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ARCHIVED - Telecom Decision CRTC 2004-22

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Telecom Decision CRTC 2004-22

  Ottawa, 2 April 2004
 

Rogers Communications Inc. and Call-Net Enterprises Inc. v. Bell Canada - Allegation of non-compliance with bundling rules

  Reference: 8661-R2-200317679

1.

The Commission received an application from Rogers Communications Inc. and Call-Net Enterprises Inc. (collectively, the Applicants), dated 25 November 2003, filed pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, alleging that Bell Canada violated the Commission's bundling rules by making the availability of four separate bundles comprised of forborne services (the bundles) contingent on customers having their local service with Bell Canada. The Applicants requested that Bell Canada be directed to cease providing these bundles until such time as a tariff and costing study for each bundle have been approved by the Commission. The Applicants also requested that Bell Canada, prior to launching bundles in the future, be required to file any internal and external material with the Commission for review, to ensure that they are in compliance with the bundling rules.

2.

On 23 February 2004, the Commission advised the parties that it would adjudicate this matter on an expedited basis, in accordance with the expedited process established in Expedited procedure for resolving competitive issues, Telecom Circular CRTC 2004-2, 10 February 2004.

3.

The matter was heard by a panel of three Commissioners on 26 March 2004. In addition to the oral component of the proceeding and the 25 November 2003 application, the Commission considered written submissions from Allstream Corp., the Canadian Cable Television Association and FCI Broadband, a division of Futureway Communications Inc., filed on 22 December 2003, Bell Canada's answer of 29 December 2003 and its 8 March 2004, summary and responses to Commission interrogatories and the Applicants' reply comments of 8 January 2004 and their 8 March 2004 summary and responses to Commission interrogatories.
 

Regulatory framework

4.

In Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994, the Commission stated that the term bundling generally refers to a situation where one rate covered a number of service elements, or where separate rate elements applied to each service element but a number of service elements were aggregated for purposes of applying volume discounts, with the result that the discount available was greater than it would be were the service elements not aggregated.

5.

In GT Group Telecom Services Corp. v. Bell Canada - Non-compliance with Bundling Rules, Telecom Decision CRTC 2002-58, 20 September 2002, the Commission ruled that by making its long distance rebates contingent on a customer obtaining local service from Bell Canada, the Company was providing a bundled service requiring tariff approval.

6.

In Call-Net Enterprises Inc. - Request to lift restrictions on the provision of retail digital subscriber line Internet services, Telecom Decision CRTC 2003-49, 21 July 2003, the Commission found that the incumbent local exchange carriers (ILECs) were not providing a bundle when they offered digital subscriber line (DSL) services that were dependent on the customer using the ILECs' local exchange services. In arriving at this conclusion, the Commission noted that the DSL and local services were not provided under a single rate structure and there was no financial benefit to taking the two services.
 

Issue

7.

Whether Bell Canada, in its promotional material and/or in the information provided by its customer service representatives (CSRs), is making the availability of the bundles contingent on customers also having their local service with Bell Canada or having to subscribe to the "One Bill option", which was only available to Bell Canada's local service customers. In such an event, Bell Canada would be contravening the Commission's bundling rules which require an approved tariff for bundles which include a tariffed service element.
 

Position of parties

8.

The Applicants submitted that Bell Canada's promotional material for the bundles conveyed the impression that subscription to Bell Canada's local service was a prerequisite to receiving the bundles by linking the convenience of a single bill, for all the services in the bundle, to the One Bill option, which was only available to its local service customers.

9.

In addition, the Applicants submitted that Bell Canada's CSRs had advised non-Bell Canada local service customers that they had to subscribe to Bell Canada's local service in order to be eligible for the bundles.

10.

The Applicants submitted that, despite additional training and refresher information given by Bell Canada to its CSRs, the CSRs still misinformed callers in 40% of the calls, in the mystery calling conducted on behalf of Bell Canada, on 2 and 3 December 2003. The Applicants argued that Bell Canada could have prevented the non-compliance and could still do so by clearly and expressly advising its CSRs that non-Bell Canada local service customers are eligible for the bundles. The Applicants submitted that the misinformation negatively affected their competitiveness.

11.

Bell Canada submitted that the bundles had always been available to non-Bell Canada local service customers at the same price and conditions as those available to Bell Canada local service customers, regardless of whether they subscribed to the One Bill option. Bell Canada noted that One Bill had originally only been available to Bell Canada's local service customers because the key identifier to receive One Bill was the Bell Canada local customer telephone number. Bell Canada added that, following a system and process change, One Bill was now available to non-Bell Canada local service customers.

