ARCHIVED - Transcript - Hull, QC - 2001/10/11
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Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
FOR THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Price Cap Regulation and Related Issues, pursuant to Telecom Public Notice CRTC 2001-37/
Révision des Prix Plafonds et Questions Connexes, conformément à L'Avis public Télécom CRTC 2001-37
| HELD AT: | TENUE À: |
|
Conference Centre Portage IV Outaouais Room Hull, Quebec |
Centre de Conférences Portage IV Salle Outaouais Hull (Québec) |
| October 11, 2001 | le 11 octobre 2001 |
Volume 8
Transcripts
In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publique.
Canadian Radio-television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Price Cap Regulation and Related Issues, pursuant to Telecom Public Notice CRTC 2001-37/
Révision des Prix Plafonds et Questions Connexes, conformément à L'Avis public Télécom CRTC 2001-37
BEFORE / DEVANT:
| David Colville | Chairperson / Président |
| Ron Williams | Commissioner / Conseiller |
| Barbara Cram | Commissioner / Conseillère |
| Andrée Noël | Commissioner / Conseillère |
| Jean-Marc Demers | Commissioner / Conseiller |
| Stuart Langford | Commissioner / Conseiller |
| David McKendry | Commissioner / Conseiller |
ALSO PRESENT / AUSSI PRÉSENTS:
| Michel Spencer | Hearing Manager and Secretary / Gérant de l'audience et secrétaire |
| Karen Moore Natalie Turmel | Legal Counsel / conseillères juridiques |
| HELD AT: | TENUE À: |
|
Conference Centre Portage IV Outaouais Room Hull, Quebec |
Centre de Conférences Portage IV Salle Outaouais Hull (Québec) |
| October 11, 2001 | le 11 octobre 2001 |
TABLE OF CONTENTS / TABLE DES MATIÈRES
| PAGE / PARA NO. | |
| PREVIOUSLY SWORN: DENNIS WEISMAN | 1949 / 12631 |
| PREVIOUSLY SWORN: MARK KOLESAR | 1949 / 12631 |
| PREVIOUSLY SWORN: SHARON SHUYA | 1949 / 12631 |
| PREVIOUSLY SWORN: DON TOWNER | 1949 / 12631 |
| EXAMINATION BY / INTERROGATOIRE PAR | |
| BCOAPO Ms MacDonald | 1949 / 12632 |
|
GT Group Telecom Mr. Daniels |
2015 / 13017 |
| Commission Counsel | 2080 / 13476 |
| Commission | 2105 / 13592 |
LIST OF EXHIBITS / PIÈCES JUSTICATIVES
| EXHIBIT NO. | DESCRIPTION | PAGE / PARA NO. |
| TELUS-1 | TELUS Opening Statement | 2011 / 12998 |
| TELUS-2 | Letter dated 9 October 2001 from Mark Kolesar providing the CVs for Mr. Kolesar, Mr. Towner and Ms Shuya | 2011 / 12999 |
| TELUS-3 | CV of Dennis Weisman | 2011 / 13000 |
| BCOAPO-3 | Introductory Pages of Edmonton TELUS Telephone Directory | 2011 / 13001 |
| BCOAPO-4 | Introductory Pages of TELUS B.C. Telephone Directory | 2011 / 13002 |
| BCOAPO-5 | TELUS General Tariff Original Page 16 | 2012 / 13003 |
| MTS-2 | Response to Undertaking requested by Commission Counsel, Ms Moore, Transcript Reference Volume 6, Paragraph 9606 | 2012 / 13004 |
| THE COMPANIES-27 | Response to Undertaking requested by BCOAPO, Transcript reference Volume 4, paragraph 5720 | 2012 / 13005 |
| THE COMPANIES-16A | Revision to Undertaking requested by ARC et al, Transcript reference Volume 3, paragraphs 4183 and 4200 | 2013 / 13006 |
| THE COMPANIES-28 | Response to Undertaking requested by BCOAPO, Transcript reference Volume 4, paragraph 5655 | 2013 / 13007 |
| THE COMPANIES-29 | Response to Undertaking requested by ARC et al, Transcript reference Volume 1, paragraphs 1551 and 1555 | 2013 / 13008 |
| THE COMPANIES-30 | Response to Undertaking requested by Commissioner Langford, Transcript reference Volume 4, paragraph 7097 | 2014 / 13009 |
| THE COMPANIES-31 | Response to undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 4, paragraph 6665 | 2014 / 13010 |
| THE COMPANIES-32 | Response to Undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 4, paragraph 6665 | 2014 / 13011 |
| THE COMPANIES-33 | Response to Undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 7, paragraph 11171 | 2015 / 13012 |
| GT GROUP TELECOM-11 | Decision CRTC 2001-238-2 | 2079 / 13469 |
| GT GROUP TELECOM-12 | A letter dated September 22, 2000 from Jonathan Daniels regarding Part VII application requesting the Commission to make certain orders against TELUS Communication Inc. and TELUS Communication B.C. | 2079 / 13470 |
| CRTC-26 | Undertaking to TELUS regarding competitive segment services | 2080 / 13471 |
| CRTC-27 | Undertaking to The Companies regarding competitive segment services | 2080 / 13473 |
ERRATA / ADDENDA
| Volume 6 | |
| Reference | Action |
| iii | "CRTC-25" s/b "THE COMPANIES-20" |
| Page 1503, line 20 | "Bodner" s/b "Bodnar" |
| Page 1521, line 7 | "and" s/b "of" |
| Page 1531, line 7 | "protecting" s/b "projecting" |
| Page 1538, line 12 | "shouldn't" s/b "should" |
| Page 1539, line 20 | "imbedded" s/b "embedded" |
| Page 1540, line 19 | "imbedded" s/b "embedded" |
| Page 1545, line 17 | "swig" s/b "swing" |
| Page 1555, line 12 | "off" s/b "of" |
| Page 1575, line 24 | "adverse" s/b "averse" |
| Page 1576, line 11 | "adverse" s/b "averse" |
| Page 1583, line 13 | "Park" s/b "PARC" |
| Page 1584, line 17 | "Park" s/b "PARC" |
| Page 1586, line 4 | "Park" s/b "PARC" |
| Page 1586, line 7 | "Park" s/b "PARC" |
| Page 1586, line 11 | "Park" s/b "PARC" |
| Page 1587, line 21 | "Park" s/b "PARC" |
| Page 1588, line 11 | "Park" s/b/ "PARC" |
| Page 1588, line 20 | "reaching" s/b "working" |
| Page 1588, line 24 | insert "average" after "use" |
| Page 1592, line 2 | delete "of" |
| Page 1593, line 6 | "provision" s/b "provisioning" |
| Page 1593, line 10 | "root" s/b "route" |
| Page 1593, line 22 | "root" s/b "route" |
| Page 1594, line 16 | "root" s/b "route" |
| Page 1595, line 5 | "Park's" s/b "PARC" |
| Page 1595, line 25 | "a" s/b "an average" |
| Page 1597, line 18 | "[unpronounceable]" s/b "Tornquist" |
| Page 1597, line 23 | "Turnquist" s/b "Tornquist" |
| Page 1599, line 11 | "EDSL" s/b "ADSL" |
| Page 1600, line 21 | "CRTC Exhibit No. 25" s/b "The Companies Exhibit No. 20" |
| Page 1600, line 22 | "CRTC-25" s/b "The Companies-20" |
| Page 1610, line 20 | "an attractive" s/b "a protected" |
| Page 1612, line 1 | "Mr. Heritan" s/b "Mr. Hariton" |
| Page 1613, line 15 | delete "being" |
| Page 1613, line 21 | "Parks" s/b "Park" |
| Page 1617, line 8 | "Of" s/b "of" |
| Page 1618, line 6 | "amongst this effort" s/b "amongst other things" |
| Page 1619, line 18 | "perspective" s/b "prospective" |
| Page 1621, line 6 | "known" s/b "their" |
| Page 1625, line 19 | "the" s/b "their" |
| Page 1626, line 20 | "A, B, C" s/b "ABC" |
| Page 1627, line 21 | "lay an audit term" s/b "get an audit done" |
| Page 1628, line 15 | "perspective" s/b "prospective" |
| Page 1629, line 12 | "mislead" s/b "misled" |
| Page 1645, line 16 | "were" s/b "because" |
| Page 1649, line 5 | "was" s/b "were" |
| Page 1651, line 23 | "plan" s/b "plant" |
| Page 1652, line 22 | "delete "the" at the end of the line |
| Page 1653, line 7 | delete "1605" |
| Page 1664, line 13 | "September02" s/b "September01" |
| Page 1672, line 8 | insert "Is it a" before "fair" |
| Page 1674, line 12 | "no new" s/b "the new" |
| Page 1675, line 21 | "de" s/b "the" |
| Page 1688, line 10 | "costs" s/b "cost" |
| Page 1688, line 11 | "Park" s/b "PARC" |
| Page 1688, line 14 | "Park" s/b "PARC" |
| Page 1690, line 21 | insert "the" before "economy" |
| Page 1691, line 3 | "mix and" s/b "mix of" |
| Volume 7 | |
| Page 1698, line 16 | "discreet" s/b "discrete" |
| Page 1700, line 6 | "dictionary" s/b "discretionary" |
| Page 1702, line 17 | "discreet" s/b "discrete" |
| Page 1705, line 23 | "witness" s/b "written" |
| Page 1717, line 9 | "year of price" s/b "period of price" |
| Page 1721, line 6 | "base" s/b "pace" |
| Page 1727, line 14 | "chain GDPPI" s/b "chained GDP-PI" |
| Page 1732, line 15 | "regulations" s/b "regulation" |
| Page 1734, line 8 | "private" s/b "productivity" |
| Page 1739, line 23 | "is" s/b "are" |
| Page 1745, line 2 | "Park" s/b "PARC" |
| Page 1745, line 7 | "Park" s/b "PARC" |
| Page 1746, line 3 | "Park" s/b "PARC" |
| Page 1746, line 5 | "Park" s/b "PARC" |
| Page 1747, line 21 | "Park" s/b "PARC" |
| Page 1749, line 3 | "drop-ware" s/b "drop-wire" |
| Page 1749, line 5 | "OPAC's" s/b "(OPACS)" |
| Page 1750, line 1 | "OPAC's" s/b "OPACS" |
| Page 1757, line 3 | "taylor" s/b "tailor" |
| Page 1757, line 15 | "things" s/b "costs" |
| Page 1769, line 8 | insert "--" after "clause" |
| Page 1822, line 18 | delete "on" |
| Page 1832, line 14 | "is" s/b "are" |
| Page 1832, line 15 | "instance" s/b/ "instances" |
| Page 1833, line 10 | "proceeding" s/b "preceding" |
| Page 1849, line 12 | "sat." s/b "satisfactory" |
| Page 1854, line 12 | insert "to" after "maybe" |
| Page 1862, line 16 | "covet" s/b "cover" |
| Page 1868, line 13 | insert "," after "local" |
| Page 1885, line 22 | "2068" s/b "2000-68" |
| Page 1890, line 24 | insert "," after "long distance" and "gateway" |
| Page 1890, line 24 | "gateway" s/b "Gateways" |
| Page 1894, line 17 | insert "Bell Nexxia was" after "where" |
| Page 1901, line 13 | "recommerce" s/b "e-commerce" |
| Page 1912, line 5 | insert "systems" after "existing" |
| Page 1913, line 22 | "municipal" s/b "multiple" |
| Page 1915, line 15 | delete "or" |
| Page 1927, line 15 | "is" s/b "are" |
| Page 1927, line 23 | "is" s/b "are" |
| Page 1929, line 11 | "Is" s/b "Are" |
| Page 1939, line 15 | "Ms Shwya" s/b "Ms Shuya" |
| Page 1940, line 3 | "Ms Shwya" s/b "Ms Shuya" |
| Page 1940, line 10 | "Ms Shwya" s/b "Ms Shuya" |
| Page 1940, line 21 | "Ms Shwya" s/b "Ms Shuya" |
| Page 1941, line 1 | "Ms Shwya" s/b "Ms Shuya" |
| Page 1941, line 11 | "Ms Shwya" s/b "Ms Shuya" |
Hull, Quebec / Hull (Québec)
--- Upon resuming on Thursday, October 11, 2001 at 0900 / L'audience reprend le lundi 11 octobre 2001 à 0900
12625 THE CHAIRPERSON: Order, please, ladies and gentlemen. We will return to our proceeding now.
12626 We had some discussion yesterday about scheduling for the balance of the hearing and the issue about oral argument and we will be making an announcement about that at the break. We are just confirming room availability and so on. So we will make an announcement on that issue at the break.
12627 I would just say, though, at this point that it would be our intention to try and finish the cross-examination of the TELUS panels this week. So whether or not we will be sitting on Saturday -- and I don't mean this to sound like a threat -- let me put it this way, we are perfectly prepared to sit on Saturday if we need to in order to finish the TELUS panels. But if, for whatever reason, the time collapses and we can finish by the end of the day tomorrow, then we won't sit on Saturday and we will finish with the remaining panels next week.
12628 And I would just remind parties, though, we have seven or eight individual consumers who we are going to handle with a teleconference on Friday And given that a couple of them are from British Columbia, I think we will probably do that at 2:00 p.m. on Friday. I have seven listed here now so that wouldn't take too too long. So leave it at that for now and, as I say, we will make an announcement just after the break this morning.
12629 Any other issues anyone wants to raise before we return to cross-examination?
12630 Mr. Secretary, this torture that they seem to want to bring upon us every morning about this time, maybe you could, again, see if they could do something with the air conditioning in here, which never seems to work particularly well in any event.
12631 So no other issues? So we will return to cross-examination of TELUS panel 1A, Ms MacDonald.
PREVIOUSLY SWORN: DENNIS WEISMAN
PREVIOUSLY SWORN: MARK KOLESAR
PREVIOUSLY SWORN: SHARON SHUYA
PREVIOUSLY SWORN: DON TOWNER
EXAMINATION BY / INTERROGATOIRE PAR
12632 MS MacDONALD: Good morning.
12633 Mr. Chairman and Commissioners, thank you very much for the opportunity to look over the Terms of Service. There had been some changes and so it was very helpful for me to not do it on the fly.
12634 With respect to that, I wanted to explain the two documents that you would have gotten this morning. Yesterday, a document was given to you and the front of it says "Contents 1" and it's the pages from the Vancouver telephone book, and it says "BCOAPO Exhibit" on it. Another document was handed out this morning and this is the document that was given to me by the panel members. And this is the Edmonton telephone books. And the third document is a one-pager, and this is, hopefully, an aid in order to go back and forth between the documents to understand what the actual changes were.
12635 And what I have done, to explain to everyone, is I didn't use a sophisticated computer program, I used my pen. And I have done a previous article number, and that is the TELUS old terms, and right next to it will be the new terms that TELUS is going to put into place, so that there is a cross-reference between them because they are not consistent, one, two, one two, all the way through.
12636 Then I have written my interpretation of it, whether it's actually a new provision or whether it's basically the same. And, of course, I will be going over most of these, so if there is -- my interpretation of "new" and "same" might be different from the panel's. But that's just to explain the documents that you got this morning and to try to navigate through them.
12637 Good morning, panel members.
12638 MR. WEISMAN: Good morning.
12639 MS MacDONALD: Ms Shuya, after getting the Edmonton telephone book, would you agree with me that the Terms of Service have changed from the exhibit I had given you earlier yesterday -- so from the Vancouver Terms of Service?
12640 MS SHUYA: I would agree that they have changed in terms of providing the same information about consumers' rights, responsibilities and liabilities in a plain English -- or a plain language format.
12641 MS MacDONALD: Okay. Now, would you agree that essentially when you are looking at the Vancouver telephone book and the Edmonton telephone book that some of the information is still in places that it used to be before? And by way of explaining that, for example, billing information in the Vancouver example is on page 17 and billing information on the Edmonton example is now on page 19. You would agree with that?
12642 MS SHUYA: Yes.
12643 MS MacDONALD: And complaints and compliments are on page 10 in the Vancouver example, page 12 in the Edmonton example?
12644 MS SHUYA: That's correct.
12645 MS MacDONALD: So in sum, then, the customer contractual terms would be laid out in pages 12, 19 and 31 through to 38 in the Edmonton example. Would that be right?
12646 MS SHUYA: Yes.
12647 MS MacDONALD: Okay. I would like to turn to the Terms of Service in both documents, and they are at page 31 in the Edmonton example and page 31 in the Vancouver sample. I would like to go through, as I see it, the changes.
12648 Would you agree with me that the "General Terms" located in articles 1 in both are basically the same?
--- Pause
12649 MS SHUYA: Yes.
12650 MS MacDONALD: Would you agree with me that the effective date of the changes in both article 2 are basically the same? And I would also ask you to look at the "Obligation to Provide Services" in article 3 are essentially the same?
12651 Actually, ignore three, I have a question on number three, pardon me.
--- Pause
12652 MS SHUYA: Yes.
12653 MS MacDONALD: In article 3, which are essentially the same number, this is the TCI obligations, would you agree that they are the same, except for -- there has been a new provision in your new Terms of Service, and that is that there is a new exception to the obligation to serve on the part of the companies and they don't have to provide services, and it's located in (c) -- TCI doesn't have to provide services if they cannot acquire or maintain the equipment facilities rights of way, rights of access, et cetera, et cetera.
12654 Would you agree with that, that there is that additional change, additional term, in the new one?
12655 MS SHUYA: Yes.
12656 MS MacDONALD: Would you agree with me that that is actually not in favour of the customer, that's not a customer right or a customer-favourable term? Would you describe it as a customer-favourable term?
--- Pause
12657 MS SHUYA: The way I'm interpreting this particular provision in our Terms of Service is that it just provides the customer with all of the facts. There are some things that may be beyond the company's control, therefore it may be very difficult for us to, in fact, be able to provide them service if we are unable to in fact, for example, establish agreements to acquire rights of ways.
12658 MS MacDONALD: Okay. And would you also agree with me that this now sets out an additional -- a fourth term where there is no obligation to serve on the part of TCI?
12659 MS SHUYA: That's true.
12660 MS MacDONALD: And that's not favourable to the consumer. Would you agree with that?
12661 MS SHUYA: No, it's just simply a fact.
12662 MS MacDONALD: A fact that's not favourable to the consumer. Would you agree with that?
--- Pause
12663 MR. KOLESAR: If I can jump in here, there are going to be certain situations that are going to come up that are simply not going to be favourable to consumers. We try to control as much of that as we can. And the purpose of the clause in here is to point out to customers that there may be certain situations where we are simply not able to act on an obligation to serve.
12664 So from that perspective, when that kind of situation comes up, certainly it's not favourable to customers, but I'm not sure that I'm comfortable with characterizing this term in our Terms of Service as not being favourable. That situation is not. And what we are attempting to do here is give customers the best information we can about what we can do on their behalf. The unfortunate fact is there are going to be some situations in which, even though we might like to have them as a customer, it's simply not possible. And the purpose of this term is to point that out.
12665 So I think the way that I would like to characterize it is there are going to be situations that come up in this business, like any other business, where you want to provide service to a customer, you are in the business of providing service to a customer, but sometimes it's just not possible. And the purpose of this term is to advise customers of a situation that may come up. So I would characterize those facts as being not particularly favourable, but I'm not sure you can characterize the term as not being particularly favourable.
12666 MS MacDONALD: Would you agree with me that the addition of this exception to the obligation to provide service formalizes the problem that TELUS has, that if they can't provide service this formalizes it and puts it out there for the customers. They know: "We are not going to provide you with service under these circumstances"?
12667 MR. KOLESAR: No, I think what it does is it points out to customers a potential problem that the industry as a whole has, and simply informs them up front that, "Look, there are going to be some situations where we are simply not going to be able to act on our desire to have you as a customer".
12668 MS MacDONALD: I would like to move on to article 4 -- and again, that corresponds to the old article 4.
12669 In comparing them, Ms Shuya, the question comes back to you, my reading of them is that the new provisions are contained in the Edmonton example in paragraphs 4.1, 4.2, 4.3 and 4.5, if I could get you to look at that and see if you can agree with me on that point.
--- Pause
12670 MS SHUYA: Could you please repeat your question?
0915
12671 MS MacDONALD: I appreciate that it's difficult to do it at the time. I was doing it at about 12 midnight.
12672 The difference between the two articles are 4.1, 4.2 and 4.3 are new additions. To help you out, my understanding of this is that because of the inside wiring issue that you wanted to make it clear that TELUS' obligation to the customer had changed, but that's my interpretation. I would certainly like to understand what yours are because mine could be wrong.
--- Pause
12673 MS SHUYA: The purpose of the changes is simply to advise customers in terms of -- at what point we are actually obligated to bring their service to and so we have provided the terminology of the customer connection point in terms of identifying what we would call a demarkation point in which we would bring their service to.
12674 MS MacDONALD: Okay. So that sets out your obligations and the limit of your obligations. You would agree with that?
