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Telecom Decision CRTC 2004-47

Ottawa, 15 July 2004

Access to pay telephone service

Reference: 8650-C90-01/01 and 8665-C12-18/02

In this decision, the Commission establishes a notification process applicable to Aliant Telecom Inc., Bell Canada, MTS Communications Inc., Saskatchewan Telecommunications and Télébec, Limited Partnership (collectively, Bell Canada et al.), and TELUS Communications Inc. and TELUS Communications (Québec) Inc. (collectively, TCI) in instances where the last pay telephone in a community is scheduled for removal.

The Commission finds that Bell Canada et al. and TCI are unjustly discriminating against deaf consumers in the provision of pay telephone service contrary to subsection 27(2) of the Telecommunications Act. The Commission directs Bell Canada et al. and TCI to implement a teletypewriter upgrade program for certain pay telephones.

1. In Access to pay telephone service, Telecom Public Notice CRTC 2002-6, 5 December 2002 (Public Notice 2002-6), the Commission invited comments on issues relating to access to pay telephone service, including access by deaf consumers. In particular, the Commission sought comments on the extent to which consumers rely on pay telephone service, the availability of pay telephone service to meet consumers' needs, the rate at which pay telephones have been or will be removed from service, the impact of the removal of pay telephones on consumers and whether there is a need to establish a regime for public interest pay telephones.

2. The Commission also sought comments on access to pay telephone service by deaf consumers, including the extent to which there is a need to improve access to pay telephone service by deaf consumers, the alternatives available to improve access by deaf consumers, whether the provision of teletypewriter (TTY)-equipped pay telephones should be mandated, who should be responsible for the provision, installation and maintenance of TTY equipment, the circumstances and conditions under which TTY-equipped pay telephones should be provided and the mechanisms for recovering the costs associated with improving access to pay telephones by deaf consumers.

The proceeding

3. The Commission received submissions from the following Canadian carriers: Aliant Telecom Inc. (Aliant Telecom), Bell Canada, MTS Communications Inc., Saskatchewan Telecommunications (SaskTel) and Télébec, Limited Partnership (collectively, Bell Canada et al.); and TELUS Communications Inc. and TELUS Communications (Québec) Inc. (collectively, TCI).

4. Submissions were filed by the following public interest advocacy groups: the Canadian Association of the Deaf (CAD); the Public Interest Advocacy Centre, on behalf of the Consumers' Association of Canada, the National Anti-Poverty Organization and l'Union des consommateurs and the BC Old Age Pensioners' Organization, Consumers' Association of Canada (BC Branch), Council of Senior Citizens' Organizations of BC, federated anti-poverty groups of BC, Senior Citizens' Association of BC, West End Seniors' Network, End Legislated Poverty, BC Coalition for Information Access, and Tenants Rights Action Coalition; the Consumers Association of Canada (MB. Branch) and the Manitoba Society of Seniors (BCOAPO et al.) (collectively, the Consumer Groups); the Tatlayoko Think Tank Ltd., on behalf of The BC Rural Women's Project, Nazko Community Association, BC Farm Women's Network, Anahim Lake and Area Community Consultative Group, Tatla Lake & Region Economic Development Council, Neil Squire Foundation, Wells and District Chamber of Commerce, West Chilcotin Tourism Association, Small Islands Research Centre of Passage Island BC, Hagwilget Village Council, Bella Coola Valley Learning Society, Nimpo Lake Community Association, Likely and District Chamber of Commerce (collectively, TTT Ltd. et al.). BCOAPO et al. filed argument and reply separately from the Consumer Groups.

5. On 16 January 2003, in response to a request from the Consumer Groups, the Commission extended the dates set out in Public Notice 2002-6. On 9 June 2003, BCOAPO et al., Bell Canada et al., the CAD, the Consumer Groups, TCI, and TTT Ltd. et al. filed arguments. On 16 June 2003 BCOAPO et al., Bell Canada et al., the CAD, the Consumer Groups and TTT Ltd. et al. filed reply arguments. TCI filed a reply argument on 17 June 2003. On 19 June 2003, the Consumer Groups replied to Bell Canada et al.'s reply argument. On 23 June 2003, Bell Canada et al. filed a supplemental reply argument.

6. The Commission also received comments from 39 individuals, and from the following organizations: the British Columbia Library Association; the Canadian Hard of Hearing Association; the Canadian Human Rights Commission; the Cariboo Regional District Board; the Council of the Corporation of Village of Valemount; the Council of the District of 100 Mile House; Interlakes CattleBelles; Municipalité de Lejeune; Libby Davies, MP, Vancouver East; Moresby Island Management Committee; the Regional District of Fraser-Fort George; Saskatchewan Deaf and Hard of Hearing Services Inc.; and the Women's Contact Society.

A. Access to pay telephone service

Background

7. In Local pay telephone competition, Telecom Decision CRTC 98-8, 30 June 1998 (Decision 98-8), the Commission found that there was no need to establish a public interest pay telephone (PIP) regime at that time. The Commission found that there was no compelling evidence on the record to indicate that the introduction of competition in the pay telephone market warranted creating such an obligation to serve. Furthermore, the Commission found that the vast majority of people who used pay telephone service did so as a matter of convenience or emergency, not as a substitute for basic telephone service.

8. In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34) and in Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002 (together, the price cap proceedings), the Commission considered a number of pricing policy proposals with respect to pay telephone service. The comments concerning those proposals raised a number of fundamental access issues which could not be thoroughly examined based on the record of those proceedings. These issues included the extent to which consumers rely on pay telephone service, the availability of pay telephone service, and the rate at which pay telephones have been or will be removed from service.

9. The Commission determined that it was premature to address these pricing policy proposals before more general policy issues relating to pay telephones were addressed. In the price cap proceedings, the Commission concluded that the public and semi-public pay telephone services would be assigned to a separate category in the price cap regime and that the rates for these services would remain at current levels until the Commission considered policy issues related to pay telephone service in a forthcoming proceeding.

Positions of parties
The extent to which consumers rely on pay telephone service

10. Most parties to this proceeding noted that since the start of competition in the local pay telephone market in 1998, there had been declines in demand for pay telephone service as measured by pay telephone usage. For example, Bell Canada et al. and TCI submitted that the availability of more attractive, low priced wireless services had provided an opportunity for many customers to reduce their reliance on pay telephones, which explained the decline in demand for pay telephone service. Bell Canada et al. filed in confidence the results of a research paper prepared by Decima Research Inc. for Bell Canada territory entitled "Public Telephone Market Study: Pay Telephone Users and Mobile Market Survey", 25 January 2002 (the Decima Study). Pointing to the Decima Study, Bell Canada et al. stated that pay telephone users with cellular telephones had dropped their usage of pay telephone service by more than one-third since acquiring a cellular telephone.

11. The Consumer Groups emphasized that, although consumers' use of pay telephone service had declined, consumers still relied on pay telephone service. The Consumer Groups placed on the public record the results of two research projects that they had undertaken to gather evidence on the issues raised in Public Notice 2002-6. The first project was a nation-wide telephone survey of Canadians regarding their use and perceptions of pay telephone service, conducted by EKOS Research Associates Inc. in February 2003 (the EKOS survey). The second research project was a survey of low-income Canadians regarding their use and perceptions of pay telephone service, conducted by l'Union des consommateurs in March 2003 (the low-income survey).

12. The Consumer Groups stated that results of the EKOS survey showed that the vast majority of Canadians considered pay telephone service to be an important public service, that half of the population used pay telephone service at least occasionally and that cellular telephone subscribers were almost as likely as others to use pay telephone service. The Consumer Groups stated that results of the low-income survey showed that the vast majority of low-income Canadians used pay telephone service at least occasionally and that people without residential telephone service and wireless service relied heavily on pay telephone service. The Consumer Groups indicated that 20% of respondents to the low-income survey said that they used pay telephone service daily, compared to 1% of respondents to the EKOS survey. The Consumer Groups submitted that the evidence indicated that Canadians relied on pay telephone service and considered it an important public service, not only because it provided those without home service with a substitute, but also because it allowed people to communicate with others while away from home.

13. BCOAPO et al. submitted that access to pay telephones was crucial for low-income consumers. BCOAPO et al. indicated that many of the persons it represented were in the lowest income brackets amongst Canadians who relied on government funded income replacement programs for disability, income assistance and senior's benefits. BCOAPO et al. argued that these income replacement benefits were rarely adequate to meet the needs of the people who relied on them.

14. BCOAPO et al. stated that the cost of telephone service also affected persons who were not on government income replacement programs, but still did not have adequate income to meet their needs and those of their families. BCOAPO et al. pointed to Human Resources Development Canada's measure of poverty, the Market Basket Measure (the MBM), which indicated that a person lived in poverty if he/she was unable to obtain specified quantities and qualities of goods and services related to food, clothing and footwear, shelter, as well as other goods and services such as personal and household needs, including telephone service. BCOAPO et al. submitted that, according to the MBM, one in eight Canadians was unable to afford a collection of goods that allowed for a minimum standard for decent living in Canada. BCOAPO et al. stated that some of these Canadians would choose food or shelter over basic telephone service. BCOAPO et al. submitted that pay telephones must be maintained for this reason and also argued that cellular telephone service was not an affordable option for these persons.