12.

Bell Canada stated that the bundles were specifically designed to comply with the Commission's bundling rules. Bell Canada submitted that its training material used with its CSRs indicated that non-Bell Canada local service customers were eligible for the bundles. Bell Canada recognised that ambiguous wording in its original training material led to confusion among its CSRs. Bell Canada added that, after it was evident that CSRs were conveying incorrect information to some customers, it immediately took corrective actions to remedy the situation. Bell Canada submitted that the additional training and revised training material provided to the CSRs emphasized that customers did not need to have their local service with Bell Canada in order to take advantage of the bundles. Bell Canada also submitted that its survey results over the last three months show that in at least 95% of the cases, its CSRs were correctly informing non-Bell Canada local service customers that they were eligible for the bundles.

13.

Although errors in the information provided by the CSRs could occur from time to time, Bell Canada submitted that the Commission should not hold it to a level of perfection in determining whether any regulatory violation had occurred.
 

Commission analysis and determination

14.

The Commission will first consider whether Bell Canada's promotional material for the bundles, by promoting the convenience of a single bill when One Bill was only available to Bell Canada's local customers, conveyed the impression that subscribing to Bell Canada's local service was a prerequisite to receiving the bundles. The Commission considers that the promotional material could have been more explicit. However, the Commission notes that the bundles were available to non-Bell Canada local service customers at the same price and conditions available to Bell Canada local service customers, even if they did not subscribe to One Bill. The Commission also notes that, while One Bill was originally only available to Bell Canada's local service customers, Bell Canada began a systems modification project to extend One Bill to non-Bell Canada local service customers as early as 2002, well before it developed and began offering the bundles in August and September 2003. The Commission further notes that One Bill is now available to Bell Canada customers, regardless of their local service provider.

15.

Accordingly, the Commission finds that it is not clear that Bell Canada, through its promotional material, made the availability of its bundles contingent on customers having their local service with Bell Canada.

16.

The Commission will next consider whether the information provided by Bell Canada's CSRs made the availability of the bundles contingent on customers having their local service with Bell Canada. The Commission notes that Bell Canada's original training material only stated that "PIC Non-Bell local" customers were not ineligible for the bundles and did not clearly state that it was not a requirement to be a Bell Canada local service customer to subscribe to the bundles. The Commission also notes that some Bell Canada's CSRs advised customers that eligibility for the bundles was contingent on being a Bell Canada local service customer. Given this situation, Bell Canada implemented a series of corrective measures, including further training and revised training material to its CSRs regarding eligibility for the bundles. The Commission notes that, despite these corrective measures, Bell Canada's own mystery calling, in early December 2003, showed that its CSRs still incorrectly advised that the bundles were contingent on subscription to Bell Canada's local service in 40% of the calls.

17.

The Commission notes Bell Canada's submission that the Commission should not hold it to a level of perfection in determining whether a regulatory violation has occurred. However, given the circumstances of this case, the Commission finds that Bell Canada failed to comply with the bundling rules in those instances where its CSRs required customers to subscribe to local service in order to receive the bundles.

18.

The Commission notes that the training material now states that customers who do not have local service with Bell Canada can subscribe to the bundles. The Commission also notes Bell Canada's statement that, for the last three months, its CSRs have provided accurate information regarding eligibility for the bundles at least 95% of the time.

19.

The Commission considers that the training and the training material originally given to the CSRs were inadequate and that Bell Canada should have more diligently sought to ensure that its CSRs accurately conveyed the eligibility requirements of the bundles.

20.

The Commission also considers that the number of new CSRs engaged every month by Bell Canada, in the order of 100, necessitates a significant ongoing training program.

21.

Accordingly, in order to minimize the risk of future regulatory non-compliance, the Commission directs Bell Canada, in the future, when it provides bundles that are not contingent on taking Bell Canada's local service or other tariffed services, to expressly state, both in its internal and external material, including its training material, brochures and promotional material, that customers who do not subscribe to Bell Canada's local service or other tariffed services are eligible for Bell Canada's bundles.

22.

With a view to ensuring the accuracy of the information provided by the CSRs with respect to bundles that are not contingent on taking Bell Canada's local service or other tariffed services, the Commission also directs Bell Canada to provide to the Commission, on a quarterly basis until further notice, a third party report detailing the ongoing results of the testing of the information provided by its CSRs, which shall include testing regarding the eligibility requirements for each bundle that is not contingent on taking Bell Canada's local service or other tariffed services.
  Secretary General
  This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca

Date Modified: 2004-04-02

Date modified: