ARCHIVED -  Telecom Decision CRTC 91-11

Telecom Decision

Ottawa, 6 August 1991

Telecom Decision CRTC 91-11

BELL CANADA AND BRITISH COLUMBIA TELEPHONE COMPANY - REVISIONS TO MONOPOLY TOLL SERVICES AND VOICECOM RATES AND INTRODUCTION OF ADVANTAGE CANADA

I BACKGROUND

On 25 July 1990, Bell Canada (Bell) and British Columbia Telephone Company (B.C. Tel) filed applications, under Tariff Notices 3616 and 2161, respectively, proposing the introduction of Advantage Canada discount toll service and revisions to rates for Message Toll Service (MTS), Wide Area Telephone Service (WATS), 800 Service, Between Friends Service and, in the case of Bell, Voicecom.

On 10 September 1990, the companies modified their applications, under Tariff Notices 3616A and 2161A, to reflect various tariff revisions approved by the Commission in Introduction of 800 Plus and Revisions to 800 Service and Wide Area Telephone Service Rates, Telecom Decision CRTC 90-18, 28 August 1990.

By letters dated 8 August 1990, the Commission addressed interrogatories to Bell and B.C. Tel. The companies filed responses to these interroga-tories on 22 and 31 August 1990.

On 24 September 1990, the Commission issued Telecom Order CRTC 90-1000 and Telecom Order CRTC 90-1001 (Orders 90-1000 and 90-1001), granting interim approval to the applications of Bell and B.C. Tel, respectively, effective 1 December 1990. On 24 September, the Commission also issued CRTC Telecom Public Notice 1990-89 (Public Notice 1990-89), establishing procedures whereby the public could comment on the applications by 24 October 1990 and the companies reply by 5 November 1990. The Public Notice also indicated that the Commission would make a final determination on the applications after comments had been considered.

On 19 October 1990, Call-Net Telecommunications Ltd. (Call-Net) filed an application requesting that the Commission rescind Orders 90-1000 and 90-1001. In its reply comments, dated 9 November 1990, Call-Net also requested that any disposition of Tariff Notices 3616, 3616A, 2161 and 2161A be delayed until such time as the Commission had fully considered the issues in the proceeding established in Unitel Communications Inc. and B.C. Rail Telecommunications/Lightel Inc. - Applications to Provide Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues: Scope and Procedure, CRTC Telecom Public Notice 1990-73, 3 August 1990 (the Interexchange Competition proceeding).

The Commission denied Call-Net's 19 October 1990 application by letterdated 30 November 1990. The Commission stated that the introduction of Advantage Canada could be considered a competitive response, since it is intended to retain contribution that the telephone companies estimate would otherwise be lost to resellers. The Commission concluded in its letter that its prima facie finding that the introduction of Advantage Canada would not result in a significant reduction in contribution was well founded and provided an appropriate basis for granting interim ex parte approval, given the competitive aspect of the filings and the fact that interveners' comments would be considered before the Commission made a final determination. In addition, the Commission denied Call-Net's request that any disposition of Tariff Notices 3616, 3616A, 2161 and 2161A be delayed until such time as the Commission had fully considered the issues in the Interexchange Competition proceeding. It was the Commission's view that consideration of the proposed implementation by Bell and B.C. Tel of Advantage Canada need not await its determinations regarding the issues in the Interexchange Competition proceeding.

On 19 December 1990, Call-Net filed an application for an ex parte interim order amending the tariffs of Bell and B.C. Tel to permit the resale of Advantage Canada Service.

By letter to Call-Net dated 24 December 1990, the Commission noted that the issue of whether resale of discounted toll services should be permitted was addressed in Bell Canada and British Columbia Telephone Company - Introduction ofBetween Friends and Teleplus Subscription Services, Telecom Decision CRTC 88-19, 10 November 1988 (Decision 88-19), and in Bell Canada and British Columbia Telephone Company - Introduction of Advantage Discount Service, Telecom Decision CRTC 90-1, 15 February 1990 (Decision 90-1). In the latter Decision, which dealt with Advantage U.S. Service, the Commission stated:

In Decision 87-2 [Tariff Revisions Related to Resale and Sharing], the Commission permitted the resale of MTS to provide MTS. However, it prohibited the resale or sharing of WATS, a domestic bulk discounted toll service, to provide MTS or other interexchange voice services. Similarly, in Decision 88-19, the Commission approved tariffs for Teleplus Subscription Service that prohibit its resale or sharing to provide MTS or other interexchange voice services. Consistent with the above, the Commission concludes that the resale or sharing of Advantage to provide MTS or other interexchange voice services should be prohibited.

In its letter of 24 December 1990, the Commission noted that, subsequent to the issuance of Decision 90-1, it had issued Resale and Sharing of Private Line Services, Telecom Decision CRTC 90-3, 1 March 1990 (Decision 90-3), in which it liberalized the rules applying to resale of private line services. Inits letter, the Commission also noted that Decision 90-3 did not change the rules applying to resale of WATS. The Commission stated that, consistent with its determinations in Decisions 88-19 and 90-1, it had granted interim approval on 24 September 1990 to tariff pages proposed by Bell and B.C. Tel under Tariff Notices 3616 and 2161, respectively, that prohibit the resale or sharing of Advantage Canada to provide MTS or other interexchange voice services.

The Commission stated in its letter that potential changes in the rules governing the resale of Advantage Canada, Advantage U.S. and Teleplus Subscription Service (Teleplus) should be considered together with any potential changes in the rules applying to the resale of WATS. The Commission noted that the issue of WATS resale would be dealt with in the Interexchange Competition proceeding. The Commission therefore decided to deal with the issue of resale of Advantage Canada, Advantage U.S. and Teleplus in that proceeding. Based on the foregoing, Call-Net's application was denied.

On 7 January 1991, Call-Net filed an application, pursuant to section 66 of the National Telecommunications Powers and Procedures Act (NTPPA), requesting that the Commission review, rescind, change, alter and vary:

(1) Orders 90-1000 and 90-1001;

(2) its decision of 30 November 1990 denying Call-Net's application to rescind Orders 90-1000 and 90-1001; and

(3) its decision of 24 December 1990 denying Call-Net's application for an order permitting the resale of Advantage Canada.

Call-Net requested that these decisions be reviewed and varied to amend Bell's and B.C. Tel's tariffs to permit resale of Advantage Canada.

The Commission denied Call-Net's application in Application by Call-Net Telecommunications Ltd. to Review and Vary Telecom Orders CRTC 90-1000 and 90-1001 and Decisions dated 30 November 1990 and 24 December 1990, Telecom Decision CRTC 91-3, 27 February 1991 (Decision 91-3).

II THE APPLICATIONS

The revisions proposed under Bell Tariff Notices 3616 and 3616A and B.C. Tel Tariff Notices 2161 and 2161A include:

(1) a restructuring of intra-B.C. MTS rates, resulting in an overall average increase of 0.1%;

(2) average rate reductions ranging from 3.7% to 26% for various other toll services; and

(3) in the case of Bell, an average rate reduction of 16% for Voicecom calls of more than 1,000 miles.

In addition to the above, both companies proposed the introduction of Advantage Canada, a form of MTS. Advantage Canada would provide subscribing customers with volume-based discounts on eligible customer-dialed station-to-station calls to locations in Canada. For calling within its operating territory, Bell proposed to apply discounts to calls placed between 8 a.m. and 6 p.m., Monday through Friday. For calling within its operating territory, B.C. Tel proposed to apply discounts to calls placed between 8 a.m. and 5 p.m., Monday through Friday. For calling from Bell or B.C. Tel territory to other locations within Canada, discounts would apply to calls placed between 8 a.m. and 6 p.m., Monday through Saturday.

Under the proposed service, subscribing customers are billed at regular MTS rates up to and including $200 per month. Thereafter, the following discounts apply to eligible monthly charges: (1) 15% on charges over $200, up to and including $1,500; (2) 17% on charges over $1,500, up to and including $3,500; (3) 20% on charges over $3,500, up to and including $10,000; and (4) 30% on charges over $10,000. Customers are required to pay a minimum monthly bill of $200 for each account. A charge of $50 applies for subscribing to the service.