12675 MS SHUYA: Yes.
12676 MS MacDONALD: And in addition, 4.5, my understanding of it is that, well, basically you have added in the term that you will have no obligation to maintain or repair facilities or equipment owned by a customer and that's a new term.
12677 MS SHUYA: That's correct. Customers have a choice. They do not have to acquire the telephone equipment from TELUS, so that's why this clause is in here.
12678 MS MacDONALD: Okay. And would you agree with me that those four provisions protect TELUS?
12679 MR. KOLESAR: Once again, I don't know that I want to characterize them as provisions that protect TELUS. I think again I would characterize them as provisions that inform customers about how the industry works now, how service is provided and makes it clear to them what we can and cannot do on their behalf.
12680 But let me also point out that it points out things that we will do. When you look at 4.5, it then goes on to say that if the customer asks, TCI may provide maintenance and repair service to the customer's facilities and equipment according to the terms of the TCI tariff.
12681 I mean the whole purpose of this document is to make clear what everybody's rights and obligations are, so it is as much to protect the company from a purely legal point of view by making it clear about what our rights and obligations are as it is about protecting customers by making it clear to them about what their rights and obligations are.
12682 MS MacDONALD: Would you agree with me -- with respect to your last answer you said that the purpose of this was to lay out your responsibilities. Would you also agree with me that it's laid out in this way and the benefit to the customer is so that they understand your responsibilities?
12683 MR. KOLESAR: We want in the clearest possible terms that customers can comprehend to make it clear to our customers what our obligations are, what our rights are and what their obligations and what their rights are.
12684 Because the less confusion we have about that, the better relationship we can forge with every individual customer. That's the purpose of the exercise. That is why TELUS moved to plain language terms of service. That was the very purpose of doing this. We wanted to put a document in a convenient place, in the front of the phone book, that would in plain English, plain language, make it clear to everybody what their rights and responsibilities were.
12685 MS MacDONALD: Mr. Kolesar, would you agree with me that TELUS obligations then have changed from old section 4 to the new section 4?
12686 MR. KOLESAR: Some of the TELUS obligations have changed because the industry has changed.
12687 MS MacDONALD: Would you also agree with me that as in the first change that we went through that certain situations aren't favourable to the customer? Would you also agree with me that this is a situation where TELUS' change in obligation is also not favourable to the customer?
12688 MR. KOLESAR: I would not agree with the latter part of what you just said. I think there are certain factual situations that because of the characteristics of the industry and changes in the way that the industry works, changes which by the way give customers more choice in terms of the types of equipment that they get, in terms of what they want their inside wiring to look like, what they want to do within the confines of their own home.
12689 Those changes then mean that the obligations of the company change with respect to what we can provide to them and those changes I would suggest are really aimed at trying to provide customers with more choice and better options.
12690 Sometimes more choice comes with changed or more -- or different obligations. So the company's obligations have changed and the customers obligations have changed as a result of changes in the way service is provided, all aimed at giving customers more choice.
12691 I'm not sure that I am willing to characterize them as more favourable or less. There is a mix of things going on here so the relationship with our customers is changing. Some of the facts for some customers may be in some situations less favourable than what they were and in some situations maybe more so.
12692 All that we are trying to do here is make it as clear to customers as we can about what we can do for them and what we can't do in the market that we are currently in.
12693 MS MacDONALD: Mr. Kolesar, we will come back to that point. If I could get you to move on and we will come back to that point a little bit later.
12694 I would like you to move on to article 5. This is a brand new obligation on the part of the customer. I couldn't find an equivalent. Would you agree with that? I couldn't find an equivalent in the old terms.
12695 MR. KOLESAR: Sorry. I will have to turn to Ms Shuya and ask her to respond to that.
--- Pause
12696 MS SHUYA: From my quick review of the B.C. terms, it would appear to be new.
12697 MS MacDONALD: So we could accept that subject to check?
12698 MS SHUYA: Yes, subject to check.
12699 MS MacDONALD: The new article 6 is another obligation, responsibility, put on the customers.
12700 Subject to check, would you agree with me that this is an entirely new provision and was not contained in the old Terms of Service?
12701 MS SHUYA: Yes, subject to check.
12702 MS MacDONALD: Going on to the article 7 which corresponds to old article 8, would you agree with me that there is essentially no change, there is no new terms in this provision?
12703 MS SHUYA: Could you repeat that question, please?
12704 MS MacDONALD: Article 7 in the Edmonton telephone book, would you agree that it's essentially the same as the provisions contained in the Vancouver article 8?
--- Pause
12705 MS SHUYA: The information contained in section 7 is actually containing the same information. It's just presented in a more readable format.
12706 MS MacDONALD: Looking at article 8, which corresponds to the old article 9, would you agree with me that there are new provisions contained in there?
12707 The first is in 8.1(b) and it involves that the customer must also pay for calls placed through the customer connection point. So that's back to an earlier provision that you have changed -- the customer connection point.
12708 As well, there is a charge -- the customer must also pay charges in (d). That's a new provision. Customers must also pay for all calls charged to the customer's telephone number. As well, a new term is 8.2,
12709 You could actually explain it far better than me, but my understanding is that because there are customers -- they are billed for services from other telephone companies, this is to ensure that they pay those bills for those other companies and TCI isn't responsible for them; the customer pays them. Is that your understanding as well?
12710 MS SHUYA: It is my understanding.
12711 MS MacDONALD: And as well, this also gives TCI the ability to collect taxes from customers on any basis if any level of government passes a law and they can just add that to the bill. So these are new provisions?
12712 MS SHUYA: As we stated before, I think what the intent here with this particular section has been is to provide as much clarity to the customer as possible by making it very specific in terms of what the scope of the responsibility is with respect to a variety of charges that they may incur through the use of their phone system.
12713 MS MacDONALD: I understand that, but these are new provisions from the old Terms of Service to the new Terms of Service.
12714 MS SHUYA: Yes, they are.
12715 MS MacDONALD: With respect to the new 9 which corresponds to 18, there is a new provision in there. It is located in 9.3. This is with respect to a customer intentionally deceiving TCI regarding an unbilled or underbilled charge. You would agree with me that that is a new provision?
12716 MS SHUYA: Yes, subject to check.
12717 MS MacDONALD: New article 10, which corresponds to 20, the only new provision that I could find there was in looking at 10.2 the old provision used to state that if the service was cancelled by the customer during the minimum contract period, the customer was responsible to pay the bill.
12718 The new provision says if the service is cancelled by TCI or cancelled by the customer during the minimum contract period, the customer is still responsible to pay the bill. That's the only change is that now TCI can cancel the service and the customer would still be responsible for it.
12719 Would you agree with that change in the Terms of Service?
12720 MS SHUYA: Yes, subject to check.
12721 MS MacDONALD: With respect to the payment terms, I did want to point out that now, unlike your old Terms of Service, it does have the interest rate and that's located in 11.2 -- pardon me, your late payment charge. The late payment charge is based on the Bank of Montreal prime rate, plus 7 per cent, converted to a monthly compound rate and rounded up to the nearest quarter percentage point.
12722 That was not a term that was in your old terms. It probably was the actual rate before, but now it is put in the Terms of Service.
12723 MS SHUYA: Yes.
12724 MS MacDONALD: So we are not talking about a new thing here. It is something that -- you had this before but now you have put it in your Terms of Service in order to provide the clarity to the customer that you have been talking about.
0930
12725 MR. KOLESAR: I can't confirm whether or not that actual interest rate changed. I really don't know. We could, of course, check and get back to you, but certainly the one thing that has changed is that we have now put that information in here so that customers will in effect know what that charge is.
12726 MS MacDONALD: And that's a good thing for the customer, to know what their charges are?
12727 MR. KOLESAR: Yes, it is.
12728 MS MacDONALD: There is a new provision in there and that is 11.5. This is that if the customer's account is paid by cheque or pre-authorized debit and that is returned then the customer must pay an administration charge.
12729 That's a new provision that wasn't contained in the old terms?
12730 MS SHUYA: Yes, subject to check.
12731 MS MacDONALD: Going on to the next page, there are some new provisions contained within here.
12732 Now, the first one is in 12.4 and it's that the amount of a deposit from a customer that is required by TCI may be reduced if the customer requests that TCI block all long distance calls originating through the customer connection point.
12733 Now, I am familiar with this term and it came in last year in, I believe, in the summer of 2000. You would agree with me that this is obviously favourable to the customer?
12734 MS SHUYA: Yes, this is favourable to the customer.
12735 MS MacDONALD: So this is the first change that we have looked at in the Terms of the Service that, in my review of them this morning, that is favourable to the customer?
12736 MR. KOLESAR: Well, I am not sure that I would say that that's the first change. I guess it depends on what you test for what would be favourable and what is not.
12737 MS MacDONALD: I understand.
12738 MR. KOLESAR: But certainly, it is your view that that is the first term that you have seen that is favourable?
12739 MS MacDONALD: Now, there is another term in here which I would say is favourable to the customer, and that is located at 12.8. That basically states that when a deposit is required if TCI finds that the anticipated charges are actually lower they will refund the excess amount of the deposit.
12740 That is a good thing for customers, isn't it?
12741 MS SHUYA: Yes.
12742 MS MacDONALD: Now, there is also a change in 12.10 and that states that when service is terminated or cancelled TCI may apply any portion of the deposit against the customer's unpaid charges and, as well, they can use any written guarantee or other deposit of alternative to pay for a portion of any customer's unpaid charges.
12743 That is a new provision that wasn't contained in the old Terms of Service?
12744 MS SHUYA: Yes, subject to check.
12745 MS MacDONALD: In the next, 13, which corresponds to 14, there is a new customer provision contained -- pardon me -- a new provision contained in 13.4. This states that if TCI changes the telephone number of a customer and it is not at the customer's request, TCI will intercept the calls and advise the caller of the new number and they will provide that service until the customer service is cancelled or updated telephone directories come up.
12746 Now, that is a new provision?
12747 MS SHUYA: Yes.
12748 MS MacDONALD: And that is of assistance to the consumer, isn't it?
12749 MS SHUYA: Yes, it would be.
12750 MS MacDONALD: There is also a new provision contained in 13.5 and this is a new provision. It says that TCI is not liable for any damages resulting from changes to telephone numbers, local service areas, exchange areas or base rate areas."
12751 That is a new provision, would you agree with that?
12752 MS SHUYA: Yes, subject to check.
12753 MS MacDONALD: In the next article 14 which corresponds to article 5 there is two new provisions in there. They are contained in 14.1(c), and that's the conditions under which the customer will allow TCI to enter their property, and 14.3, it's an addition that TCI may enter the customer's property without permission. They have added one more provision.
12754 Would you agree with those two changes from the old Terms of Service?
12755 MS SHUYA: Yes, subject to check.
12756 MS MacDONALD: The next article is article 15 which corresponds to 22 and it's the right to suspend and terminate service, and 15.2 -- there are several new provisions.
12757 And 15.2 is when TCI may suspend a customer's service and they can only do it under these circumstances. My understanding is that (h), (i), (j), (k) and (l) are new provisions.
12758 MS SHUYA: Yes, subject to check.
12759 MS MacDONALD: And 15.3, which is that TCI may suspend or terminate a customer's message toll services if the customer fails to pay for the charges of an alternate provider of long distance service.
12760 That is a new provision entirely?
12761 MS SHUYA: Yes, subject to check.
12762 MS MacDONALD: In 15.5 there is a new provision that within a -- I have to read it because I don't recall offhand what it says, but:
"Within a reasonable amount of time before TCI suspends service, TCI must contact the customer and give them the following information." (As read)
12763 (d) is a new piece of information that is given to the customer and it states that:
"... notice that service will be terminated 10 days after suspension and the customer will have to reapply for service after that date." (As read)
12764 Would you agree with me that is a new provision?
12765 MS SHUYA: Yes, subject to check.
12766 MS MacDONALD: Ms Shuya, could you tell me whether that adds any time to the customer's notice?
12767 I was unclear whether there was a clarity being provided or this was some new term that would be of assistance to customers in order -- like not just to provide them clarity but to provide them with something new. I was unclear about that.
12768 MS SHUYA: Could you restate your question, please?
12769 MS MacDONALD: (d) is new and I am unsure whether (d) is a clarity of what is happening anyway or if the customer is actually being given something concrete that is in their favour. I must admit I don't really understand this term that well, but given that I don't understand it maybe you could let me know what is the practical effect of this provision?
12770 MS SHUYA: I don't know.
12771 MS MacDONALD: Ms Shuya, could I ask you to look at it and have an undertaking that you could provide me with some information on this term?
12772 MS SHUYA: Yes, I could do that.
12773 MS MacDONALD: Thank you.
12774 15.10 is a new term and it states that if service is re-established within 10 days of suspension the customer will be allowed to keep their telephone number. That is a new term contained in these provisions?
12775 MS SHUYA: Yes, subject to check.
12776 MS MacDONALD: And that is a good thing for customers. You would agree with that?
12777 MS SHUYA: Yes.
12778 MS MacDONALD: 15.13 is a new term. It states that if service is terminated TCI will charge the customer for the purchase of the equipment rental or lease from TCI which was used for the purposes of the terminated service and the customer will have to reapply for service in order to have the service reestablished, and you will not necessarily get the same number.
12779 That is a new provision?
12780 MS SHUYA: Yes.
12781 MS MacDONALD: Under telephone directories, 16, which corresponds to 12, there is a new provision in there that -- it is an additional charge that TCI may charge the customer for telephone directories if they require more telephone directories and if they are needed because the customer lost or intentionally destroyed telephone directories.
12782 That is a new provision?
12783 MS SHUYA: Which section are you referring to?
12784 MS MacDONALD: 16.4.
12785 MS SHUYA: Yes.
12786 MS MacDONALD: Thank you.
12787 If you go on to 17 --
12788 MR. KOLESAR: If we can just roll back to 16.4 one might assume that that means that if a customer walks into a TELUS office and says, "Can I have a phone book?" we would say, "No, sorry. We are going to charge you for it."
12789 This provision is really applied in really severe situations where you get certain customers who have a huge need. They need/want, you know, large volumes of books or in a situation where you have sort of an obvious and continual -- an obvious abuse of what one would normally expect. But I don't think you should interpret that one as saying that if somebody walks in and says "Can I have a phone book?" we are not going to tell you that they can't have one.
12790 MS MacDONALD: Thank you.
12791 Moving onto paragraph 17, would you agree with me that essentially it is the same?
12792 MS SHUYA: Yes.
12793 MS MacDONALD: Moving on to paragraph 18, which corresponds to 15, I would have to ask you to turn to 15 here, so 15 in the Vancouver example, that there is a change here and the change comes about that in the old 15 -- this is a refund for service problems.
12794 In the old 15 on the right-hand side of that row there is a full sentence that starts "No request is necessary." So that's a request for a refund by the customer. So the customer doesn't have to request a refund where a problem in primary exchange services lasts 24 hours or more from the time BCTel is advised of the problem.
12795 Now, my understanding -- now, that is the only change -- is that provision is now taken out and a customer would have to request?
12796 MS SHUYA: That's correct.
12797 MS MacDONALD: Moving on to paragraph 19, customer confidentiality, this corresponds to old 11. 19.2 is a new provision and that states that customers can basically have an unlisted number.
12798 That's a new provision?
12799 MS SHUYA: Yes.
12800 MS MacDONALD: And that has been -- unlisted numbers have been available for a number of years so this is a clarity of your current Terms of Service with your customers?
12801 MS SHUYA: I would agree.
12802 MS MacDONALD: There is also a new provision in 19.4(f) and this is an exception of when TCI can disclose customer confidential information.
12803 So there is a new exception in (f) that they can disclose to a public authority. You would agree with that?
12804 MS SHUYA: Yes.
12805 MS MacDONALD: There is a new provision in 19.7 that the customer requests that TCI provide any information in TCI's possession, and the difference is that paragraph (b) has been added, and that if TCI would incur unusual expense to provide the information the customer agrees to reimburse TCI for those costs.
12806 You would agree with me that is a new provision?
12807 MS SHUYA: Yes.
0945
12808 MS MacDONALD: In paragraph 19 -- pardon me, 19.8 is the same. Moving on to paragraph -- article -- actually 19.8 is slightly different, pardon me.
12809 My note to myself is a bit opaque. But my note to myself says that this is slightly amended, but it's a clarity and it's not a new term. And if I can --
12810 MS SHUYA: I would agree.
12811 MS MacDONALD: Pardon me?
12812 MS SHUYA: Yes.
12813 MS MacDONALD: Okay, thank you.
12814 Moving on to article 20 which corresponds to 19, in comparing the two, the old provisions used to have two limits set into them and one was a limit by law and the other one was a limit that TELUS had in place. The new provision takes out those limits.
12815 Would you agree with me on that?
12816 MS SHUYA: Can you please repeat the question?
12817 MS MacDONALD: Under the old provisions, if there were overbilled charges, TELUS had two limits in them. One was a limit -- they had a term that says TELUS won't have to pay this if they are limited by law, or TELUS won't have to pay it if it's over a certain number of days.
12818 Now, you have taken those provisions out in the new term, the new article.
12819 MS SHUYA: I think that's right, subject to check.
12820 MS MacDONALD: And that's a good thing for customers, isn't it?
12821 MS SHUYA: Should be.
12822 MS MacDONALD: In the dispute procedure, would you agree with me that nothing new has been added, but you have taken some of the things from your dispute procedure in the introductory pages and you have slipped them into here? Would you agree with that?
12823 MS SHUYA: The introductory pages from the B.C. phone book or the --
12824 MS MacDONALD: They are actually both the same. So you can look at the one you are more familiar with.
12825 MS SHUYA: Yes, subject to further check.
12826 MS MacDONALD: In article 22 which corresponds to article 21, there is a change at 22.2 and this basically says that if a customer relocates, TCI will, without charge, intercept the calls to the old telephone number and refer them to the new telephone number.
12827 And that's something that has been done by TELUS for a number of years, but it's something that wasn't contained in their old Terms of Service. You would agree with that?
12828 MS SHUYA: Yes.
12829 MS MacDONALD: In 22.3, there is a new provision that:
"When a service is cancelled, the customer must return to TCI all equipment rented or leased from TCI which was used by the customer for that service. And if they fail to return it, they will be charged." (As read)
12830 And that is a new provision.
12831 MS SHUYA: My understanding is that that provision has always been there, it's just made a little bit clearer for the customer.
12832 MS MacDONALD: Okay. You could very well be right. I must admit that I did have some difficulty with this last, the cancellation of service, going back and forth between the terms because they have changed a little bit.
12833 Other than this provision, would you agree with me that then 22.2 would be the only change in the provisions?
12834 MS SHUYA: Yes, subject to check.
12835 MS MacDONALD: Article 23 which is customer's liability, that's a new term that was never covered under the old terms of service. There was no provision like that?
12836 MS SHUYA: That's correct.
12837 MS MacDONALD: Article 24, the limitation of TCI's liability, that corresponds to article 16. There is a new provision in 24.3 and that is that:
"TCI is not liable for any damages arising out of continuation of the customer's listing in a telephone directory." (As read)
12838 Would you agree that that's a new provision?
12839 MS SHUYA: Yes, subject to check.
12840 MS MacDONALD: Would you agree with me that it's a new provision in 24.4 that:
"TCI is not liable for liable or slander..." (As read)
12841 And these are two changes? Would you agree with that? "Defamation or the infringement of copyright" was already contained in the old provisions.
12842 MS SHUYA: Yes.
12843 MS MacDONALD: Would you agree with me that 24.4(c) that:
"TCI is not liable for damages arising out of the act, default, neglect or omission of the customer in the use or operation of equipment provided by TCI." (As read)
12844 That's a new provision, would you agree with that?
12845 MS SHUYA: Yes, subject to check.
12846 MS MacDONALD: Would you agree with me that 24.4(d):
"TCI is not liable for damages arising out of the transmission of material or messages over TCI's telecommunication networks." (As read)
12847 Would you agree with me that that's a new provision?
12848 MS SHUYA: Yes, subject to check.
12849 MS MacDONALD: Would you agree with me that 24.5, that:
"When facilities of other companies or telecommunication services are used in establishing connections, again, TCI is not liable for any act, omission or negligence of the other companies." (As read)
12850 You would agree with me that that's a new term?
12851 MS SHUYA: Yes, subject to check.
12852 MS MacDONALD: 24.6, would you agree with me that this is a new term that:
"TCI is not liable for any damages arising out of any act or omission of TCI permitted pursuant to..." et cetera, et cetera, "...provided that TCI acted in good faith." (As read)
12853 MS SHUYA: Yes.
12854 MS MacDONALD: Would you agree with me that 24.8 is a new term and that it states that:
"If a customer uses..."
12855 I'm looking at the second sentence:
"If a customer uses TCI's facilities and equipment for purposes other than those for which the customer has designed or for services to which the customer has not subscribed, TCI is not liable for errors, omissions, interruptions, delays or defects." (As read)
12856 Would you agree with that, that that's a new term?
12857 MS SHUYA: Yes.
12858 MS MacDONALD: Would you agree with me that it's a new term in 24.9 that:
"TCI does not guarantee that a specific portion of TCI's telecommunications network will remain compatible with any of the customer's facilities or equipment." (As read)
12859 Would you agree with me that that's a new term?
12860 MS SHUYA: Yes.
12861 MR. JÉRÔME: Mr. Chairman, I hate to interrupt. I would just like, at this point, to clarify maybe the scope of the undertaking that was agreed to a little bit earlier.
12862 Ms MacDonald has asked a number of questions about the potential differences between the old B.C. Terms of Service and the new Terms of Services. I gather it's a little bit difficult for the witnesses to answer and the reason, in part, is because of the differences in language that we have referred to earlier.
12863 So if it's agreeable to Ms MacDonald, what we would do is undertake to provide the differences, a list of the differences between the old Terms of Service, if any, and the reasons for such differences, if that is agreeable to Ms MacDonald.
12864 MS MacDONALD: Mr. Chairman, I had asked for one undertaking. It's with respect to article 15.5, paragraph (d). There was a new provision there and I had asked Ms Shuya if she could provide for me whether or not that had a practical effect to the customers, somehow changed their services beyond a clarity of language in the provision.
12865 That's the only undertaking that I have asked for from this panel.
12866 MR. JÉRÔME: I was just offering that to help in the context where most of the answers were subject to check. So I was just offering that we would indeed check and provide the correct information.
12867 CHAIRMAN: Thank you for the offer, Mr. Jérôme. That undertaking might have saved quite a bit of questioning earlier.
12868 MS MacDONALD: Of course, Ms Shuya has stated that some of the answers are subject to check.
12869 Those are my questions with respect to those particular Terms of Service.
12870 Ms Shuya, I kept a little score card of new terms that were favourable, in my opinion -- and you agreed with my opinion -- to the customer and I came up with five new things that were good for customers, subject to check.
12871 Would you agree that there were five terms in the new provisions that were favourable to customers?
12872 MS SHUYA: No, I don't think I would -- I can agree with you that there are only five favourable articles that we had referred to here.
12873 I think I would like to bring us back to the point that TELUS undertook a significant initiative to, in fact, have these general terms of service rewritten in plain language. That's a good starting point to establish that and recognize the fact that customers would be better off if they were fully apprised of their rights, responsibilities and obligations in a plain language format.
12874 So I don't want it to be interpreted the fact that there is only value in five articles that may have additional information provided for clarity. I think the whole Terms of Services provides a lot better information for customers so that they clearly understand their obligations, rights and responsibilities as well as the company's.
12875 MS MacDONALD: You would agree with me, Ms Shuya, that when we went through, there were, despite clarity being provided to the customer, there were five new services. For example, putting in your Terms of Service "deposits," that you could have a lower deposits in certain circumstances and you did agree with me that that was a good thing for customers.
12876 So you would agree with that there were five things that came up that were good for customers beyond plain language and clarity reasons that you have just stated.
12877 MS SHUYA: I would agree that there are those five and there are likely others that I'm not able to identify at this time.
12878 MS MacDONALD: I understand.
12879 Ms Shuya, TELUS has an instalment plan and my understanding of the instalment plan is that you can have your payments in equal instalments over a period of six months.
12880 Now, that's not in the -- I know that is being done and I know a number of people have taken advantage of that and that's something that you would agree is good for customers in order to take advantage of the large amount that a connection fee might be to them and have that paid out over instalments.
12881 You would agree that that's a good thing?
12882 MS SHUYA: Yes.
12883 MS MacDONALD: That's not in the new Terms of Service, is it?
12884 MS SHUYA: No, it's not specifically made reference to in terms of payment terms within the Terms of Service, but any customer that is, in fact, ordering service from TELUS is provided those particular options.
12885 So if we become aware of a situation where the fees that may be required to establish service are beyond the customer's ability to pay, we will discuss a variety of payment options with them. We believe that's a personal thing. What we don't want to do is have customers literally interpret words that may be provided in the terms of service in a wrong manner, to assume that TELUS would not be considerate of their ability to meet those obligations.
12886 So we would prefer to discuss with customers flexible payment options that certainly would meet their financial requirements.
12887 MS MacDONALD: Thank you.
12888 Bear with me for one moment. I'm looking for a term and article and I didn't write my reference down.
1000
--- Pause
12889 MS MacDONALD: In the new article 13 which involves "TCI initiated changes in telephone numbers or service arrangements", you have added a new sentence to 13.1 which I neglected to point out.
12890 Would you agree with me that the sentence, which is the second last sentence in 13.1, when it states:
"This might result in rate changes or a change to the customer's telephone number." (As read)
12891 Would you agree with me that this a new statement that TCI initiated changes in telephone numbers or service arrangements provisions?
12892 MR. KOLESAR: Yes, I think that is true. That is a change, yes.
12893 MS MacDONALD: And you would agree with me that in 13.3, that if TCI changes a telephone number, they will -- first of all, they will only do it if they have reasonable grounds, but as well they will give reasonable advance written notice. You would agree with me that that provision is there in 13.3?
12894 MR. KOLESAR: Yes.
12895 MS MacDONALD: Now, the addition of that sentence that there may be changes in rates to the customer and the way that changes to telephone numbers are having a reasonable advance written notice, it appears to me that there is no reasonable advance written notice required for rate changes, you would agree with that?
12896 MR. KOLESAR: That would seem to be true when you read the words that are here. It doesn't specifically say that we have to tell people if there is going to be a change to their rates or a change to the rate. True.
12897 MS MacDONALD: And that would be a good thing for customers to know when their rates are going to change?
12898 MR. KOLESAR: Yes, it would and just let me say that I believe it's the company's practice that if a customer's rates are going to change, that we give them as much advance notice of that as we can.
12899 MS MacDONALD: TELUS no longer accepts cash in payment for their telephone bills, and that is a recent change initiated by the company, isn't it?
12900 Pardon me! You accept cash in B.C., in Burnaby, at the head office, and I believe you accept cash in one place in Alberta, and I think it's Edmonton, would that be correct?
12901 MR. KOLESAR: Actually no. I think there is a couple of other places we do. I believe in Calgary we still accept cash. I actually pay my phone bill there and I believe that I pay it in cash too.
12902 MS MacDONALD: So, you can only pay cash in three places in TELUS' area in B.C. and Alberta?
12903 MR. KOLESAR: I am not completely sure that it's only three, but I do take your point that we have limited the number of locations where it is possible to pay at a TELUS location in cash. But there are many other options that a customer might choose in order to pay their bill and I believe, if they want to go to virtually any bank branch, they can pay their bill in cash there.
12904 MS MacDONALD: And that information is listed in page 19 in the Edmonton example, and you set that out there.
12905 Would you agree with me that if someone is to pay it through a bank, there would potentially be charges associated with paying the telephone bill. So, if someone wanted to pay it in cash, took the telephone bill to the bank with their cash, they might have to pay a bill depending upon their relationship with the bank, if they had one, you would agree with that?
