ARCHIVED -  Telecom Order CRTC 97-1214

Telecom Order

Ottawa, 29 August 1997

Telecom Order CRTC 97-1214

On 30 April 1997, Stentor Resource Centre Inc. (Stentor) on behalf of BC TEL, Bell Canada, The Island Telephone Company Limited, Maritime Tel & Tel Limited, MTS NetCom Inc., The New Brunswick Telephone Company, Limited, NewTel Communications Inc., TELUS Communications Inc., TELUS Communications (Edmonton) Inc., Québec-Téléphone, and Northwestel Inc. (collectively, the telephone companies), filed its Initial Submission to set up an affordability monitoring plan which would include Annual and Quarterly Reports, pursuant to the directives issued by the Commission in Local Service Pricing Options, Telecom Decision CRTC 96-10, 15 November 1996 (Decision 96-10).

File No.: 96-2176

1. In its Initial Submission, Stentor proposed to:

(a) provide telephone penetration rates on a quarterly basis instead of a yearly basis, using Statistics Canada's monthly survey to gather the relevant data;

(b) through Statistics Canada's monthly survey, ask questions to determine how many households have telephone service and, in appropriate cases, the reasons why people do not have telephone service. When the main reason for non-subscription is affordability, Stentor also proposed questions to find out which charges on the telephone bill are most difficult to afford;

(c) through Statistics Canada's monthly survey, determine whether the primary family income of customers unable to afford telephone service is below Statistics Canada's Low-Income-Cut-Off (LICO);

(d) conduct exit interviews with customers who voluntarily drop off the network for affordability reasons to gather and record data regarding the charges which have caused the affordability problem;

(e) track, for some telephone companies, the total number of customers that subscribe to their Instalment Payment Plan (IPP) in a reporting month, and for other telephone companies, track the number of new customers subscribing to the IPP in a reporting month;

(f) file an annual affordability analysis including the reasons for non-subscription. The report will include penetration rates broken down by income and for households whose primary family income is less than LICO;

(g) track the number of residence customers that are subscribing to toll restriction in a reporting month;

(h) promote the telephone companies' bill management tools through inserts with customers' telephone invoice, by updating the introductory pages of White Pages Directories, by using Revenue Canada's General Sales Tax (GST) credit program, and by working with various organizations;

(i) file the first Quarterly Report seven months after the receipt of this Order, with subsequent Quarterly Reports being filed at a regular intervals; and

(j) file the first Annual Report within six months of receipt of the merged Household Facilities and Equipment/Family Expenditures surveys' (HFE/FAMEX) microdata file and, subsequently, within three months of receipt of the microdata file.

2. The City of Calgary, the Consumers' Association of Canada (CAC), CAC (Alberta), and jointly the Alberta Council on Aging, the Fédération nationale des associations de consommateurs du Québec, and the National Anti-Poverty Organization (ACA/FNACQ/NAPO) filed comments on 30 May 1997. Stentor filed its reply comment on 9 June 1997.

3. Interveners were generally satisfied with Stentor's Initial Submission. However, they also considered that it needed revisions and adjustments.

4. CAC proposed that Stentor provide in its Annual Report the monthly residential rates, including Touch-Tone, in effect at the end of the period for which the penetration rates are reported. CAC also suggested that this data be provided for one large city and one small community within each company's territory for five years preceding the report date. In its reply, Stentor agreed to provide the information requested by CAC in each Annual Report. Stentor proposed that the monthly rates reported be those in place on 1 January of each reported year.

5. ACA/FNACQ/NAPO proposed that the Annual Report include year-over-year comparisons of the data of penetration and characteristics of subscribers/non-subscribers, for at least the five preceding years. Stentor indicated that the requested information had not been prepared and a significant effort would be required to do so. Instead, Stentor proposed to include in its Annual Report, on a going-forward basis only, year-over-year comparisons on penetration rates and characteristics of subscribers versus non-subscribers.

6. In addition to gathering data on subscribers who voluntarily disconnect, CAC and ACA/FNACQ/NAPO recommended that Stentor survey customers disconnected against their will, as they are more likely to be disconnected for affordability problems. Stentor replied that surveying customers disconnected against their will would not provide useful information and would be administratively difficult and extremely uncomfortable for both the interviewers and the disconnected subscribers.

7. In addition to the activities set out in Stentor's submission to promote its bill management tools, the City of Calgary proposed that Stentor also make use of government departments responsible for welfare to promote its bill management tools. Stentor replied that, after examination, it had rejected this avenue because of the complexity of the vehicle in some provinces where both the provincial and municipal governments are involved. Stentor concluded that sending the information along with the GST rebate would provide comprehensive coverage with much simpler administration and reduced costs.

8. ACA/FNACQ/NAPO considered that because of the small sample size of non-subscribing households, the telephone companies should over-sample the affected population, in particular low-income households and seniors, when analyzing and measuring affordability. For its part, the City of Calgary suggested that Stentor use a personal survey of randomly selected households without telephone service to determine whether affordability is increasingly a reason for not having telephone service. In response to ACA/FNACQ/NAPO's comment, Stentor replied that the use of LICO will increase the sample size of non-subscribers and provide reliable results. With respect to the City of Calgary's proposal to use personal surveys, Stentor maintained that such a survey would be impractical, intrusive, labour intensive and very costly, while not providing a representative sample of low income households.

9. ACA/FNACQ/NAPO proposed that Stentor keep track of customers who move to toll restrict for affordability reasons, versus those who do so for other reasons. Stentor replied that virtually all customer initiated subscriptions to toll restriction are for affordability reasons and tracking would be unnecessary. Stentor presumed that customers subscribing to toll restriction do so to avoid long distance charges.

