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ARCHIVED - Order CRTC 2000-397

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Order CRTC 2000-397
Ottawa, 12 May 2000
Altering terms of service for competitors that are customers

Reference: 8622-C12-03/97

In this order the Commission is taking several steps to ensure equitable treatment of competitors that are customers of the telephone companies. These include changes to the terms of service, to remove the limitation on the companies' liability in cases of anti-competitive behaviour, and to specify that generally 30 days notice is required before a competitor's service can be disconnected. In addition, the telephone companies will be required to report to the Commission all significant interruptions in service to competitors.

 

1.

Many of the provisions of the Canadian telephone companies' present terms of service date back to Review of the general regulations of the federally regulated terrestrial telecommunications common carriers, Telecom Decision CRTC 86-7, dated 26 March 1986. While Decision 86-7 applied only to Bell Canada, British Columbia Telephone Company, Northwestel Inc. and Terra Nova Telecommunications Inc., other telephone companies adopted similar terms of service as they became subject to regulation by the Commission.

2.

At the time of Decision 86-7, there was only limited competition for services provided by the telephone companies, and the terms of service were not specifically designed to address issues that could arise when a telephone company provides services to a customer that uses the services to compete with the telephone company.

 

3.

Following disputes between Call-Net Entreprises Inc. and fONOROLA Inc. and Bell Canada, and an application by Unitel Communications Inc. (now AT&T Canada Corp.) requesting that the telephone companies be required to report all service outages of more than 15 minutes duration, the Commission issued Review of the terms of service and general regulations of the telephone companies with respect to services and facilities provided to competitive providers of telecommunications services, Telecom Public Notice CRTC 97-40, dated 1 December 1997. In this public notice the Commission requested comment on whether, and if so, how, the terms of service should be changed for customers who are also competitors of the telephone companies.

 

4.

PN 97-40 also stated that the Commission intended to dispose of AT&T Canada's application in this proceeding.

 

5.

The Commission received comments or reply comments from Association des compagnies de téléphone du Québec inc., AT&T Canada, AT&T Canada Enterprises Inc., Call-Net, Clearnet Communications Inc., fONOROLA, London Telecom Network Inc., MetroNet Communications Group Inc., Microcell Telecommunications Inc., Westel Telecommunications Ltd., Canadian Bankers Association; Northwestel, and from Stentor Resource Centre Inc., on behalf of Bell Canada, BC TEL, (now TELUS Communications (B.C.) Inc.) (TCBC), TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI), Island Telecom Inc., Maritime Tel & Tel Limited (MTT), MTS Communications Inc., NewTel Communications Inc. and NBTel Inc.

6.

This order applies to Bell Canada, TCBC, Island Tel, MTT, MTS, NewTel, TCI, TCEI, NBTel, Northwestel, Québec-Téléphone and Télébec ltée and the other independent telephone companies in Quebec and Ontario, except Ontario Northland Transportation Commission, Abitibi-Price Inc., Cochrane Public Utilities Commission, and Prince Rupert City Telephones.
Liabilities of the telephone companies

7.

Many competitors that participated in this proceeding expressed the view that with the limitations of liability in the telephone companies' present terms of service, they cannot seek financial redress for direct and consequential damages that they experience as a result of negligent acts or omissions by the telephone companies. Competitors also argued that the present terms of service provide few disincentives for the telephone companies to act anti-competitively.

 

8.

The Commission considers that there is no excuse for anti-competitive behaviour, whether with regard to service quality, refusal to provide service, or other matters. Anti-competitive conduct increases costs and risks to competitors, and thus slows the development of competition. The Commission considers that to ensure the continuing development of competition in telecommunications markets, competitors should be able to seek redress through the courts for losses they experience as a result of anti-competitive conduct by a telephone company.

 

9.

To make it possible for competitors to recover such losses, the Commission directs the telephone companies to change their terms of service so that the telephone companies' liability is not limited in cases of anti-competitive conduct. Further, their liability will continue to be unlimited in those circumstances currently covered in the terms of service, including physical injury, death or damage to customer premises or other property occasioned by telephone company negligence, and cases of deliberate fault, gross negligence or breach of contract where the breach of contract is the result of gross negligence.

 

Suspension or termination of a competitor's service

10.

Several competitors that participated in this proceeding submitted that with the telephone companies' present terms of service, service may be suspended or terminated if there is an unpaid balance of as little as $50.

 

11.

Pursuant to the telephone companies' current terms of service (in most cases Article 22), the telephone company may suspend or terminate a customer's service once the customer's account is past due if the amount owed is greater than $50. However, before the service can be disconnected, the telephone company must provide the customer with reasonable advance notice, and, at least 24 hours prior to disconnection, must advise the customer that disconnection is imminent. The present terms of service do not define what constitutes reasonable advance notice. The present time limit provisions (usually Article 17) in the terms permit the telephone company to request more rapid payment in exceptional circumstances or extreme situations.

 

12.

The Commission considers that service to a customer who is a competitor of a telephone company should generally not be suspended or terminated unless the customer has 30 days notice to pay past due amounts. Accordingly, for the purposes of the termination and suspension provisions in the terms (Article 22.3 in most cases), the Commission considers that reasonable advance notice for the termination or suspension of a customer that is a competitor of the telephone company should generally be at least 30 days, and that the terms of service should be amended accordingly. However, this determination does not affect the provisions which permit the telephone company to abridge the date by which an account may be considered past due, and reduce the amount of notice required (for example, Articles 17.2 and 17.4 of Bell Canada's terms).

 

Reporting of service outages to the Commission

13.

AT&T Canada requested that the telephone companies be required to report to the Commission all service outages that exceed 15 minutes in duration and affect service to one or more competitors.

 

14.

During the proceeding, a number of competitors submitted that the telephone companies may have incentives to provide their competitors with service subject to interruption, since service interruptions may create perceptions on the part of competitors' customers that competitors provide low quality service.

 

15.

The Commission considers that, depending on the circumstances, an interruption in service to competitors, or a lack of timely restoration, may indicate anti-competitive conduct by a telephone company.

 

              16. Accordingly, in order to be able to ascertain whether this is the case, the Commission considers that the telephone companies should report all service outages that affect competitors and that exceed 15 minutes in duration. To enable the Commission to determine whether an outage could indicate anti-competitive conduct, the report should contain the following information for each reportable outage:
a) the duration and reason for the outage;
b) the extent to which service to the telephone company's other customers was affected;
c) the time at which service was restored to the competitor; and
d) the time at which service was restored to the telephone company's other customers.

 

Other issues raised in the proceeding

17.

Several other issues were raised by interested parties in this proceeding. However, after reviewing the submissions, the Commission considers that no changes to the telephone companies' terms of service, other than those already identified, are required at this time.

 

18.

Some of the issues raised by competitors are as follows.

 

Telephone company initiated changes in telephone numbers

19.

A number of competitors noted that pursuant to the terms of service, customers have no proprietary rights to their telephone numbers. They submitted that frequent changes in telephone numbers may make it more difficult for competitors to compete with the telephone companies.

 

20.

Changes in telephone numbers are not an issue for competitive local exchange carriers (CLECs), since CLECs obtain their numbers directly from the numbering administrator. The Commission notes that frequent changes in telephone numbers could create some difficulties for other competitors, such as resellers with line-side access.

 

21.

However, the telephone companies' present terms of service permit the telephone companies to change customers' telephone numbers only if there are reasonable grounds for doing so, and only after customers have received reasonable advance notice of the number change. Further, the Commission has no evidence that the telephone companies have abused their authority to change telephone numbers. Accordingly, the Commission considers that no change is required to the terms of service relating to changes in telephone numbers.
Payment time limits

22.

Some competitors submitted that they do not receive bills from the telephone companies in a convenient format. They complained that bills are often received only a few days before the payment due date and that they do not have sufficient time to examine them.

 

23.

The Commission considers that to the extent that these problems remain, they can and should be resolved between the parties. The Commission notes that the telephone companies and other service providers could utilize the CRTC Industry Steering Committee (CISC) to negotiate matters relating to billing format and payment times.

 

Obligation to provide service

24.

The telephone companies' terms of service state that a telephone company is not obligated to provide service if it would incur unusual expenses that an applicant for service is unwilling to pay.

 

25.

Fonorola and Westel submitted that the telephone companies should be obligated to provide service if the competitor provides a demand forecast.

 

26.

The Commission considers that the telephone companies would assume some of the business risks of their competitors if they were required to provide service when a competitor has simply forecast a demand. The Commission considers that competitors should assume this risk, and pay the amounts required to obtain service from the telephone company. Accordingly, the Commission concludes that no change to the companies' terms of service is required relative to provision of service involving unusual expenses.

 

Quality of service to competitors

27.

Several competitors submitted that the terms of service should specify quality of service standards, and that competitors should have the right to discontinue services of below standard quality and switch without incurring additional costs to the service with the next higher grade of quality.

 

28.

In Final standards for quality of service indicators for use in telephone company regulation and other related matters, Decision CRTC 2000-24, dated 20 January 2000, as amended by Decision CRTC 2000-24-1, dated 15 February 2000, the Commission directed the telephone companies to propose a methodology for reporting compliance with the quality of service standards which were negotiated in the CISC and approved by the Commission.

 

29.

Considering the requirements of Decision 2000-24, and in light of the changes made to the telephone companies' terms of service in this order, the Commission concludes that the telephone companies' terms of service need not specify quality of service standards.

 

Alternate dispute resolution

30.

Several competitors stated that the telephone companies' terms of service should refer to the alternate dispute resolution (ADR) process, so that parties could avoid the often lengthy and costly delays that occur when filing applications under Part VI or Part VII of the CRTC Telecommunications Rules of Procedure.

 

31.

The Commission considers that the ADR process is available to all parties, and has been used successfully on many occasions by interested parties and the Commission. While the Commission encourages parties to utilize the ADR process, it does not consider it necessary that the terms of service refer to it.
Direction to change the terms of service and report service outages

32.

The telephone companies are directed, within two weeks of the date of this order, to issue revised tariff pages so that the relevant articles in their terms of service state:

 

"These terms do not limit (company name)'s liability in cases of deliberate fault, gross negligence, anti-competitive conduct, or breach of contract where the breach results from the gross negligence of (company name)"; and

 

"For the purposes of Article X [insert number of provision equivalent to Article 22.3 of Bell Canada's terms of service], reasonable advance notice for the termination or suspension of the service of a customer that is a competitor will generally be at least 30 days."

 

33.

The telephone companies are directed to report, effective immediately, on a going forward basis, all service outages exceeding 15 minutes in duration that affect service to competitor(s).

34.

They are directed to report the following information for each outage:
  • the time and location of the outage
  • the competitor(s) affected by the outage
  • the duration and reason for the outage;
  • the extent to which the outage affected service to the telephone company's other customers;
  • the time at which service was restored to the competitor(s) affected by the outage; and
  • the time at which service was restored to the telephone company's other customers.
Secretary General
This document is available in alternate format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca
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