Bell and B.C. Tel indicated that Advantage Canada is designed to satisfy the demand for a switched network alternative to customer-dialed MTS, Teleplus and WATS, and to fill a void in their respective toll service portfolios. Bell stated that, as well as providing a substitute for some WATS customers, Advantage Canada would address the needs of MTS customers who are not currently attracted to WATS. Bell noted, for instance, that some customers cannot benefit from WATS because of the geographical dispersion of their traffic. Bell also noted that, because Advantage Canada has account-based billing, it does not require the rearrangement of equipment or the ongoing management of facilities associated with WATS. Bell stated that, as a result, Advantage Canada would provide some customers with a more convenient long distance service option. In addition, Bell noted that Advantage Canada would be attractive to higher volume users of Teleplus, since it offers discounts beyond the current $400 usage cap applicable with Teleplus.

Bell and B.C. Tel submitted that Advantage Canada would reduce the potential migration of business customers to message toll alternatives offered by resellers under the liberalized resale and sharing rules established in Decision 90-3. The companies stated that Advantage Canada would therefore preserve contribution that would otherwise be lost due to customer migration to resellers' services.

III THE ECONOMIC STUDIES

The economic studies submitted by Bell and B.C. Tel compare the status quo situation in which Advantage Canada is not introduced (the Reference Plan) to the situation in which Advantage Canada is introduced (the Alternate Plan).

Under the Reference Plan, resellers enter the market under the liberalized resale rules established in Decision 90-3 to compete with toll services provided by the telephone companies, with the result that the companies lose contribution due to the migration of customers to resellers' services.

Under the Alternate Plan, customers are expected to be attracted to Advantage from resellers' services, MTS, WATS, Teleplus and private lines. Thus, there are two specific components to the demand for Advantage Canada: customers who, in the absence of Advantage, would subscribe to telephone company interexchange services (MTS, WATS, Teleplus and private line) and customers who, in the absence of Advantage, would migrate to resellers' services. Because the elasticity assumed for Advantage is less than one in absolute value, migration from telephone company interexchange services to Advantage Canada can be expected to result in a reduction in company revenues and contribution. Therefore, any positive impact Advantage Canada may have on contribution depends on preventing migration to reseller-provided alternatives from telephone company toll services, and the consequent reduction in contribution, that would occur in the absence of Advantage Canada.

Estimates of the amount of migration from resellers' services to Advantage Canada are contingent, in part, upon the companies' views of the migration to resellers' services under the Reference Plan throughout the ten year study period. The estimated migration to resellers' services and the migration from resellers' services to Advantage are based on the likelihood that customers would migrate, which, in turn, is based on, among other things, (1) the level of savings achievable with resellers' services, (2) analyses relating probability of subscription to those savings, (3) the non-price differences between Advantage and resellers' services (captured in the non-price factor), and (4) the geographic coverage of resellers' services. The larger the potential migration to resellers' services, the greater the contribution loss under the Reference Plan and the greater the contribution loss prevented by the introduction of Advantage Canada. Therefore, the greater the predicted migration to resellers' services in the absence of Advantage Canada, the higher the Advantage Canada net present value (NPV).

The assumed reseller discount in relation to MTS rates, by affecting estimates of the potential savings a customer could realize by moving to a reseller's service, affects estimates of the probability that customers will move to resellers' services. The higher the assumed discount, the greater the probability that customers will move to resellers'services. In the Advantage Canada economic studies, Bell and B.C. Tel assumed that resellers would offer an MTS alternative with a $20 monthly subscription fee, a 30% discount from peak MTS rates on calls originating and terminating in 8 larger centres, and a 20% discount on calls originating or terminating in 9 smaller centres.

The non-price factor acts to reduce the probability that the customer would subscribe to a reseller's service, relative to the probability that the customer would subscribe to an identical service offered by the telephone company, by reflecting non-price differences between services provided by the telephone companies and those provided by resellers (specifically, different dialing patterns, non-universal geographic termination and consumer preference for the telephone company). The value of the non-price factor changes over the study period to reflect the assumption that customer resistance to migrate to resellers' services will decline over time.

In the economic studies, an NPV greater than or equal to zero implies that the introduction of Advantage Canada would not result in a reduction in contribution vis-à-vis the situation in which the service is not introduced. In Decision 88-19, the Commission indicated that the issue of the impact of message toll alternative services on contribution is an important one. The Commission stated that, were such services to result in a significant reduction in contribution, it could be argued thatthe reduction would be more appropriately applied to the reduction of all toll rates. In that Decision, the Commission approved the introduction of Teleplus and Between Friends, noting that, under pessimistic assumptions, Bell's combined NPV for these services would be negative $11.7 million. The Commission added that, on an annual basis, this would amount to a reduction in monopoly toll contribution of $1 million to $2 million. Given that Bell's total monopoly toll contribution was, at that time, in the order of $1.8 billion annually, the Commission was of the view that, even under pessimistic assumptions, the reduction in toll contribution attributable to Between Friends and Teleplus would not be significant.

