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ARCHIVED - Order CRTC 2000-735

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Order CRTC 2000-735

Ottawa, 3 August 2000

Compensation for toll-free payphone calls and tracking report service approved

Reference: Bell Canada TN 6413; MTS TNs 383 and 384; TCBC TNs 4019 and 4020; and TCI TNs 173 and 174
The Commission approves applications from three telcos for compensation per call for toll-free calls from companies' payphones. The compensation will be paid once the companies provide tracking report service to competitive pay telephone service providers (CPTSPs).
The Commission also approves the proposed tracking report service for specific telcos with changes to the proposed rates and report formats. In addition, the Commission directs the companies to make the service available to agencies representing CPTSPs.

1.

On 3 December 1999, Bell Canada filed Tariff Notice (TN) 6413 to introduce CPTSP Toll-Free Report at a monthly rate of $250 plus $0.027 per call reported.

2.

Also on 3 December 1999, TELUS Communications Inc. (TCI) filed TNs 173 and 174 and TELUS Communications (B.C.) Inc. (TCBC) (collectively TELUS) filed TNs 4019 and 4020, identical pairs of TNs introducing both a charge per call for toll-free calls from pay telephones and the provision of the required billing information to CPTSPs.

3.

On 14 January 2000, MTS Communications Inc. filed TNs 383 and 384 to introduce a charge per call for toll-free calls from pay telephones and to provide the required billing information to CPTSPs respectively.

Pay per-call for TCI, TCBC and MTS

4.

TCI, TCBC and MTS propose to introduce payphone per-call compensation by charging interexchange carriers (IXCs) $0.25 per completed toll-free call from the respective company's pay telephones. MTS submitted a cost study in support of its proposed rate. TELUS did not file cost studies to support the TCI or the TCBC filings, but stated that their incremental costs and fixed common costs per call will not be lower than those of Bell Canada (Bell Canada's approved cost-based rate, with a reasonable mark-up is $0.25).

5.

On 23 December 1999, the Canadian Payphone Association (CPA) intervened on the TELUS filings. CPA submitted that the rate per call in Alberta should be $0.35, which is the rate for local coin calls in that province.

6.

The Commission finds the proposed rate of $0.25 per completed toll-free call to be reasonable.

7.

Telecom Order CRTC 99-1017 approved Bell Canada's pay per-call service, noting that the rate for pay per-call service should not be linked to the rate for local coin calls. That order also considered that the incumbent telephone company should not introduce a pay per-call service until the toll-free call detail billing information could be made available for CPTSPs to provide a similar service.

8.

The Commission approves pay per-call services proposed by MTS, TCBC and TCI effective the date that the companies have approved tariffs in place to provide toll-free tracking report service to CPTSPs.

Competitive payphone toll-free tracking report service

9.

This service provides a CPTSP with the necessary billing information to bill IXCs for toll-free calls that originate from the CPTSP's payphones.

10.

Bell Canada proposes to provide the billing information for $250 per month plus $0.027 per call. The proposed tracking report format provides the subscribing CPTSP with a list, by IXC, of the toll-free numbers called and their frequency. CPTSPs are required to sign an agreement stating that the list of toll-free numbers may only be used for the purpose of billing the charge per call.

11.

The MTS proposal is the same as Bell Canada's except that the rate per call is proposed to be $0.026.

12.

TELUS proposes to make the billing information available at a flat rate of $520 per month. The format of the report is a list, by pay telephone access line, of the total number of toll-free calls for each of the IXCs accessed. To allow the IXCs to verify the bills from the CPTSPs, TELUS also proposes to provide a list of the toll-free numbers called and the frequency to the IXCs.

13.

The Commission notes that all companies propose to provide the report on an originating exchange basis, if requested.

14.

The telephone companies filed cost studies in support of the proposed rates.

Tracking report format

15.

Canada Payphone Corporation (CPC) submitted that the report format proposed by TELUS required too much processing to prepare the bill, adding unwarranted costs for the CPTSP. CPC further submitted that it failed to see why TELUS could not provide a report format similar to that proposed by Bell Canada.

16.

TELUS replied that its proposed billing reports meet the Commission's requirements outlined in Order 99-1017. It said modifying the existing systems and processes for purposes of an alternate reporting structure could result in higher incremental costs and thereby higher charges for the report.

TELUS to produce the report using Bell Canada format

17.

The Commission considers that the format of the tracking report should be similar for all companies so that the CPTSPs will not be required to develop multiple billing processes. The interveners preferred Bell Canada's proposed format.

18.

The report which TELUS proposes to send to the IXCs for verification purposes is similar to the tracking report produced by Bell Canada for the CPTSPs. The Commission therefore considers that TELUS would be able to produce the tracking report in the format proposed by Bell Canada without incurring significant additional costs.

Interveners ask for changes to rates and rate structure

19.

CPC submitted that Bell Canada's rates were too high. CPC suggested the Commission should deny the rate per call, approving only the $250 per month.

20.

Bell Canada replied that its rates are cost-based with a reasonable mark-up. The telco says it chose the particular rate structure to meet the needs of the various sizes of CPTSPs expected to subscribe to this service without presenting a barrier to entry for the smaller companies. Bell Canada also submitted that a rating structure which includes a usage-sensitive charge provides an equitable cost recovery mechanism.

21.

TELUS received an intervention from The Payphone Connection (TPC). TPC submitted that, in the interest of small CPTSPs, TELUS should adopt the MTS proposed rate structure, but limit the monthly charges to a maximum of $520. It also asked that the proposed competitive payphone toll-free tracking report service be made available to an agent representing more than one CPTSP.

22.

TELUS replied that it was receptive to changing the rate structure but submitted that the $520 maximum on a revised rate structure was not economically realistic. The company further stated that including agents was possible but that this would require a new economic study and would likely result in higher rates.

Commission sets revised rates

23.

The Commission notes that the lower monthly rate, plus a usage charge proposed by Bell Canada and MTS, make this service more economical for smaller companies. However, for CPTSPs handling less than 1,200 toll-free calls per month, even this rate structure may not be practical.

24.

The Commission notes that TPC's proposal to allow agents representing more than one CPTSP to be customers of this service may provide the opportunity for small CPTSPs to implement pay per-call service on an economical basis.

25.

The Commission considers that with a usage charge, opening this service to agencies would not have a significant impact on the telephone companies.

26.

In response to Commission interrogatories, the telephone companies indicated that the usage charge would decrease if the demand increased.

27.

The Commission considers that the demand in terms of the number of calls reported in the toll-free tracking report service will be higher than forecast by the telephone companies. In the Commission's view, the companies will be able to recover their costs plus a reasonable mark-up with the following rates:
a) a flat rate of $250 per customer per month plus;
b) a usage-sensitive rate of $0.02 per call to a maximum of $500 per month, plus $0.01 per call for monthly usage over $500.
28. The Commission approves the proposed competitive payphone toll-free tracking report services with the following changes, effective when tariff pages reflecting the changes are issued. In any event, revised tariff pages are to be issued by 2 October 2000. The Commission directs:
a) the companies to implement the above rates;
b) TELUS to implement the report format proposed by Bell Canada/MTS; and
c) the companies to make the tracking report service available to agencies representing groups of CPTSPs.
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
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