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ARCHIVED - Order CRTC 2000-675

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Order CRTC 2000-675

Ottawa, 21 July 2000
Bell Canada rate increases approved for mailboxes and Ident-A-Call
Tariff Notice 6466
The Commission approves, by majority decision, Bell Canada's request to increase the monthly rates for fully-integrated mailboxes from $6 to $7 for residences and from $9 to $10 for businesses. It also approves increases for partially-integrated mailboxes from $4.50 to $5.50 for residences and from $5.95 to $6.95 for businesses. It also approves rates for Ident-A-Call from $3 to $5 for residences and from $5 to $7 for businesses.
1. The Commission has traditionally treated mailboxes and calling features as optional local services because they are discretionary.
2. Price cap regulation and related issues, Telecom Decision CRTC 97-9, dated 1 May 1997, established a new regulatory regime for the major incumbent telephone companies. Decision 97-9 excluded optional local services from the price cap regime. Given the discretionary nature of this class of service, the Commission was of the view that an upper pricing constraint was not warranted.
3. The Commission considers that Bell Canada's application to increase the rates for fully- and partially-integrated mailboxes and Ident-A-Call conforms to the flexibility accorded to Bell Canada for the pricing of uncapped services.
4. Bell Canada filed this application on 7 April 2000 to revise Item 2025 - Integrated Voice Messaging Services and Item 2165 - Calling Features, of its General Tariff 6716.
5. These revisions will take effect on 21 August 2000.
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

Dissenting opinion of Commissioner Andrew Cardozo

An excessive increase for discretionary services

I dissent from the majority on this decision because I believe that the increases sought by Bell with regards to integrated mailboxes (voice mail) are excessive for services that are becoming increasingly ubiquitous and for some consumers, are a necessity with no comparable alternative.
While the price cap regime does not apply to discretionary services, in my view an increase of this magnitude for such a widely used service is problematic for consumers.
I note that the rate of inflation this year has been in the 2% to 3% range. The increase proposed would see monthly rates for fully-integrated mailboxes increase by 17% for residential customers and 11% for business customers; while rates for partially-integrated mailboxes increase by 22% for residential customers and 17% for business customers.
While I understand the rationale used by the majority and agree that it is consistent with the price cap policy, I believe that the Commission has the discretion to deny rate increases when they are of this magnitude. I respectfully submit that the increases for these services are excessive.

Dissenting opinion of Commissioner Stuart Langford

This is an application to significantly increase the prices paid by subscribers for two of Bell Canada's optional features, its extremely popular call answering service and its "Ident-A-Call" display option. Customers will see their bills go up one, two, or if they subscribe to both services, three dollars per month. Bell's revenues will rise by many millions of dollars. There will be virtually no increase in Bell's expenses. On the basis of the meagre information Bell provided to support this application, I would not have approved it.
Because Bell has submitted its revenue projections in confidence, I am prevented from revealing precisely how much additional money these rate increases will bring into Bell's coffers. Adjectives like significant and substantial, barely do justice to what will happen. If the majority's interpretation of the regulatory regime under which this application is made is correct, however, (a regime set out in Decision CRTC 97-9) the Commission has no option but to approve this application.
So long as Bell does not discourage competition by reducing prices below cost levels, the Commission takes a laissez-faire attitude. Decision CRTC 97-9, according to the majority, sets a floor but not a ceiling when it comes to the pricing of optional services. To quote from the majority decision: "Given the discretionary nature of this class of service, the Commission was of the view that an upper pricing constraint was not warranted." (paragraph 2)
In a truly competitive marketplace, such an approach might be feasible. Unfortunately, no informed commentator would describe the local markets in which Bell has historically operated as competitive. The stage may have been set for local competition by Decision CRTC 97-8 but as yet, few new players, to paraphrase the Bard of Avon, "strut and fret their hour" upon it. (Macbeth, Act V, scene 5, line 25)
With competition inadequate to meet the challenge of safeguarding consumer interests, then, who is to speak for subscribers? Surely that job falls to the Commission and that job cannot be done if a hands-off attitude is adopted.
Until such a time as local competition is a viable alternative to regulatory action, the Commission has a role. It must, as mandated by sub-section 27 (1) of the Telecommunications Act, ensure that rates are "just and reasonable". Accordingly, I would not have approved this application.

Date Modified: 2000-07-21

Date modified: