ARCHIVED - Telecom Order CRTC 2002-323

Telecom Order CRTC 2002-323

Ottawa, 1 August 2002

Aliant Telecom Inc.
Reference: Tariff notice 14

Promotions

1.

The Commission received an application by Aliant Telecom Inc. (Aliant Telecom), dated 9 April 2002, to add item 901, Promotions, to its General Tariff, in order to introduce a time-limited promotion aimed at winning back business customers. The proposed promotion would be available to eligible customers in the Newfoundland and Labrador, Nova Scotia and Prince Edward Island serving territories (the serving territories) from 1 May 2002 to 28 June 2002.

2.

Aliant Telecom proposed to waive applicable service connection charges for eligible business customers in its serving territories. Business customers would be eligible if they currently have their local service with an alternative provider of local service, and they subscribe to one of the following services from Aliant Telecom: business single line access service, small business network service, multi-line service, Provincial Centrex service, national Centrex service and Centrex business service. The purpose of this promotion is to offer business customers an incentive to return to Aliant Telecom.

3.

In comments dated 18 April 2002, GT Group Telecom Services Corp. (Group Telecom) argued that the Commission should deny the application as it constitutes a proactive attempt to undermine the emergence of local competition. Group Telecom stated that there is insufficient competition in Eastern Canada to justify any winback promotion as local exchange competition only exists in the cities of St. John's, Newfoundland and Labrador; Halifax, Nova Scotia; and Charlottetown, Prince Edward Island.

4.

Group Telecom noted that Aliant Telecom's Annual Report for 2001 indicated that Aliant Telecom had retained 98% of the market for local services. In Group Telecom's opinion, the intent of the present application is to stifle competition before Group Telecom can gain a foothold rather than win back the small number of customers that have already made a decision to change service providers.

In reply comments dated 25 April 2002, Aliant Telecom stated that market forces are operating in Atlantic Canada and that competition is well established. In addition, Aliant Telecom noted that its application proposed a short-term promotion that would only waive non-recurring charges and not decrease prices. Aliant Telecom submitted that competitive local exchange carriers, being unregulated, are able to offer any price or promotion without prior approval from the Commission. In Aliant Telecom's view, the company is unlikely to be able to match the incentives that these carriers are able to offer. The company's proposal provides it with an opportunity to address the competitive losses in a short-term campaign. Aliant Telecom further submitted that the present application's proposals are within all of the guidelines established by the Commission for short-term promotions.

In Review of regulatory framework - Targeted pricing, anti-competitive pricing and imputation test for telephone company toll filings, Telecom Decision CRTC 94-13, 13 July 1994, the Commission considered that below-cost pricing in the case of market trials and promotions is generally not anti-competitive and that these filings would be exempt from the imputation test on the condition that sufficient information is provided by the telephone companies to demonstrate that the offering is a legitimate market trial or promotion of limited duration.

7.

The Commission considers the promotion in the present application is a legitimate promotion of limited duration. The Commission notes that the combined enrolment and benefit periods are less than 12 months, and hence, within the Commission's duration requirements. Therefore, the Commission approves Aliant Telecom's application. The promotion is to be in effect for a two-month period commencing in 2002, at a date to be determined by the company. Aliant Telecom is to issue tariff pages reflecting this decision effective upon the date of filing.

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