ARCHIVED -  Telecom Order CRTC 97-1029

Telecom Order

Ottawa, 23 July 1997

Telecom Order CRTC 97-1029

On 25 April 1997, Stentor Resources Centre Inc. filed an ex parte application on behalf of Bell Canada (Bell) for approval of tariff revisions to provide for the "Welcome Back Real Plus Extra Savings Promotion".

File No.: Tariff Notice 458

1. The proposed tariff revisions were approved on an interim basis on 15 May 1997 under Telecom Order CRTC 97-644. The promotion offered eligible high value residence customers the opportunity to increase their Real Plus Extra savings plan discount to 70% for a period of six months.

2. On 20 June 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) filed comments submitting that Tariff Notice 458 (TN 458) should be denied because it is not a promotion of limited duration and should, therefore, be subject to the imputation test.

3. AT&T Canada LDS stated that the promotion is a year-long pricing program designed to attract and retain high value customers. AT&T Canada LDS submitted that the customer's discount is accumulated and does not begin to be paid out until the second six month period, and that the customer would have to remain with Bell as their Primary Interexchange Carrier (PIC) for a period of at least 12 months in order to receive the full discount. AT&T Canada LDS considered that any special offer that lasts up to 12 months or longer has been considered by the Commission to be a general price decrease and has been made subject to the imputation test. AT&T Canada LDS also submitted that the promotion is misleading in that the effective discount that a customer will receive is substantially less than 70%, with the exact amount contingent on calling volumes over the twelve month period.

4. AT&T Canada LDS submitted that Stentor had not provided a clear explanation of how the rebate will be credited to customers, which raises concerns about the potential for unjust discrimination and undue preference, and is contrary to section 27 of the Telecommunications Act.

5. Stentor, in reply comments dated 3 July 1997, submitted that the "Welcome Back Real Plus Extra Savings Promotion" is a legitimate promotion of limited duration, the application of the discount is clear and the effective discount is 70%. Stentor submitted that AT&T Canada LDS' arguments are based on a fundamental misunderstanding of the tariff and should be rejected and that TN 458 should be granted final approval.

6. Stentor submitted that the promotion period was clearly identified as being from 1 June 1997 to 15 July 1997, and that the payout period for the promotion commences immediately after the customer enrolls in the promotion, and not six months later. Stentor noted that the eligibility criterion is the customer's billed usage when last with Bell and is not based on the customer's billed usage during the payout period. Stentor denied AT&T Canada LDS' subsequent allegations, noting that they were based on this apparent misunderstanding of the tariff.

7. The Commission notes that in Review of Regulatory Framework - Targeted Pricing, Anti-Competitive Pricing and Imputation Test for Telephone Company Toll Filings, Telecom Decision CRTC 94-13, 13 July 1994 (Decision 94-13), it considered that below-cost pricing in the case of promotions is generally not anti-competitive and that promotions would be exempt from the application of an imputation test, on the condition that sufficient information is provided by the telephone companies to demonstrate that the offering is a legitimate promotion of limited duration.

8. The Commission is of the view that the wording of the tariff clearly identifies the terms and conditions of the offering and that the "Welcome Back Real Plus Extra Savings Promotion" does constitute a legitimate promotion of limited duration in accordance with Decision 94-13 and is therefore exempt from the application of an imputation test.

9. In light of the foregoing, the Commission approves the proposed tariff revisions on a final basis.

Laura M. Talbot-Allan
Secretary General

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