Bell's economic study indicates an NPV of $25.4 million. The B.C. Tel and Telecom Canada economic studies (the latter includes Bell and B.C. Tel originated inter-company traffic) indicate small negative NPVs. B.C. Tel argued that its marginally negative NPV for Advantage Canada is not significant relative to the magnitude of the B.C. Tel Advantage Canada revenues and costs over the study period and that it therefore represents essentially a break-even position with respect to contribution. B.C. Tel submitted that the service will recover its associated costs and generate a significant contribution. Similarly, Bell argued that the NPV for the Telecom Canada study, relative to the Telecom Canada Advantage Canada revenues of several hundred million dollars over the ten year study period, can be regarded as essentially break-even.

In all three cases, the economic studies indicate that Advantage Canada would more than cover its associated costs.

IV REQUEST FOR DISCLOSURE

Unitel submitted that Bell and B.C. Tel should be required to provide estimates of the resellers' market, in terms of revenue, minutes and messages, for each year of the study period.

Unitel also requested disclosure of the results of demand and rate sensitivity analyses provided in confidence by Bell and B.C. Tel in the Advantage Canada economic evaluation studies. Unitel submitted that, without this information, it would be difficult to determine the reasonableness of Bell's and B.C. Tel's study results and to assess the degree to which the size of the reseller market may be overestimated and the study results flawed.

Finally, Unitel requested "a more complete public record of assumptions regarding the reseller market." Unitel submitted that the public benefits of a more detailed examination of the telephone companies' projections of the reseller market would outweigh any possible harm to Bell and B.C. Tel. Unitel also submitted that disclosure of the information requested would enable interveners to submit further comments, providing the Commission with more information on which to base its decision.

In response, Bell noted that the results filed for all demand and rate sensitivities demonstrate a positive NPV for Bell. Bell submitted that virtually all the assumptions relating to the reseller market were publicly disclosed in the study filed with Advantage Canada. Bell stated that, furthermore, the estimation of the size of the reseller market in the Advantage Canada study is consistent with the approximate 2% market share estimated by the Commission in Decision 90-3. Bell's view was that public disclosure of the information requested by Unitel would not provide significantly more information regarding the viability of Advantage Canada. In addition, Bell submitted that such disclosure would reveal valuable competitive information that could be used by Unitel and others to develop more effective pricing and marketing strategies, thereby causing specific direct harm to the company, particularly in view of the applications of Unitel and B.C Rail Telecommunications/Lightel Inc. to compete in the long distance market.

B.C. Tel noted Unitel's statement that this type of information was made available in previous proceedings. B.C. Tel submitted that information released in one proceeding does not necessarily form a precedent for the release of information in a subsequent proceeding. B.C. Tel was of the view that Unitel's reference to previous proceedings without regard to the specific fundamental circumstances is therefore immaterial.

With respect to Unitel's request that Bell and B.C. Tel be required toprovide estimates of the resellers' market for each of the study period years, in terms of revenue, minutes and messages, the Commission notes that Bell and B.C. Tel filed, in confidence, forecast reseller revenues under the Reference Plan. Reseller revenue and demand forecasts are the result of the application of the assumptions and methodology for determining migration to resellers' services, referred to above, to Bell and B.C. Tel MTS, WATS, Teleplus and private line account level information.

The Commission has generally been of the view that it is more appropriate to disclose a methodology than to disclose the results of the application of that methodology. The rationale for this approach is that the results tend to be more competitively sensitive than the assumptions. In addition, it is often the case that the reasonableness of the results of an analysis can be best assessed by an examination of the reasonableness of the assumptions. As a result, disclosure of the assumptions and methodology provides for a public assessment of the analysis, while limiting harm that would be incurred from the disclosure of sensitive information.

The Commission considers that the critical assumptions used to estimate the resellers' market are already on the public record. These include assumptions concerning reseller pricing, reseller geographic coverage, probabilities of subscription and non-price factors. In addition, a description of how these assumptions were combined to estimate expected migration toresellers' services and to Advantage Canada is also on the public record.