15. TTT Ltd. et al. submitted that in many rural and remote communities of British Columbia, pay telephone service was a substitute for basic exchange telephone service. TTT Ltd. et al. stated that in many of those communities, consumers did not have access to basic individual line service and wireless devices did not work in all parts of British Columbia. TTT Ltd. et al. added that while advanced services were being implemented in major centres, basic levels of service had not been achieved in rural and remote regions of British Columbia. TTT Ltd. et al. stated that this was particularly the case in many First Nations communities, where telephone penetration rates were lower than the rest of Canada because the cost of telephone service was not affordable for many aboriginal households.

The availability of pay telephone service

16. Bell Canada et al. noted that results of the Decima Study showed high levels of consumer satisfaction with pay telephone service and with the availability of pay telephone service. In particular, Bell Canada et al. reported that, according to the Decima Study, over 90% of customers were satisfied with Bell Canada's pay telephone service and over 80% were satisfied with the availability of Bell Canada's pay telephones as measured by ease of locating a pay telephone, security, working order and time waiting in line.

17. Both Bell Canada et al. and TCI submitted that the low level of customer complaints concerning pay telephone removals and pay telephone availability indicated that pay telephone service adequately met customer needs. Bell Canada et al. reported having registered 29 such complaints during the period 1999 to 2002. TCI reported 9 complaints even though it removed approximately 10,000 pay telephones during the period 1999 to 2002.

18. Bell Canada et al. stated that availability of pay telephone service was not a greater issue in smaller communities and rural areas. Bell Canada et al. stated that approximately 17% of their pay telephones were located in high-cost serving areas (HCSAs). Bell Canada et al. noted that in Restructured bands, revised loop rates and related issues, Decision CRTC 2001-238, 27 April 2001, the Commission estimated that approximately 15% of network access services overall were located in HCSAs. Bell Canada et al. stated that there were proportionately more pay telephones available to meet the needs of consumers in HCSAs than in non-HCSAs. TCI also indicated that, in its operating territory, it had removed a proportionately higher number of pay telephones in non-HCSAs than in HCSAs.

19. Bell Canada et al. and TCI submitted that pay telephone service remained at a high level of availability relative to its diminishing usage. Bell Canada et al. argued that, considering that demand for pay telephone service was declining more rapidly than the offering of pay telephone service, relatively speaking, availability had improved in recent years. TCI estimated that, in western Canada, for the period 1999 to 2002, the annual average call reduction was 9% and the average annual reduction in revenues was 12.3%. TCI submitted that the data, both with respect to TCI and the industry in general, demonstrated that pay telephones remained accessible to the public in absolute terms.

20. The Consumer Groups submitted that the evidence was insufficient to determine whether pay telephones were currently available to meet consumer needs. The Consumer Groups stated that the evidence suggested that pay telephone service availability was considered adequate by a majority of Canadians, but that concerns with respect to availability were greater in small and remote communities, where fewer pay telephones are deployed.

21. The Consumer Groups submitted that there was a strong public interest in ensuring pay telephone availability. They stated that pay telephone service was not just an alternative for those who could not afford residential telephone service.

22. The Consumer Groups disagreed with Bell Canada et al.'s and TCI's submission that availability had improved over time, when measured by the ratio of pay telephones to pay telephone usage. The Consumer Groups submitted that a better statistic to examine when measuring pay telephone availability would be the number of locations served by pay telephones. The Consumer Groups cautioned that this statistic may be misleading insofar as it does not distinguish between remote pay telephone locations and pay telephone locations where other pay telephones are available close by.

23. The Consumer Groups submitted that the number of complaints from consumers did not support Bell Canada et al. and TCI's conclusions that existing levels of pay telephone service were meeting consumer needs. The Consumer Groups stated that the complaint data on the public record suggested that there was an availability problem in certain locations. They submitted that further investigation of the specifics of such complaints (for example, the location, the proximity of the nearest pay telephone, the size of the local population, the number of visitors passing through, and the type of usage expected) was necessary to determine whether the provision of pay telephones in these locations would fulfill a public policy objective related to health, safety or public welfare.

The rate at which pay telephones have been or will be removed from service

24. Bell Canada et al. stated that the rate of removal of pay telephones was demand-driven and fluctuated from year to year. Bell Canada et al. stated that, in many cases, the location providers requested removal of the pay telephone service. Bell Canada et al. added that a small number of pay telephones were removed as a result of fire, theft, vandalism or requests from law enforcement agencies. Bell Canada et al. added that they also removed or added pay telephones to ensure that the demand and supply of pay telephone service remained in reasonable balance. Bell Canada et al. explained that, by removing pay telephones from those locations where demand had fallen, resources could be focused on areas where demand remained strong and on areas of new demand.

25. Bell Canada et al. submitted that, with the exception of Aliant Telecom in Newfoundland and Labrador, in cases of low demand, they approached the location provider to determine whether he or she wished to retain the existing pay telephone by paying a monthly rental or subscribing to semi-public pay telephone service. Bell Canada et al. added that some location providers might decide to replace pay telephone service with a courtesy telephone. Bell Canada et al. defined a courtesy telephone as a regular business or Centrex line service equipped with toll denial.

26. Bell Canada et al. noted that the number of pay telephones in-service had declined annually by about 3.5% in the period from June 1999 to June 2002. Bell Canada et al. indicated that, assuming past trends continue, the rate of decline in the overall base of pay telephones in-service for 2003 would be about the same as in recent years, that is, between 3% and 4% annually.

27. TCI provided similar reasons for the removal of pay telephones. TCI added that removal of pay telephones located in banks of pay telephones had a negligible impact on service availability, as the remaining telephones in the bank continue to serve the public. TCI stated that in its more remote regions and communities, it had, on many occasions, refrained from removing a pay telephone, even when usage failed to cover the operating costs. TCI also stated that, in other cases, it had successfully negotiated with the community to replace the pay telephone with alternative public access arrangements.

28. The Consumer Groups submitted that many pay telephone removals had no significant adverse effect on consumers and that there might even be situations, such as criminal activity or vandalism, in which removal of the pay telephone was in the public interest.

29. The Consumer Groups stated that pay telephone removals had caused problems for individuals who relied on the pay telephone, especially in smaller communities and rural areas. The Consumer Groups stated that the availability of a pay telephone could make a critical difference in an emergency situation. The Consumer Groups also stated that when a user relied on the pay telephone as an alternative to basic service, the removal of the pay telephone might increase the communication barrier already faced by such individual.

30. The Consumer Groups submitted that considering the forecasted continuing annual net reduction of 3% in overall pay telephones by Bell Canada et al. and TCI, even if there was no significant pay telephone availability concern now, there might be one in a few years time. The Consumer Groups submitted that further investigation was warranted to determine the extent and seriousness of reported pay telephone problems in Canada. They added that, depending on the results of such information gathering, further regulatory action may be needed to prevent the situation from deteriorating further.

31. TTT Ltd. et al. submitted that maintaining pay telephones, even if they are low usage or subject to vandalism or non-compensatory, was essential in rural areas. In TTT Ltd. et al.'s view, the impact of the removal of a pay telephone, even if it was the only one at that location, was minimized in urban settings. They submitted that rural Canada, specifically rural British Columbia where TCI does not provide any alternative to pay telephone service, should not be subjected to the same criteria as urban areas when determining whether to keep a pay telephone.

Commission analysis and determination

32. The Commission recognizes that certain segments of the population rely more heavily on pay telephone service than others. Based on information presented in this proceeding, the Commission considers that low-income Canadians, especially those without access to basic residential service, are more likely to use pay telephone service for important personal and emergency calls. The Commission notes that although wireless service may constitute an alternative for many consumers, it is not an affordable option for all. The Commission considers that access to pay telephone service is particularly crucial in rural and remote communities, where consumers may not have access to basic residential service and where telecommunications service providers may not offer wireless services.

33. The Commission concludes that, although demand for pay telephone service is declining, pay telephone service is still an important public service that wireless services have not rendered obsolete.

34. The Commission notes that the reported survey results suggest general consumer satisfaction with the availability of pay telephone service. The Commission considers that the number of complaints or lack thereof is not a good indicator of consumer satisfaction with regard to the availability of pay telephone service. The Commission considers that issues of availability are likely of greater concern in small and remote communities and concludes that there is a strong public interest in ensuring pay telephone availability in those communities.

35. The Commission notes, as reported in its 2003 Monitoring Report, that, as of the end of 2002, the number of incumbent pay telephones had declined by 2.7% annually since the first full year of competition in 1999, to roughly 157,000 pay telephones and that, over the same period, total pay telephone revenues had declined at an annual rate of 11.9%, reflecting decreasing usage of pay telephones. In its 2003 Monitoring Report, the Commission concluded that this trend was mainly attributable to the continued growth in cellular usage, which has resulted in a reduction in the average number of consumers requiring pay telephone facilities. The Commission found that wireless penetration, as measured by the number of wireless subscribers, had increased from 5.3 million in 1998 to almost 12.0 million in 2002. The Commission also concluded that optional payment means related to pay telephone usage, such as pre-paid phone cards, reduced the amount of revenues typically collected at the pay telephone location.

36. The Commission notes that the number of pay telephones removed between 1999 and 2002 has been proportionately lower than the decline in both pay telephone service usage and pay telephone service revenues. The evolution process used by Bell Canada et al. and TCI for removing pay telephones includes a consultation with the location provider to determine whether he or she wishes to opt for an alternative to public pay telephone service such as a monthly rental pay telephone service, a semi-public pay telephone service, a courtesy telephone or other alternative public access arrangements.

