ARCHIVED -  Telecom Order CRTC 99-995

Telecom Order

Ottawa, 15 October 1999

Telecom Order CRTC 99-995

On 8 July 1999, MTS Communications Inc. (MTS) filed Tariff Notice (TN) 372 to withdraw Prime Line service effective 30 September 1999. MTS stated that Prime Line is provided by equipment that is not Year 2000 (Y2K) compliant. MTS indicated that continuing to offer the service is uneconomical.

File No.: Tariff Notice 372

1. On 14 July and 27 August 1999, MTS sent letters to subscribers informing them of its plan to withdraw Prime Line and explaining some of the options available to replace Prime Line.

2. The Commission received less than 10 letters from subscribers. Subscribers opposed MTS' plan to discontinue Prime Line and/or asked for an extension of time to properly test and evaluate the alternatives offered. The subscribers characterized Prime Line as a sophisticated, integrated service ideal for small businesses and mobile office communications. Some subscribers indicated that their businesses or incomes would suffer.

3. MTS stated that the cost to upgrade the equipment in order to continue offering the service would result in a dramatic rate increase for subscribers, rendering Prime Line unaffordable for many customers. MTS submitted that the manufacturer of the software for the service no longer supports the product.

4. MTS stated that for technical reasons, it is unable to delay the withdrawal of Prime Line beyond 30 September 1999. A North American agreement between the telephone companies prohibits any significant network changes as of November 1999, including the deletion of services. There is also an agreement that only minimal changes be made to all networks as of 1 October 1999. MTS noted that such a moratorium on changes to systems prior to 1 January 2000 is a common business practice across many industries.

5. In response to concerns on the business case for Prime Line, MTS stated that Prime Line is a more technically advanced service, and therefore, more challenging to use than most other services. MTS stated that even though it has a service representative dedicated to Prime Line, one-third of Prime Line's customers discontinued their subscriptions over the past few years.

6. The Commission notes that in a similar proceeding initiated by Bell Canada (Bell) Tariff Notice 6264 dated 14 August 1998, Bell proposed to grandfather and eventually withdraw its PrimeLine Executive service by the end of 1999. On 8 December 1998, Bell applied to withdraw its proposals, stating that it had re-evaluated its position in light of customer letters and calls received.

7. The Commission notes than unlike the situation in Bell's territory, there has not been substantial opposition to the withdrawal of MTS' Prime Line service. The Commission further notes that there are far fewer customers over which to recover the costs of the service.

8. The Commission finds that significant changes would be necessary in order to allow for the continuation of the Prime Line service. The Commission further finds that the company would be required to incur significant costs which could not be recovered from Prime Line customers.

9. In light of the above, the Commission approves MTS TN 372 effective 31 October 1999. MTS
is to issue forthwith revised tariff pages consistent with this Order.

Secretary General

This document is available in alternative format upon request and may also be viewed at the following Internet site: www.crtc.gc.ca