10. CAC (Alberta) requested that the raw data used by Stentor in the preparation of the monitoring report should be available to all parties. Stentor replied that data for Disconnect Studies and tracking of Bill Management Tools will be reported in the Quarterly Report while the other data from Statistics Canada is already available and can be purchased from Statistics Canada.

11. The Commission finds that, overall, Stentor has complied with the directives set out by the Commission in Decision 96-10. The Commission considers, however, that revisions to Stentor's affordability monitoring plan are warranted.

12. Firstly, the Commission agrees with CAC and Stentor that the Annual Report should have the monthly residential rates, including Touch-Tone, in place on 1 January of each year reported, for one large city and one small community within each company's territory for the five years preceding the report date.

13. Secondly, with regard to ACA/FNACQ/NAPO's proposal that the Annual Report include five-year comparisons of telephone penetration rates and characteristics of subscribers/non-subscribers, the Commission is satisfied with Stentor's view that it is sufficient to provide this data on a going-forward basis only, commencing in 1996. However, the Commission considers that subsequent Annual Reports should include the penetration rates and data regarding characteristics of subscribers versus non-subscribers from previous Annual Reports as they become available, for a period of up to five years, to facilitate comparisons.

14. Thirdly, the Commission agrees with Stentor that telephone companies should not have to survey customers disconnected against their will. However, in order to gather data on the number of telephone disconnections, the Commission considers that Stentor should collect and report data on the total number of voluntary and involuntary disconnections.

15. The Commission is also satisfied that Stentor's proposals to promote telephone companies bill management tools are sufficient to inform customers most likely in need of them. The Commission considers however, that until such further notice is provided, Stentor should indicate in its Quarterly Reports all measures taken by the telephone companies to promote, or further promote, their bill management tools.

16. The Commission notes that Stentor indicated its plan to use Revenue Canada's GST credit program to inform low income customers about the telephone companies' bill management tools. Stentor stated that Revenue Canada was willing to work with Stentor, provided that the Minister received an official confirmation of the request by the Commission. The Commission supports using Revenue Canada's GST credit program to promote the telephone companies' bill management tools and confirms its approval of the proposal.

17. As for the interveners' remaining proposals concerning alternative methods to measure affordability, the time required by Stentor to file its first Annual Report, the need to track why subscribers take toll restrict, and making raw data available to parties, the Commission does not consider that the proposed changes and adjustments are necessary and agrees with Stentor that they need not be incorporated in the Reports.

18. In addition, the Commission notes that Stentor only proposed to monitor penetration rates and reasons for non-subscription when affordability is cited as the cause for non-subscription in cases where households indicate that their primary family income is less than or equal to Statistics Canada's LICO, rounded to the nearest $1,000. While the Commission agrees that LICO is an efficient and effective means of identifying most low income households, it is nonetheless aware that it is an imperfect indicator. Under Stentor's proposal, all individuals who have cited affordability as a concern but whose incomes are above LICO would be excluded from the Quarterly Report statistics. However, the Commission is concerned with all households who indicate affordability concerns, not just with those whose incomes are below LICO. The Commission therefore considers that Stentor should collect telephone penetration and reasons for non-subscription data on all households who indicate affordability concerns, and should report separately for those who fall above and below LICO.

19. As well, the Commission notes that Statistics Canada does not provide telephone penetration rates for Yukon and the Northwest Territories. Accordingly, existing Statistics Canada data cannot be used by the Commission to monitor whether local service remains affordable in those regions and take appropriate actions, if necessary.

20. In order to address affordability concerns in the Yukon and Northwest Territories, the Commission considers that a proxy for Statistics Canada's penetration rates is necessary. The Commission recognizes that measuring the telephone penetration rate for Yukon and the Northwest Territories would need to be derived from a variety of sources and would not be comparable to Statistics Canada's data. Therefore, the Commission considers that Stentor should develop a methodology to measure residential penetration rates for Yukon and the Northwest Territories making use of any company and/or other relevant statistics. The data obtained should be included in the Annual Report.

21. In light of the foregoing, the Commission orders that Stentor's Initial Submission be approved, subject to the following adjustments and modifications:

(a) that Stentor provide in its Annual Report the monthly residential rates, including Touch-Tone, in place on 1 January of each year reported, for the previous five years, for one large city and one small community within each telephone company's territory;

(b) that Stentor provide in its Annual Report, on a going-forward basis, commencing in 1996, for each telephone company, year-over-year comparisons of penetration and characteristics of subscribers/non-subscribers. Stentor is also directed to include in its subsequent Annual Reports the penetration rates and data regarding characteristics of subscribers versus non-subscribers from previous Annual Reports, as they become available, for a period of up to five years, to facilitate comparisons;

(c) that Stentor collect and submit data for each telephone company on the total number of voluntary and involuntary telephone disconnections;

(d) that Stentor collect data for each telephone company on all households who indicate affordability concerns and report separately for those who fall above and below LICO;

(e) that Stentor indicate in its Quarterly Reports all measures taken by telephone companies to promote, or further promote, their bill management tools;

(f) that Stentor develop a methodology to measure residential penetration rates for Yukon and the Northwest Territories, making use of company and/or other relevant government statistics. The data obtained will be included in the Annual Report. Stentor is directed to file its proposed methodology within thirty (30) days following this Order for the Commission's approval, serving a copy on all interested parties. Interested parties have two weeks in which to file comments on the methodology, with Stentor being given a further week in which to file a reply;

(g) that Stentor file its first Quarterly Report seven months after the receipt of this Order, with subsequent Quarterly Reports being filed regularly in February, May, August and November of each year; and

(h) that Stentor file its first Annual Report within six months of receipt of the merged HFE/FAMEX's microdata file and, subsequently, each Annual Report shall be filed within three months of receipt of the microdata file.

Laura M. Talbot-Allan
Secretary General

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