In light of the above, and of the quantity of information already on the public record relating to the assumptions and methodology used in estimating reseller demand and revenues, the Commission concludes that the release of the estimates requested by Unitel would not significantly aid in the assessment of the economics of Advantage Canada, and that the public interest in the disclosure of further information is outweighed by the specific direct harm that would result from its disclosure. The Commission therefore considers that disclosure of such information should not be required.

Unitel also requested that Bell and B.C. Tel be required to place on the public record the results of the demand growth and rate sensitivity analyses contained in the economic studies.

In the Commission's view, such information is not specifically related to an assessment of the reasonableness of estimates or assumptions concerning the resale market size. The demand growth sensitivity analyses examined the impact of +/- 15% changes in the assumed demand growth rates for MTS, Teleplus, WATS, interexchange circuits, PBX trunks and Advantage Canada. Consequently, while the -15% demand growth sensitivity, for example, would result in a reduction in the reseller market size, and therefore in reduced migration from resellers' services to Advantage Canada, it would also result in a reduction in the contribution lossdue to migration from MTS, WATS, Teleplus and private lines to Advantage Canada. Furthermore, in its reply, Bell stated for the public record that the results of all the rate and demand growth sensitivity analyses for the Bell economic study indicated positive NPVs.

In light of the above, the Commission does not consider the public interest in disclosure sufficient to equal or outweigh the specific direct harm likely to result from disclosure. Accordingly, the Commission is of the view that Bell and B.C. Tel should not be required to make further disclosure of the results of sensitivity analyses.

Finally, Unitel requested "a more complete public record of assumptions regarding the resale market". As stated above, the Commission considers that the critical assumptions used to estimate resellers' market are already on the public record, as is a description of how these assumptions were combined to estimate expected migration to resellers' services and to Advantage Canada.

Given the quantity of information on the public record, and since Unitel did not specify the particular items that it wished disclosed and did not indicate why it needed the information or how it would use the information to assist in the formulation of its case, the Commission concludes that the specific direct harm that would result from further disclosure outweighs the public interest in further disclosure. Consequently, the Commission is of the view that Bell and B.C. Tel should not be required to make further disclosure of the information requested by Unitel.

In light of all the above, Unitel's request for disclosure is denied.

V COMMENTS RECEIVED IN RESPONSE TO PUBLIC NOTICE 1990-89

A. General

In response to Public Notice1990-89, the Commission received comments from Unitel Communications Inc. (Unitel), Fonorola Inc. (Fonorola), Cable & Wireless Telecommunications (CWT), Cam-Net Communications Inc. (Cam-Net), Call-Net and the Competitive Telecommunications Association (CTA).

CTA argued that Advantage Canada should be denied on the basis that its approval would frustrate the Commission's objective of a competitive resale market with its attendant benefits to subscribers. CTA submitted that, having opened the resale market in Decision 90-3, the Commission bears an onus to ensure that that market is not stifled by anti-competitive conduct on the part of the carriers. CTA stated that the Commission has long recognized that the activities of the dominant carriers may have to be restricted in the short run in order to provide a foothold for a new competitive market. Specifically, CTA noted that, in Decision 90-3, the Commission denied the facilities-based carriers the ability to enter the resale market through the establishment of affiliates that would resell the facilities of their affiliated carriers. CTA submitted that this determination was based on the Commission's view that resale by the carriers of their own facilities would grant them an unfair advantage. CTA submitted that business users accept the notion that restrictions on the carriers' conduct are required in competitive markets where those carriers still dominate, recognizing that it is in the interest of business users to have healthycompetitive alternatives from which to choose. CTA stated that, while acceptance of its submissions would result in the denial of the lower-priced Advantage Canada service, it would benefit all users in the long run.

In response to CTA, Bell submitted that the Commission has never expressed or adopted the principle that the company should be restrained from offering services that compete with new competitive services. Bell stated that, on the contrary, the Commission's decisions to permit increased competition have assumed increased competitive activities by all participants in the market in question. Bell stated that the Commission has approved new services introduced by the company in response to competition, provided that such services recover all associated costs, thereby avoiding any question of cross-subsidization or undue competitive advantage.

