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Telecom Decision
CRTC 98-8
Ottawa, 30 June 1998
LOCAL PAY TELEPHONE COMPETITION
I BACKGROUND
In York University - Provision of Competitive Local Pay Telephone Service, Telecom Decision CRTC 95-20, 18 September 1995 the Commission expressed the preliminary view that the resolution of certification issues for competitive local exchange carriers (CLECs), in the context of the proceeding announced in Implementation of Regulatory Framework - Local Interconnection and Network Component Unbundling, Telecom Public Notice CRTC 95-36, 11 July 1995, would be sufficient to address concerns identified with respect to competition in the local pay telephone market. The Commission also indicated its intention to initiate a proceeding, following the establishment of the CLEC certification requirements, to consider whether or not additional consumer safeguards were required as a condition of competitive entry into this market.
On 1 May 1997, the Commission issued Local Competition, Telecom Decision CRTC 97-8 (Decision 97-8), which established the framework for local exchange competition. The Commission found that resellers of local exchange services would meet certain of the service requirements that the Commission imposed on local exchange carriers (LECs) such as 9-1-1 and Message Relay Service (MRS), by virtue of the underlying LEC obligations.
On 8 July 1997, the Commission issued Telecom Public Notice CRTC 97-26, Local Pay Telephone Competition, requesting comments on issues in relation to pay telephone competition, including the following:
(i) Is it appropriate at this time to permit competition in the local pay telephone market?
(ii) If so, what consumer safeguards should be met by service providers?
(iii) What is the appropriate mechanism to ensure the enforceability of the consumer safeguards identified in (ii) above?
Comments and reply comments were received from AT&T Canada Long Distance Services Company (AT&T Canada LDS), The British Columbia Public Interest Advocacy Centre on behalf of the British Columbia Old Age Pensioners’ Organization, Council of Senior Citizens’ Organizations of B.C., Federated Anti-Poverty Groups of B.C., Senior Citizens’ Association of B.C., West End Seniors’ Network, End Legislated Poverty, B.C. Coalition for Information Access and the Tenants’ Rights Action Coalition (collectively, "BCOAPO et al."), Consumers’ Association of Canada (CAC), Consumers’ Association of Canada, Alberta Branch (CACAlta), Call-Net Enterprises Inc. on behalf of itself and Sprint Canada Inc. (Call-Net), Canadian Business Telecommunications Alliance (CBTA), Canadian Cable Television Association (CCTA), Canada Payphone Corporation (CPC), the Director of Investigation and Research (the Director), The Public Interest Advocacy Centre (PIAC), Queen’s University (Queen’s), RNL Financial & Investment Advisory Services (RNL), Stentor Resource Centre Inc. (Stentor) on behalf of BC TEL, Bell Canada (Bell), Island Telecom Inc. (formerly known as The Island Telephone Company Limited), Maritime Tel & Tel Limited, MTS Communications Inc. (formerly known as MTS Netcom Inc.), The New Brunswick Telephone Company, Limited, NewTel Communications Inc., TELUS Communications Inc. and TELUS Communications (Edmonton) Inc., The City of Calgary, and Vidéotron Télécom Itée.
II GENERAL CONCLUSIONS
A. General
As noted above, the Commission in Decision 97-8 established a framework for local competition that balances the interests and needs of consumers, local competitive entrants, toll competitors and incumbent telephone companies. Building on that framework, the Commission finds that it is appropriate to allow competition in the local pay telephone market.
Highlights of the Commission’s determinations in this proceeding are listed below. Detailed discussion of the various issues and rationale are set out in Parts III, IV, and V of this Decision.
B. Competition
The local pay telephone market is opened to competition effective the date of this Decision. Before a new entrant may provide service, the following must be completed: (i) all new entrants must register; (ii) where an unregulated provider uses an incumbent local exchange carrier’s (ILEC) services for access, Commission approved pay telephone access tariffs and a standard service agreement must be in place; and (iii) where an unregulated service provider uses CLEC’s services for access, the CLEC must ensure that its service contract includes the consumer safeguard requirements of this Decision.
The Commission intends to hold a review within a three-year time frame to investigate the impact competition has had on the local pay telephone market. This review will include, among other things, problem areas that have been identified through complaints, including complaints with respect to consumer safeguards and barriers to entry.
C. Consumer Safeguards
The Commission mandates additional consumer safeguards to augment those established in Decision 97-8. These safeguards will serve to protect the Canadian consumer and address the concerns which have historically militated against the opening of the pay telephone service market to competition.
D. Enforcement Mechanism
The registration process established for CLECs in Decision 97-8 is modified for specific application to entry into the local pay telephone market. A new entrant must: (1) attest in writing that it understands and will conform to the obligations and consumer safeguards set out in this Decision; (2) provide the name of the carrier supplying the access lines; (3) provide to the Commission serving area maps for information purposes and make such serving area maps available upon request at its business offices; and, (4) provide details as to how it proposes to deal with consumer complaints.
CLECs are directed to include the consumer safeguards established in this Decision in all contracts negotiated with competitive pay telephone service providers (CPTSPs) for the provision of pay telephone service.
Stentor-member companies are directed to file proposed pay telephone access tariffs within 45 days of this Decision. The tariffs are to incorporate the mandated consumer safeguards established in this Decision.
Non-compliance by the CPTSP with the ILEC tariff or the CLEC contract as applicable will constitute reason for the termination of the access service.
E. Regulatory Framework For New Entrants
Pursuant to section 34 of the Telecommunications Act (the Act), the Commission refrains from exercising its powers and performing its duties pursuant to sections 25, 29 and 31 and subsections 27(1), (5) and (6) of the Act, in relation to local pay telephone services provided by CLECs. Sections 24, 25, 27, 29 and 31 do not apply to CLECs to the extent that they are inconsistent with the determinations in this Decision.
F. Other
ILECs are directed to file reports within 45 days of this Decision indicating where pay telephones were located as of 1 July 1998 in their respective serving territories. Thereafter, ILECs are directed to file annual reports indicating locations where pay telephones were removed and the reasons why.
ILECs are directed to file information within 45 days of this Decision with respect to any long-term or exclusive contracts entered into after 1 July 1997 which have a life expectancy of five years or longer.
The Commission considers it appropriate to establish a per-call compensation regime and that ILECs may file tariffs for its implementation. The Commission also considers it appropriate that new entrants negotiate rates with interexchange carriers.
III ISSUES
A. Should Competition be permitted in the Local Pay Telephone Market?
All parties that commented on this issue, with the exception of CAC, CACAlta, PIAC and Stentor, expressed the view that competition should be introduced in the local pay telephone market.
