ARCHIVED - Order CRTC 2000-393

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Order CRTC 2000-393

Ottawa, 10 May 2000
Commission modifies reporting requirements for affordability
Reference: 96-2176 and 8665-B20-01/99
The Commission finds that promoting bill management tools (BMTs) to facilitate access to telephone service is an important goal. To enhance that access, the Commission will prepare a public service announcement to promote BMTs and require the major incumbent telephone companies, including Télébec, to distribute the information as a billing insert. The Commission will also set up a committee to examine the promotion of BMTs and improve access to telephone service. BMTs include outbound long distance call blocking, inbound collect call blocking and instalment payment plans.
The Commission permits the companies to file affordability monitoring reports in November and in March of each year. The report filed in November will contain penetration rates and related data, including penetration rates for each territory, information on the charges which have caused affordability concerns, take-rate for BMTs and disconnect studies. The companies are required to file penetration rates and related data in the report filed in March. The companies are no longer required to report routine measures taken to promote BMTs.
Télébec is directed to report its take-rate for BMTs and its disconnect studies on a yearly basis.


In Local service pricing options, Telecom Decision CRTC 96-10, dated 15 November 1996, and Telecom Order CRTC 97-1214, dated 29 August 1997, the Commission directed the Stentor- member companies, Québec-Téléphone and Northwestel Inc. (the companies) to file annual and quarterly reports to monitor affordability of telephone service in Canada. The companies were also directed to report measures taken to promote BMTs on a quarterly basis, until further notice was provided.


BMTs address the main reasons why persons with affordability concerns either do not obtain service or disconnect service. A toll-restrict option allows customers to block outbound long distance calls and inbound collect calls for free. The instalment payment plan lets customers spread qualifying connection service charges over a period of up to six months.


On 13 July 1999 and 16 November 1999, the companies filed applications to modify the above-referenced reporting obligations. In the first application, the companies proposed to discontinue reporting all measures taken to promote or further promote BMTs. The companies submitted that reporting routine promotional efforts was of no value. Promotional efforts approved by the Commission in Order 97-1214 were now discontinued while existing ones (promoting BMTs to persons expressing affordability concerns through service representatives and informing customers of the availability of BMTs in White Pages directories) were not expected to vary in the future.


The Action Réseau Consommateur, the Consumers' Association of Canada and the National Anti-Poverty Organization (ARC), opposed the companies' proposal to discontinue reporting all measures to promote BMTs. ARC submitted that BMTs were an important tool to combat affordability problems and should be promoted to all new customers, not just those expressing affordability concerns. They also submitted that service representatives could easily promote BMTs to all new customers at little or no extra cost. ARC submitted that the Commission or Industry Canada should design a public service announcement and distribute it through the Canadian Customs and Revenue Agency's (CCRA) Goods and Services Tax (GST) Credit Program and other government agencies. Finally, ARC submitted that the low take-rate for BMTs either showed that they were not effective or that customers were not aware of their availability. ARC advocated that BMTs should be modified to better address affordability problems.


The companies replied that promoting BMTs to all new customers was expensive and ineffective. The companies submitted that promotions should only target customers with affordability concerns. Promoting BMTs to the general body of subscribers would reach customers who do not need or want those services and would encourage some to subscribe to BMTs, and unnecessarily increase the companies' costs for providing them. The companies also submitted that customers with affordability concerns were aware of BMTs and use them, relative to the number of Canadians who cannot afford telephone service.


In the second application, the companies proposed to vary the frequency and timing of the affordability reports. They also proposed to stop reporting information on which telephone-related charges cause affordability concerns. They submitted that the current and expected continued stability of this data justified either not reporting, or reducing the frequency at which it is reported. The companies submitted that penetration rates remain stable, data consistently show that customers who do not obtain service cannot afford up-front charges or basic monthly charges or security deposits, and those who disconnect service do so because they cannot pay toll charges.


The companies proposed to file two reports each year in November and March instead of filing quarterly reports and an annual report. The report filed in November would provide the information currently filed in the annual report, including data on penetration rates. It would also include the companies' take-rate for BMTs and the disconnect studies, which are currently filed on a quarterly basis. The report filed in March would only provide data on penetration rates.


Télébec, which currently files quarterly reports separately from the companies, supported the application. It also submitted that any change to the companies' filing requirement should apply to it.


The Government of the Northwest Territories (GNWT) submitted that the companies should expand monitoring and provide more disaggregated data for the Northwest Territories, Yukon and Nunavut (the Territories). GNWT submitted that Northwestel was not subject to competition or price cap constraints and consumers were therefore not afforded the same rate protection existing in other telephone companies' territories. GNWT also noted that the monitoring reports did not necessarily reflect the realities in the Territories, since Statistics Canada did not collect data in the north. Finally, GNWT noted that penetration rates in the Territories were substantially lower than in the rest of the country.


ARC submitted that penetration rates are of limited use when measuring affordability of telephone service. Accordingly, they did not oppose reducing the frequency at which penetration rates are reported. However, ARC noted that reporting on the reasons why customers either do not subscribe to, or disconnect, service is critical to any serious effort to understand and design solutions to affordability problems. ARC believes that the reports showed that people increasingly did not subscribe or disconnected service because they could not afford basic local charges and they expected this trend to continue.


In reply, the companies indicated that they rely on Statistics Canada data for their reports. The companies noted that disaggregated data was not available at the levels requested by GNWT. The companies also noted that Statistics Canada does not collect penetration data for the Territories on a quarterly basis. The companies noted, however, that Statistics Canada was now collecting penetration data for the Territories in its annual survey and undertook to report the Territories' annual penetration rates in their November report. With regard to ARC's comments, the companies reiterated that the reasons why customers either disconnect or do not subscribe to telephone service were well-established and there was no value in continuing to report this data.
Reporting routine promotion of BMTs


The Commission notes that, while certain promotional efforts have been discontinued, the companies plan to continue to promote BMTs in their White Pages directories and through their service representatives. In the Commission's view, there is no need for the companies to continue reporting promotional efforts that have been discontinued. The Commission also finds that the companies do not need to continue reporting routine efforts to promote BMTs, such as in White Pages directories, because this information does not provide additional insight to the Commission or interested parties. However, the Commission expects the companies to report on any future measures and initiatives taken to promote BMTs.
GST credit program


The Commission notes that ARC suggested using the GST credit program to promote BMTs and that the companies supported this request and were willing to work with interested parties.


The Commission considers that distributing an insert/public announcement through the GST credit program would be a very effective way of promoting BMTs to those persons with affordability concerns who would most benefit from those services. The Commission also considers that using the GST credit program would be simple, cost effective and would greatly avoid duplication of work and resources, because persons with affordability concerns would likely be eligible for a GST credit. However, the CCRA has advised the Commission that the proposed use of the GST credit program does not meet the agency's policy objectives for publishing GST credit cheque inserts because the BMT inserts would not have direct relevance to the program. Accordingly, the CCRA has indicated that it cannot send information on BMTs with the GST credit program.
Additional measures to promote BMTs


The Commission considers that BMTs are important tools to address affordability problems. The efforts to date to promote BMTs and to assist customers to either remain on the network or obtain telephone service have not been as successful as expected. Accordingly, the Commission will take an active role to promote BMTs and help customers obtain service or remain on the network. As a first measure, the Commission will require the companies and Télébec to distribute a billing insert describing the availability of BMTs, with text provided by the Commission.


The Commission notes that other promotional measures put in place pursuant to Order 97-1214 did not produce the outcome originally expected, such as the limited success of promoting BMTs through social agencies and organizations. The Commission also notes that existing promotional efforts are aimed at customers who already have telephone service. There are currently no initiatives in place to reach those persons without telephone service. To attempt to address these problems, the Commission will set up a new committee to examine avenues and approaches to promote BMTs and facilitate access to telephone service. Various interested parties, including ARC, will be invited to participate on the committee with Commission staff and Commissioners.
Frequency of reporting


Parties do not object to reducing the number of times the companies report penetration rates except in the Territories, where GNWT submits that monitoring should be expanded and disaggregated to the community and regional level. However, Statistics Canada does not provide data disaggregated to those levels. The Commission notes that Northwestel will continue reporting its monthly customers' take-rate for BMTs and its disconnect studies in the November report, together with the other companies. The companies will now be able to report the Territories' penetration rates in the November report, using data from Statistics Canada. Finally, penetration rates have remained stable and consistently high. Accordingly, the Commission finds it reasonable for the companies to report penetration rates twice a year in November and in March. The Commission also finds it reasonable that the companies report the Territories' penetration rates once a year in November.
Reporting non-subscription and disconnection


The Commission finds that the companies should continue reporting the reasons for which customers either do not subscribe to or disconnect service. The Commission notes that the grounds most commonly cited for not subscribing to or for disconnecting service are installation charges, monthly basic local rates and deposits, all of which continue to be regulated by the Commission. However, as suggested by ARC, with changes in the competitive environment, these grounds may change. The Commission therefore considers that the information is relevant and it would be premature to stop reporting it.


Finally, the Commission notes that Télébec is currently reporting its take-rate for BMTs and its disconnect studies on a quarterly basis. The Commission permits Télébec to report this data on a yearly basis.


In light of the foregoing, the Commission:

a)     directs the companies to start providing penetration rates for each territory in their November report;

b)     directs the companies, including Télébec, to print and distribute, as soon as practically possible, a billing insert regarding BMTs and related matters, which will be prepared by the Commission;

c)     permits the companies to file penetration rates and related data twice a year in November and March;

d)     directs the companies to continue reporting information on the charges which have caused affordability problems in their report filed in November;

e)     permits the companies and Télébec to report the take-rate of BMTs and their disconnect studies on an annual basis; and

f)     finds that the companies do not need to report routine measures taken to promote BMTs.

Secretary General

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