37. The Commission is particularly concerned with the impact that the removal of the last pay telephone in a small or rural community may have on that community. Accordingly, the Commission finds that there is a need to strengthen the current regulatory requirements for notification and reporting when the last pay telephone of a community is targeted for removal to ensure that potential problems are addressed.

Notification and reporting requirements

Position of parties
Notification requirements

38. Based on the fact that pay telephone removal may have unforeseen impacts on a community, TCI proposed a notification and consultation process in which service providers would notify the location provider and/or the community of each impending pay telephone removal 60 days prior to the proposed removal. TCI proposed that the location provider could then, through consultations, consider whether to switch to an alternative such as a semi-public pay telephone or a courtesy telephone. TCI submitted that this approach would provide the location provider or community with the flexibility to add or remove pay telephones as they deem necessary to fit their public interest requirements. TCI also stated that this approach would allow a prompt response to concerns that might arise upon the proposed removal of a pay telephone, on a case by case basis.

39. The Consumer Groups proposed the establishment of a notification process applicable in those instances where there is no other working pay telephone located within 100 meters. Under the Consumer Groups' proposal, at least 60 days prior to removal, Bell Canada et al. and TCI would be required to:

40. The Consumer Groups proposed that the notices clearly inform users of the pending removal, invite them to complain to the Commission and to their local municipality (at specified toll-free numbers) and invite applications by alternative location providers in the vicinity, where appropriate. The Consumer Groups also proposed that the wording of all of the notices be reviewed by interested parties and be subject to Commission approval. Finally, the Consumer Groups suggested that a follow-up process to this proceeding could develop a standard format and wording for use by all pay telephone service providers.

41. Bell Canada et al. submitted that there was no compelling need for the proposed notification processes. Bell Canada et al. argued that they already provide notice and discuss payment and service options with location providers prior to removing a pay telephone. In addition, Bell Canada et al. noted that many requests to remove pay telephones are initiated by the location providers themselves.

42. Bell Canada et al. stated that the Consumer Groups' proposed notification process raises several implications and questions. According to Bell Canada et al., the notification process would likely result in pay telephones being less available than they otherwise would be because, for example, location providers would be unwilling to provide pay telephone service once they knew that their ability to change that service in the future would be restricted by regulation. Bell Canada et al. stated that the proposed notification process could also compromise the ability of telephone companies and location providers to meet customers' needs in a timely fashion as the proposed notification would apply to removals for any reason, including the relocation of a pay telephone. Bell Canada et al. stated that, although the proposed notification process provided for the opportunity for customers to complain to the Commission and to the local municipality, no details as to the manner in which those complaints would be dealt with had been provided. Bell Canada et al. indicated that there is no evidence that local municipalities would agree to set-up and pay for toll-free numbers, as well as hire staff and develop procedures to receive and handle such complaints.

43. Additionally, Bell Canada et al. noted that, under the Consumer Groups' proposal, the incumbent pay telephone service providers would need to possess maps, or equivalent information, showing the exact location of every pay telephone location vis-ŕ-vis other pay telephone locations. Bell Canada et al. indicated that they did not have such maps. They explained that they track pay telephone locations by street address, and in some cases, by a description of the site of a location within a building, or buildings, at that street address. Bell Canada et al. noted that they would need to undertake a detailed survey of all pay telephone locations and incur significant costs to build and maintain databases to accommodate this mapping information.

44. TCI stated that while it agreed in principle with the requirement for notification, it did not consider all of the notification requirements proposed by the Consumer Groups to be necessary or practicable. TCI stated that it concurred with two of the proposed notification requirements. Specifically, TCI stated that it was prepared to work with location providers and to provide them with a 60-day notification period and it was prepared to provide users of a pay telephone with a 60-day notification period, by way of a notification on the pay telephone. TCI proposed that the requirements to post a notice on pay telephones scheduled for removal and to inform the location provider of each impending pay telephone removal be applied to all impending removals, except where the removal is in a bank of pay telephones or where there is another pay telephone within the same building or within a city block.

45. TCI opposed the other notification requirements proposed by the Consumer Groups. TCI argued that criteria or conditions that unduly restrict a service provider's ability to add or remove pay telephones could have the undesired effect of reducing pay telephone availability if new regulatory burdens cause location providers to allocate pay telephone space to other uses during the notification period. In addition, TCI stated that the Consumer Groups' proposal for different criteria based on proximity was based on the assumption that incumbent local exchange carriers (ILECs) have the measurement and geographic mapping information in place to trace proximity of pay telephones, on an ongoing basis. TCI stated that it did not currently have mechanisms in place to undertake such tracking. TCI was of the view that it was impractical, costly and administratively burdensome to undertake such tracking to satisfy an arbitrary 5 km radius standard that served no meaningful purpose.

46. TCI stated that there was little benefit to the public to place a notice in the newspaper. TCI argued that the vast majority of the public would have no interest and any party who might have a genuine interest was likely to visit the pay telephone sometime in the 60-day period.

47. TCI also argued that there was little benefit to consumer groups and to local authorities to receive a notice of every pending removal. TCI submitted that this would be administratively burdensome and might serve no purpose other than to collect data that would be made available to the Commission, and potentially to the public. TCI proposed that, as an alternative, with proper authorization, designated consumer groups' and/or a local government authority's contact information could be included in the notice of removal to be posted on each pay telephone to be removed. TCI stated that interested parties could contact the relevant consumer group, if they desire and the consumer groups could take whatever action they deemed necessary in response. TCI submitted that, under its proposed alternative, consumer groups could assist affected parties directly if and when they were contacted. In addition, TCI stated that participating local authorities could then devise procedures to deal with any complaints that might be brought by interested parties.

48. Finally, TCI submitted that the proposal to inform all possible location providers of a pending removal was not necessary. TCI stated that service providers already had a market incentive to seek out location providers in the vicinity of any pay telephone targeted for removal to find alternative locations that might be compensatory or to find location providers willing to pay for alternatives such as semi-public telephones or courtesy telephones.

49. TCI disagreed with the Consumer Groups' recommendation that the requirement to notify be imposed only on incumbent pay telephone service providers. TCI argued that this would be contrary to the Commission's long-held policy of competitive equity and to the objective of seeking workable alternatives for maintaining pay telephone service for individuals who rely on a specific pay telephone. TCI proposed that the requirement be extended to other pay telephone service providers as well.

50. TCI proposed that, in response to any complaint to the Commission from an interested party, pay telephone service providers be prepared to demonstrate that they satisfied the proposed notification procedures, prior to removing the pay telephone. TCI suggested that the Commission deal with complaints respecting pending or completed pay telephone removals using the complaint procedures it currently has in place.

51. TCI stated that it was prepared to work with consumer groups, community and government representatives to establish the wording of the notice to be posted on pay telephones. TCI agreed that a follow-up process to this proceeding could develop a standard format and wording to be used and proposed that a working group of the CRTC Interconnection Steering Committee could be convened to undertake this task.

Reporting requirements

52. The Consumer Groups proposed that all pay telephone service providers be required to record and report quarterly to the Commission, by location, all customer complaints and inquiries regarding pay telephone service, all requests for pay telephone installations and related inquiries and all impending and actual pay telephone removals. The Consumer Groups also proposed that all pay telephone service providers be required to report annually to the Commission the number and proportion of their pay telephones with coin capacity and the number and proportion of their pay telephones with incoming call capacity. The Consumer Groups further proposed that all of the above information be made publicly available and posted on the Commission's web site. Finally, the Consumer Groups proposed that the Commission initiate a review after three years to determine whether the current approach to provisioning was adequate, and, if not, to establish a mandatory regime for public interest pay telephones at that time. BCOAPO et al. and TTT Ltd. et al. supported the Consumer Groups' proposal.

53. Bell Canada et al. and TCI opposed the Consumer Groups' proposal with respect to complaints. They submitted that the measures currently in place were adequate and that no additional reporting should be required. They noted that they already reported on customer complaints relating to pay telephone service under indicator 5.1 of the Quality of Service indicators on a quarterly basis. They explained that the complaints reported under this quality of service measure included all complaints received in regards to pay telephone service availability and functionality. TCI also stated that there was no value of reporting on additional complaint information such as location, proximity, usage and population size, as proposed by the Consumer Groups and that, in any event, such information would be difficult, if not impossible, to collect or to extract from parties with a complaint. Bell Canada et al. opposed the Consumer Groups' proposal with respect to inquiries on the basis that this proposal would imply a level of intrusive surveillance over its business which was not warranted.

54. With respect to the Consumer Groups' proposal regarding the reporting of requests for pay telephone installations and removals, Bell Canada et al. and TCI noted that the ILECs report to the Commission the total number of pay telephones removed, on an annual basis. They proposed to continue such reporting on an annual basis and in confidence to the Commission, with a refinement to include the location of the removals. Additionally, TCI submitted that other pay telephone service providers should be required to provide similar annual decommissioning reports, including location withdrawal information. Concerning the Consumer Groups' proposal that such information be made publicly available and be posted on the Commission's web site, Bell Canada et al. submitted that any of the above information reported publicly by the Commission in its monitoring reports, or otherwise, should be aggregated across all pay telephone service providers. TCI proposed to file with the Commission an abridged copy of its report for public disclosure. In addition, Bell Canada et al. stated that it was prepared to report annually to the Commission, in confidence, the number of actual pay telephone installations. TCI also indicated that it was prepared to report annually on the number of pay telephone installation requests received and the number of pay telephone installation requests refused.