CAC, CACAlta, PIAC and Stentor supported competition in varying degrees provided adequate consumer safeguards were put in place. CAC expressed considerable reservation that such a state could be reached and urged the Commission to consider the United States’ experience carefully. PIAC submitted evidence prepared by Dr. Mark Cooper indicating that since competition became a major thrust of public policy in telecommunications in the United States, few areas have been more troubling than the competitive provision of pay telephone service. Dr. Cooper also recommended the provision of public interest pay telephones. These are pay telephones which are deemed to be required in locations to further the public interest (e.g. promote public health and safety), but which are not likely to be profitable. To ensure that these telephones are deployed, subsidy mechanisms are necessary, typically drawn from a universal service fund.
Stentor submitted that Canadian consumers have been provided with and have come to expect high quality pay telephone service. According to Stentor, pay telephones located in Canada provide consumers with an array of services and consumer safeguards, including access to local and toll services provided by the Stentor-member companies and other service providers, alternate billing arrangements, access to emergency services, access to MRS, clearly posted instructions, a process for repairs, and leading edge technology.
Stentor noted that the details of the competitive pay telephone scene painted by Dr. Cooper would not be disputed by knowledgeable industry observers. Given the awareness of the situation, Stentor stated that the Commission must assess whether it is in the public interest to establish a competitive environment for the provision of pay telephones. If so, a framework should be put in place that embodies consumer safeguards, establishes appropriate enforcement mechanisms, allows consumers to obtain the benefits of competition, promotes a healthy and viable pay telephone industry, fosters investment and innovation in the pay telephone industry, and ensures equality in regulatory treatment for all pay telephone service providers.
In Decision 97-8, the Commission found that it was in the public interest to exercise its powers under section 24 of the Act, in order to impose a variety of terms and conditions (e.g. consumer safeguards) on CLECs. The Commission also indicated that resellers providing local exchange services would meet certain of the service requirements imposed on LECs, such as 9-1-1, MRS, and privacy protection, by virtue of the underlying LECs’ obligations. The Commission notes that parties to this proceeding generally supported the notion of competition in the local pay telephone market, provided appropriate consumer safeguards were put in place.
The Commission notes that parties to this proceeding generally agreed that safeguards, in addition to those established in Decision 97-8, were required to deal with specific issues associated with pay telephone service.
The Commission also notes that CAC, CACAlta, PIAC and Stentor submitted that the introduction of pay telephone competition in the United States was accompanied by customer confusion and complaints caused by negative practices. Many of the problems encountered were related to alternate operator service providers (AOSPs) and included such concerns as a lack of rate information on the services provided and the inability of callers to select or use a service provider of their choice. Customer complaints reflected concerns such as being billed unreasonable rates, being billed for unanswered calls, restricted carrier access and variances in billed amounts due to "call splashing". Call splashing occurs when an AOSP transfers a call to a particular carrier at the caller’s request. In such cases, for billing purposes, the call is transferred or deemed transferred to an interexchange carrier in the city where the AOSP’s switching centre is located. If the location of the AOSP switching centre differs from that of the caller, the call may be billed from the location of the centre, rather than from the location where the call originated. As a result, the bill may confuse the customer and be higher than expected.
The Commission considers that the uniform consumer safeguards adopted by the Commission in Consumer Safeguards for Operator Services, Telecom Order CRTC 95-316, 15 March 1995, (Telecom Order 95-316) go a long way towards resolving many of the price gouging problems involving AOSPs encountered in the United States’ market. (A detailed description of these safeguards is outlined in Part III B (vi) "Provisioning of Operator Services" of this Decision).
The Commission considers that the establishment of a regime that incorporates the safeguards established in Decision 97-8, those set out in Part III B of this Decision, and the enforcement mechanism in Part III C of this Decision is sufficient to protect the Canadian consumer and address the concerns which have historically militated against the opening of the pay telephone service market to competition.
In the Commission’s view, introducing competition in the local pay telephone market will stimulate service innovation, foster a viable domestic industry and increase total market revenues. It is therefore consistent with the Commission’s stated objective in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994 that increased competition in the local telecommunications market is in the public interest and that restrictions on entry into the market should be removed where appropriate. Furthermore, the Commission considers that the rules for competition in the local pay telephone market established in this Decision conform to the Commission’s objectives of placing greater reliance on market forces and ensuring that regulation, where required, is effective. Accordingly, the Commission directs that the local pay telephone market be opened to competition effective the date of this Decision. Before a new entrant may provide service, the following must be completed: (i) all new entrants must register; (ii) where an unregulated provider uses an ILEC’s services for access, Commission approved pay telephone access tariffs and a standard service agreement must be in place; and (iii) where an unregulated service provider uses CLEC’s services for access, the CLEC must ensure that its service contract includes the consumer safeguard requirements of this Decision.
B. Consumer Safeguards
Many of the safeguards established in Decision 97-8, such as access to 9-1-1 and provision of MRS were unanimously supported and are being mandated here. As noted above, parties, in general, supported the view that additional safeguards are required to ensure that consumers are protected from potential abuses and competition is permitted to roll out properly. The following areas were contentious and are examined in more detail: rate regulation; notification of long distance charges; location provider commissions; per-call compensation regime; provisioning of various types of calls (local, long distance, incoming and outgoing) and means of payment (use of coin and/or card); provisioning of operator services; provisioning of operating instructions; public interest pay telephones; information campaign; and long-term and exclusive contracts. Each of these concerns is addressed below.
i) Rate Regulation
PIAC, CAC and CACAlta argued that the Commission should impose full rate regulation on CPTSPs and that a rate ceiling should be established for local calls at current rates.
AT&T Canada LDS, CPC, the Director and Queen’s submitted that, similar to the treatment afforded CLECs in Decision 97-8, retail rates for CPTSPs should not be regulated. Furthermore, the Director argued that the Commission should forbear from regulation of the rates charged by the ILECs, pursuant to the provisions of section 34 of the Act, if it is satisfied that there is, or is likely to be, sufficient competition to protect the interests of users.
The Director noted that traditional wireline services as well as wireless cellular and personal communications services (PCS) services were likely to provide an increasing constraint on the pricing of pay telephone services and that, given factors such as location and volume of calls, it is highly likely that there is a wide range of costs associated with the provision of pay telephone services. The Director considered that capping rates at $0.25 or some other pre-determined level could have the effect of eliminating price competition and inhibiting the installation of competitive pay telephones in higher cost areas. Moreover, to the extent that rate regulation has led to subsidies for the provision of pay telephone service, such subsidies will act as a barrier to entry for competitors.
