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Order CRTC 2000-858

Ottawa, 15 September 2000
CRTC sets final rates for payphone access lines
Reference: Stentor Tariff Notices (TNs) 674 and 677, TELUS Communications Inc. TNs 1083/A, TELUS Communications (Edmonton) Inc. TNs 95/A and associated competitive pay telephone service providers agreements
The Commission sets final rates for basic payphone access line (PAL) service for competitors at a 25 percent discount off the business line rates retroactive to 13 November 1998. This order also sets out applicable charges for associated payphone features. The billed number screening (BNS) database service rates will remain interim pending additional clarification in light of a number of industry changes that have occurred since the incumbent major telephone companies filed the initial tariff. These companies must issue revised tariff pages reflecting the rates and changes specified in this order.
PAL service description

1.

Local pay telephone competition, Telecom Decision CRTC 98-8, dated 30 June 1998, directed the major incumbent telephone companies to file pay telephone access line tariffs. The proposals of those incumbent local exchange carriers (ILECs) provide for:
  • access lines to the public switched telephone network for competitive pay telephone service providers (CPTSPs);
  • access service based on existing individual business line access services;
  • specific requirements for CPTSPs; and
  • additional specific optional features and/or services for CPTSPs.

2.

The ILECs proposed basic PAL rates vary from a low of $30 in Moncton to a high of $49.95 in Halifax. Service charges to install the basic service range from $60 in Halifax to a high of $128.45 in St. John's. The Stentor tariff includes a $5 monthly PAL service feature surcharge. The ILECs proposed other features and services at additional cost including:
  • answer supervision
  • BNS database service
  • cut-off on disconnect
  • call blocking
  • TCBC Call Guardian
  • toll restriction.

3.

Bell Canada et al. (see Appendix 2) stated that rate differences for the various features and services proposed are the result of differences in underlying costs. The services are provided by different companies in their respective operating territories, however, the services and features are generally consistent across the companies.
Is PAL service inferior to individual business line service?

4.

Paytel Communications Inc. opposed paying full individual business line rates for a service that is substantially inferior to individual business line service. Paytel stated that the modifications made by the ILECs to the individual business line service are nothing more than the removal of essential features, which are either offered back to the CPTSPs as options or simply denied.

5.

Paytel submitted that the proposed PAL service is unjustly discriminatory and confers an undue preference on the ILECs' operations, contrary to section 27(2) of the Telecommunications Act.
Paytel stated:
  • CPTSP customers may not call ILEC operator services ("0-" calling);
  • ILECs refuse to provide operator service to CPTSPs;
  • ILECs refuse to provide billing and collection service to CPTSPs;
  • CPTSPs may only obtain BNS database service and 900/976 call blocking on an optional basis, generally at additional cost; whereas
  • individual business line customers enjoy some of the above features as part of their regular service at no additional charge.

6.

The ILECs' reply included:
  • the companies designed the PAL service in such a way that the CPTSPs are able to avail themselves of the choices available in the marketplace;
  • there is no reason why the companies should be mandated to become Paytel's sub-contractors; and
  • the companies could make operator and directory assistance services available to a CPTSP if an arrangement is negotiated between the CPTSP and one or more of the companies.

7.

The parties agreed on the concept of basing the PAL tariff on the individual business line tariff as set out in Decision 98-8. The CPTSPs stated they only require a basic business line with the features that accompany it. Paytel submitted that its rollout of a national pay telephone service has been complicated by the considerable confusion concerning features included in the basic PAL service.

8.

The Commission considers that the ILECs are providing a lower grade of business line service and have not appropriately addressed the concerns raised by the CPTSPs.
Is a discount warranted?

9.

Paytel submitted that the fairest resolution to the inferior level of service for CPTSPs is the use of a discount. Paytel asked for PAL service at a discounted rate equal to 75 percent of the applicable individual business line service rate for one year beginning 13 November 1998 (the date of interim approval). Thereafter, the discount would be reduced by five percentage points per year until it was eliminated. Paytel submitted this is fair, since all business line services are priced at levels that are at cost or above cost.

10.

The ILECs submitted that no case exists for the use of mandated discounts to help competitors. The companies stated CPTSPs have already achieved market success in the limited period since the Commission issued Decision 98-8.

11.

Bell Canada's business line rate is $39.95 per month with a $99 service charge. Under Bell Canada's proposal, a fully featured installed PAL would cost $55.40 per month with one-time service charges of $146.50. The tariffs approved in this proceeding are likely to form the largest single ongoing expense of every CPTSP.

12.

In light of the lower grade of service provided, the Commission has reduced the proposed basic PAL rate by 25 percent effective 13 November 1998.
Is the $5 PAL feature surcharge just and reasonable?

13.

The Stentor tariff includes a $5 monthly PAL service feature surcharge. Stentor stated the $5 rate reflects the added value and the extra costs associated with PAL service. TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI) did not propose a specific PAL service feature surcharge, and in response to questions, stated that the incremental costs were not significant enough to warrant such a charge.

14.

Paytel and Canada Payphone Corporation opposed the surcharge and questioned the cost evidence provided by Bell Canada.

15.

Bell Canada stated that it incurs costs to ensure, among other things, that all personnel involved in the PAL provisioning receive appropriate training.

16.

Bell Canada proposed to recover the extra costs associated with PAL service through a monthly surcharge. However, the majority of the costs are not in the nature of recurring costs but more in the nature of one-time provisioning costs. The Commission considers that there is generally sufficient mark-up in the PAL rates and service charges to recover these costs.
Are other features basic or optional?

17.

Paytel submitted that the CPTSPs cannot economically or technically duplicate the suite of PAL features or options. Paytel added that these features are in the nature of essential services or facilities. In particular, it requested operator services and billing and collection service be provided to CPTSPs. Paytel submitted that it is the Commission's mandate to ensure that whatever options are provided to ILEC payphone operations are also included in the PAL service offered to CPTSPs.

18.

As noted in this order, the ILECs designed the PAL service in such a way that the CPTSPs can select the choices available in the marketplace.

19.

CPTSPs are customers of the ILECs, similar to business line customers. In setting the basic PAL service tariff, the Commission has compared PAL features with business line features relative to business line tariffs. Given the current evolution of the competitive marketplace for telecom support services, such as operator services and directory assistance, among others, the Commission finds that some of these services can be considered as optional. As noted in paragraph 12, the rate for this service reflects the lower grade of service that results from excluding features from the PAL service. However, the Commission agrees with Paytel that some features integral to the business line service are basic requirements for CPTSPs.

20.

The various features are classified as follows and are to be provided at the rates specified:

a) Basic features:

  • PAL basic service at 75 percent business line rate;
  • PAL feature surcharge at no additional charge;
  • business line service charge for PAL line installation;
  • answer supervision at tariffed rate;
  • BNS database service at tariffed rate;
  • cut-off on disconnect at no charge if ordered with PAL;
  • 9-1-1 (emergency) at tariffed rate;
  • 7-1-1 (Message Relay Service or MRS) at tariffed rate;
  • 6-1-1 (repair service), but based on alternate routing such as programming 6-1-1 calls to route to a toll-free number;
  • 900/976 call blocking at tariffed rate;
  • local calling extended area service (EAS) at the same rate business customers pay;
  • Touch-Tone included at no additional charge;
  • directory to be provided if requested, at no additional charge.

b) Optional features:

  • operator "0-" services;
  • 4-1-1: local directory assistance;
  • XXX-555-1212: long distance directory assistance;
  • receive incoming calls at no charge if ordered with PAL;
  • directory listing at no charge if ordered with PAL;
  • TCBC Call Guardian at tariffed rate;
  • TCI/TCEI toll restriction at no charge; and
  • billing and collection (as discussed below).
Other options for operator, directory assistance and billing and collection services

21.