Bell submitted that the Commission's policy in regard to competitive services offered by the carriers is demonstrated by its approval of new services such as Faxcom and Advantage U.S. Bell's view was that, if the Commission were to restrain the company from offering new services in response to increased competition, the resulting market would be characterized by only a very restricted and sheltered form of competition. In Bell's view, this would deny the market and the users of such services the benefits that the Commission anticipated would flowfrom competition.

Bell submitted that restrictions preventing facilities-based carriers from reselling their services through affiliates do not reflect a Commission policy of restricting the introduction of new competitive services by the carriers. Rather, Bell argued, it reflects an entirely different policy concern: the prevention of full facilities-based competition indirectly through affiliates of facilities-based carriers.

B.C. Tel stated that there is no basis to warrant CTA's characterization of Advantage Canada as anti-competitive. B.C. Tel submitted that it is indisputable that the liberalized resale rules established in Decision 90-3 will result in market share loss and associated contribution erosion for B.C. Tel. B.C. Tel submitted that the suggestion that it should not be allowed to propose any initiatives unless and until the estimated full extent of such market share loss has been realized is without basis.

CTA stated that the Commission determined in Decision 90-3 that the impact of liberalized resale on the telephone companies' toll contribution would be minimal, and submitted that this determination was made on the basis that the carriers would not respond to reseller discounts with lower MTS or WATS rates. CTA stated that the Commission determined that the small contribution loss would be recovered by the $200 per line contribution charge established in that decision.

Call-Net submitted that the impact of Decision 90-3 on Bell's and B.C. Tel's toll contribution is virtually negligible. In Call-Net's view, Bell and B.C. Tel have not successfully made the case that the proposed Advantage Canada is necessary; it should therefore be denied.

Bell and B.C. Tel submitted that these arguments are incorrect. Bell and B.C. Tel noted that the Commission stated the following in Decision 90-3:

In the Commission's opinion, volume discounts, such as those provided by Teleplus, Between Friends and Advantage [U.S.] Service, are one approach to reducing price differentials. The Commission will continue to evaluate proposals for discount services on a case-by-case basis....

The Commission finds that it is not necessary in such a resale environment for the contribution charges applicable to resale for joint use to be designed to compensate fully for losses to the contribution derived from MTS/WATS.

Bell submitted that these statements refute CTA's arguments.

B. Resale of Advantage Canada

Fonorola supported the introduction of Advantage Canada, since it wouldhelp to reduce the current disparity between business long distance costs in Canada and the United States. However, Fonorola, Cam-Net, Call-Net and CWT objected to the proposed tariff provisions prohibiting the resale or sharing of Advantage Canada to provide MTS or other interexchange voice services.

Call-Net submitted that either Advantage Canada should be denied or its resale should be permitted. Call-Net stated that, unlike WATS, which may not be resold, Advantage Canada is not zone-limited and does not require a special line to the customer's premises. Call-Net noted that, in Public Notice 1990-89, the Commission characterized Advantage Canada as "a form of MTS." Call-Net stated that, under the terms of Tariff Revisions Related to Resale and Sharing, Telecom Decision CRTC 87-2, 12 February 1987
(Decision 87-2), resale of MTS to provide MTS is permitted. To permit MTS to be resold except where it is offered on a volume discount basis would, in Call-Net's view, confer an undue advantage on the applicants, particularly in the small and medium-sized business sector that is the resellers' main market.

CWT argued that WATS is significantly different from Advantage, and therefore the restrictions on resale applicable to WATS should not be extended to Advantage Canada. CWT submitted that Advantage, while not a pure MTS service, resembles MTS more closely than it resembles WATS; therefore, resale of Advantage should be permitted.

Cam-Net argued similarly that, since Advantage is an MTS service, restricting its resale is inconsistent with Decision 87-2. Cam-Net also argued that the proposed restriction on the resale of Advantage Canada will have a more significant impact on resellers than did the previous restriction on the resale of Advantage U.S. Cam-Net noted that resellers are permitted to resell private line facilities on cross-border routes. However, they are not currently permitted to resell private line facilities to points located in Canada but outside of the territories of Bell and B.C. Tel. Cam-Net noted that Advantage Canada offers Bell and B.C. Tel customers universal termination in Canada at discounted rates, while, absent resale of Advantage, resellers can provide termination in Canada outside of Bell and B.C. Tel territories only through the resale of MTS, which is more expensive. Cam-Net argued that the restrictions on the resale of Advantage Canada confer an undue preference or advantage on Bell and B.C. Tel.