55. Finally, Bell Canada et al. and TCI agreed to report on the number and proportion of their pay telephones with coin capacity and incoming call capacity, provided that the information, if made publicly available by the Commission, was aggregated across all pay telephone service providers. Bell Canada et al. suggested that it could provide the information annually, as part of the Commission's monitoring program established further to Order in Council P.C. 2000-1053.

Commission analysis and determination
Notification requirements

56. The Commission notes that, prior to removing a pay telephone where demand has fallen, Bell Canada et al. and TCI notify the location provider of their intention to remove the pay telephone. They offer the location provider various payment and service options such as rental of a pay telephone, subscription to semi-public pay telephone service or the provision of a courtesy telephone. The Commission recognizes that under the current contractual arrangements between pay telephone service providers and location providers, no one else in the community is likely to be aware of the impending removal. The Commission is of the view that the public interest would be better served if the community and the users of the service were also notified.

57. The Commission notes that TCI and the Consumer Groups presented notification proposals aimed at strengthening the current regime. They proposed that notification be required at least 60 days prior to removal, and that such notice not be restricted to location providers. The Commission notes that these proposals raised issues concerning which removals would require notification, who would be notified, how the notice would be provided and what information would be included in the notification.

58. The Commission considers that it would not be reasonable to require community notification for every pay telephone removal. The Commission is of the view that there are removals that do not have a major impact on users. For instance, the Commission notes that removal of a pay telephone from a bank of pay telephones would not have a substantial impact on accessibility. Another example where community notification should not be required is where a pay telephone is moved to another location within a building.

59. The Commission considers that the proposed criterion for public notification where there is no other working pay telephone located within 100 meters is arbitrary and unreasonable. The Commission considers that distance alone, with no differentiation between urban and rural locations, is not an appropriate measure. In addition, the Commission notes that to satisfy this criterion, the ILECs would need a record of the distances between every pay telephones in their territories. The Commission recognizes that this information is not currently available and the ILECs would have to undertake a detailed survey of all pay telephone locations and would also be obliged to build and maintain databases to accommodate the necessary mapping information.

60. In light of the significant reliance by Canadians on pay telephone service in small or rural communities and the above comments on the appropriateness of the notification proposals, the Commission considers that the public interest would be best served if only those pay telephone removals that result in withdrawal of pay telephone service in a specific community be subject to notification requirements. The Commission notes that this would limit the number of notifications to those pay telephone removals that would result in denial of public access to the public switched telephone network (PSTN) in a community.

61. The Commission recognizes the difficulty in precisely describing what constitutes a community when applying this notification requirement. The Commission notes that the ILECs have established geographic administrative areas within their territories used to define local exchanges. Within an exchange, there are one or more wire centres. The Commission considers that, as a minimum rule, the ILECs must undertake public notification in all cases where the last pay telephone in the area served by a wire centre is to be removed.

62. The Commission determines that Bell Canada et al. and TCI must provide a written notification to the location provider and to the local government at least 60 days prior to the proposed removal, if the pay telephone targeted for removal is the last pay telephone in a particular community. In the Commission's view, a 60-day notification period provides sufficient time for the local government to consider options for continued public access to pay telephone service.

63. The Commission requires that Bell Canada et al. and TCI also post a notice, 60 days prior to the proposed removal, on the pay telephone scheduled for removal when it is the last pay telephone in the community. The Commission considers that the notice should include an ILEC toll-free number where customers could register their concerns or requests for information. The Commission believes that consumers who depend on that particular pay telephone as their only means of accessing the PSTN would benefit from such a notice and notes that customer concerns could then be addressed on a timely basis.

64. The Commission requires Bell Canada et al. and TCI to place a notice, at least 60 days prior to the proposed removal, in the local newspapers in cases where the pay telephone to be removed is the last one in a particular community. The Commission is of the view that such a notice will help to raise consumer awareness within a specific community that access by the general public to the PSTN will be withdrawn from that community once the pay telephone is removed.

65. In order to ensure that members of the community have access to comprehensive information, the Commission considers that the notices must clearly indicate the pending removal in a large enough format to attract users' attention. Bell Canada et al. and TCI are to include at a minimum the date of removal, the ILEC's name, address and toll-free number and the directions to, and location of, the nearest pay telephone.

66. The Commission establishes the following notification process applicable to Bell Canada et al. and TCI in instances where the last pay telephone in a community is scheduled for removal. Effective the date of this decision, the Commission directs Bell Canada et al. and TCI to:

Reporting requirements

67. The Commission established in Decision 98-8 that Bell Canada et al. and TCI are required to report to the Commission annually on pay telephone removals and, as part of the Commission's monitoring activities, on various other aspects of pay telephone service. The Commission also notes that Bell Canada et al. and TCI file customer complaint reports quarterly under indicator 5.1 of the Quality of Service indicators.

68. The Commission considers that annual reporting is adequate because information gathered over a longer period enhances the identification of problems. The Commission considers that there is no evidence that quarterly reports would provide better or more actionable data.

69. The Commission notes that pay telephone installations are not reported at this time. The Commission considers that annual reporting of all pay telephone installations would complement the annual report on pay telephone removals and provide information on the total changes in the overall number of pay telephones in service.

70. Finally, the Commission considers that annual reporting on the number and proportion of pay telephones with coin capacity and with incoming call capacity, as part of the Commission's monitoring program, is appropriate because it will provide warning of any impending concerns with the removal of the coin payment option, among other things.

71. The Commission notes that SaskTel does not provide reports as set out in Decision 98-8. The Commission directs SaskTel to file annual reports regarding pay telephones in accordance with the directives set out in Decision 98-8 and this decision, beginning on 30 June 2005.

72. The Commission further directs Bell Canada et al. and TCI to supplement the information provided in the annual reports filed pursuant to Decision 98-8 with the following information on pay telephone installations and pay telephone removal, beginning on 30 June 2005:

73. The Commission directs Bell Canada et al. and TCI to provide annually, as part of the Commission's monitoring activities established further to Order in Council P.C. 2000-1053, information on the number and proportion of their pay telephones with:

The need for a public interest pay telephone regime

Position of parties

74. The Consumer Groups submitted that Bell Canada et al. and TCI provide pay telephones in some locations where revenues are insufficient to cover the costs of the pay telephone. The Consumer Groups also submitted that location providers subsidized non-compensatory pay telephone service by either renting a pay telephone or subscribing to semi-public pay telephone service. The Consumer Groups submitted that Bell Canada et al. and TCI continued to maintain some non-compensatory pay telephones in various locations. The Consumer Groups submitted that the evidence demonstrated that pay telephones were nonetheless being removed from locations where they were not compensatory to the service provider, and that more removals could be expected in the future. The Consumer Groups noted that Bell Canada et al. and TCI would not remove pay telephones without discussion with or warning to the location provider. The Consumer Groups also noted that, where the removal might result in the last pay telephone being removed from a community, a telephone company might seek agreement from an elected official before proceeding. The Consumer Groups stated that such measures appeared to be discretionary on the part of the pay telephone service provider.

75. The Consumer Groups submitted that there was a need to maintain pay telephone service in some locations where usage revenues were insufficient to cover costs. According to the Consumer Groups, what was not clear was whether a subsidy regime was needed to ensure that this occurs.

76. The Consumer Groups acknowledged that there was insufficient evidence regarding the extent and seriousness of pay telephone availability problems. Accordingly, the Consumer Groups did not propose a mandated public interest pay telephone regime.

77. The Consumer Groups proposed an improved reporting and notification approach associated with pay telephone removals which they felt would fill this evidentiary gap and confirm whether the current voluntary approach, which leaves the discretion of pay telephone service delivery within the hands of the pay telephone service providers, is adequate. The Consumer Groups submitted that should the evidence collected indicate that the voluntary approach did not achieve satisfactory availability, then a mandatory approach should be adopted.

78. Bell Canada et al. submitted that there was no need to design a mandatory regime to provide a pay telephone to meet the health, safety and welfare requirements of consumers in locations where costs exceeded revenues. Bell Canada et al. noted that the evidence demonstrated that customers were satisfied with pay telephone service as well as with the accessibility of pay telephones. Bell Canada et al. also noted that the market already provided a low cost means to secure the placement of pay telephones where no other commercial incentive existed.

79. Bell Canada et al. considered that local government authorities were in the best position to consult with fire departments, law enforcement agencies, health and welfare agencies, and community groups to determine the location(s) where a pay telephone is essential to the health, safety and welfare requirements of consumers. Bell Canada et al. submitted that, if the government authority deemed that a pay telephone is essential to the health, safety and welfare requirements of consumers, the government could then approach a pay telephone provider to obtain pay telephone service.

80. Bell Canada et al. submitted that the imposition of a mandatory PIP regime with its associated regulatory obligations would impose a heavy administrative burden on the industry and the Commission, and would prove to be contentious. Bell Canada et al. noted that PIP regimes in other jurisdictions have resulted in the placement of very few pay telephones. For example, Bell Canada et al. noted that there were currently about 60 PIPs in the state of California.

81. Bell Canada et al. submitted that, consistent with the principles established in the price cap decisions, the cost of a PIP regime would be recoverable from an exogenous adjustment or through rating flexibility for other regulated services. Bell Canada et al. stated that, for ease of customer understanding, the services provided, the prices and customer safeguards should be the same as for other pay telephones.

82. TCI stated that pay telephone removals did not raise a sufficient public policy concern about pay telephone accessibility to warrant regulatory intervention such as the establishment of a public interest pay telephone regime. TCI argued that the location provider was in the best position to determine whether the pay telephone met a genuine public interest need.

83. TCI submitted that, if a location provider chose to retain a non-compensatory pay telephone in its current location, the location provider should bear the responsibility for cost recovery by obtaining semi-public telephone service or, as an alternative, a courtesy telephone.

84. TCI stated that it was particularly sensitive to the communication requirements of its remote and northern communities. TCI submitted that serving these regions was technologically challenging and expensive. TCI stated that it used alternative technologies such as radio and satellite services and was not contemplating abandoning the relationship it had established with these communities, but rather was moving towards a solution that best met the needs and obligations of all parties.

85. TCI submitted that, if the Commission were to designate some pay telephones as public interest pay telephones, the consumer safeguards governing the operation of the pay telephones should remain in effect to ensure calling parity with other pay telephones and identical baseline service. TCI also submitted that the question of providing access to long distance service from public interest pay telephones should be left to the service provider.

Commission analysis and determination

86. The Commission notes that the evidence demonstrates that customers are generally satisfied with pay telephone service as well as with the availability of pay telephones. The Commission considers that demand for pay telephone service is being met, in spite of pay telephone removals. In addition, the Commission notes that the net removal of pay telephones and pay telephone locations in HCSAs is proportionately lower than in non-HCSAs and that the majority of Canadians continue to use pay telephone service predominantly for convenience. The Commission also notes that only a small minority of Canadians are not satisfied with the availability of pay telephones and that Bell Canada et al. and TCI do not remove pay telephone service without discussion with or warning to location providers.

87. The Commission notes that none of the parties to this proceeding proposed the implementation of a PIP regime. In the Commission's view, a PIP regime could impose a heavy administrative and monetary burden on the industry. The Commission notes that PIP regimes in other jurisdictions have resulted in minimal placement of pay telephones. The Commission also notes that the ILECs provide options to location providers to secure or retain pay telephones where no commercial incentive exists.

88. The Commission concludes that the evidence does not support a need for the establishment of a PIP regime at this time. In the Commission's view, the establishment of the notification process and the modifications to the current reporting requirement will provide warning of any impeding concerns with pay telephone removals.

89. The Commission considers that the current regime, as modified in this decision, will ensure access to pay telephones to meet the health, safety and welfare requirements of consumers. The Commission considers that it would not be in the public interest to impose an obligation to provide pay telephone service at this time. The Commission will continue to monitor pay telephone removals and consumer complaints in order to determine if further action needs to be considered.

B. Access by deaf consumers

90. The Commission received an application by the CAD, dated 25 April 2001, pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, requesting that the Commission initiate a public proceeding to consider issues regarding access to public pay telephones by deaf consumers. In Public Notice 2002-6, the Commission invited comments on access to pay telephone service by deaf consumers.

Position of parties

91. The CAD submitted that deaf consumers were being unjustly discriminated against contrary to subsection 27(2) of the Telecommunications Act (the Act) because they were denied access to pay telephones in Canada. In the CAD's view, access to pay telephones meant that deaf consumers should be able to arrive at a pay telephone with nothing other than the means of payment and be able to place a call in the same manner as a hearing user.

92. The CAD submitted that only TTY-equipped pay telephones qualified as accessible since they alone put deaf consumers on equal footing with hearing users. The CAD stated that less than 0.5% of pay telephones in Canada are TTY-equipped.

93. The CAD submitted that a pay telephone equipped with a shelf and power source did not put deaf consumers on equal footing with hearing users since a deaf consumer might not own a portable TTY unit or have it at the relevant time. In addition, the CAD stated that although some portable TTY units were equipped with rechargeable batteries, a battery failure might occur. The CAD argued that the expectation that deaf consumers were required to purchase and carry around their own supplementary device in order to use pay telephones and face the risk of battery failure were burdens and barriers to access not imposed on any other group of users. According to the CAD, a pay telephone would be compatible if it had both a shelf to accommodate the portable TTY unit and a power source for the unit. The CAD argued that this configuration would not represent equivalent access. The CAD submitted that denial of equivalent access amounted to unjust discrimination in the provision of a telecommunications service contrary to subsection 27(2) of the Act.

94. The CAD submitted that the Commission's interpretation of subsection 27(2) of the Act must be consistent with the equality protections of the Canadian Charter of Rights and Freedoms and the Canadian Human Rights Act and must be applied with a view to implementing the policy objectives set out in section 7 of the Act.

95. The CAD submitted that the policy objectives contained in subsections 7(a), (b), and (h) of the Act were not aimed at ensuring only hearing Canadians benefit from Canada's telecommunications system. The CAD stated that, on the contrary, all Canadians, both hearing and deaf consumers, were entitled to a reliable and affordable telecommunications system which was accessible to them across Canada and which responded to their social and economic requirements.

96. The CAD submitted that Canadian human rights law imposed an obligation on service providers to accommodate the needs of disabled persons up to the point of undue hardship. The CAD argued that a situation where less than 0.5% of pay telephones were TTY-equipped could not represent fulfilment of that legal obligation. Moreover, the CAD submitted that ILECs could not claim that the CAD's proposal to remedy this situation, with an estimated cost of $176 million, would impose undue hardship on the pay telephone providers as the costs could be fully met without raising the pay telephone rates or the rates of any other services.

97. The CAD submitted that the Commission cannot interpret subsection 27(2) of the Act in a manner that permits continued discrimination against deaf consumers and then leave it up to the Canadian Human Rights Commission to fix the problem. The CAD also submitted that accommodation to the point of undue hardship is what the law requires and is what the Commission should do.

98. The CAD stated that the most effective method of ensuring access to pay telephones by deaf consumers would be to equip pay telephones with TTY units. The CAD proposed that the following program be required from all pay telephone service providers:

  1. on a going forward basis, all new pay telephone installations and all pay telephone replacements must incorporate TTY units;
  2. no later than 31 December 2004, all pay telephone banks with four or more pay telephones must be upgraded to include at least one TTY-equipped pay telephone;
  3. no later than 31 December 2005, all pay telephone banks with two or three pay telephones must be upgraded to include at least one TTY-equipped pay telephone; and
  4. no later than 31 December 2008, all individual pay telephones, not located in a bank of pay telephones, must be upgraded to include a TTY unit.

99. The CAD stated that the upgrades would not be required if there were already a TTY-equipped pay telephone within the same building and on the same level and within 70 metres of the pay telephone bank or pay telephone in question or, in the case of pay telephone banks or pay telephones located outdoors, if there were already a TTY-equipped pay telephone within 70 metres of the pay telephone bank or pay telephone in question.

100. The CAD estimated that its proposal would result in a maximum implementation cost of $176 million, based on Bell Canada et al.'s estimate to upgrade every pay telephone location and based on the assumption that its proposal would reduce the number of pay telephone locations to be upgraded by 20%.

101. The CAD proposed that the costs of implementing its access initiative could be recovered by pay telephone service providers from their ongoing revenues over the life of the pay telephones. The CAD suggested that, for the large ILECs, the cost of purchasing and installing the TTY units could be funded by pay telephone rate increases or an exogenous adjustment to the price cap formula or a draw down from the ILECs' deferral accounts.

102. Bell Canada et al., TCI and the Consumer Groups all opposed the CAD's proposal for a TTY upgrade program.

103. Bell Canada et al. stated that the CAD had misconstrued the mandate and jurisdiction of the Commission and objected to what they characterized as CAD's efforts to convert the Commission into a human rights tribunal. Bell Canada et al. stated that the Commission's mandate was to regulate and supervise Canadian telecommunications with a view to implementing the policy objectives provided for in section 7 of the Act. Bell Canada et al. argued that the Commission should not replicate the processes and jurisdiction of the Canadian Human Rights Commission, which was to investigate, adjudicate and remedy alleged violations of human rights.

104. Bell Canada et al. submitted that proper construction of subsection 27(2) of the Act involved more than a rights-based analysis as proposed by the CAD. Bell Canada et al. submitted that, when interpreting and applying subsection 27(2) of the Act, the Commission must consider all of the issues and competing interests in the process of developing reasonable telecommunications policy and not just the rights-based analysis proffered by the CAD. Bell Canada et al. added that they did not disagree that the Commission may properly take into account equality and anti-discrimination objectives in exercising its regulatory mandate. Bell Canada et al. stated that, however, the Commission should not engage in a human rights analysis divorced from the full range of section 7 policy objectives of the Act.

105. Bell Canada et al. stated that all of their pay telephones were hearing-aid compatible, provided message relay service (MRS) and were connectible with portable TTY units. Bell Canada et al. added that the majority provided volume control and some had built-in data jacks.

106. Bell Canada et al. noted that they also assisted location providers in permanently equipping pay telephones with TTY units where demand existed and that they consulted and worked with location providers and representatives of the deaf community to identify locations where a TTY unit should be placed.

