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ARCHIVED -  Telecom Order CRTC 97-514

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 Telecom Order

 Ottawa, 16 April 1997
 Telecom Order CRTC 97-514
 The Commission received an application by The New Brunswick Telephone Company, Limited (NBTel) dated 15 September 1995, requesting that the Commission review and vary, pursuant to section 62 of the Telecommunications Act (the Act), a decision issued by letter dated 16 August 1995 directing that Stentor members were not to implement a Primary Interexchange Carrier (PIC) Restrict feature and that those who were offering such a feature were to discontinue it.
 File No.: 95-1130
1.  The Commission received initial comments on NBTel's application from ACC TelEnterprises Ltd. (ACC), AT&T Canada Long Distance Services Company (AT&T Canada LDS) (formerly Unitel Communications Inc.), BC TEL, Cam-Net Communications Inc. (Cam-Net), Sprint Canada Inc. (Sprint), TELUS Communications Inc. (TCI) (formerly AGT Limited) and Westel Telecommunications Ltd. (Westel).
2.  The criteria by which the Commission determines whether or not to exercise its powers under section 62 of the Act (see Telecom Decision CRTC 79-1, 2 February 1979) require that the applicant demonstrate, on a prima facie basis, the existence of one or more of the following: (1) an error in law or in fact; (2) a fundamental change in circumstances or facts since the original proceeding; (3) failure to consider a basic principle raised in the original proceeding; and (4) a new principle that has arisen as a result of the decision.
3.  In addition, notwithstanding the lack of prima facie evidence that any of the above criteria have been met, it is open to the Commission to determine that there is substantial doubt as to the correctness of the original decision and that reappraisal is accordingly warranted.
4.  On the basis of the initial comments received, the Commission concluded by letter dated 3 July 1996 that it had erred in law in the proceeding leading to its ruling of 16 August 1995, in that adequate notice was not provided to members of the public, including interested parties, in the operating territories of the companies to whom the ruling pertained.
5.  This conclusion was based on the fact that the record of the proceeding had not been placed in public examination rooms in the Commission's regional offices.
6.  In its letter of 3 July 1996, the Commission found that its ruling of 16 August 1995 should be reviewed, but that prior to determining whether or not to vary the ruling, persons not previously given notice should be granted that notice and provided with an opportunity to comment.
7.  The Commission stated that the following would be placed in all of its public examination rooms: (1) its letter of 3 July 1996, (2) its ruling of 16 August 1995 and the record of the proceeding leading to it, and (3) the record associated with NBTel's application of 15 September 1995.
8.  The Commission stated that persons who had not already filed comments with regard to the availability of PIC Restrict could do so by writing to the Commission, serving copies on the telephone company or companies in question.
9.  Pursuant to its letter of 3 July 1996, the Commission received further comments with regard to NBTel's application of 15 September 1995.
10.  On 9 September 1996, Stentor Resource Centre Inc. (Stentor) filed a reply on behalf of BC TEL, Bell Canada, The Island Telephone Company Limited, MTS NetCom Inc., Maritime Tel & Tel Limited, NBTel, NewTel Communications Inc. and TCI.
11.  In its application of 15 September 1995, NBTel submitted that there was substantial doubt as to the correctness of the Commission's ruling of 16 August 1995 and requested that the Commission permit the company to continue to offer PIC Restrict for customers who requested it.
12.  NBTel submitted, among other things, that the Commission's failure to consider and address a previously approved PIC Restrict process was not in keeping with Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12, 12 June 1992, and that, in prohibiting PIC Restrict, the Commission appeared to be placing the rights of the consumer behind the rights of the competitor, thus striking an inappropriate balance between the interests of the two groups.
13.  NBTel stated that PIC Restrict would be available with respect to all carriers on an equal basis.
14.  NBTel submitted that, in the 14 months that PIC Restrict had been available in its territory, only seven customers had "of their own accord, requested in writing, PIC Restrict".
15.  On this basis, NBTel questioned the Commission's conclusion in its ruling of 16 August 1995 that PIC Restrict may impede, to some extent, the evolution of the competitive marketplace.
16.  NBTel also submitted that, with the issuing of Forbearance - Services Provided by Non-dominant Canadian Carriers, Telecom Decision CRTC 95-19, 8 September 1995 (Decision 95-19), the situation had sufficiently changed that the PIC Restrict issue warrants review, in that reduced regulatory oversight for the interexchange carriers and their ability to act more quickly in the marketplace should somewhat diminish the Commission's concern with respect to impediments to competition.
17.  BC TEL and TCI supported NBTel's application, and submitted that the Commission should permit other telephone companies to implement PIC Restrict.
18.  BC TEL and TCI submitted that there is substantial doubt as to the correctness of the Commission's conclusions with regard to the effect that PIC Restrict would have on the evolution of the competitive marketplace.
19.  BC TEL submitted, among other things, that the extent to which PIC Restrict would be used by customers would likely be directly proportional to the extent to which customers were subjected to slamming, and that PIC Restrict should be recognized as a self-modulating consumer safeguard mechanism that will hamper unethical competitive practices but not competition itself.
20.  TCI contended that customers are entitled, if they so choose, to subscribe to a PIC Restrict feature.
21.  TCI submitted, among other things, that concerns expressed by alternative providers of long distance service as to the effect of PIC Restrict were speculative compared to the concerns expressed by actual customers.
22.  TCI stated that the Federal Communications Commission (FCC) in the United States had encouraged entities such as Local Exchange Carriers to offer services such as PIC Restrict.
23.  ACC, AT&T Canada LDS, Cam-Net, Sprint and Westel opposed NBTel's application.
24.  Cam-Net submitted that it was clear to all participants in the original proceeding that NBTel had implemented PIC Restrict.
