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Ottawa, 17 July 1998
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Telecom Order CRTC 98-702
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The Commission received an application from Bell Canada (Bell) dated 19 March 1998, for approval of revisions to the company's General Tariff to simplify the current Basic Work Element structure for Centrex III Service, including Centrex Microlink Accesses. Bell proposed to consolidate the present rate structure of the Basic Work Element Charges from five rate elements to two rate elements. On
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7 April 1998, Bell filed corrections to its application under Tariff Notice (TN) 6199A.
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File No.: TN 6199
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1.Bell's existing rate structure is as follows: Service Connection and Visit ($140.00), Service Connection ($69.00), Order Processing ($35.00), Customer Visit ($35.00) and On-Site Work Activity ($36.00). Bell submitted that the current rate structure is complicated for customers and estimated that approximately 60% of customers call back for clarification on their bills regarding how the service charges are applied. Bell's proposed structure would be: Service Connection,1 to 25 locals ($99.00) or Service Connection, 26 locals and more ($50.00) and Administration ($50.00).
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2.Comments on the application were received from ACC TelEnterprises Ltd. (ACC), Optel Communications Corp., Municipal Telecommunications Inc. and London Telecom Network Inc.
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3.The interveners opposed the application arguing that the proposal results in an increase in excess of forty percent per local billed to Centrex resellers for acquiring a customer from Bell. The interveners stated that Bell should be required to continue to offer unbundled service charge components until such time that there are viable competitive alternatives to resold Centrex in the local market.
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4.ACC submitted that the charge for a premise visit has to date been a distinct charge because not every customer requires a premise visit and on-site work activity. ACC further submitted that service charges are based on the underlying causal costs involved. ACC argued that with the proposed bundling of the premise visit and on-site work activity charges into the new service connection charge, the cost causality underlying the components is lost.
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5.The interveners further argued that the proposed rates are clearly skewed to the advantage of new customers of Bell rather than existing customers migrating to a Centrex reseller.
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6.Bell replied that the intent of combining the service charges is to meet the needs of the company's entire Centrex market and not just the reseller segment. Bell noted that the reseller market segment for Centrex service represents only a small portion of the overall Centrex market.
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7.Bell stated that combining these service charges will result in reduced costs, increased profitability and improved customer service.
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8.The Commission notes Bell's statement that the vast majority of new Centrex Service connections require a visit. However, Bell did not refute the statement of Centrex resellers that they do not need a visit when they migrate a customer to their re-sold Centrex service.
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9.The Commission also notes that while Bell claimed reduced costs from the bundling of the rate elements, it did not file any cost support for the claim.
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10.In the circumstances, the Commission is of the view that the effect of the pricing actions proposed by Bell would be unjustly discriminatory against Centrex resellers as it would force them to absorb a disproportionate share of the cost for service connections.
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11.In light of the foregoing the Commission denies TNs 6199/A.
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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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