107. Bell Canada et al. submitted that they had made progress in enhancing access for deaf consumers and were committed to working with location providers and deaf consumers to further improve access and that the collaborative approach they had adopted for enhancing access for deaf consumers satisfied any legal obligation they might be under to accommodate deaf consumers in the provision of pay telephone service.

108. Bell Canada et al. argued that there was no demonstrated evidence of demand for TTY-equipped pay telephones. Bell Canada et al. noted that usage studies of TTY-equipped pay telephones found very low usage levels of TTY units, even in areas where message volumes are otherwise relatively high. In addition, Bell Canada et al. reported having received very few customer complaints relating to the provision of TTY-equipped pay telephones.

109. Bell Canada et al. submitted that the CAD's proposal to TTY-equipped pay telephones should not be imposed because such a proposal raised important financial, logistical and technological considerations.

110. Bell Canada et al. estimated the up-front costs to implement the CAD's proposal in their operating territories to be in excess of $120 million. Bell Canada et al. specified that this estimate did not include such one-time costs as providing power or modifying pay telephone furniture to accommodate the TTY units or any ongoing maintenance costs. Bell Canada et al. submitted that the costs associated with the CAD's proposal should not be recovered from pay telephone revenues because this would result in significant damage to the health of the industry, accelerate the rate of removal of low usage pay telephones due to the magnitude of the costs associated with the CAD's proposal and could potentially force some pay telephone service providers to exit the business. Bell Canada et al. submitted that, consistent with the price cap decisions, the impact should be recovered from an exogenous adjustment, whether or not there is sufficient money in a company's deferral account to allow the exogenous adjustment to be taken as a draw-down.

111. Bell Canada et al. indicated that the installation of TTY units could not be accomplished unilaterally by ILECs. Bell Canada et al. noted that agreement and cooperation of the location provider was required because TTY units required a power source that could provide 110 volts of electricity. Bell Canada et al. added that retrofitting pay telephones with a TTY unit would almost certainly require extensive, intrusive and costly site-work for the installation of wiring. Finally, Bell Canada et al. stated that there existed a risk that many location providers would elect not to provide pay telephone service at all.

112. Bell Canada et al. stated that TTY units were not embraced by deaf consumers as the predominant means of accessing telecommunications systems and had been overtaken by new technologies such as the Internet, wireless communications, and video. Bell Canada et al. stated that the TTY technology had been referred to on the CAD's web site as obsolete and submitted that it would be impractical and inefficient to order the installation of TTY units on thousands of pay telephones when the technology had not been readily accepted in the deaf community and may even be obsolete.

113. In Bell Canada et al.'s view, adopting the CAD proposal would run counter to several policy objectives in the Act, including rendering reliable and affordable telecommunications services of high quality in both urban and rural areas, enhancing efficiency and competitiveness, and encouraging innovation in the provision of telecommunications services.

114. TCI stated that accessibility by deaf consumers has improved in its serving territory consequent to the deployment of over 9,000 Millennium pay telephones. TCI explained that these pay telephones offered volume control and hearing aid compatibility, and allowed deaf consumers to connect and communicate through the use of portable TTY units.

115. TCI stated that, despite the variety of locations served by its TTY-equipped pay telephones, the demand for TTY functionality remained very low. TCI suggested that this could be explained by the availability of other services such as text messaging using wireless telephones, Blackberry devices and public Internet kiosks. TCI stated that a month long usage study conducted by TCI from December 2002 to January 2003 revealed that, of the 40 TTY-equipped pay telephones studied, less than half were used. TCI specified that, of the 18 TTY units registering calls, 12 had ten or fewer calls, while six had more than ten calls.

116. TCI stated that it recognized that deaf consumers have a right to enjoy access to pay telephones, but that the access rights of deaf consumers must be balanced against the rights of all pay telephone users and must not impose undue hardship on the telecommunications carrier or pay telephone location provider. TCI submitted that the CAD failed to demonstrate how the implementation costs associated with its proposed TTY upgrade program would not impose an undue hardship on other pay telephone consumers or the public at large.

117. TCI submitted that the location provider should be responsible for the provision of TTY units at pay telephone locations.

118. TCI submitted that there was an evidentiary gap on the record of the proceeding about how deaf consumers use TTY units at pay telephones and the extent to which they use alternatives to TTY units. TCI submitted that in the absence of further evidence of this nature, it is impossible for the Commission to measure the actual or anticipated level of demand for TTY units beyond the estimates provided by the CAD.

119. TCI estimated the cost to install one TTY unit in every pay telephone in its territory at $68.8 million, using an average unit cost of $1,500 plus $300 for initial installation.

120. TCI opposed the use of the deferral accounts to fund the proposed upgrade program on the grounds that there was uncertainty on the amounts available from the deferral accounts, the cost to implement the proposal was significant and the implementation of the proposal would continue beyond the current price cap period.

121. The Consumer Groups expressed concerns about the need for and cost of improving access for deaf consumers. The Consumer Groups submitted that the evidence regarding the need to improve access to pay telephone service by deaf consumers was inconclusive. The Consumer Groups argued that focusing on usage as an indicator of need was not helpful because deaf consumers had become accustomed to lack of access.

122. The Consumer Groups submitted that the CAD's proposal to equip all pay telephone locations with TTY units would generate an enormous cost with implications for general telephone availability and affordability. The Consumer Groups submitted that, in determining whether, or at what point, failure to accommodate deaf consumers via TTY-equipped pay telephones constitutes unjust discrimination under subsection 27(2) of the Act, the Commission should consider the following factors:

  1. the cost of installing and maintaining TTY units in pay telephones,
  2. the manner in which such cost would be recovered,
  3. the implications of such cost recovery for pay telephone availability generally and for the affordability and reasonableness of rates for basic telephone service,
  4. the demand for TTY-equipped pay telephones, and
  5. alternative ways to accomplish the desired accommodation that may place less of a burden on telephone companies, other pay telephone users, or telephone subscribers.

123. The Consumer Groups stated that they were not sure whether pay telephone service providers, location providers or some mix of the two should be made responsible for providing, installing and maintaining TTY units in pay telephones. In the Consumer Groups' view, both approaches risk adverse consequences in terms of pay telephone availability. The Consumer Groups added that funding such an initiative via telephone rates would be relatively regressive and, therefore, less desirable.

124. The Consumer Groups suggested that a decision on this matter should be made by a body capable of considering all options. The Consumer Groups stated that, unlike the Canadian Human Rights Tribunal, the Commission has no jurisdiction over location providers other than Canadian carriers and the Commission has limited options in terms of assigning responsibility for the funding of TTY units in pay telephones.

125. The Consumer Groups submitted that any monthly rate increase for basic service as a result of an exogenous adjustment should be fully justified in terms of the benefits that it will bring, as compared to the burden that such rate increases would have on low-income subscribers. The Consumer Groups also submitted that any increase to the price of basic telephone service would exacerbate existing affordability problems for some low-income households. The Consumer Groups stated that it was unlikely that the benefits of placing TTY units in every pay telephone location throughout Canada outweighed the cost burden on subscribers. According to the Consumer Groups, the benefits of less widespread, but still expanded, provision of TTY-equipped pay telephones would justify the burden of a very small end-user surcharge.

126. The Consumer Groups submitted that the CAD proposal should not be funded via an increase in the price of pay telephone service or an increase in the price of general telephone service. The Consumer Groups stated that an increase to the current charge to place a local call from a pay telephone would compromise pay telephone accessibility and affordability and an increase to the price of general telephone service could further compromise the affordability of basic telephone service. The Consumer Groups stated that the effort to increase accessibility for a certain class of users would have the effect of reducing accessibility for the rest of the user population. The Consumer Groups indicated that, if required, any increase in the rates for general telephone service should be so minor as to make no significant difference to subscribers.

127. Finally, the Consumer Groups stated that, from the consumer's perspective, it would be preferable to use funds available in the deferral account to cover the costs of increased TTY provision, rather than imposing a rate increase or end-user surcharge. The Consumer Groups warned, however, that use of deferral funds for purposes other than rebating residential subscribers would be effectively use of monies rightfully owed to such subscribers.

Commission analysis and determination

128. The Commission notes that the provision of pay telephone service in Canada constitutes the provision of a telecommunications service under the Act. Subsection 27(2) of the Act prohibits a Canadian carrier from unjustly discriminating or giving an undue or unreasonable preference towards any person or subjecting any person to an undue or unreasonable disadvantage in relation to the provision of a telecommunications service:

27(2) No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

129. The Commission noted its general interpretive approach to subsection 27(2) of the Act 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 (Decision 2003-49):

The Commission's analysis of an allegation concerning a contravention of subsection 27(2) of the Act is conducted in two phases. The Commission first determines whether the conduct in question is discriminatory or preferential, and where it so determines, it then decides whether the discrimination is unjust or the preference is undue or unreasonable.

130. The Commission considers that the general interpretive approach to subsection 27(2) outlined in Decision 2003-49 is equally applicable in the present context.

131. In order to place a call at over 99.5% of pay telephones in Canada, deaf consumers have the additional obligation of providing a portable TTY unit. This additional obligation is imposed on deaf consumers because of a personal physical characteristic and is not imposed on other users. As such, the Commission finds that the provision of non-TTY equipped pay telephones discriminates against deaf consumers.

