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Telecom Public Notice
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Ottawa, 25 November 1992
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Telecom Public Notice CRTC 92-71
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HOTEL AND MOTEL COMMISSION PLANS
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On 12 May 1992, Call-Net Telecommunications (Call-Net) filed an application requesting that the Commission direct Bell Canada (Bell) and British Columbia Telephone Company (B.C. Tel) (the respondents) to provide Call-Net with effective discounts off tariffed rates for long distance voice services on the same or similar terms and conditions as are currently offered under the respondents' recently revised Hotel and Motel Commission Plans (HMCPs).
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In its application, Call-Net stated that the respondents, under their respective HMCPs, offer commissions to hotels and motels on long distance calls originated by guests. Call-Net submitted that the definitions of "telephone toll" and "toll" in the Railway Act are broad enough to include the services provided to hotels and motels and the commissions offered by the respondents under their HMCPs. Call-Net argued that the commissions are tantamount to discounts on approved tariffed rates for telecommunications services billed to guests' rooms, and that the rates offered by means of these effective discounts clearly fall within the Commission's jurisdiction to regulate the telephone companies pursuant to the Railway Act.
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In support of its application, Call-Net filed evidence to indicate that B.C. Tel offers commissions of up to 30% on all operator-assisted and Direct Distance Dial guest calls. Call-Net's evidence indicated that Bell offers participating hotels and motels commissions of up to 30% on almost all calls aggregated and billed to guests' rooms, except calling card, third number, "976" and other alternatively billed calls. Call-Net's evidence also indicated that Bell would not offer services under the HMCP unless (1) facilities for guest calling are physically separated from administrative facilities, (2) guest calls are routed directly over Bell's public switched network, and (3) an agreement is executed between Bell and the hotel or motel.
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Call-Net stated that the respondents have refused to negotiate an agreement to provide it with effective discounts or commissions on the same or similar terms and conditions as are currently offered to hotels and motels. Call-Net argued that the respondents' refusals and their actions are contrary to section 340 of the Railway Act. Call-Net submitted that it has been unduly and unreasonably prejudiced and disadvantaged vis-a-vis a class of similar users, i.e., hotels and motels, and that the latter have preferential access to service and rate options not available to Call-Net. In addition, Call-Net submitted that the respondents have conferred an undue and unreasonable preference on themselves by offering HMCP selectively only to lucrative hotel and motel subscribers who otherwise might have purchased services from Call-Net.
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The respondents disputed Call-Net's argument that the commissions paid pursuant to HMCPs constitute a service or toll. They argued that the commission is an agency fee arising out of an agency agreement. They noted that, in Maritime Telegraph and Telephone Company Limited - Revenue Requirement for 1990 and 1991, Telecom Decision CRTC 90-30, 20 December 1990, and in AGT Limited - Revenue Requirement for 1992, Telecom Decision CRTC 92-9, 26 May 1992 (Decision 92-9), the Commission found that the HMCP was not a "toll" within the meaning of the Railway Act and was not a matter subject to the Commission's authority. Further, the respondents submitted that, in light of the Commission's findings in Decisions 90-30 and 92-9, there is no unjust discrimination or undue preference contrary to section 340 of the Railway Act with respect to the HMCP arrangements.
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The respondents further submitted, among other things, that resellers and hotels do not operate under similar conditions. B.C. Tel stated that hotels and motels are fundamentally different from resellers such as Call-Net in the nature of their business and in their business relationship to B.C. Tel. The respondents further submitted that the HMCP is not offered selectively, as suggested by Call-Net, but is offered to all hotels and motels.
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In reply, Call-Net reiterated that the HMCPs clearly fall within the scope of the Commission's jurisdiction to regulate the activities of the respondents pursuant to section 340 of the Railway Act, whether or not the HMCP is a "toll". Further, Call-Net submitted that the basis of its application is consistent with the concerns about anti-competitive pricing raised by the Commission in Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992.
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In light of the above, the Commission initiates a proceeding to consider Call-Net's application and issues related to a carrier's use of agency arrangements involving the provision of telecommunications services or facilities to an agent or the customers of an agent. In particular, the Commission invites comment on the issues set out below:
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(1) Under what circumstances, if any, would an agency arrangement amount to the charging of a toll at rates discounted from those approved by the Commission?
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(2) Under what circumstances, if any, would an agency arrangement be unjustly discriminatory or confer an undue preference?
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(3) What are the characteristics, if any, that distinguish a carrier-agent relationship from a conventional carrier-customer relationship?
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(4) What are the characteristics, if any, that distinguish hotel/motel agency arrangements from resale arrangements?
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Procedure
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1. In addition to Bell, B.C. Tel and Call-Net, the Commission joins AGT Limited, The Island Telephone Company Limited, Maritime Telegraph and Telephone Company Limited, The New Brunswick Telephone Company Limited, Newfoundland Telephone Company Limited, Northwestel Inc., Teleglobe Canada Inc., Telesat Canada and Unitel Communications Inc. as parties to this proceeding.
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2. Other persons wishing to participate in this proceeding must file a notice of intention to participate by writing to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, by 29 December 1992, fax: (819) 953-0795. The Commission will issue a complete list of parties and their mailing addresses.
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3. Parties may file comments with the Commission, serving copies on each other, by 12 January 1993.
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4. Parties may file reply comments with the Commission, serving copies on each other, by 9 February 1993.
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5. 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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Allan J. Darling
Secretary General
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