25.  Westel submitted that the Commission had been fully aware of all the relevant circumstances, including the fact that NBTel had implemented PIC Restrict, and had been cognizant of the need for reasonable consumer safeguards.
26.  Westel submitted that there had been no change in facts or circumstances, and that reduced regulatory oversight for facilities-based service providers did not diminish concerns as to the impact of PIC Restrict on the evolution of competition.
27.  Sprint and Westel submitted that NBTel had not introduced any new evidence or information that would raise doubt as to the correctness of the Commission's original decision.
28.  ACC submitted, among other things, that the feature, if implemented, would prevent the evolution of competition by restricting customer mobility, and would aid Stentor members in their win-back campaigns.
29.  Cam-Net and Sprint indicated that NBTel's evidence that only seven customers had requested the feature demonstrates that there is no compelling need or demand for the feature.
30.  Sprint was of the view that the above situation could change rapidly if the Stentor members were to begin a nation-wide promotion of PIC Restrict.
31.  AT&T Canada LDS, Cam-Net, Sprint and Westel noted the consumer safeguards currently in place, and submitted that they are adequate to reasonably protect consumers from slamming.
32.  ACC submitted that any benefits of customer protection that might be provided by PIC Restrict would be significantly outweighed by the harm the feature would bring to competitors.
33.  ACC submitted, among other things, that actions taken by the FCC are irrelevant in the Canadian context, given the integration of the Stentor companies' local and long distance operations.
34.  In its reply of 20 November 1995, NBTel again submitted, among other things, that there is considerable doubt as to the correctness of the decision.
35.  NBTel also submitted that no party could demonstrate that PIC Restrict has had a discernible impact on competition.
36.  Those who filed comments pursuant to the Commission's letter of 3 July 1996 complained of having been slammed in the past and supported the PIC Restrict feature as a protection against slamming.
37.  In its reply of 9 September 1996, Stentor stated its belief that the comments submitted reflected the view of a larger group of customers who are frustrated at having to bear the risk of unauthorized PIC changes.
38.  Stentor submitted, among other things, that PIC Restrict is an effective consumer safeguard.
39.  Stentor submitted that the implementation of PIC Restrict would not have a negative impact on the development of a competitive market, as supported by actual experience in NBTel's territory where PIC Restrict had been available without any evident negative impact.
40.  Stentor submitted that PIC Restrict should be available and should be implemented to ensure non-discriminatory treatment of all service providers.
41.  The Commission's original denial of PIC Restrict was based on concerns that introduction of the feature would to some extent impede the evolution of the competitive marketplace by increasing the effort required on the part of the customer to change carriers.
42.  As noted by Westel in the original proceeding, implementation of PIC Restrict would require competitors to ascertain whether each newly recruited customer had subscribed to PIC Restrict.
43.  Each such customer would have to contact the telephone company in order to deactivate PIC Restrict before the customer's service could be switched to the competitor.
44.  In the Commission's view, this would constitute an inconvenience to customers, which might make some of them reluctant to switch carriers, and could provide the telephone company with an opportunity, which would not be available to its competitors, to solicit or win back the customer's business.
45.  The Commission considers that the argument that PIC Restrict would be available to customers of competitors, as well as to customers of the Stentor companies, does not address the above concerns, since it is the telephone company that customers of competitors would have to contact before changing to another service supplier.
46.  The Commission considers that the issuing of Decision 95-19 has no bearing on its concerns as to the potential impact of PIC Restrict, since there is nothing in the subject matter of that Decision that would affect concerns as to the additional difficulties that PIC Restrict would cause for competitors in attempting to recruit customers.
47.  The Commission agrees with those parties who argued that approaches taken by the FCC with regard to PIC Restrict are not indicative of what is appropriate in Canada, given that Canadian telephone companies are integrated providers of both local and long distance services.
48.  With regard to the submission that the Commission failed to consider and address a previously approved PIC Restrict process, the Commission notes that the fact that NBTel had been offering PIC Restrict was evident on the record of the proceeding and is recognized in the Commission's ruling of 16 August 1995, which stated that those Stentor companies offering PIC Restrict were to remove it.
49.  As argued by the competitors in this proceeding, NBTel's experience with PIC Restrict cannot be relied upon as a predictor of what would occur if the availability of PIC Restrict was better known and more extensively marketed, or of what might occur in the territories of other telephone companies.
50.  In the Commission's view, NBTel's comments with regard to demand for PIC Restrict are contradictory, in that the company noted in its application that only seven customers had "of their own accord, requested in writing, PIC Restrict", while stating in its reply that it had received "numerous direct and forceful requests by customers wishing to eliminate the risk" of unauthorized PIC changes.
51.  The Commission notes that the current PIC/CARE process provides for safeguards for consumers.
52.  The Commission considers that, in the current environment, the existing safeguards constitute an appropriate balance between protecting the consumer and ensuring the health of the competitive market.
53.  While recognizing that unauthorized PIC changes do occur and that PIC Restrict could have value for some customers as a means of preventing unauthorized PIC changes, the Commission remains of the view that the benefits of the feature are outweighed by the harm it might cause to the competitive marketplace.
54.  Based on the above, the Commission finds that there is no substantial doubt as to the correctness of its ruling of 16 August 1995 and that no other grounds for varying the ruling have been established.
55.  In light of the foregoing, the Commission orders that:
56.  NBTel's application of 15 September 1995 is denied.
 Allan J. Darling
Secretary General

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