Local competition, Telecom Decision CRTC 97-8, dated 1 May 1997, did not require competitive local exchange carriers (CLECs) to provide operator, directory assistance or billing and collection services. These are optional for each CLEC to provide at its discretion. In addition, the Commission notes:
  • alternate operator service providers and alternative directory assistance service providers have emerged in the telecom operations support systems market;
  • some of the ILECs offer wholesale operator and directory assistance tariffs;
  • most of the ILECs stated they are willing to negotiate the provision of operator services for the CPTSPs;
  • the ILECs currently offer "0-" emergency calling as part of the basic PAL service; and
  • CPTSPs can also purchase the ILECs'
    zero- dialed emergency call routing services.

22.

Given the competitive regime established in the local competition decision and the evolution of alternatives in the operations support systems market, the Commission finds it appropriate to treat ILEC provision of these services for their CPTSP customers as optional.

23.

Bell Canada, TCI and TELUS Communications (B.C.) Inc. (TCBC) currently offer local operator assistance service (LOAS) to carriers. Telecom Order CRTC 99-1155 deferred granting third-party access to LOAS until "0-" emergency call routing issues were resolved. As zero- dialed emergency call routing services are now available from the ILECs, the Commission considers it appropriate to allow third-party access to LOAS at this time. This will provide another option for CPTSPs to provide alternate operator assistance service to their customers.

24.

Bell Canada, TCI and TCBC also offer third-party access to directory information service, a wholesale directory assistance service. CPTSPs can take this tariffed service as an alternative to negotiation.

25.

With respect to billing and collection, the ILECs' individual business line tariffs do not include this service on behalf of their business customers. ILECs do offer billing and collection service to interexchange carriers (IXCs) and trunk-side resellers under the Carrier Access Tariff. The Commission considers that CPTSPs can access this service provided that they register as trunk-side resellers and conform to the procedures established for billing and collection service. A CPTSP can also negotiate billing and collection service as part of its business arrangements with the IXC that it preselects for toll calling from its payphones.
Other features

26.

The ILECs currently provide answer supervision as an optional service under their General Tariff. Only Bell Canada proposed to charge for cut-off on disconnect, which it provides from its Special Facilities Tariff at a rate of $5 per month.

27.

CPTSPs need answer supervision and cut-off on disconnect to comply with the Decision 98-8 safeguard pertaining to the provision of coin return for uncompleted calls. The Commission considers that for answer supervision service, CPTSPs should be treated the same as business customers and pay the tariffed rate.

28.

The Commission is of the view that Bell Canada has not justified why the cut-off on disconnect monthly rate would apply to payphone equipment used to originate calls. Bell Canada introduced cut-off on disconnect for call termination in relation to business lines with equipment such as answering machines, faxes and modems. The Commission denies Bell Canada's proposed monthly rate for cut-off on disconnect for PAL service and directs Bell Canada to provide it at no charge if ordered with the PAL service.

29.

The Commission considers that CPTSPs should be treated the same as business customers for call blocking services, including TCBC Call Guardian service, and pay the tariffed rates. CPTSPs are to be treated equivalently to business line customers who pay tariffed charges for MRS, 9-1-1 and EAS in addition to paying the basic rate.

30.

The ILECs include certain other features as a basic part of business service. These features include Touch-Tone, directory listings, directories and the ability to receive incoming calls. The Commission considers that these features should be available as part of the basic PAL tariff with no additional charge.

31.

Parties raised concerns about the routing of 6-1-1 or repair traffic. The ILECs provide 6-1-1 access for repair service to business line customers as part of the basic monthly charge. Under the PAL service, the ILECs proposed that this issue could be negotiated. They indicated a preferred solution would be that CPTSPs program their payphones to route 6-1-1 calls to a 1-800 customer service number. However, CPTSPs would incur extra costs under this alternative. The Commission considers that the rate reduction determined in paragraph 12 compensates the CPTSPs for the reduced repair service in the basic PAL service, compared to the repair service which business line customers receive.
Are BNS database rates excessive?

a) BNS database needed for call billing restrictions

32.

Toll service providers check the BNS database to confirm that a telephone number provided by a caller is valid for the purpose of billing a collect or bill-to-third party call. The ILECs have provided a BNS database service which permits CLECs, wireless service providers (WSPs) and CPTSPs to list the telephone numbers for which they are responsible. This allows these customers to place collect or bill-to-third party call billing restrictions on their end-users' telephone lines.

33.

BNS database service is not included as part of business line service. Business customers must provide their own safeguards to protect against fraudulent calls. The ILECs, CPTSPs, CLECs and WSPs, however, need access to the BNS database (or equivalent) to meet their requirements for liability protection in instances where there may be fraudulent calls. As the ILECs incur costs for loading restricted numbers into the BNS database and maintaining the service, a charge is appropriate.
b) BNS database service essential or optional?

34.

The WSPs argued that the proposed rates are excessive. WSPs and CPTSPs submitted that BNS database service is essential. WSPs requested the rates be based on the rating principles for essential services established in the local competition decision. Parties also questioned the accuracy of the BNS database and raised the issue of liability for fraudulent calls.

35.

The ILECs stated that at least 12 alternative service providers currently exist in the United States for billing validation databases for a collect or bill-to-third party calls and provided material on two of these suppliers - Illuminet and Southern New England Telephone.
c) Responsibility for numbers

36.

Microcell Telecommunications Inc. stated that if its billing and collection agreements are not in place with toll service providers, it should not have to enter telephone numbers it is responsible for into a billing validation database.

37.

The Commission's letter decision dated 6 August 1998 determined that CLECs must provide billing and collection service for toll service providers. This is to allow CLEC customers the ability to complete all types of calls with at least the same ease and efficiency that ILEC users enjoy at present, regardless of the service provider which originates, routes and/or terminates the call.

38.

In an environment in which a WSP operates as a CLEC in some exchanges and as a WSP in others, this strategy would leave toll service providers and customers in a confusing state with respect to collect or bill-to-third party calls. The Commission considers that toll service providers' ability to offer collect or bill-to-third party calling in Canada requires local carriers to assume the responsibility of specifying in a database which of their customers can assume collect or bill-to-third party charges.

39.

Collect or bill-to-third party calling to toll service providers has been available pursuant to Competition in the provision of long distance voice telephone services and related resale and sharing issues, Telecom Decision CRTC 92-12, dated 12 June 1992. While any service provider could establish a billing validation database service, only the ILECs were mandated to make the service available to toll service providers on an essential facility basis.

40.

With the introduction of local competition, parties other than ILECs now administer phone numbers. One of the results is that fraud prevention is now the number holder's responsibility. The Commission concludes that Microcell, and other WSPs must assume responsibility for the numbers they administer.

41.

Fraud control is an industry issue. In the past, the Commission has reviewed disputes dealing with liability on fraudulent calls on a case-by-case basis and this approach will continue to be used. The requests of parties that liability rests completely with the ILEC are denied.
d) Rates kept interim

42.

In the U.S., a CLEC or WSP can determine the most economical supplier and service offerings that meet its requirements for liability protection. In Canada, Bell Canada administers the BNS database under a cost-sharing arrangement with the ILECs. In light of the break up of the Stentor alliance, the Commission is of the preliminary view that the current arrangements and the proposed rate structure may no longer be appropriate. In light of these concerns, the Commission will keep the rates interim at this time for BNS database service.
Other issues

43.

Issues with respect to PAL provisioning and network demarcation have been and continue to be addressed in industry forums. To the extent that these issues have not been resolved, the CPTSPs have brought forward a number of applications, some of which the Commission has already adjudicated. These procedures remain appropriate.

44.

AT&T Canada Telecom Services Company (formerly known as MetroNet Communications Group Inc.) stated that CLECs should be permitted to resell the PAL service. The Commission considers that resale of PAL service should be allowed as long as parties file and implement agreements which:

a) require the reseller of the service to abide by the consumer safeguards set out in Decision 98-8, and

b) provide for the enforcement of the consumer safeguards by the CLEC.

45.

Clearnet Communications Inc. requested modifications to the ILECs' networks to allow access to the screening lists maintained by alternative BNS database supplier(s). Toll service providers are responsible to query the appropriate databases. As access to alternative database services is optional, the ILECs are not required to act for a CLEC or WSP in accessing these other databases.
Implementation

46.

The Commission approves Stentor TN 677, TCI TN 1083, as amended by TN 1083A, TCEI TN 95, as amended by TN 95A, and the associated CPTSPs' agreements with the changes noted in this order. The final rates are retroactive to 13 November 1998. The ILECs are to issue forthwith revised tariff pages.

47.

The Commission will initiate further procedure on Stentor TN 674 before final disposition. Stentor filed TN 674 on 28 July 1998 for the addition of Item 639, Billed Number Screening Database Service, to the National Services Tariff.

48.

Stentor filed TN 677 on 14 August 1998 to introduce Item 910, Pay Telephone Basic Access Line Service, to the National Services Tariff.

49.

TCI filed TN 1083 on 14 August 1998, as amended by TN 1083A filed on 20 August 1998, to introduce Item 416, Public Telephone Access Line Service, to its Carrier Access Tariff.

50.

TCEI filed TN 95 on 14 August 1998, as amended by TN 95A filed on 20 August 1998, to introduce Item 5075, Public Telephone Access Line Service, to its Carrier Access Tariff.

51.

In response to comments received, the Commission granted interim approval to these applications and agreements in a letter decision dated 13 November 1998.
Secretary General 
This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca

 

Appendix 1 / Annexe 1
Reference documents
Competition in the provision of public long distance voice telephone services and related resale and sharing issues, Telecom Decision CRTC 92-12, dated 12 June 1992
Local competition, Telecom Decision CRTC 97-8, dated 1 May 1997
Local pay telephone competition, Telecom Decision CRTC 98-8, dated 30 June 1998
Commission Decision regarding CRTC Interconnection Steering Committee dispute on billing and collection service requirements, CISC/CRTC letter decision issued 6 August 1998
Directory information service and local operator assistance service, Telecom Order CRTC 99-1155, dated 15 December 1999
First Canadian Telecom alleges anti-competitive behavior by Bell Canada in payphone marketplace, Order 2000-60, dated 31 January 2000
Compensation for toll-free payphone calls and tracking report service approved, Order 2000-735, dated 3 August 2000
Commission rules on Goldiphones allegations of Bell Canada's interference in payphone marketplace, Order 2000-61, dated 31 January 2000
Appendix 2 / Annexe 2
Interested parties
The following parties filed submissions or comments:
AT&T Canada Telecom Services Co. (formerly known as MetroNet Communications Group Inc.)
Banff Film Lab
Bell Canada, Island Telecom Inc., Maritime Tel & Tel Limited, MTS Communications Inc., NBTel Inc. and NewTel Communications Inc. (Bell Canada et al.)
Call-Net Enterprises Inc. on behalf of Sprint Canada Inc.
Canada Payphone Corporation
Canadian Wireless Telecommunications Association
Clearnet Communications Inc.
Independent Payphone Management
Microcell Telecommunications Inc.
Paytel Canada Inc.
Rogers Wireless Inc. (formerly known as Rogers Cantel Inc.)
Stentor Resource Centre Inc.
TELUS Communications (B.C.) Inc. (formerly known as BC TEL)
TELUS Communications (Edmonton) Inc.
TELUS Communications Inc.
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