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ARCHIVED -  Telecom Order CRTC 97-841

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Telecom Order

Ottawa, 17 June 1997
Telecom Order CRTC 97-841
On 19 February 1997, Bell Canada (Bell) filed a proposal to consolidate its Centrex service charges under General Tariff Item 675 (Centrex III Service) and in addition, proposed to eliminate the Centrex Connection Charge for customers subscribing to small Centrex systems with 3 and 5 year contracts.
File No.: Tariff Notice 5946
1. Bell proposed in Tariff Notice (TN) 5946 to include the Service Connection charge in the monthly rate associated with 3 or 5 year contracts for locals of Centrex systems of up to 100 locals (Small Centrex).
2. Bell proposed the inclusion of the Service Connection in the monthly rate in lieu of a reduction in the monthly rate for Small Centrex customers in an attempt to stimulate customers to sign longer term contracts. Bell referred to an economic study filed with TN 5684 dated 25 January 1996, a related Centrex service filing, to support the implied rate decrease.
3. Comments were filed by AT&T Canada Long Distance Services Company (AT&T Canada LDS) dated 21 March 1997 and by Optel Communications Corporation (Optel) dated 14 April 1997.
4. AT&T Canada LDS noted that Bell had not submitted a Phase II cost study with this proposal and claimed that it was wholly inappropriate for Bell to rely on cost information submitted as part of another Tariff Notice in support of this filing.
5. Both AT&T Canada LDS and Optel stated that the proposal to eliminate the Service Connection charge for Small Centrex was anticompetitive because it provided strong incentives for Bell's Centrex customers to migrate towards longer term contracts, thus precluding them from switching to new local competitors for the duration of the contract.
6. AT&T Canada LDS stated that eliminating the Service Connection charge should be disallowed because it would result in increasing Bell's Utility segment shortfall which in turn would cause increases in the contribution paid by toll service providers.
7. Bell replied on 3 and 30 April 1997.
8. Bell stated that the study referenced in TN 5946 was indeed a Phase II study and was sufficient to support the proposal.
9. Bell noted that the proposal to eliminate the up front service charge of $69 per local for Small Centrex was equivalent to a rate decrease of approximately 4% and that consequently AT&T Canada LDS's concerns about its impact on Utility segment revenue shortfall and the foreclosure of local competition were overstated.
10. The Commission notes that the Phase II cost study, which Bell has relied on in this filing, was submitted 25 January 1996.
11. The Commission considers that, in light of the relative stability of the costs and estimated contribution, the results of the cost study are still appropriate to support the proposed rate change for this service in this proceeding.
12. The Commission considers that the rate changes proposed by Bell are relatively minor and that the impact of this proposal on Bell's Utility segment revenues would be negligible.
In light of the foregoing, the Commission orders that:
The proposed tariff pages filed under TN 5946 are approved.
Allan J. Darling
Secretary General
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