ARCHIVED -  Telecom Order CRTC 99-511

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Telecom Order


Ottawa, 7 June 1999


Telecom Order CRTC 99-511


File No.: Bell TN 6307




1. On 26 November 1998, Bell Canada (Bell) filed Tariff Notice (TN) 6307 proposing to introduce Advantage Business Offer Service in Rate Bands A and B. On 30 December 1998, Bell filed TN 6307A amending the original filing to extend the service offering to Rate Bands C and D and also change the name of the proposed service to Local Link Package. Bell filed an imputation test with each of the proposals.


2. The Commission granted the applications interim approval in Telecom Order CRTC 98-1303 dated 22 December 1998 and Telecom Order CRTC 99-114 dated 8 February 1999 respectively.


3. A similar proposal had been filed by Bell under TN 6198 on 19 March 1998. That service was called Centrex Essentials. The Commission denied TN 6198 in Telecom Order CRTC 98-680 dated 10 July 1998 (Order 98-680) because the filing specifically excluded resale and the proposed rates did not meet the imputation test in Rate Band D.


4. Interventions on the current filing were received from Optel Communications Corporation on behalf of itself and Telephone Savings Network (collectively referred to as Optel) dated 17 December 1998; from Vidéotron Télécom ltée (VTL) dated 22 December 1998; from MetroNet Communications Group Inc. (MetroNet) dated 22 December 1998; and from AT&T Canada Corp. (formerly AT&T Canada Long Distance Services Company) on behalf of itself and ACC TelEnterprises Ltd. (AT&T Canada) dated 23 December 1998. A second letter of intervention was received from Optel dated 11 January 1999 and from VTL dated 29 January 1999.


5. Bell filed its reply on 8 February 1999.




6. In its proposal, Bell stated that Local Link Package provides small to medium business market customers (1 to 15 lines) a combination of exchange service and intercommunicating service consisting of two pre-defined, non-customizable bundles of station features, as well as access to the public switched telephone network (PSTN).


7. Optel noted that a service similar to Bell's Local Link was filed previously in Bell TN 6198, 19 March 1998, and further, that the Commission denied TN 6198 because it failed to pass the imputation test in Rate Band D, and because of the proposed provision in the tariff that prevented resale. Optel submitted that the issue of unjust discrimination caused by the provision proposed in TN 6198 that prevented resale by single and multi-hop resellers has not been addressed by TN 6307. Optel stated that the provision in the current filing which limits the number of calls that can be simultaneously call forwarded to three, makes the service unusable for this application.




8. AT&T Canada stated that the inclusion of the restriction of simultaneous call forwarding was effectively a technical limitation to resale and was therefore unjustly discriminatory.


9. In its covering letter to the application, Bell stated that the proposed Local Link Package addressed the concerns expressed by the Commission in Order 98-680. That is, the proposed rates meet the imputation test and the proposed service is available for resale.


10. With respect to interveners' submissions that limiting the number of simultaneous calls forwarded effectively limits resale of the service, Bell replied that in order to compensate for bundling the PSTN connection into the rate for Local Link Package locals, the company is proposing to limit the number of simultaneous calls forwarded to three rather than the unlimited number of calls currently available on Centrex III service. This limitation would permit full utilization of features while eliminating the high volume call forwarding situations, which ultimately led to the introduction of the unbundled PSTN connection charge. Bell further submitted that, contrary to the allegations of Optel and AT&T Canada, Local Link Package provides all customers, including Centrex resellers, with another service option that is available for resale. Single and multi-hop resellers will have to determine whether it is in their interest to subscribe to this service or to other alternative services such as Centrex III.


11. VTL, in its submission, compared the price of the proposed Local Link Package with that of an individual business line configured with a similar set of features and also with the price for Centrex III service also configured with similar features, and, based on the results of its comparison, stated that this difference in rates for identical services is clearly unjustly discriminatory.


12. In its reply, Bell submitted that VTL's examples were flawed, in part, due to unreasonable assumptions VTL had made. Bell further submitted that VTL's analysis demonstrated nothing more than the fact that Bell offers differing services under different conditions at differing prices and that offering customers such choice is clearly not unjustly discriminatory.


13. Optel submitted that approval of Bell TN 6307 at this time would do substantial harm to the competitive environment that the Commission has worked so hard to create. AT&T Canada stated that Local Link Package will cut deeply into competitor's attempts to attain market share and could effectively suppress local competition at this important juncture.


14. MetroNet submitted that Bell should be required to maintain the existing rate relationships between high and low volume Centrex services.


15. Bell replied that it appears that the interveners are of the view that they have been granted an exclusive market share and appear to be looking to the regulatory process to protect this share. Bell submitted that, contrary to the interveners' allegations in this regard, Local Link Package fully complies with the Commission's guidelines for competitive service filings in that it passes the imputation test and is available for resale. In the company's submission, the proposed service provides customers, including resellers, with greater choice and alternative service arrangements, thereby enhancing competition.


16. The interveners expressed their concern with regard to the proposal that the one-year contract for Local Link Package automatically renews unless the customer informs the company at least 30 days prior to the end of the 12-month period of its choice to terminate service. For example, MetroNet submitted that this type of "negative option" contract renewal was not in the public interest.


17. In response, Bell noted that the customer is made aware of contract renewal options when subscribing to the service. Further, unlike the negative option concept, the company would not be requiring customers to subscribe to a service level, which differs from that which they currently receive. Rather, automatic renewal of service is a consumer-oriented method of providing a continuous level of service at a fixed price. Bell also stated that the automatic renewal feature allows the company to offer the service at a lower price.


18. Both MetroNet and AT&T Canada submitted that Bell's proposal to bundle PSTN connections with local charges is in violation of Telecom Order CRTC 93-405 (Order 93-405).


19. In response, Bell noted that Order 93-405 dealt specifically with the company's TNs 4454 and 4454A pertaining to tariff revisions to Centrex III Service and quoted the following excerpt from Telecom Order CRTC 93-1141 dated 30 December 1993: ".in Order 93-405, the Commission found that the proposed rates were anti-competitive and discriminatory, in that their levels were excessive and would in large part only apply to resellers, and thus directed the company to file tariff revisions that apply equally to all Centrex users". Bell submitted that the proposals in TNs 6307 and 6307A respond to the Commission's conclusions in Order 93-405.




20. The Commission notes that the proposed Local Link Package offers bundled PSTN connectivity but limits the number of simultaneous calls forwarded, while the existing Centrex III tariffs include extra charges for each link to the PSTN but do not limit the number of calls forwarded at any one time. Customers choosing between Local Link Package and Centrex III service may decide if unlimited PSTN connectivity or unlimited call forwarding suits their business plan.


21. The Commission considers that Local Link Package is an optional, bundled Centrex offering available to all customers under the same conditions and is therefore not unjustly discriminatory.


22. Concerning interveners' submissions that approval of Bell TN 6307 at this time would harm the competitive environment, the Commission notes that Bell's proposal meets the conditions for introducing a new service. The Commission notes in this respect that the proposed service offering passes the imputation test.


23. The Commission considers that the proposed automatic renewal feature of this proposal does not constitute a negative option service subscription. In this case, business customers specifically subscribe to a service and sign an agreement that outlines the automatic renewal feature. The Commission further notes that this type of automatic renewal is a common feature of business agreements.


24. With respect to interveners' submissions that the proposed bundled PSTN connection contravenes Order 93-405, the Commission notes that it did not rule against bundled PSTN connections in that Order. Since the service proposed in TNs 6307 and 6307A is available to all customers under the same conditions, and is available for resale, the Commission considers that the service is neither anti-competitive nor unjustly discriminatory.


25. In light of the above, the Commission grants final approval to TNs 6307 and 6307A.


26. The Commission notes that the limit of three simultaneous calls forwarded, while stated in the covering letter to the above TNs, is not mentioned in the tariff. The Commission therefore directs Bell to issue revised tariff pages, within 30 days, that state this limit.


Secretary General


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