ARCHIVED - Telecom Decision CRTC 2002-60

Telecom Decision CRTC 2002-60

Ottawa, 27 September 2002

TELUS Communications Inc. - Withdrawal of Mobile and Ship Stations - MF/HF

Reference: TCBC tariff notice 4172

The Commission approves the application by TELUS Communications Inc. to withdraw radiotelephone service from the General Tariff of TELUS Communications (B.C.) Inc.

The application

1.

The Commission received an application by TELUS Communications Inc. (TCI) dated 26 March 2002 proposing to withdraw Item 242, Mobile and Ship Stations - MF/HF (radiotelephone service) from the General Tariff of the former TELUS Communications (B.C.) Inc.

2.

TCI submitted that the demand for radiotelephone service has declined as more advanced satellite-based and land-based wireless technologies became available. According to TCI only 11 customers currently subscribe to radiotelephone service and most of these are not actively using the service but are retaining it as a back-up or for emergency use only.

3.

TCI argued that the older technology used to provide this service is obsolete and costly to maintain. TCI stated that the service has not been profitable for some time and that it would have to incur significant additional operating costs to continue to offer this service.

4.

TCI argued that, given the availability of superior alternatives and the diminished customer base, it would not be able to recover its investments without significantly increasing the current rates. In TCI's view, such an increase in rates would likely decrease the customer base further.

5.

TCI stated that it would assist existing customers in finding an alternative service and that, where necessary, it would be prepared to provide customers with financial assistance, in the form of a one-time payment of $1,200, to ease conversion to an alternative service.

6.

TCI notified customers in writing in October 2001, of its plan to withdraw radiotelephone service. It subsequently contacted individual customers in February 2002 by telephone. When it filed this application, TCI notified the customers who were still subscribing to radiotelephone service by letter of its intention to withdraw the service and advised them that they could provide comments on the application to the Commission by 28 April 2002.

Comments from parties

7.

The Commission received comments from one of the affected customers, Mr. Ron Steffey. Mr. Steffey stated that for 18 years he has owned and operated Moose Valley Outfitters, a tourism business providing wilderness adventures and located over 200 miles from the nearest town.

8.

Mr. Steffey indicated that the radiotelephone is the only source of phone communication available to operate the business and to provide some security in the event of an emergency.

9.

Mr. Steffey submitted that if the Commission allows TCI to withdraw its radiotelephone service, it should be subject to the condition that TCI supply him with a satellite telephone as compensation for the loss of value for his existing radiotelephone and losses associated with reprinting the promotional material for his business. Mr. Steffey further submitted that to be fair, TCI should reduce the charges for the satellite service for a period of time.

10.

In the alternative, Mr. Steffey argued that a fair resolution would be to provide monetary compensation to affected customers for their losses and the costs of restoring telephone communication. He submitted that, in his case, $5,000 would be a reasonable amount.

TCI's reply

11.

TCI replied that Mr. Steffey's request for reduced satellite service charges is unwarranted since satellite-based systems are not only more effective but should also be less expensive in the long run.

12.

TCI submitted that Mr. Steffey's existing radiotelephone set has been discontinued by the manufacturer and that replacement parts can no longer be purchased. TCI further submitted that since Mr. Steffey uses his radiotelephone for his business, it would be reasonable to expect that the equipment has been completely depreciated for income tax purposes. TCI therefore argued that the net value of Mr. Steffey's radiotelephone is not material.

Commission determination

13.

The Commission finds that the limited demand for radiotelephone service together with the older technology involved and the costs of upgrading the service, justify the withdrawal of radiotelephone service by TCI.

14.

The Commission considers that the proposed one-time payment of $1,200 as proposed by TCI, to ease conversion to an alternative service, would not cover the cost of the lowest-priced equipment for those customers whose only alternative is satellite service. The Commission finds a one-time payment of $1,500 to be appropriate, as this amount is expected to cover virtually all of the costs of the lowest priced satellite equipment.

15.

Accordingly, the Commission approves TCI's application and directs TCI to provide each customer $1,500 to ease conversion to an alternative service.

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca