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ARCHIVED -  Telecom Order CRTC 95-453

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Telecom Order

Ottawa, 12 April 1995
Telecom Order CRTC 95-453
IN THE MATTER OF an application by Stentor Resource Centre Inc. (Stentor) under Tariff Notice 125 dated 6 March 1995, filed on behalf of all the federally regulated members of Stentor, for approval of a six month market trial of Business Rewards.
WHEREAS Stentor filed the application on an ex parte basis;
WHEREAS there is no subscription fee, but a customer must enroll in the Business Rewards program in order to be eligible to collect Business Rewards;
WHEREAS the customer must meet a qualifying threshold of revenues in a minimum of three eligible Stentor service categories in order to qualify for Business Rewards;
WHEREAS Business Rewards are determined by multiplying a percentage of the revenues in excess of the minimum qualifying threshold in each category by the Cross-Portfolio Multiplier;
WHEREAS the Commission notes that the application includes Competitive Network (CN) services and therefore does not qualify for ex parte consideration;
WHEREAS in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994, the Commission expressed concerns with the bundling of 800 service elements with those from either the CN or the discount toll markets, prior to the resolution of the issues surrounding 800 service access;
WHEREAS the Commission considers that, in this case, there are two instances of bundling 800 service elements with those from either the CN or discount toll market;
WHEREAS the Commission considers the first instance of bundling to be the use of the Cross-Portfolio Multiplier, which would, all other things being equal, cause the amount of the total reward to be higher if a customer were a subscriber of Stentor´s 800 service;
WHEREAS the Commission considers the second instance of bundling to be the requirement that the customer meet a qualifying threshold in revenues in a minimum of three eligible Stentor service categories;
WHEREAS the Commission notes that because one of the service categories is 800 service, the requirement that a customer meet a qualifying threshold of revenues in at least three service categories could have the result that a customer would not qualify for Business Rewards if they were not a customer of Stentor´s 800 service;
WHEREAS the Commission considers it appropriate that market trials or promotions that involve bundling of 800 service elements, prior to resolution of issues surrounding 800 access, be accompanied by an imputation test;
WHEREAS the Commission has also stated on numerous occasions that prior to the resolution of the issues surrounding 800 service access, long-term contracts are not appropriate for 800 service;
WHEREAS the Commission notes that, in each month of the trial, customers earn Business Rewards which can only be spent in future months;
WHEREAS the Commission notes that Business Rewards can be spent on Stentor´s 800 service and that consequently, the market trial has competitive implications similar to a
long-term contract for 800 service;
WHEREAS the Commission is of the view that, in the absence of the resolution of the issues surrounding 800 service access, the proposed Business Rewards market trial would grant the federally regulated members of Stentor an undue advantage;
WHEREAS Stentor stated that the market trial is required to test the acceptance of Business Rewards in the marketplace, determine the stimulative effect of the Business Rewards reinvestment in new and expanded applications, test a number of operational issues and administrative details, test the design of the administrative procedures related to accounting and other operational issues, explore the viability and acceptability of reinvestment concepts by customers and to determine customer attitudes to the administrative complexities of the program;
WHEREAS the Commission considers that, given the purpose of the Business Rewards market trial, the scope of the market trial is too broad;
WHEREAS, if Stentor chooses to refile the Business Rewards market trial, the Commission considers that it would be appropriate to limit the scope of the market trial to 10 customers; and
WHEREAS the Commission considers that it would be appropriate for telephone companies to provide justification for the scope of proposed market trials -
IT IS HEREBY ORDERED THAT:
1. The proposed tariff revisions submitted by Stentor under Tariff Notice 125 are denied.
2. Each of the federally regulated members of Stentor are directed to, for the purposes of future market trial filings:
i) indicate the number of customers eligible for the trial;
ii) indicate the forecast number of customers for the trial;
iii) provide the justification for the forecast in ii) in light of i);
iv) provide justification for the number of customers and scope of the market trial, in light of the objectives of the market trial;
v) describe the objectives of the market trial; and
vi) provide justification for the company´s view that a trial is necessary to achieve the objectives of the trial and the company´s views as to whether the objectives could be satisfied without a trial.
3. Stentor is directed to provide a copy of the application for the public record in all relevant public examination rooms within two business days of the date of this Order.
Allan J. Darling
Secretary General

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