ARCHIVED - Telecom Order CRTC 2002-464

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Telecom Order CRTC 2002-464

Ottawa, 20 December 2002

Bell Canada

Reference: Tariff Notice 6647

Centrex III service


The Commission received an application by Bell Canada, dated 15 January 2002, to revise General Tariff item 675, Centrex III Service, which proposed the following:

- a 3% increase to the monthly rates on voice local lines;
- a 5% increase to the monthly rates on public switched telephone network connections; and
- a 7% increase to the service charges (basic work elements and miscellaneaous).


Bell Canada submitted that rates for these components had remained unchanged since 1997 and that the proposed increases were intended to help it meet its revenue objectives for this service, as well as, contribute to its overall financial objectives.


On 12 February 2002, Primus Telecommunications Canada Inc. (Primus) filed comments on Bell Canada's Tariff Notices (TNs) 6647 and 6648. On 14 February 2002, AT&T Canada Corp., on behalf of itself and AT&T Canada Telecom Services Company (collectively, AT&T Canada) filed comments with respect to Bell Canada's TNs 6647, 6648 and 6649. On 27 February 2002, Bell Canada filed reply comments.

Parties' comments


In their respective comments, both AT&T Canada and Primus submitted that the Commission should deny Bell Canada TN 6647.


AT&T Canada submitted that the proposed price changes underscored Bell Canada's dominant position within the local business market. AT&T Canada argued that the proposed price increases exacerbated the competitive situation since Centrex service was a vehicle used by AT&T Canada and other competitors to expand their market reach and to build the critical mass of customers necessary to justify a facilities build.


Primus submitted that there was no justification for the proposed rate increases since Bell Canada had not provided evidence that costs had gone up or that improvements to these services had been made to support the increased rates.


Primus also submittted that the continued price increases of services, such as Centrex, which are used by competitors to compete in the fiercely contested local and toll markets, was leading to competitive inequities. Primus argued that Bell Canada was able to enrich itself by raising the rates it charges and at the same time raising the costs to competitors who rely on these services to compete.

Bell Canada's reply


Bell Canada submitted that the comments of AT&T Canada and Primus should be dismissed and its application should be approved.


Bell Canada submitted that AT&T Canada's arguments centre on the alleged dominant position that Bell Canada has in the business marketplace and reiterate the theme of alleged competitive inequity.


With respect to Primus' comments, Bell Canada submitted that service enhancements and increased costs, while valid reasons for applying for a rate increase, are not the only considerations for justifying such a request. Bell Canada stated it was not obliged to justify increases to Centrex service rates on the basis of cost increases. Bell Canada further submitted that the financial impact of the proposed increases on telecommunications service providers were proportionally no different than that experienced by any other large retail user of the service.

Commission determination


The Commission notes that in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002, Centrex service was classified as an uncapped service and, as a result, rate increases for Centrex service were not required to satisfy the price cap constraints.


The Commission considers that the proposed rate increases will not cause a disproportionate financial impact on competitive telecommunications service providers.


In light of the above, the Commission approves Bell Canada's application. The revisions take effect as of the date of this order.

Secretary General

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Date Modified: 2002-12-20

Date modified: