copy of the application and related documents may be obtained by any interested person upon request directed to Cantel at the address shown above.
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5. The parties noted in paragraph 1 are requested to file, by 22 May 1991, a description of their practices with respect to the marketing of cellular products and services, as well as any comments they may have. Copies are to be served on all other parties, also by 22 May 1991.
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6. Interveners may file comments with the Commission, serving copies on all other parties, by 19 June 1991.
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7. Parties noted in paragraph 1, other than Cantel, may file final argument with the Commission, serving copies on all other parties, by 17 July 1991.
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8. Cantel may file final argument with the Commission, serving copies on all other parties, by 31 July 1991.
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9. Where a document is to be filed or served by a specific date, the document must be actually received, not merely mailed, by that date.
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The Commission will issue a final determination on Cantel's application as part of its Decision in this proceeding.
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Allan J. Darling
Secretary General
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