ARCHIVED -  Telecom Order CRTC 98-1104

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Telecom Order

Ottawa, 6 November 1998
Telecom Order CRTC 98-1104
On 10 July 1998, NewTel Communications Inc. (NewTel) filed an application for approval of tariff revisions to General Tariff Item 454, providing for a short-term sales promotion from 17 August to 30 October 1998, to waive the basic service charge and the line connection charge for customers who switch back to NewTel from an alternate provider of local service.
File No.: Tariff Notice 585
1.The Commission granted interim approval to Tariff Notice 585 in Telecom Order CRTC 98-793 dated 13 August 1998.
2.On 10 August 1998, Call-Net Enterprises Inc. filed comments on behalf of MetroNet Communications Group Inc., Vidéotron Télécom ltée and itself (the Parties). The Parties expressed concerns that insofar as the proposed promotion relates to Competitive Local Exchange Carriers, it is not consistent with the Commission's 16 April 1998 ruling regarding a CRTC Interconnection Steering Committee dispute on competitive winback guidelines (Winback Guidelines), nor is it in the public interest.
3.The Parties noted that in its ruling on the Winback Guidelines the Commission stated that an Incumbent Local Exchange Carrier (ILEC) is not to attempt to win back a customer for a period of three months after that customer's service has been completely transferred to another local service provider, with one exception: ILECs should be allowed to win back customers who call to advise them that they intend to change local service provider.
4.The Parties also submitted that the proposed promotion amounts to predatory behaviour as the costs associated with this type of promotion outweigh the stimulated revenue.
5.On 20 August 1998, NewTel replied that it is inappropriate and unnecessary to include its customer communication plan in the tariff. NewTel submitted that the issue of publicizing to the broad market place is addressed in the Winback Guidelines where the Commission noted that the ILECs are not prevented from advertising to the general public. The Winback Guidelines further specify that ILECs will not be allowed to communicate with customers on an individual basis for a limited period of time.
6.NewTel submitted that as a short-term promotion campaign, its application is exempt from the imputation test requirements of Review of Regulatory Framework - Targeted Pricing, Anti-Competitive Pricing and Imputation Test for Telephone Company Toll Filings, Telecom Decision CRTC 94-13, 13 July 1994 and Local Competition, Telecom Decision CRTC 97-8, 1 May 1997 (Decision 97-8).
7.Based on the evidence before it, the Commission considers that the NewTel winback promotion does not involve communication with customers on an individual basis, and is not inconsistent with the Winback Guidelines.
8.With respect to the Parties' predatory behaviour argument, the Commission considers that as the NewTel offering is a promotion of limited duration, it is exempt from the application of the imputation test as per Decision 97-8.
9.In light of the foregoing, the Commission approves the proposed tariff revisions on a final basis.
Secretary General
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