ARCHIVED -  Telecom Public Notice CRTC 95-33

Telecom Public Notice

Ottawa, 27 June 1995

Telecom Public Notice CRTC 95-33

BELL CANADA - RESTRUCTURING OF RATES FOR BUSINESS LOCAL EXCHANGE SERVICES

Reference: Tariff Notices 5471 and 5506

The Commission has received applications from Bell Canada (Bell) proposing tariff revisions to restructure the rates for business local exchange services. The applications relate to the introduction of (1) access banding, and (2) a flat-rate access component and usage-sensitive rates for local calls (TelecomLink). Tariff Notice 5471 - Access Banding

Under Tariff Notice 5471, dated 7 April 1995, Bell proposes to revise the rate structure for business primary exchange service, Touch-Tone and other related exchange services. Bell states that the proposed tariff revisions provide for the conversion of the existing rate group structure, based on value of service, to a structure consisting of four rate bands defined by market and cost considerations, such as community size and differences in underlying costs. Bell states that its proposals for these rate bands are intended to align rate levels more closely with costs and to reduce the differences in levels of contribution across rates. In Bell's view, the proposed approach would provide more appropriate economic market signals that would be consistent with the move toward competition in the provision of local telephone service as endorsed by the Commission in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994.

Bell states that, in general, its proposed revisions would result in increases in rates for business individual line service in the lower rate groups (rate groups 3A to 12) and in decreases in most rates in the higher rate groups (rate groups 13 to 20). To be consistent with its proposals for business individual line and PBX trunk services, Bell proposes to include business two-party, business four-party and individual message rate services in the new rate bands. In addition, the company proposes to increase the proportional rate relationships of four-party and message rate service to individual line service, with four-party service moving from 60% to 70%, and message rate service moving from 70% to 75%. Two-party service would remain at its current proportion of 80%. Bell also proposes to equalize Touch-Tone rates between business individual line and PBX trunk services, to further the aligning of rates with costs.

Bell states that remaining imbalances between rates and costs would be addressed in 1997 with the introduction of separate access rates and local network measured rates, proposed under Tariff Notice 5506.

Bell proposes to implement the changes proposed under Tariff Notice 5471 in two phases, with phase one effective 1 July 1996 and phase two effective 1 July 1997. Tariff Notice 5506 - TelecomLink

Under Tariff Notice 5506, dated 31 May 1995, Bell proposes to replace the flat monthly rates for business individual line service and PBX service with a common, lower, flat-rate access component and a usage-sensitive rate component applicable to completed outgoing local calls. The restructured service would be known as TelecomLink.

Bell notes in its application that, on 22 April 1991, the Commission wrote to the company questioning the continued relevance of price differentials between business individual lines and PBX trunks, in view of the Terminal Attachment Program Advisory Committee's conclusion that PBX and key system technologies were no longer mutually exclusive. Bell states that, in response to the Commission's letter, the company filed a report evaluating three different approaches for restructuring the tariffs for business primary exchange service (namely, Blended Rate, Sliding Scale and Threshold Pricing), and that the Commission concluded in Bell Canada - Tariff Restructuring for Business Access Services, Telecom Letter Decision CRTC 93-18, 2 December 1993 (Letter Decision 93-18), that Threshold Pricing was the most equitable of the three approaches. Bell notes that the Commission directed the company to file proposed tariffs, and related information, to implement Threshold Pricing.

Bell states that, in order to comply with the Commission's direction and to ensure that the needs of its business customers were addressed, it and Stentor Resource Centre Inc. created a business customer advisory panel. Bell also states that, while the panel did not support the concept of local measured service, most members were of the view that a simplified structure, without a usage threshold and similar to that of message toll service, would be preferable.

As noted above, the proposed TelecomLink rate structure consists of a flat-rate access line charge and distance sensitive usage rates (based on four local distance bands) for outbound local calls. The rate structure does not incorporate thresholds, as contemplated in Letter Decision 93-18. Incoming calls, long distance calls (1+), calls to the operator (0), calls to directory assistance (411), calls to repair (611) and calls to emergency reporting (911) would not be subject to the proposed local usage charges.

The TelecomLink rates proposed in Tariff Notice 5506 would, if approved, supplant phase two of Bell's access banding proposals, filed under Tariff Notice 5471. Bell states that the phase two rates proposed in Tariff Notice 5471, which provide for four flat-rated access bands, were used as a reference for developing the common business access rate and the distance-sensitive usage rates for TelecomLink. Bell provided comparisons of the proposed phase two access banding rates and the proposed TelecomLink rates for the purposes of showing the impact of TelecomLink on customers.

The proposed tariff revisions do not address a number of company services, such as Cellular access, Mobile Telephone Service and Public Telephone Service, which make use of the public switched telephone network (PSTN) for call completion. Bell states that the rates for these services are based on costs that include an allocation for PSTN usage.

Bell also states that it is not proposing to introduce a usage-sensitive pricing structure for Centrex, Megalink and Digital Exchange Access Services at this time. However, Bell adds that, as a result of a number of local service initiatives, proposals to restructure Centrex, Megalink and Digital Exchange Access would follow later. In this context, Bell submits that the restructuring of Centrex Service must adequately address (1) historic rate relationships between Centrex and local service rates, while maintaining price positioning to other multi-line products, and (2) customer needs and concerns.

Procedure

1. The applications may be examined at any of Bell's business offices or at the offices of the CRTC in the following locations:

Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Room 201
Hull, Quebec

Place Montréal Trust
1800 McGill College Avenue
Suite 1920
Montréal, Quebec

Copies of Bell's applications may be obtained by any interested person upon request directed to Mr. B.A. Courtois, Vice-President, Corporate and Legal Affairs, Bell Canada, 105 Hôtel-de-ville Street, 6th Floor, Hull, Quebec, J8X 4H7, fax: 819-778-3437.

2. Those parties who registered to participate in the proceeding initiated by Bell Canada and British Columbia Telephone Company - Restructuring of Tariffs for PBX Trunks and Central Office Lines, Telecom Public Notice CRTC 92-72, 27 November 1992, will be considered parties to this proceeding.

3. Other persons wishing to participate in the proceeding must notify the Commission of their intention to do so by writing to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 28 July 1995. The Commission will issue a complete list of parties and their mailing addresses.

4. Parties may address interrogatories to Bell. Any such interrogatories must be filed with the Commission and served on Bell by 28 July 1995.

5. Responses to interrogatories are to be filed with the Commission and served on all parties by 18 August.

6. Requests by parties for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, must be filed with the Commission and served on Bell by 29 August 1995.

7. Bell may file replies to requests for further responses and to requests for public disclosure, serving a copy on the party making the request, by 8 September 1995.

8. The Commission will issue directions on further procedure when it issues its determination with respect to requests for further responses and for disclosure.

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.

Allan J. Darling
Secretary General