ARCHIVED - Telecom Order CRTC 2003-454

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Telecom Order CRTC 2003-454

  Ottawa, 10 November 2003

Bell Canada

  Reference: Tariff Notice 6759

Megalink bundle for health and education entities


The Commission received an application by Bell Canada, dated 14 July 2003, to introduce General Tariff item 2240, Megalink Bundle for Health and Education Entities. Bell Canada's application proposed a flat-rate service bundle comprising Megalink service, Direct Inward Dialing numbers and white page directory listings, at rates lower than the current General Tariff rates, to eligible customers within the health and education sector willing to commit to either a three-year or a five-year minimum contract period.


The Commission received no comments with respect to the application.

Commission analysis and determination


In Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19), the Commission determined that the rate bases of the large incumbent local exchange carriers (ILECs) should be split into Competitive and Utility segments, effective 1 January 1995, to facilitate the transition to price regulation.


In Tariffs for Educational and Health Services Entities, Telecom Decision CRTC 96-9, 27 September 1996 (Decision 96-9), the Commission concluded that preferential tariffs for educational or health service entities were appropriate provided that, among other things, the rates for the service recovered the cost of providing it. The Commission determined that Utility segment services would be costed at General Tariff rates while Competitive segment services would be based on their Phase II causal costs.


In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), the Commission considered that the distinction between the Utility and Competitive segments was no longer relevant in light of the revised regulatory framework established in Decision 2002-34.


The Commission notes that the criteria established in Decision 96-9 were based on the concept of the split rate base regime adopted by the Commission in Decision 94-19. Given that this regime no longer applies to the large ILECs, the means pursuant to which preferential tariffs for educational and health entities were to be costed in Decision 96-9 is no longer applicable.


Further, the Commission notes that the environment has changed significantly since Decision 96-9 was issued. At that time, local competition had not yet been allowed and neither the long-distance market, nor the private line market, had been deregulated. Since then, local competition has been permitted and market segments have been deregulated. The Commission considers that approving preferential tariffs for educational and health entities would not be consistent with today's competitive environment as it would enable the large ILECs to target a subset of customers (e.g., universities and hospitals) by offering discounted rates not otherwise available to other customers. In light of this, the Commission considers that it would generally not be appropriate to approve applications proposing preferential tariffs for educational and health entities.


In light of the above, the Commission denies Bell Canada's application.
  Secretary General
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Date Modified: 2003-11-10

Date modified: