ARCHIVED - Telecom Order CRTC 2004-203

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Telecom Order CRTC 2004-203

  Ottawa, 23 June 2004

Aliant Telecom Inc.

  Reference: Tariff Notice 126

Centrex service


The Commission received an application by Aliant Telecom Inc. (Aliant Telecom), dated 3 March 2004, to revise the following tariff items in order to increase by $2 the non-contracted monthly rate for Centrex service in the smaller volume bands (up to 1,500 lines) in the provinces of Nova Scotia, Newfoundland and Labrador and Prince Edward Island and for all volume bands in New Brunswick:
  • Maritime Tel & Tel Limited (MTT) General Tariff item 780.4, Centrex Business Service, and item 975, Small Business Network Service;
  • Island Telecom Inc. General Tariff item 698.5, Centrex Business Service;
  • NBTel Inc. General Tariff item 70.2(1), Business Communications Service; and
  • NewTel Communications Inc. General Tariff item 190.2(b), Provincial Centrex Service.


Aliant Telecom also proposed to remove MTT General Tariff item 775, Centrex Business Service, Contract Rate Ceilings, noting that it was an expired promotion.


The Commission issued Centrex service, Telecom Order CRTC 2004-121, 16 April 2004, approving Aliant Telecom's application (Tariff Notice 126). On 2 April 2004 Allstream Corp. (Allstream) filed comments, which the Commission, inadvertently, had not taken into account in its consideration of the application.The Commission therefore considers Aliant Telecom's application on a de novo basis in this order.


Allstream argued that Aliant Telecom's proposal was anti-competitive, submitting that the proposed rate increases were a means of subsidizing the revenue losses associated with the dramatic decreases that Aliant Telecom recently made to the rates of its higher-volume and longer-term commitment customers in urban areas. Allstream cited Tariff Notices 39, 39A, 39B and 104, in which Aliant Telecom proposed to decrease Centrex rates for its largest customers, submitting that these rate changes impeded competition.


Allstream stated that the rate increase proposed in its application would force smaller customers to either pay the higher rates or subscribe to a minimum contract period of one year or greater. According to Allstream, this was an anti-competitive tactic designed to ensure that customers would not have the flexibility to easily change service providers.


In reply comments, dated 12 April 2004, Aliant Telecom submitted that its proposal was not anti-competitive, but that it followed the basic pricing principles whereby higher-volume and longer-term contract customers' rates were lower than smaller-volume and non-contractual monthly customers' rates.


The Commission notes that Centrex service is currently categorized as an uncapped service and as such, is not subject to the price constraints established in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34).


In Decision 2002-34, the Commission noted that an important consideration underlying its approach in the initial price cap regime was to provide regulatory protection to customers of primary exchange service where market forces were not sufficient to do so. This remained an important consideration for the next price cap period. In Decision 2002-34, the Commission also noted that Centrex service was a premium business service that was used as a substitute for single-line and multi-line business local exchange services. As Decision 2002-34 made single-line and multi-line business local exchange services subject to a basket constraint and a rate element constraint, the Commission did not consider it necessary to subject Centrex service to such constraints. Accordingly, Aliant Telecom's proposed rate increase is permissible under the existing regulatory framework.


The Commission approves,on a de novobasis, Aliant Telecom's Tariff Notice 126.
  Secretary General
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Date Modified: 2004-06-23

Date modified: