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Order CRTC 2000-346
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Ottawa, 27 April 2000
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Contract pricing for business lines
Reference: Bell Canada Tariff Notice 6448
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The Commission approves Bell Canada's application to introduce lower rates for customers who enter into one-year or three-year minimum contract period arrangements for individual line flat-rate business service.
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Bell Canada is directed to obtain prior customer authorization through one of the methods set out in this order.
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1.
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Bell Canada filed an application to introduce lower rates for customers who enter into one-year or three-year minimum contract period arrangements for individual line flat-rate business service. Rates would vary depending on the length of the minimum contract period (MCP) and whether the customers use Bell Canada as their primary interexchange carrier.
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2.
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Bell Canada proposed that there be no paper contract. Following a commitment on the part of the customer, it planned to send the customer the terms and conditions under which the contract would be governed. Unless the customer informs the company within the last 30 days of the commitment period, the arrangement renews automatically for the same terms as the original.
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3.
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Should a customer opt to terminate the service prior to the expiration date of the MCP arrangement, termination charges equivalent to the present value of the rates applicable for the remainder of the MCP would apply.
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4.
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Bell Canada filed its application on 9 February 2000.
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5.
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Optel Communications Corporation and Primus Telecommunications Canada Inc. filed comments on 3 March 2000. Comments were also filed by McCarthy Tétrault, on behalf of Cannect Communications Inc., and by Call-Net Enterprises Inc., on behalf of Call-Net Communications Inc., Call-Net Technology Services Inc. and Sprint Canada Inc. on 9 March 2000.
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6.
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Optel, Primus and Call-Net were especially concerned that there would not be a signed contract between Bell Canada and the end-customer. They indicated that Optel had raised this same issue in its Part VII application to require Bell Canada to obtain proof of customer acceptance of a MCP under General Tariff Item 680, filed on 3 November 1999.
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7.
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Primus also submitted that the long term contracts and deep discounts proposed by Bell Canada are anti-competitive. Cannect argued that Bell Canada should not be permitted to abuse its market power to foreclose competitive entry.
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8.
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Bell Canada filed reply comments on 20 March 2000. The company noted that its proposal meets the Commission's criteria for the introduction of new pricing options for local service, provides customers, including resellers, with additional service options, and is very similar to pricing options already approved by the Commission. Bell Canada submitted that rather than inhibiting the development of competition, its proposal provides customers, including resellers, with greater choice and alternative service arrangements, thereby enhancing competition.
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9.
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Bell Canada further submitted that the interveners' objections to its proposal not to administer signed agreements are baseless and should be viewed for what they are – a blatant attempt to use the regulatory process to prevent the company from competing.
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10.
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In Optel Communications Corporation vs. Bell Canada – CRTC clarifies contract requirements for local link service, Order CRTC 2000-250, dated 30 March 2000, the Commission ruled, among other things, on the issue of Bell Canada having no signed contract with respect to the 12-month MCP for its local link service.
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11.
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In Order 2000-250, the Commission noted that while signed contracts would provide the best evidence that customers are fully aware of and consent to the MCP, they could be very costly to administer and implement. The Commission found that any one of the four methods described below, that obtains end-customer authorization prior to a change in service, would be an acceptable method of demonstrating customer consent:
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a) accepting a signed document as end-customer confirmation;
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b) oral confirmation verified by an independent third party;
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c) electronic confirmation through the use of a toll-free number; and
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d) electronic confirmation via the Internet.
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12.
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In order to ensure that customers are aware of the available options prior to selecting a one-year or three-year MCP arrangement for flat-rate individual business line, the Commission finds it appropriate to require Bell Canada to obtain its customers' consent through one of the four methods described above.
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13.
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The Commission notes that Bell Canada provided imputation test results by band averaged over customers that would select Bell Canada as their primary interexchange carrier and customers who would not.
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15.
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The Commission notes that when Bell Canada proposed different rates for customers choosing or not choosing the company as their primary interexchange carrier, the company was differentiating between what it considers to be different market segments.
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15.
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Therefore, for each band, separate imputation tests should have been filed for customers choosing or not choosing the company as their primary interexchange carrier. However, in this instance, the lowest rate proposed by Bell Canada for this service meets the imputation test in each of Bands A, B and C.
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16.
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In the future, the Commission expects Bell Canada to file separate imputation tests when circumstances such as those set out in paragraph 15 arise.
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Conclusion
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17.
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The proposed tariff revisions are approved with the following modification: Bell Canada is directed to obtain prior customer authorization through one of the methods set out in paragraph 11.
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18.
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Bell Canada is directed to issue tariff pages forthwith incorporating the methods described in paragraph 11 above for obtaining prior authorization from customers enrolling in the one-year or three-year MCP arrangement.
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Secretary General
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This document is available in alternate format upon request and may also be viewed at the following Internet site: http://www.crtc.gc.ca
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