132. Only discrimination that is unjust is proscribed by subsection 27(2) of the Act. Subsection 27(4) of the Act places the onus of establishing that the discrimination is not unjust or that any preference is not undue or unreasonable on the Canadian carrier that discriminates or gives the preference:

27(4) The burden of establishing before the Commission that any discrimination is not unjust or that any preference or disadvantage is not undue or unreasonable is on the Canadian carrier that discriminates, gives the preference or subjects the person to the disadvantage.

133. In determining whether a finding of discrimination in the provision of telecommunications services on the basis of a physical disability is unjust, the Commission utilizes a polycentric approach. This approach recognizes the importance to be accorded to human rights principles when interpreting and applying subsection 27(2) of the Act while at the same time recognizing that compliance with the direction provided by Parliament in subsection 47(a) of the Act is also required:

47. The Commission shall exercise its powers and perform its duties under this Act and any special Act.

  1. with a view to implementing the Canadian telecommunications policy objectives and ensuring that Canadian carriers provide telecommunications services and charge rates in accordance with section 27.

134. The Commission notes that, unlike other bodies responsible for administering human rights codes whose mandates are exclusively human rights in nature, the Commission's mandate under the Act is to regulate the telecommunications system in Canada. Part of that mandate, as expressed in subsection 27(2) of the Act, includes an anti-discrimination provision which obliges the Commission to ensure that Canadian carriers provide telecommunications services in a manner that is not unjustly discriminatory. Given the breadth of the Canadian telecommunications policy objectives contained in section 7 of the Act and the direction contained in subsection 47(a) of the Act, regulation of the telecommunications system necessarily involves the balancing of competing objectives. Thus, in determining whether the discrimination is unjust and in developing an appropriate regulatory response, the Commission must make a polycentric policy decision that balances multiple objectives and competing interests. The Commission would not be fulfilling its mandate if it engaged solely in a human rights analysis divorced from consideration of the full range of Canadian telecommunications policy objectives.

135. Accordingly, the Commission's polycentric approach to determining what constitutes "unjust" discrimination in the provision of a telecommunications service utilizes leading Canadian human rights principles that recognize that equality is a fundamental value and central component of the public interest and further considers an application of those principles within the broader policy framework imposed by section 7 of the Act.

136. Applying the polycentric approach outlined above, the Commission finds that Bell Canada et al. and TCI have not demonstrated that there are substantial technical, operational or financial obstacles which justify their discriminating against deaf consumers in more than 99.5% of pay telephones in Canada.

137. The Commission is of the view that a situation where over 99.5% of pay telephones are not accessible by deaf consumers on a basis that is equivalent to hearing users is unacceptable. Accordingly, the Commission finds that Bell Canada et al. and TCI have placed too much reliance on the compatibility of their pay telephones with portable TTY units as a measure of their satisfaction of their obligations under subsection 27(2) of the Act.

138. The Commission acknowledges that pay telephones with compatibility features do reduce the access obstacles faced by deaf consumers of pay telephone service. However, the Commission considers that the almost total reliance that Bell Canada et al. and TCI have placed on the compatibility features of their pay telephones, which require that deaf consumers provide a portable TTY unit, when a more accommodating feature was commercially available, is not sufficient to justify the discrimination faced by deaf consumers. Accordingly, the Commission finds that Bell Canada et al. and TCI are unjustly discriminating against deaf consumers in the provision of pay telephone service in Canada contrary to subsection 27(2) of the Act.

139. The Commission considers that the appropriate policy response to the above finding is a mandatory TTY upgrade program for certain pay telephones in Canada that, when considered within the context of the Canadian telecommunications policy objectives contained in section 7 of the Act, eliminates the unjust discrimination faced by deaf consumers in a manner that minimizes the risk that more pay telephones will become non-compensatory and therefore be removed from operation.

140. The Commission finds that the TTY upgrade program proposed by the CAD is more than what is required in order to address the unjust discrimination faced by deaf consumers. The Commission considers that the fixed and operational costs associated with the CAD's upgrade program, absent any expected matching increase in pay telephone revenues, would likely result in more pay telephones becoming non-compensatory and being removed from operation, thereby reducing the overall number of pay telephones available in Canada and the accessibility of reliable telecommunications services to Canadians. Accordingly, the Commission has developed a TTY upgrade program that achieves the desired balance.

141. The Commission notes that banks of pay telephones tend to be located in areas where there is high pedestrian traffic and usage. The Commission considers that a TTY upgrade program that primarily targets banks of pay telephones will have the benefit of placing TTY units on pay telephones located in areas with high usage that are less likely to become non-compensatory and removed as a result of having a TTY unit installed. The Commission is also of the view that banks of pay telephones that are more likely to be used by hearing consumers are also more likely to be used by deaf consumers. Having TTY units installed at such banks will have the associated benefit of increasing general awareness of their availability. The Commission considers that with less than 0.5% of pay telephones in Canada being TTY-equipped, the low usage research findings submitted by Bell Canada et al. and TCI may be attributable more to a lack of awareness of the availability of this service than to a representation of the adoption of this technology by members of the deaf community.

142. As noted above, the Commission is of the view that CAD's proposal to TTY-equip most stand-alone individual pay telephones is more than required in order to address the unjust discrimination faced by deaf consumers. The Commission notes that deaf consumers are dispersed throughout the country and that there may be communities where there are many deaf consumers and some where there are none. In the Commission's view, in those communities where there are no resident deaf consumers, TTY-equipped pay telephones would only be used by deaf consumers who are travelling in the area, decreasing the likelihood that the TTY units would ever be used. The Commission considers it unreasonable to mandate the installation of TTY units in areas where usage would in all likelihood be nil and where the likelihood that the pay telephone would be removed as a result of it becoming non-compensatory is high.

143. The Commission recognizes that there are locations where stand-alone individual pay telephones should be equipped with a TTY unit. In the Commission's view, these locations should be selected where it is reasonably likely that a TTY-equipped pay telephone will be used. The Commission considers that it is fair to assume that there is a reasonable likelihood that a TTY-equipped pay telephone will be used in communities where one or more deaf consumers are registered TTY users with Bell Canada et al. or TCI. The Commission considers that every community where Bell Canada et al. or TCI provide pay telephone service in which a registered TTY user resides should have at least one TTY-equipped pay telephone.

144. For all new pay telephone installations and pay telephone replacements in banks of pay telephones, the Commission directs Bell Canada et al. and TCI to equip at least one of the pay telephones with a TTY unit.

145. For all new pay telephone installations and pay telephone replacements in each community where there are no banks of pay telephones and at least one member of the community is registered with Bell Canada et al. or TCI as a TTY user, the Commission directs Bell Canada et al. and TCI to equip at least one stand-alone individual pay telephone with a TTY unit.

146. The Commission directs Bell Canada et al. and TCI to upgrade all of their pay telephone banks of four or more pay telephones by equipping at least one pay telephone with a TTY unit by no later than 31 December 2006.

147. The Commission directs Bell Canada et al. and TCI to upgrade all of their pay telephone banks of two or three pay telephones by equipping at least one pay telephone with a TTY unit by no later than 31 December 2007.

148. The Commission directs Bell Canada et al. and TCI to upgrade all of their stand-alone individual pay telephones located in each community where there are no banks of pay telephones by equipping each pay telephone with a TTY unit by no later than 31 December 2010, if a member of the community is registered with Bell Canada et al. or TCI as a TTY user.

149. The Commission notes that given the timeframe over which the directions above are to be implemented, newer technologies may become commercially available that are superior to TTY technology. In such circumstances, the Commission encourages Bell Canada et al. and TCI to apply for a modification of the present decision such that the more advanced technology could be installed.

150. Bell Canada et al. and TCI may file a request for an exogenous factor to recover the costs of upgrading their pay telephones with TTY units if they are of the view that it qualifies for such treatment.

C. Other issues

Interoperability of pre-paid calling cards

Positions of parties

151. The Consumer Groups submitted that, increasingly, telephone companies and their competitors are encouraging consumers to use chip cards (i.e., stored value cards) for local calls. They stated that these cards operate only with certain types of pay telephones and, in particular, they do not operate on pay telephones provided by companies other than the card issuer. They noted as an example, that a Bell Canada chip card cannot be used on an Allstream pay telephone. The Consumer Groups argued that this lack of interoperability reduced pay telephone accessibility and caused consumer frustration.

152. The Consumer Groups submitted that should pay telephone competition develop to the point where there are multiple pay telephone service providers, each operating a significant number of pay telephones in a given territory, further consideration should be given to making such cards interoperable. The Consumer Groups also submitted that should the Commission permit widespread provision of pay telephones without a coin payment option, the issue of calling card interoperability should be given higher priority and should be addressed in a follow-up proceeding.

153. Bell Canada et al. submitted that the Consumer Groups' proposal for a follow-up proceeding should be rejected. Bell Canada et al. stated that there was nothing on the record of this proceeding to suggest that such a proceeding was necessary. Bell Canada et al. added that the issue of pre-paid calling cards concerned billing arrangements for long distance services, which forborne from regulation.

154. TCI stated that the cost to implement technical and settlement solutions to enable calling card interoperability would likely exceed any benefit that would be expected by either incumbent or competitive pay telephone service providers. TCI indicated that given the near absence of complaints in Alberta or British Columbia with respect to calling card interoperability, it did not anticipate significant customer frustration if an interoperability policy was not adopted. TCI stated that there was no public policy reason for a regulatory requirement, at this time, for mandated pre-paid calling card interoperability.

