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Ottawa, 12 June 1998
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Telecom Order CRTC 98-582
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On 22 January 1998, Northern Telephone Limited (Northern) filed an application for approval of tariff revisions providing for changes to the rates for Internet access service.
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File No.: Tariff Notice 80
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1. Northern submitted that the proposed rate changes were revenue neutral.
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2. On 16 February 1998, ViaNet filed comments noting that no cost study had been filed in support of the proposed rate reductions.
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3. ViaNet submitted that Northern was attempting to match Sympatico prices in Bell Canada's (Bell's) territory. ViaNet asserted that the proposed rates could not be compensatory for Northern.
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4. ViaNet submitted that the Commission should not consider this application until Northern offers all competing Internet service providers (ISPs) the same services at the same prices as are available to ISPs in Bell's territory.
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5. ViaNet submitted that the rate changes requested by Northern in Tariff Notice 80 would lessen competition.
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6. On 4 March 1998, Northern filed its reply to ViaNet's comments. The company submitted that the proposed rates were compensatory and moreover that cross-subsidization from other services was not possible under current Phase III rules.
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7. Northern submitted that ViaNet's concerns regarding the costing of Internet services was unfounded.
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8. Northern submitted that it offers several Internet access arrangements to its ISP customers and that each of those arrangements is priced in accordance with Phase II costing rules and offered at CRTC-approved rates.
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9. Northern submitted that ViaNet's intervention should be dismissed.
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10. The Commission considers that the rate changes proposed by Northern are effectively rate reductions.
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11. The Commission reminds Northern that in Telecom Decision CRTC 96-6, it required the independents to file economic studies for rate reductions, where there are concerns that rates may not make an appropriate contribution to the local/access shortfall and where there is a potential for anti-competitive pricing.
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12. The Commission is, however, of the view that Northern's proposed rates are in line with the rates prevailing in the market.
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13. The Commission intends to pursue the issue of alternate access arrangements for ISPs with Northern.
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14. In light of the foregoing, the Commission orders that:
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The proposed tariff revisions are approved effective the date of this Order.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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