ARCHIVED - Telecom Decision CRTC 2002-74

Telecom Decision CRTC 2002-74

Ottawa, 4 December 2002

Call-Net Enterprises Inc. v. Bell Canada and Bell Nexxia - Alleged discrimination in Bell Canada's winback campaigns

Reference: 8622-C25-13/01

The Commission denies Call-Net Enterprises Inc.'s request for an order directing Bell Canada and Bell Nexxia to cease and desist from informing resellers that, if they chose Bell Nexxia as their wholesale service provider, Bell Canada would not target their toll and toll-free customer bases in its winback activities.

The Commission finds that Bell Canada is not unjustly discriminating against resellers or carriers when it uses primary interexchange carrier lists to target resellers' and carriers' toll customer bases for its winback campaigns and is not, therefore, contravening section 27(2) of the Telecommunications Act.

Call-Net's application

1.

On 5 November 2001, Call-Net Enterprises Inc., on behalf of itself and its affiliated companies, including Sprint Canada Inc. (collectively, Call-Net), filed an application, pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, alleging that Bell Canada was engaged in discriminatory activities in contravention of section 27(2) of the Telecommunications Act (the Act).

2.

In its application, Call-Net stated that Bell Nexxia, in the course of bidding for the account of a national reseller, had informed the reseller, by letter dated 4 October 2001, that if Bell Nexxia won the account, the reseller's customers would not be targeted by Bell Canada in its winback campaigns. Call-Net stated that, as a result, the reseller, who resells toll and toll-free services to customers principally in Ontario and Quebec, indicated that it would not be renewing its contract with Call-Net.

3.

Call-Net indicated that Bell Nexxia and Bell Canada did not provide such winback assurances to Call-Net, even if Call-Net were to choose Bell Nexxia's or Bell Canada's wholesale toll services. Call-Net submitted that Bell Canada's and Bell Nexxia's conduct therefore constituted unjust discrimination and undue preference, contrary to section 27(2) of the Act. In addition, Call-Net argued that this conduct by Bell Canada and Bell Nexxia was impairing competition in retail and wholesale toll markets.

4.

By way of relief, Call-Net requested that the Commission direct Bell Canada and Bell Nexxia to cease and desist from either guaranteeing or informing toll resellers that, if they chose Bell Nexxia as their wholesale service provider, Bell Canada would not target their customers in its winback campaigns.

5.

Bell Canada, on behalf of itself and Bell Nexxia, filed its reply to Call-Net's application on 5 December 2001. Call-Net filed reply comments on 17 December 2001.

Bell Canada's reply

6.

In its reply, Bell Canada argued that no unjust discrimination had occurred since Call-Net was treated in the same manner as any other company that rebilled or resold Bell Canada's or Bell Nexxia's services. Bell Canada also argued that Call-Net was incorrect in stating that Bell Canada had guaranteed that it would not engage in winback activities aimed at end-users of resellers. Bell Canada indicated that Call-Net had failed to draw an important distinction between wholesale toll customers that were resellers and those that were rebillers, a distinction that was reflected in Bell Canada's internal procedures.

7.

Bell Canada stated that it used the primary interexchange carrier (PIC) list for its various winback campaigns in order to target end-users that had switched to another toll service provider. Bell Canada indicated that it could not, however, use the PIC list to identify the end-users of rebillers for the purpose of its winback campaigns. Bell Canada explained that, when an end-user migrated from Bell Canada to a reseller or another carrier, the end-user's PIC was changed, and Bell Canada's PIC list recorded the end-user as having switched to another unidentified toll provider. By contrast, Bell Canada stated that since rebillers did not operate their own switching equipment, their end-users remained on Bell Canada's toll network, and consequently no PIC change occurred for such customers. Bell Canada submitted that, because the PICs of rebillers' end-users did not change, it was unable to differentiate between rebillers' end-users and its own end-users when it used the PIC lists for its winback marketing activities.

8.

Bell Canada stated that the wholesale customer identified by Call-Net was both a reseller and a rebiller, and not simply a reseller as alleged by Call-Net. Bell Canada noted that, upon closer examination of the 4 October 2001 letter from Bell Nexxia to the wholesale customer in question, it was clear that the letter simply described how Bell Canada's PIC lists operated with respect to rebillers. Bell Canada further noted that Bell Nexxia had explicitly stated in the letter that Bell Canada would, in fact, attempt to win back end-user customers of the rebiller if it were to find out that the end-user was not a Bell Canada retail long-distance end-user.

9.

Bell Canada also argued that the relief sought by Call-Net would be unworkable from a practical business perspective since it would preclude Bell Canada and Bell Nexxia from answering basic questions from wholesale customers about the operational differences between rebilling and reselling toll services. Bell Canada noted that any such discussion would require a discussion of PIC lists and winback activities.

10.

Finally, Bell Canada submitted that, since the market for toll and toll-free services was competitive, the Commission should be wary of any application that was directed at limiting the ability of any supplier to engage in competitive rivalry.

Call-Net's reply comments

11.

In its reply comments, Call-Net argued that the distinction made by Bell Canada between rebiller and reseller wholesale customers was irrelevant. It stated that, as one of Bell Canada's largest wholesale carrier services customers, Call-Net's end-users should be treated in the same manner as Bell Nexxia's end-users.

12.

Call-Net also argued that Bell Canada's statement that the toll and toll-free market was competitive was irrelevant, given that the Commission had retained its authority under section 27(2) of the Act for the purpose of curbing the type of conduct at issue in its application.

Commission analysis and determination

13.

The Commission considers that, in the 4 October 2001 letter from Bell Nexxia to the wholesale customer in question, Bell Nexxia did not guarantee that Bell Canada would not winback resellers' end-users, but rather described how its PIC lists operate with respect to rebillers. Moreover, the Commission notes that Bell Nexxia stated in the letter that Bell Canada would, in fact, attempt to win back the end-users of toll rebillers if it were to find out that the end-users were not Bell Canada retail long-distance end-users.

14.

The Commission accepts Bell Canada's submission, which was not disputed by Call-Net, that Bell Canada cannot differentiate between its own toll end-users and those of its rebiller customers since rebillers' end-users remain on Bell Canada's toll network, and consequently their PICs do not change. The Commission therefore finds that there is no evidence that Bell Canada's winback activities treat Call-Net's end-users differently from the end-users of toll resellers and toll carriers.

15.

In light of the above, the Commission finds that there is no evidence of discriminatory treatment of Call-Net by Bell Canada. Consequently, the Commission finds that Bell Canada has not contravened section 27(2) of the Act and denies Call-Net's application.

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