According to Stentor, in a competitive pay telephone market, the terms and rates for pay telephone services should be determined by market forces, thus generating conditions which will support service availability, quality, innovation and competitive prices. Stentor submitted that the principle of establishing a level playing field should lead the Commission to conclude that the regulation of pay telephone rates will not be necessary once competition is established to some degree.
The Commission is of the view that ILECs will remain dominant in the local pay telephone market for the foreseeable future and accordingly, until such time as sustainable competition is in place, forbearance from the regulation of ILEC-provided pay telephone service is inappropriate. However, the Commission considers that, in a competitive pay telephone market, new entrants will not have sufficient market power to impose unreasonable rates on callers. Accordingly, market forces should be sufficient to discipline the pay telephone rates of these providers. Forbearance is discussed further in Part IV of this Decision.
ii) Notification of Long Distance Charges
PIAC and CAC submitted that a mechanism to inform the customer of the long distance rates for all calls should be provided on-line (e.g. the rate for the first three minutes or the per-minute rate for that particular carrier) after the number has been dialled, but prior to the call being completed, thus giving the caller the opportunity to terminate the call at no charge.
CPC indicated that should a caller choose an alternate interexchange carrier (IXC), it may not be possible for the CPTSP to identify the charges which would apply, as only the IXC selected by the caller would have this information.
According to Stentor, the rates for alternately billed calls are determined by the network service provider and are beyond the control of the pay telephone service provider (PTSP). Additionally, long distance rates for most service providers are unregulated and, therefore, there is no readily available process through which PTSPs could learn of rate changes, making it a challenge to ensure that accurate rate information is provided. Moreover, Stentor noted that the costs incurred to change the rate information at each pay telephone at the time of any service provider’s rate change would be onerous. Stentor submitted that should the CPTSP or location provider impose an end-user charge in addition to that of the network service provider, a mechanism should be provided so that consumers are aware of such charges prior to placing calls.
The Commission notes that currently ILECs are not in a position to provide customers who use alternate interexchange service providers via swipe cards, 1-800/888 or 10XXX dialling with the long distance charges incurred on those networks. Furthermore, the long distance rates charged by such service providers are unregulated. Given these circumstances, CPTSPs would not be in a position to provide the long distance rates for all alternate interexchange service providers. In addition, the Commission considers that callers who select alternate interexchange service providers, other than the default service provider, can be presumed to be aware of the rates charged by that provider, or if not, are likely to have been informed by the selected service provider how to obtain this information. In the Commission’s view it would not be feasible or practical to direct CPTSPs to provide the long distance rates for all service providers, given the number of resellers. However, in order to ensure that consumers are aware of the default service provider selected for the pay telephone in question, the Commission directs CPTSPs to display prominently the name of the default long distance service provider at each pay telephone.
iii) Commissions Charged By Location Providers
CACAlta submitted that splitting of revenues with location providers such as the owner of the establishment, placement agent, property manager or any other party who might gain benefit from the establishment of a pay telephone location should not be permitted. CACAlta considered that these third parties already benefit due to increased traffic to the location, enhanced property values or other similar reasons. CACAlta also considered that revenue splitting would cause the CPTSP to increase rates.
Stentor noted that location providers supply essential floor space and appropriate lighting and, in some cases, assume additional responsibilities such as cleaning the telephone and enclosure, providing electricity, reporting service problems and assisting customers with change or dialling problems. According to Stentor, a discontinuation of the practice of revenue splitting with location providers would lead to a reduction in the availability and quality of pay telephone service in Canada and, therefore, CACAlta’s arguments in this regard should be rejected.
In Canada, typically, location providers are compensated through negotiated settlements with the ILECs based on earned eligible revenues per public pay telephone. The Commission is of the view that it would not be possible or appropriate to eliminate revenue splitting between the PTSPs and third parties and that, in fact, to do so could result in a deterioration of pay telephone service.
The Commission notes that location surcharges to be paid by pay telephone users have not been part of the history of the Canadian pay telephone industry and are not a part of the historic norm in a monopoly environment. The Commission also notes PIAC’s concern that, in the United States, CPTSPs are not adhering to a requirement to post warnings with respect to location surcharges. The Commission considers that the Canadian consumer’s expectation about the cost of a call is based on experiences with long distance calls billed from home and that without warnings about location surcharges, consumers will, at least initially, not be aware of them.
Accordingly, the Commission directs that any surcharges not included in the cost of a call be prominently displayed at each pay telephone location.
iv) Per-Call Compensation Regime
Stentor submitted that PTSPs should be compensated for every call that accesses an IXC’s network from a local pay telephone. However, Stentor considered that this charge should ideally be collected from the IXC rather than directly from the initiator of the call. This would permit toll-free and casual calling to continue and reflect the fact that the network service provider is the beneficiary of the provision of this access to their network. Stentor also concurred with CPC’s view that, at the present time, such a charge should be at least equivalent to the value of a local call. According to Stentor, even if the Commission determined that competition is not appropriate at this time, the implementation of a per-call compensation regime for access from pay telephones is required. Stentor indicated that its members were studying alternative approaches for implementing a per-call compensation regime for the use of their pay telephones, with the intention of proposing tariffs in the fourth quarter of 1997.
CPC submitted that a suitable mechanism to compensate PTSPs would be to charge the caller the price of a local call in order to access an IXC, although a lesser charge (or no charge at all) could be levied for calls to IXCs who have made compensation arrangements with the PTSP. CPC noted that a similar approach had been adopted by the Federal Communications Commission (FCC) and could serve as an appropriate interim or final arrangement in Canada.
AT&T Canada LDS considered that rates charged for services or forms of access from CPTSPs (e.g., card swipe access or location provider compensation), should be limited to no more than the rates charged by ILECs where the ILECs’ rates are subject to Commission approval. Moreover, AT&T Canada LDS and Call-Net indicated that until Stentor offered details as to the type of access charge and the business case underlying that fee, they were not in a position to comment meaningfully on the justification of such a charge.
Queen’s submitted that CPTSPs should be compensated for calls and should negotiate the appropriate charge. In its view, if parties are unable to agree on the amount, they should have recourse to some form of alternative dispute resolution procedure.
In Stentor’s view, services such as swipe card access, which are provided on a competitive basis or could be self-provided, do not meet the definition of an essential service. Furthermore, in a competitive environment, rates for such services, regardless of the specific service provider, should be subject only to market forces. Stentor noted that the economic structures associated with different location characteristics vary substantially and, therefore, inflexible price structures or terms and conditions associated with location access would unduly constrain service availability, and quality, and stifle innovation.
The Commission notes that the Canadian pay telephone industry has accommodated access to alternate toll service providers, delivered card swipe access service and provided access to toll-free services without additional direct charges to the pay telephone user. In Telecom Order CRTC 98-281, dated 18 March 1998, the Commission found it appropriate to establish an ongoing usage charge of $0.25 as a proxy for an access charge to provide for a contribution to the costs of the pay telephone operations. However, this rate will apply solely to calls using the three slots being offered by the ILECs to long distance competitors.
The Commission also notes that Stentor, CPC, the Director and Queen’s supported the requirement for a per-call compensation regime. In principle, the Commission considers such a regime to be appropriate but is of the view that there is insufficient evidence at the present time to assess the appropriate level of this compensation. The Commission notes that Stentor, in reply comments, stated that its members were in the process of studying alternative approaches for implementing a per-call compensation regime, with the intention of filing proposed tariffs in the fourth quarter of 1997. As of this date, no tariffs have been filed. The Commission considers it appropriate to establish a per-call compensation regime and ILECs may file tariffs for its implementation. With respect to unregulated PTSPs, the Commission considers it appropriate that they negotiate rates with IXCs.
v) Provisioning of Various Types of Calls and Means of Payment
PIAC noted that several parties wished to provide a level of pay telephone service which is substantially less than currently provided. PIAC considered that consumer expectations would likely be frustrated by partial service and noted that while many participants indicated that competition would promote better service at lower prices, the first thing they wished to do was raise prices and cut back on services.
With the exception of Queen’s, parties considered that CPTSPs should provide for both local and long distance calls. According to Queen’s, all pay telephones should be technically configured to provide both services; however, CPTSPs should not be mandated to provide both as a condition of service.
Stentor submitted that any CPTSP’s telephones that provide for long distance calls should be required to provide equal access to all networks of alternate providers of long distance services (APLDS).
With the exception of CBTA, Queen’s and Stentor, parties to the proceeding were of the view that both coin and card payment options should be mandated.
CBTA submitted that coin access should be mandatory and card access optional, the assumption being that in order to compete, PTSPs will provide for card access. With respect to CBTA’s proposal, Queen’s argued that the service provider should have the ability to determine which means of payment best satisfies its customers’ needs and its own business operations, whether that be through the use of coins, credit cards, debit cards, smart cards, or some combination of these or other alternatives. Queen’s noted that the operation of coin pay telephones involves increased operating costs, e.g. collection of coins, and greatly increased risks of vandalism and theft, as compared to card only pay telephones.
Stentor indicated that its installed base of pay telephones includes both coin-operated sets and pay telephones which do not accept coins. According to Stentor, mandating the acceptance of cash payment at all pay telephones could actually stifle innovation in the technology and services available to consumers in Canada.
The Commission is of the view that opening the local pay telephone market to competition and then mandating CPTSPs to provide the identical services to those currently in place is at odds with the concept of the benefits to be derived from competition. The Commission finds that, subject to the requirements established in this Decision, new entrants should be allowed to determine the nature and scope of the services they wish to provide. However, if long distance calling is provided for, the CPTSP must allow access to all APLDS’ networks accessed by the CPTSP’s underlying LEC.
In addition, it will be left to the CPTSPs’ discretion as to what types of payment they will accept. However, it is imperative that they ensure coinage is returned for incomplete calls, such as busy signals or no answer (if coins are accepted) or similarly, if a card is used, that alternately billed charges do not apply if the call is not connected to the called party.
vi) Provisioning of Operator Services
Parties varied in opinion as to whether or not provision of directories and operator services, other than 9-1-1 and MRS, should be mandated. AT&T Canada LDS argued that if operator services are provided, it should be in compliance with the industry guidelines noted in paragraph 284 of Decision 97-8. BCOAPO et al. argued that operator services similar to those provided by ILECs should be mandated, including 9-1-1, MRS, directory assistance, collect calling, line verification, and coin return for incomplete calls. CAC expressed the view that local and long distance directory assistance should be provided. CBTA argued that free access to the ILEC’s operator assistance, or that of any CLEC’s as such services are developed, should be provided.
According to CPC, operator services should be limited to 9-1-1, MRS, local and long distance directory assistance. Queen’s submitted that all pay telephones should provide free access to directory assistance, operator assistance, 1-800 services, 9-1-1 and MRS. In RNL’s view, 411 and 0+ calling should be provided.
Stentor considered that access to operator services and directory assistance could be mandated as an industry requirement or left to market forces. In addition, Stentor submitted that the provision of directories need not be mandated, as market forces could reasonably be expected to ensure that consumer needs in that regard were met by CPTSPs.
In Telecom Order 95-316, the Commission mandated that: (1) operators identify themselves as representing the company to callers or to any party accepting charges for a collect or billed-to-third party call, prior to charges being incurred; (2) operators provide the customer with sufficient time to terminate the call at no charge prior to the call being connected; (3) operators provide, upon customer request, (a) rates or charges for a call, (b) alternative call billing methods available to customers, and (c) complaint procedures available to dissatisfied customers; (4) the company post information in close proximity to each publicly accessed telephone serviced, identifying itself and providing rate information; and (5) in cases where the company provides operator services on behalf of another party, it withhold payment of any compensation to that party if 10-XXX or 1-800 access is blocked to competitive carriers.
In addition, the Commission directed Unitel Communications Inc. (now AT&T Canada LDS) in that Order to implement standards to ensure that (a) emergency calls are connected to the appropriate emergency service in the reported location, if known, and, if not known, in the originating location of the calls, and (b) where there is no 9-1-1 service available, operators handle emergency calls in a manner similar to that expected of the incumbent local telephone company operators; furthermore AT&T Canada LDS was directed to incorporate its complaints and access procedures into its operator services tariffs.
The Commission directed the ILECS, in Telecom Order 95-316, to file operator services tariffs that (a) incorporate the consumer safeguards currently set out in various locations in their tariffs and white page directories, and (b) state that contracts are required pursuant to the ILECs’ operator services tariffs. Furthermore, the ILECs were directed to negotiate contracts with operator services providers for services or facilities used in the provision of operator services. These contracts were to (a) include provisions similar to Article 11 of the ILECs’ Terms of Service, (b) specify that, when cases of abuse arise, the Commission may direct regulated carriers to discontinue the provision of access and related services to operator services providers, and (c) reference the fact that negotiated operator services contracts were required pursuant to the ILECs’ operator services tariffs.
In Decision 97-8, the Commission declined to mandate the provision of, or terms and conditions for, operator services provided by CLECs, with the exception of access to emergency services through 9-1-1 or, failing that, through an operator and MRS. With regard to 9-1-1, all service providers were directed to ensure, to the extent technically feasible, that the appropriate end-user information is provided to the Automatic Location Identification database to the same extent as that provided by the ILECs. Furthermore, the Commission declined to mandate the provision of directory assistance and directories as it considered that, by virtue of CLEC non-dominance, market forces would be sufficient to discipline the provision of these services.
The Commission notes that CPC has indicated its intention to initiate service using paper directories. CPC plans, over time, to develop new electronic directory services that will not be subject to the same vandalism problems experienced with paper directories.
The Commission is of the view that the same rationale used in Decision 97-8 with respect to CLECs can be adopted in this proceeding. Accordingly, CPTSPs are not mandated to provide directories, access to directory assistance or operator services, with the exception of 9-1-1 or operator assisted emergency service access and MRS. However, should a CPTSP decide to offer its own operator services or use the operator services of a third party, such services must comply with the consumer safeguards established in Telecom Order 95-316.
In Decision 97-8, the Commission directed the CRTC Interconnection Steering Committee (CISC) to establish guidelines, processes and procedures for the provision of Operator Services within a multiple service provider environment. In its Consensus Report to the Commission (DOTF009 - Operator Processes, dated 26 August 1997), the Operator Services/Directory Listings Sub-Working Group of CISC indicated that further discussions would be deferred until such time as an AOSP existed. At that time the industry would decide whether to re-open discussions using the work completed to that date as a starting point.
The Commission directs that any operator services offered by CPTSPs be provided in compliance with procedures that evolve from CISC.
vii) Provisioning of Operating Instructions
Parties submitted that an approach for the provision of operating information similar to that established in Decision 97-8 should be adopted. In Decision 97-8, CLECs were directed to provide two distinct categories of information. The first category contains consumer information, which must be made available upon request, including rate information, and services available. The second category contains information that must be made available before the purchase decision is made, including the company name, address and a toll-free telephone number where information can be obtained and complaints addressed.
Stentor was of the view that the provision of instructions on accessing APLDS should not be mandated but should continue to be the responsibility of each APLDS. With respect to the level of detail for operating instructions to be posted on or near a pay telephone, Stentor considered that it would be in the CPTSPs’ best interest to ensure that their pay telephones are easy for customers to use.
The Commission is concerned that in a competitive environment where rates for all parties are not regulated, it is essential that consumers have full, comprehensive and comprehensible information to make informed choices.
In order to achieve this goal, the Commission directs that the following information be prominently displayed at each pay telephone location provided by CPTSPs: (a) rates of local calls; (b) charges for operator services (if provisioned); (c) the name of the default long distance provider, if applicable; (d) any surcharge, mark-up or location charges not included in the price of the call; and, (e) the CPTSP’s name, address and toll free number where information can be obtained and complaints addressed. In addition, CPTSPs are directed to place the Commission’s address and toll-free number (1-877-249-CRTC) on all pay telephones, in order to ensure that, when complaints are not satisfactorily addressed, consumers have direct recourse to the Commission. CPTSPs are also directed, as part of the registration process, to disclose the method by which complaints concerning rates, charges or collection practices will be resolved.
With respect to providing information on the operation of special features such as Email, Internet browsing and on-line services, the Commission considers that these services could conceivably be delineating factors and an incentive for the public to opt to use the equipment. Accordingly, given that it would be in the CPTSP’s best interest to ensure that clear operating instructions are provided, the Commission will not mandate that such instructions be provided.
However, should there be limitations on the functionality of the pay telephone equipment, such as an inability to make long distance calls, the Commission directs the CPTSPs to post this information either on, or in close proximity to, the pay telephone.
With respect to providing information on how to access APLDS, the Commission considers that, similar to when the long distance market was opened to competition, APLDS will ensure that their customers know how to access their networks from pay telephones. Accordingly, the Commission does not consider it necessary to mandate this requirement.
viii) Public Interest Pay Telephones
As already noted, PIAC submitted evidence prepared by Dr. Mark Cooper recommending the provision of public interest pay telephones. Public interest pay telephones are defined by the FCC as pay telephones which (a) fulfil a public policy objective in health, safety, or public welfare; (b) are not provided for a location provider with an existing contract for the provision of a pay telephone, and (c) would not otherwise exist as a result of the operation of the competitive marketplace.
BCOAPO et al. argued that a regulatory body should be created, whose costs would be borne by the CPTSP through a fee of $0.25 per month per telephone, to handle issues and concerns raised by consumers, location providers and competitors, in respect of these telephones.
AT&T Canada LDS submitted that subsidized public interest pay telephones have the potential to be as contentious as existing mechanisms to subsidize residential basic local service. Such a regime would require a clear definition to establish which pay telephones would be eligible, quantifying the appropriate subsidy, possibly at a very disaggregated level depending on the location, and establishing a mechanism to recover and distribute the subsidy.
CPC indicated that in Local Service Pricing Options, Telecom Decision CRTC 96-10, 15 November 1996 (Decision 96-10), the Commission noted the high penetration rate of telephone service in Canada and found that affordability was not presently an issue. CPC noted that PIAC had relied for its submissions solely on information relating to activities in the United States and that the FCC had acknowledged in CC Docket No. 96-128, Implementation of Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, that the question of whether there was a need for public interest pay telephones varied from region to region and it was, therefore, more appropriate for the individual states to regulate this area based on local conditions.
CPC argued that it would be inappropriate to import a regulatory scheme from California or any other state which would almost certainly be unrelated to Canadian realities. In this regard, CPC submitted that Decision 96-10 reflected Canadian realities and a comparable approach should be adopted with respect to public interest pay telephones.
Queen’s objected to the imposition of an obligation to serve on CPTSPs and submitted that such an obligation does not currently exist. Queen’s considers that it would be ironic if the introduction of competition in the provision of pay telephone service was accompanied by an obligation to serve which is more typically associated with the provision of a service on a monopoly basis.
Stentor argued that requiring a certain number of pay telephones to be maintained and funded in the interest of serving health, safety and welfare goals had never been imposed in the past, and would, in effect, be an attempt to mandate certain forms of obligation to serve.
Stentor stated that pay telephones are installed today primarily to meet the needs of the travelling public and people away from their primary network access. Unlike the situation in the United States, these pay telephones are not typically installed in areas with low levels of residential telephone penetration in order to provide an extension to basic local service.
According to Stentor, communication options available to the travelling public have increased over the last several years and, as a result, the number of non-compensatory pay telephones has decreased. In Stentor’s view, the approaches suggested by BCOAPO et al. and PIAC are entirely inappropriate in today’s environment.
The Commission has in the past encouraged ILECs to provide pay telephone service in locations where costs exceed revenues. However, this is not mandated, as illustrated in Item 250 of Bell’s General Tariff which states that the company furnishes public telephone service at its discretion, primarily to make outgoing service available to the general public and determines the location of the service.
In the Commission’s view, there is no compelling evidence on the record to indicate that the introduction of competition in the pay telephone market warrants placing an obligation to serve, which currently does not exist, on CPTSPs or incumbent PTSPs at this time. Furthermore, establishing such a regime could prove to be contentious and a heavy administrative burden. The FCC acknowledged this concern when it indicated that any effort by it to implement a national program for public interest pay telephones would be beyond its current resource capabilities.
The Commission considers that the vast majority of people who use pay telephones do so as a matter of convenience or emergency, not as a substitute for basic telephone service. The Canadian telecommunications policy, as set out in the Act, requires the Commission to ensure that reliable and affordable telecommunications services of high quality be accessible to all Canadians in both urban and rural areas throughout Canada. This generally refers to the requirement that as many as possible are able to connect to the network via good quality basic access service. The Act also requires the Commission to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective.
The Commission agrees with the majority of parties in this proceeding that circumstances, at present, do not indicate a need for the establishment of public interest pay telephones. However, it is the Commission’s intention to hold a review within a three-year time frame to investigate the impact competition has had on the pay telephone market. This review will include, among other things, problem areas that have been identified through complaints, including complaints with respect to consumer safeguards and barriers to entry. In addition, the Commission will, as part of the review, assess the requirement for public interest pay telephones. ILECs are directed to file reports within 45 days of this Decision indicating where pay telephones were located as of 1 July 1998 in their respective serving territories. Thereafter, ILECs are directed to file annual reports indicating locations from which pay telephones have been removed and the reasons why. Should the outcome of the review indicate that significant negative changes have occurred, the Commission would consider establishing a regime for public interest pay telephones.
ix) Information Campaign
PIAC argued that there should be a CRTC-directed information program, paid for by the CPTSPs, that would begin to educate Canadian telephone customers against potential abuses. This information program would be proactive and go beyond the mechanisms, i.e., billing inserts, adopted by the Commission with respect to long distance competition.
CPC opposed PIAC’s suggested campaign noting the expense and the implicit and unjustified message that competitive pay telephones are unreliable and likely to cause consumers problems. According to CPC, this type of hidden message would undermine the evolution of competition from the outset.
In Stentor’s view, mandating an information campaign focusing on potential consumer abuses, as proposed by PIAC, could well have the effect of prejudicing Canadian consumers against all new CPTSPs, which would retard the establishment of a competitive marketplace and the attendant benefits that Canadians may derive from it. Stentor noted that Canadians are well educated concerning the use of pay telephones and, indeed, many have first-hand experience with the complexities associated with the use of competitive pay telephones in the United States. In addition, Stentor considered that normal market forces could be relied upon to ensure that necessary and sufficient information is provided to consumers.
The Commission considers that the concept of competition generally in the telecommunications industry is not new to Canadians. Further, the Commission is of the view that, imposing the requirement on all CPTSPs to post rates, etc. at all pay telephone locations should provide sufficient information to consumers. The Commission is not persuaded that the expected benefits of conducting an information campaign would materialize and, in fact, believes that it could stifle the introduction of competition. The Commission, therefore, finds that an information campaign is not required.
x) Long-term and Exclusive Contracts
The Director submitted that the widespread existence of long-term and exclusive contracts entered into by ILECs prior to the beginning of competitive entry could pose a competition policy concern if it prevented entry in high volume locations such as airports, shopping malls, hospitals, universities and hotels.
CPC shared the Director’s concern and submitted that it would be ironic if regulatory concerns about the anti-competitive aspects of these types of contracts actually served to delay the introduction of competition.
RNL submitted that Stentor should reveal the percentage of key, high volume locations that are presently under contract and the percentage of total revenue currently protected under these contracts, as well as any other contracts expiring beyond the end of 1997 in order to assist in determining whether barriers to entry exist.
Stentor submitted that, although some exclusive contracts have been entered into by certain ILECs with location providers, such contracts do not constitute a significant barrier to entry into the pay telephone business. Furthermore, the percentage of pay telephones covered under such arrangements is small and would not prevent an entrant from acquiring presence in key, high volume locations.
The Commission notes that one of the key success factors in operating a pay telephone service is the securing of appropriate sites. From a commercial perspective, these sites are ideally located in high pedestrian traffic areas. The use of long-term and/or exclusive contracts is one way to secure these sites for a pay telephone provider and thereby lower its ongoing costs. In anticipation of competition, the ILECs have had an extra incentive to secure attractive pay telephone sites on both privately and publicly owned lands. Such recent arrangements would be anti-competitive if they had the effect of erecting barriers to prevent new entrants from entering the market.
The Commission is of the view, however, that long-term contracts between PTSPs and owners/managers of airports or hotels, for example, are not counter to the public interest in the long term as such contracts lower the costs to both parties of providing the service or underlying services. If exclusive contracts give rise to inappropriately high prices, one can be confident that the users will put pressure on the airport or hotel management to get the price lowered either directly or through the use of alternatives such as portable wireless handsets.
Further, as far as competition itself is concerned, the Commission expects that the airport or hotel management will wish to engage in cost-efficient business practices that stimulate revenues by serving its customers and engendering goodwill. Such managers, therefore, can be expected to contract with the CPTSP or CPTSPs that can provide the best service at reasonable prices. Such CPTSPs will have to be at once innovative and efficient.
The Commission notes that, based on the above, exclusive contracts may be benign or disadvantageous. Those most likely to be disadvantageous to entry are the ones that have been concluded before entry is permitted. In order to identify whether a problem exists, the Commission directs the ILECs to file information with respect to any long-term or exclusive contracts entered into after 1 July 1997 which have a life expectancy of five years or longer, within 45 days of this Decision.
xi) Mandated Safeguards
The following safeguards are mandated as a condition of entering the local pay telephone market:
(a) Provision of coinless and cardless access to 9-1-1, or access to emergency call routing by an operator accessed by dialling 0 at a pay telephone. Where required by civic authorities, provision of a list of detailed pay telephone locations to the enhanced 9-1-1 administrator;
(b) Provision of MRS;
(c) Provision of 6-1-1 or other number for reporting telephone trouble;
(d) Provision of non-discriminatory access to the networks of all APLDS connected to the underlying LEC network, if long distance calling is permitted;
(e) Posting on or near the pay telephone the company name, address and toll free number where information can be obtained and complaints addressed;
(f) Posting the Commission’s address and toll-free number (1-877-249-CRTC) on all pay telephone equipment, in order to ensure that consumers have direct recourse to facilitate resolution of unresolved complaints;
(g) Operator services, if provided, (other than emergency services access and MRS) that are in compliance with Telecom Order 95-316 as well as with procedures that evolve from the CISC;
(h) Prominent display, at each pay telephone location, of the following information: rates of local calls, the name of the default long distance provider; and any surcharges not included in the price of the call;
(i) Provision for coin return for uncompleted calls, such as busy signals or no answer if coin access is applicable, and similarly if a card is used, alternately billed charges must not apply if the call is not connected to the called party;
(j) Standard arrangement of letters as well as numbers provided on the dial in order to permit callers to reach their provider of choice through the use of commonly used vanity access sequences;
(k) All pay telephones are to meet existing and future CSA and the Terminal Attachment Program Advisory Committee standards to prevent network harm;
(l) All pay telephones are to be accessible to the physically disabled, be hearing aid compatible and meet the standards established in Telecom Order CRTC 98-626 for provisioning of service to visually impaired consumers; and
(m) Adherence to all applicable Commission rules concerning protection of customer privacy.
C. Mechanism to Ensure Enforceability of Safeguards
With respect to the appropriate mechanism to ensure enforceability of safeguards, CAC, CCTA, PIAC, Queen’s and Stentor supported the system established for CLECs in Decision 97-8. CPC submitted that the appropriate mechanism to ensure enforceability of the safeguards would be to embody them in the relevant LEC tariffs. In a similar vein, safeguards could be imposed on CPTSPs by incorporating them in the pay telephone access tariff offered by LECs to CPTSPs. Should a complaint be lodged, the Commission would investigate the matter and if the CPTSP had failed to comply with one or more of the safeguards, it could be directed to demonstrate that it had brought itself into compliance. Failing this, the Commission could direct the LEC supplying the access line to terminate the service. According to CPC, this tariff mechanism is familiar, fair and effective and has been used by the Commission to enforce regulatory restrictions against end-users, resellers and other unregulated service providers.
CPC indicated that when it conducted its technical trial in the Vancouver area, it utilized a regular business line with answer supervision and BC TEL’s directory assistance - all of which were provided on a General Tariff basis. According to CPC, given the minimal technical requirements necessary to begin offering competitive pay telephone service, the Commission could direct the companies to adopt a tariff along the lines of the model tariff it provided which included provision for interconnection, resale, and terms and conditions of service.
In CPC’s view the tariff could, in time, evolve to address any technical requirements or related matters that might arise. CPC urged the Commission to approve an initial pay telephone access tariff as part of its decision to allow the immediate commencement of competition and to direct the Stentor-member companies to file tariffs implementing the Commission’s decision within 30 days of the date of the decision.
The Director supported the registration/tariff approach envisaged by CPC, but agreed with Stentor that a requirement for the LECs to essentially police their competitors would place an inappropriate regulatory burden on the LECs. According to the Director, any certification process should be subject to review within a fixed period of time, at which time, the process could be modified or terminated.
Queen’s submitted that ILECs should be required to submit pay telephone tariffs incorporating appropriate safeguards. With respect to CLECs, Queen’s noted that safeguards could be imposed, pursuant to section 24 of the Act, in all CLEC contracts with CPTSPs for the provision of services. In both scenarios, non-compliance by the CPTSP could constitute cause for termination of the service.
Stentor was of the view that the Commission should enforce safeguards directly. Complaints regarding non-compliance should be addressed to the Commission for review with the possibility of certification being withdrawn. Furthermore, the Commission would have the power to effect this termination through a disconnection order served on the provider of the underlying access lines.
Stentor noted that enforcement of these safeguards could be compromised in the instances where a CPTSP obtains access facilities from a reseller and, accordingly, the Commission might consider prohibiting the resale of underlying facilities for purposes of providing pay telephone service. In addition, the CPTSP should inform the Commission as to which carrier is providing the underlying facilities.
Stentor concurred with parties that recommended the use of both a certification and complaints process. Stentor noted that in order for a complaint process to be effective, it must be simple for consumers to invoke and it must produce timely results. Stentor also noted that, based on the volume of complaints to the FCC and state Public Utilities Commissions, a more robust complaint process (e.g., added resources, use of a 1-800 number, etc.) than is currently in place at the Commission might be required.
With respect to CPC’s suggestion to embody safeguards in the relevant LEC access line tariffs, Stentor argued that it would be inappropriate for the companies to be tasked with policing their competitors and that the Commission, in Resale to Provide Primary Exchange Voice Services, Telecom Decision CRTC 87-1, 12 February 1987 (Decision 87-1), had recognized the potential drawbacks to this approach. According to Stentor, the imposition of such a role on the companies would inevitably lead to disputes between the parties along with accusations of anticompetitive behaviour in cases where the companies are obliged to take action to correct non-compliance.
In addition, such disputes would act to slow the process of resolving the non-compliance - to the detriment of the public - and would burden the companies with substantial additional costs as a result of this role, which their competitors would not experience. Therefore, Stentor submitted that the imposition of such a role on the companies would be an ineffective public policy, which would ultimately negatively effect the pay telephone industry.
With respect to CPC’s proposal that existing tariffs for individual business lines were sufficient to meet the needs of a new pay telephone industry, Stentor noted that the companies would expect to file tariffs for the provision of pay telephone access lines which reflect the unique requirements of these customers (such as, among other things, inclusion of the pay telephone number in the Billed Number Screening (BNS) Database), until competition in access lines allows deregulation. Additionally, the costs associated with provisioning pay telephones in public locations (e.g., on street corners or along highways) would need to be reflected in the development of such tariffs.
Stentor noted that CPC plans to initially install pay telephones that have certain operating characteristics which enable them to operate with a standard business access line. However, other competitors may choose to install pay telephones that utilize a different technology and require different access line characteristics. For example, the answer supervision provided on business lines would not provide appropriate service to the majority of the pay telephones currently installed in North America. Issues of this nature would have to be addressed to adequately reflect the access line needs of all CPTSPs. Furthermore, the unique calling patterns generated from pay telephone lines may result in an additional or reduced load on operators when compared to other access services.
Stentor agreed with CBTA that with full competition the market would tend generally towards self-regulation, eliminating the need for any elaborate enforcement mechanism. However, Stentor submitted that it would be naïve to believe that the elimination of all regulated safeguards would be possible with the initial establishment of local pay telephone competition bearing in mind the United States experience.
Finally, Stentor noted CCTA’s proposal that only CLECs be permitted to provide local pay telephone service, so that safeguards would be enforced through direct regulation. Stentor further noted that this would be a workable enforcement mechanism and was, in fact, very similar to the approach taken by the Commission in its findings regarding the provision of toll only pay telephone service.
The Commission has, over a period of several years, declined to permit competition in the pay telephone market due to concerns with respect to unregulated service providers. With its decision to allow competition, the Commission must now establish a competitive pay telephone framework that encompasses the ILECs and two new potential types of competitive service providers.
The first such entity is a CLEC, which by definition, is a Canadian carrier pursuant to the Act and is subject to direct enforcement of its consumer safeguards by the Commission. In Decision 97-8, the Commission found that, with respect to end-users, CLECs would be bound by the obligations set out in the Decision, but no tariffs would be required. However, the Commission retained its power under section 24 of the Act so that the offering and provision of any telecommunications service by Canadian carriers would still be subject to any conditions imposed by the Commission or included in a tariff approved by the Commission.
The second type of provider would be an unregulated service provider, a reseller, such as CPC or Queen’s. Resellers are beyond the scope of the Act, are not subject to direct regulation, and are not required to file tariffs for the approval of rates or of other terms and conditions of service. Therefore, for these entities, the enforcement of consumer safeguards would involve indirect regulation through the LEC whose access services are being used to connect the pay telephone equipment.
In Decision 87-1, the Commission found that it would not be appropriate to place conditions in ILEC tariffs for enforcement of obligations on CPTSPs, as it would place the ILEC in a position whereby it would have to monitor and enforce compliance on its potential competitors.
However, the Commission notes that it has used the tariff mechanism to enforce regulatory restrictions on telecommunication resellers on several occasions, in a variety of areas. For example, in Attachment of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 82-14, 23 November 1982, terminals (i.e., telephones, PBX systems) which could be attached to the networks of carriers were restricted via tariff provisions. Likewise, pursuant to Telecom Order CRTC 94-629, 8 June 1994, Access to Billing and Collection Services and Related Databases by Resellers with Trunk-Side Access, the telephone companies were required to provide resellers with trunk-side access to the telephone companies’ BNS databases, conditional on the recipient signing a non-disclosure agreement. This agreement required the reseller to undertake to protect the confidentiality of any billing or other information received, using it only for the purpose of billing and not reselling it or otherwise disclosing it to any third party. The Commission also notes that consumer safeguards governing the provision of operator services have been included in tariffs, with a condition stipulating that unregulated service providers that obtain facilities or services of the company which are used in the provision of operator services must have a signed contract with the company which spells out the terms and conditions and consumer safeguards with which they must comply. Furthermore, contractual arrangements such as agreements specifying the procedures of the Interexchange Carrier Group and Non-Disclosure Agreements are currently used by the telephone companies and competitors in place of specific tariff provisions in the provisioning of interconnection services.
In the Commission’s view, the registration/tariff/contract approach is the most suitable to ensure adherence to its findings in this Decision. The registration process established for CLECs in Decision 97-8 is modified for specific application to entry into the pay telephone market.
The Stentor-member companies are directed to file proposed pay telephone access tariffs which include the unique requirements, i.e., inclusion of the pay telephone number in the BNS database, associated with provisioning of pay telephone service, together with a standard service agreement, within 45 days of this Decision. The tariffs are to make reference to service agreements which include as part of the terms and conditions of service, the mandated consumer safeguards established in this Decision.
The CLECs are directed to include the consumer safeguards established in this Decision in all contracts negotiated with CPTSPs for the provision of pay telephone service.
The Commission notes that non-compliance by a CPTSP with either the ILEC tariff or the CLEC contract will constitute reason for the termination of the access service. When cases of abuse arise and are substantiated, the Commission will direct LECs to discontinue the provision of access service.
IV REGULATORY FRAMEWORK FOR NEW ENTRANTS
In Decision 97-8, the Commission considered the issue of forbearance for certain services offered by CLECs, and concluded that sections 25, 29 and 31 and subsections 27(1), (5) and (6) of the Act would not apply in respect of retail telecommunications services offered by CLECs to end-users. The Commission notes that, while local pay telephone service offered by CLECs would be considered a retail service, issues with respect to the extent of regulation of this service were not considered in Decision 97-8.
In light of the findings set out in this Decision, the Commission considers that it is appropriate to refrain, pursuant to section 34 of the Act, from exercising certain of its powers and performing certain of its duties in respect of local pay telephone service offered by CLECs. The Commission is of the view that to do so would be consistent with the Canadian telecommunications policy objectives outlined in the Act. Subject to the following, the Commission also considers that the offering of local pay telephone service will be subject to sufficient competition to protect the interests of users.
As noted earlier in this Decision, the Commission considers that competition will be sufficient to discipline the rates for pay telephone services offered by CLECs. Accordingly, the Commission will forbear from exercising its powers and duties under section 25 and subsection 27(1) of the Act with respect to the rates charged for local pay telephone service provided by CLECs. CLECs will not be required to file tariffs for these services. The Commission is also of the view that it is appropriate to refrain from exercising its powers under section 29 of the Act with respect to the approval of agreements.
The Commission has also concluded in this Decision that it is appropriate to require CLECs to include the safeguards set out in this Decision in all contracts negotiated with CPTSPs. Accordingly, the Commission considers that it is in the public interest that it continue to exercise its powers under section 24 of the Act to impose on CLECs the conditions contained in this Decision, as well as any that may prove necessary in the future.
In order to ensure that CPTSPs do not unjustly discriminate against any other service providers or subscribers, or confer an undue or unreasonable preference toward any person, the Commission will retain its powers and duties under subsections 27(2), (3) and (4) of the Act.
The Commission has also concluded that it would be appropriate to forbear from exercising its powers and duties pursuant to section 31 of the Act which deals with limitation of a Canadian carrier’s liability. In Decision 97-8, the Commission concluded that it would not be in the public interest to provide CLECs with the regulatory protection that ILECs receive in respect of limitation of liability, as many CLEC services would not be subject to rate regulation while those of the ILECs would. The Commission is of the view that the same reasoning applies in respect of local pay telephone services.
In light of the above, the Commission will refrain from exercising its powers and performing its duties pursuant to sections 25, 29 and 31 and subsections 27(1), (5) and (6) of the Act, in relation to local pay telephone services provided by CLECs. Sections 24, 25, 27, 29 and 31 do not apply to CLECs to the extent that they are inconsistent with the determinations in this Decision.
Pursuant to subsection 34(3) of the Act, the Commission finds, as a matter of fact, that to refrain from exercising its powers as set out herein, would not likely impair unduly the establishment or continuance of a competitive market for local pay telephone service.
V ENTRY PROCEDURES
New entrants must conform to the following registration procedures:
(1) The CPTSP must attest in writing that it understands and will conform to the obligations and consumer safeguards set out in this Decision;
(2) The CPTSP must provide the name of the carrier supplying the access lines;
(3) The CPTSP must provide to the Commission serving area maps for information purposes and make such serving area maps available upon request at their business offices; and
(4) The CPTSP must provide details as to how it proposes to deal with consumer complaints.
Laura M. Talbot-Allan
Secretary General
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