Commission analysis and determination

155. The Commission notes that the vast majority of pre-paid calling cards that are available in retail outlets can be used from any pay telephone. The Commission also notes that pay telephone service is provided subject to certain consumer safeguards that facilitate access. Included among these are coinless access to emergency services, access by the hearing impaired and physically disabled, clear operating instructions including instructions for handling complaints, and the ability of telephone sets to return coins. In the event that the pay telephone is not equipped to accept a particular stored-valued pre-paid calling card, the customer can still make a local call (or a long distance call) by using a variety of other payment options such as cash in most pay telephones (90% accept coin payment), a calling card or a credit card. The Commission further notes that the customer can also reach the operator to place a collect call or have the call billed to a third number.

156. The Commission notes that the Consumer Groups' request for a follow-up proceeding is conditional upon the development of pay telephone competition to the point where there are multiple pay telephone service providers, each operating a significant number of pay telephones in a given territory. In the Commission's view, the Consumer Groups' request for a follow-up proceeding is premature because the condition upon which it is based has not materialized. The Commission denies the request for a follow-up proceeding.

Acceptance of coins

Positions of parties

157. The Consumer Groups stated that the evidence demonstrated that the vast majority of pay telephone users use coins and would find it problematic if pay telephones no longer accepted coins. The Consumer Groups proposed that every pay telephone location include a coin-operated pay telephone, except where specifically approved otherwise by the Commission (for example, where vandalism has been a problem in the past). The Consumer Groups also proposed that pay telephone service providers be required to post a notice on pay telephones where the coin option was to be removed, for 30 days prior to the removal of the coin box, and afterward for at least 90 days, explaining why the coin box was removed.

158. According to the Consumer Groups, elimination of the coin payment option would seriously reduce pay telephone accessibility to the general public. The Consumer Groups pointed to the results of the EKOS survey that demonstrated that the vast majority of pay telephone users use coins to make pay telephone calls; that 64% use coins more often than other methods of payment; that 23% reported using pre-paid calling cards, and that this method of payment was used "most often" by only 6% of respondents; that 36% of pay telephone users have been frustrated by pay telephones that would not accept coins and that a strong majority (71%) agreed that it would be a problem for them if pay telephones no longer accepted coins.

159. The Consumer Groups contended that company-specific pre-paid calling cards, while more convenient for telephone companies, were not nearly as convenient for consumers as cash. The Consumer Groups stated that coins were more widely available than cards and could be used for other purposes while pre-paid calling cards required a minimum up-front payment, eventually run out, could be lost, and did not work in pay telephones provided by alternative carriers.

160. Bell Canada et al. submitted that, in their experience, most customers chose the coin payment option for local calls, and most chose alternate billing mechanisms for long distance calls (various calling card options, collect, or third-party billing). Bell Canada et al. stated that, to meet the needs of customers, they continued to accept coin payment in the majority of pay telephone locations where pay telephones were used for local calling. They noted that over 90% of their pay telephones were equipped to take coin payments and that the percentage of locations where coin payment was accepted was higher, because, in banks of pay telephones, there would be a mix of card-only pay telephones and pay telephones which accept coin.

161. Bell Canada et al. noted that whether or not the pay telephone accepted coin payment, customers could call the operator to, for example, place an alternately-billed call or obtain directory assistance; call 6-1-1, 7-1-1 and 9-1-1 services free of charge. Customers could also use pre-paid calling cards at Bell Canada et al.'s card-only pay telephones.

162. Bell Canada et al. submitted that there were good business reasons for providing coin-operated pay telephones in most circumstances, and that there were also good, and legitimate, business reasons for providing card-only service in certain circumstances. Bell Canada et al. stated that in the following circumstances, not all pay telephone locations provided coin-operated pay telephones: where location providers specifically requested it; where the pay telephone was a desk-top pay telephone; where experience indicated that the pay telephone was used primarily for alternately billed local and/or long distance calling; to provide increased service reliability where repair personnel would be required to travel a considerable distance in order to repair a pay telephone with a damaged coin collection mechanism; where the pay telephone was located in a remote area and where coin theft or vandalism of coin mechanisms was a recurring problem.

163. Bell Canada et al. stated that in those instances where a company was considering providing card-only service, the situation was discussed in advance with the location provider and the location provider was offered by the company the option to become a vendor for card products.

164. Bell Canada et al. submitted that there was no justification on the record of this proceeding for the Commission to adopt the proposal that pay telephone service providers should be required to post notices before and after the removal of coin-capacity from a pay telephone. Bell Canada et al. noted that, in Decision 98-8, the Commission allowed that pay telephone service providers could determine what types of payment they accepted. In addition, Bell Canada et al. stated that coin payment was accepted at the vast majority of their pay telephone locations. Bell Canada et al. submitted that the market should continue to decide what payment options were provided.

165. TCI submitted that the supply of coin-operated pay telephones should continue to be driven only by market demand. TCI stated that there was both current and foreseeable demand for coin calling and indicated that it did not anticipate instituting any policy changes at this time that would affect the supply of coin-operated pay telephones.

Commission analysis and determination

166. The Commission notes that the evidence demonstrates that the majority of consumers use the coin payment option for local calls and that Bell Canada et al. accept coin payment in the majority of pay telephone locations where pay telephones are used for local calling. The Commission also notes that most consumers use alternate billing arrangement options for long distance calls such as calling cards, collect calls, and third-party billing.

167. The Commission notes that coin payment is accepted at over 90% of Bell Canada et al.'s pay telephone locations and that pre-paid calling cards are used extensively and are available in many retail outlets. In addition, the Commission notes that whether or not the pay telephone accepts coin payment, the customer can reach 9-1-1, MRS, repair service and operator services. Finally, the Commission considers that, in certain locations, it is acceptable to provide card-only service (for example, inmate service, desk-top pay telephones, remote areas such as mining camps, where coin payments is seldom used, such as provincial parks and where a damaged collection mechanism would require repair personnel to travel a considerable distance to repair the pay telephone). The Commission considers that the proposal to equip every pay telephone location with a coin-operated telephone is not required.

168. The evidence demonstrates that the coin payment option is still widely available. In addition, Bell Canada et al. discuss with the location provider and offer the location provider the option of becoming a calling card vendor before removing the coin payment option. Finally, the Commission notes that Bell Canada et al.'s and TCI's reporting on the number and proportion of their pay telephones with coin-capacity will provide warning of any impending concerns with the removal of the coin payment option. The Commission considers that the proposal for a notice to be posted on pay telephones where the coin payment option is scheduled for removal and afterward is not required.

169. The Commission denies the Consumer Groups' proposal to have all pay telephone locations equipped with a coin-operated pay telephone. The Commission also denies the Consumer Groups' proposal for a notice to be posted on pay telephones where the coin payment option is scheduled for removal and afterward.

Procedural matters

170. In its reply argument, Bell Canada et al. stated that the final argument filed by the Consumer Groups included new proposals concerning notification procedures. Bell Canada et al. submitted that these new proposals should have been included in the Consumer Groups' initial argument. Bell Canada et al. submitted that, by including these new proposals in its final argument, the Consumer Groups avoided the normal process of interrogatories. Bell Canada et al. stated that the notification procedures proposed by the Consumer Groups contemplated complex and far reaching regulatory procedures whereby the Commission would micro-manage the removal and installation of pay telephones. Bell Canada et al. submitted that for these reasons, paragraphs 37 to 44 of the Consumer Groups' final argument should be stricken from the record.

171. In its reply dated 19 June 2003, the Consumer Groups explained that they were unable to decide on a position and develop proposals based on that position until after they had obtained key information from Bell Canada et al. and TCI via the interrogatory process.

172. The Commission established principles, in Decision 2002-34, to determine whether the admission of proposals introduced at the end of a proceeding would be prejudicial to the rights of other parties. The Commission considered that there was a distinction to be made between new proposals not otherwise on the record and proposals that are similar to those already submitted by other parties earlier in the proceeding. The Commission determined that the admission of new proposals at the argument stage would be unfair to other parties, and would inhibit a full development of the record. The Commission also determined that proposals made at the argument stage that are similar to those made by other parties earlier in the proceeding should remain on the record provided they do not introduce new evidence.

173. The Commission considers that the Consumer Groups' proposal to require Bell Canada et al. and TCI to first demonstrate to the Commission that a pay telephone scheduled for removal was non-compensatory and that no other location provider in the vicinity for such pay telephone could be found as well as the proposal to impose on pay telephone service providers notification obligations in the event that they deny a request for installation of pay telephone service are new proposals not otherwise on the record. Based on the principles it established in Decision 2002-34, the Commission has stricken from the record those Consumer Groups' proposals. Specifically, paragraphs 42, 43 and 44 have been stricken from the record.

174. The Commission considers that the Consumer Groups' proposals to impose on Bell Canada et al. and TCI notification requirements associated with pending removals of pay telephones are similar to those proposed by TCI earlier in the proceeding and do not introduce any new evidence. Accordingly, the Commission considers that these proposals should remain on the record, and be accorded the weight deserved in the circumstances.

175. The Commission also considers that proposals dealing with pricing policy issues submitted by Bell Canada et al. and the Consumer Groups that were not directly limited to public interest pay telephones or pay telephones equipped for deaf consumers were outside the scope of the proceeding.

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

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