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ARCHIVED -  Telecom Order CRTC 96-1087

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Telecom Order

Ottawa, 2 October 1996
Telecom Order CRTC 96-1087
IN THE MATTER OF applications from BC TEL under Tariff Notice 3449 (TN 3449) dated 6 March 1996 and Bell under Tariff Notice 5716 (TN 5716) dated 5 March 1996, for approval of tariff revisions providing for the destandardization and subsequent withdrawal of eleven-digit wide area paging access service.
WHEREAS the Commission granted interim approval to Bell TN 5509 in Telecom Order CRTC 95-927, dated 17 August 1995;
WHEREAS the Commission issued Bell Canada and BC TEL - Destandardization and Withdrawal of Eleven-Digit Wide Area Paging Access Service, Telecom Public Notice CRTC 96-14, 26 April 1996, to consider Bell TN 5716 and BC TEL TN 3449;
WHEREAS the Commission granted interim approval to Stentor TN 273 in Telecom Order CRTC 96-263, dated 20 March 1996;
WHEREAS the Commission addressed interrogatories to Bell regarding TN 5509;
WHEREAS Canadian Wireless Telecommunications Association (CWTA) addressed interrogatories and submitted comments on all the applications;
WHEREAS comments were received from paging and messaging service providers;
WHEREAS reply comments were received from Bell, BC TEL and Stentor;
WHEREAS Bell noted that the service (which is the subject of TNs 5509 and 5716) is commonly referred to as WACOPS (Wide Area Customer Owned Paging Service);
WHEREAS Bell and BC TEL (the companies) submitted that WACOPS should be destandardized and withdrawn because: (1) the service is not compensatory at existing rates; (2) the existing flat rate structure is not sustainable due to the large variations in calling patterns and message duration between users of the service; (3) of the need to provide, to the extent possible, long distance and local access service components on an unbundled basis; and (4) the service is only offered in certain exchanges in the companies' operating territories;
WHEREAS Bell and BC TEL noted that, coincident with their proposals to destandardize WACOPS, the proposed service filed in Stentor TN 273 will be a replacement service that provides for unbundling of the long distance portion from the local access, as well as both competitive and compensatory rates and universal access, rather than the limited access offered under WACOPS;
WHEREAS CWTA acknowledged that WACOPS may not cover its costs, but submitted that if the call duration limit were enforced, WACOPS would be compensatory if reasonable rate adjustments were made;
WHEREAS CWTA and many of the interveners disagreed with the companies' proposal: (1) to withdraw WACOPS; and (2) that all WACOPS users should migrate to Stentor's new Advantage Toll-free Messaging Service as, in their view, the new service is not an appropriate substitute for traditional paging applications;
WHEREAS many of the interveners submitted that the Commission should deny the applications by the companies to destandardize and withdraw WACOPS because of the likely severe impact on their businesses;
WHEREAS CWTA and other interveners argued that the twelve month transition period proposed by the companies is totally inadequate;
WHEREAS CWTA submitted that it would be inappropriate for the Commission to permit the companies to withdraw WACOPS in these circumstances;
WHEREAS CWTA and other interveners submitted that new applications developed since WACOPS was first introduced are not well-suited to WACOPS and that Advantage Toll-free Messaging Service may provide an appropriate mechanism for these applications;
WHEREAS CWTA and several interveners submitted that the companies should be directed to work with WACOPS customers to develop the parameters of a revised flat rate, short duration toll-free access service;
WHEREAS Bell and BC TEL argued that WACOPS is not compensatory and Bell stated that it has provided the Commission, in confidence, with sufficient information to this effect;
WHEREAS Stentor, Bell and BC TEL argued that, contrary to CWTA's assertions that call duration limits should be enforced to control costs, the cost increase due to longer call duration is, in fact, substantially less than the cost increase caused by higher call volumes;
WHEREAS Stentor, Bell and BC TEL stated that the diversity of technology used within the paging industry has made the existing fixed rating concept of WACOPS inappropriate and that, as a result, the Advantage Toll-free service Messaging Option was introduced primarily as a replacement for the existing monthly fixed aspect of these existing services;
WHEREAS Stentor, Bell and BC TEL submitted that a flat rate toll-free service at a compensatory rate is not viable due to the wide variations in call volumes per day across the customer base;
WHEREAS Stentor, Bell and BC TEL submitted that a usage sensitive rate structure, based on a per minute rate, will ensure adequate cost recovery by the companies and is more equitable across the customer base;
WHEREAS Bell and BC TEL submitted that the proposed transition period represents a reasonable balance between the industry's requirement for an adequate lead time to implement administration and advertising changes and the companies' requirements to stem the financial losses resulting from maintaining support for a non-compensatory service;
WHEREAS the Commission notes that Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19) specified that the bundling of monopoly elements (local access) with competitive elements (toll-free calling) is generally appropriate, subject to, among other conditions, that a bundled service must cover its costs;
WHEREAS, consistent with Decision 94-19 and based on the record of this proceeding, the Commission considers that the companies should not continue to offer WACOPS as a non-compensatory bundled service as it includes a competitive element;
WHEREAS the Commission considers that the decision to provide the functionality of WACOPS through either a bundled or unbundled service arrangement should be at the option of the companies, given that the bundled service includes a competitive element;
WHEREAS, the Commission accordingly finds it appropriate for the toll-free calling capability and local access required by paging and messaging service providers to be provided on an unbundled basis, as proposed by the companies;
WHEREAS the Commission notes that complaints have been received from paging and messaging companies concerning areas where WACOPS is not available;
WHEREAS the Commission considers that a transition period would be appropriate, but limited such that it would not impede the development of competitive alternatives;
WHEREAS, with respect to concerns raised by Canpage Communications Ltd. and InterPage Communications regarding migrating their customers to the new Stentor service, the Commission considers that the companies should be accepting return numbers for WACOPS in groups of 10 rather than in blocks of 100 consecutive numbers, and notes Stentor's submission that it would address service charge waivers once destandardization of WACOPS was approved; and
WHEREAS in light of all the information received -
IT IS HEREBY ORDERED THAT:
1. Bell TN 5509 and Stentor TN 273 are granted final approval.
2. Bell TN 5716 and BC TEL TN 3449 are approved with a destandardization date of 2 December 1996 and a service withdrawal date of 31 July 1997.
Allan J. Darling
Secretary General

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