12906 MR. KOLESAR: Yes, that is true. If there is a bank fee to pay a bill, that might very well be true, yes.
12907 MS MacDONALD: So, you would agree with me that, if someone doesn't have a bank account or is not -- a bank may not be that easy to get to depending upon where they are, their bank may not be that easy to get to, dependent upon where they are, that persons are going to have to pay fees in order to pay their telephone bills with cash?
12908 MR. KOLESAR: That may very well be true.
12909 MS MacDONALD: In the terms of service, along with the instalment plan which is referred to as a bill management tool in the lingo, there are no other -- are there other additional bill management tools which TELUS provides that are in the new TELUS Terms of Service?
12910 MS SHUYA: Could you repeat that question, please?
12911 MR. KOLESAR: Instalment plans that's referred to as a bill management tool, other than the ones that we have looked at, are there other bill management tools which TELUS has which are not located in the new Terms of Service?
12912 MS SHUYA: It's not specifically stated the same way but it means the same thing. We do offer toll restrict rate --
12913 MS MacDONALD: We have gone over that one.
12914 MS SHUYA: Okay. That would be --
12915 MS MacDONALD: Ms Shuya, have you given any thought in -- I don't know if you were preparing the Terms of Service, but have you given any thought to what might be described as customer rights? For that, I would like you to turn to Exhibit B-4A of the Barbara Alexander's evidence.
--- Pause
MS SHUYA: We have it now.
12916 MS MacDONALD: I am looking at the heading "Putting These Rights Into Practice" from the Telephone Consumer Alert Exhibit B-4A. The first one is "Notice At Time Of Service Order". Had you given any thought to putting that in the Terms of Service, something that would be favourable to customers?
12917 MS SHUYA: A lot of the same information is actually provided when a customer orders service from TELUS. So as the frontline service agent is actually taking the order, this information would be provided.
12918 MS MacDONALD: I understand that, but it's not in the Terms of Service, is it?
12919 MR. KOLESAR: Sorry. Can I just ask for a clarification.
12920 Is the suggestion that we add to our Terms of Service a phrase such as: Where you order a new service, your company has to give you a clear and understandable description of the terms, conditions, rates and charges for all the services that you request. It also has to tell you what the lease cost alternatives are.
12921 Is that the phrase that you are suggesting should be put in?
12922 MS MacDONALD: No, I am not suggesting the phrase be put in, and it could be worded in any way. The Notice at Time of Service Order is something that would be favourable to the customer, something that would be good to them, and it's something that's not in your terms of service.
12923 You have just changed your services and, in my reading of it, you have added some things that are good for customers, some very good things. You have also added many things from the point of view from protecting the company, from protecting TELUS' position, by providing clarity to the customer of TELUS' position.
12924 I am wondering where is the parity? Where is the clarity for the consumer? And some of these might be additional terms, but you had no problem putting in some additional terms for TELUS' obligations? Where is the parity? Was this Notice at Time of Service Order, was this something that was contemplated as something that customers would like to have in the actual Terms of Service?
12925 MR. KOLESAR: I am afraid I am still having trouble trying to understand exactly what your question is and I wonder if I could ask you to restate your question because I am not clear what the suggestion that you are making to me about a potential change to the Terms of Service might be.
12926 What I am hearing you tell me is that, in your -- well, I guess I am not sure what I am hearing you tell me and I would like to have a better understanding of the question you are trying to seek some clarification on.
12927 MS MacDONALD: And it's probably because I might not actually know how to write that up myself. I don't know what it would look like.
12928 Let's go on to the next page where it might be a little bit easier because that's something that's a bit more concrete.
12929 It's got "Notice of Change in Rates, Terms and Conditions of Service," and we just went through that. There was this one sentence which is in the new provision, the new articles of service, and it was saying that you might change the rates and there was no provision that there would be any reasonable notice put right in the terms. And you have said that there's a custom of doing it, but it's not in the terms.
12930 MR. KOLESAR: No, it's not, but I can give you as much assurance as I can that we actually do do that because it's in our best interest to make sure that customers know any changes to either our rates or any of our terms or service that are going to have an impact on them. We try to keep our frontline people informed as well so when customers call in, they can give them as much up-to-date information as they can. But true, that specific provision is not set out in our terms of service.
12931 MS MacDONALD: There is one other article that I want to look at and it's more to provide clarity for me because I was uncertain about your rewrite and whether it changed the customers -- the practical effect on the customers, and that was in article 15, "Restrictions on TCA's Right to Suspend and Terminate Service." In 15.4, TCI cannot suspend -- the old term was TCI couldn't suspend service for non-tariff charges.
12932 And the new term says:
"TCI cannot suspend a customer's service because the customer fails to pay charges that are not authorized by the CRTC." (As read)
12933 Is there any difference -- practical difference between those two?
1015
12934 MR. KOLESAR: As far as I know, no. They really are meant to kind of convey the same thing.
12935 MS MacDONALD: Okay. Now, I appreciate your answer to me, Mr. Kolesar, about the value of your customers and customer service. Would it be your position, and would it be TELUS' position, that if customer service is shoddy, say, and it's not in the Terms of Service but it's the practice of TELUS to do something and it kind of falls apart and it's not done, for whatever reason, would it be your position that TELUS should somehow be made responsible for that customer service inferior quality?
12936 MR. KOLESAR: Let me say that when you talk about "shoddy" quality of service, any time there is a shoddy quality of service, there is a customer somewhere that's been impacted by that.
12937 MS MacDONALD: Yes.
12938 MR. KOLESAR: Let me turn your attention to page 12 of the Terms of Service -- sorry, not the Terms of Service, of the section of the yellow pages, there is a section there that says -- that's referred to as "Complaints and Compliments," and it gives every customer the information they need to contact us. And we view those situations where we have quality problems as something that we have to deal with an individual-affected customer on.
12939 So what we do here is try to give every customer who might be impacted, who might make a determination that -- you know, they are just not happy with quality of some aspect of our service, they get the information that they need in order to contact us and we have frontline people who are given the discretion to deal with that individual, as required, in order to try to satisfy whatever their concern might be.
12940 So we take quality problems very seriously and at the level of the individual customer. And so I would agree with you that if we have a failure in quality, that's of concern to us. There is an individual customer somewhere that has been affected by that and we want that customer to be able to contact us and talk to us about that problem.
12941 MS MacDONALD: And from your answer, then, the customer service representative that dealt with that situation would have some discretion in order to make that particular customer happy?
12942 MR. KOLESAR: Yes, they do. They actually have fairly wide latitude, including the discretion to provide customers with rebates and the discretion to provide customers with a variety of other alternative forms of redress.
12943 The objective of the exercise is to deal with every individual affected customer as an individual. And so our preferred approach is put mechanisms into place that let us deal with those affected customers as individuals.
12944 MS MacDONALD: What is your position with respect to systemic problems? And by that I mean you are not just looking at individual circumstances. What happens if, let's say, your frontline people don't know some of the policy that you have in place. For example the instalment fee policy that you have, it's not in the Terms of Service. Let's say a customer phones in and they are getting different messages about what the policy is -- and they don't know what the policy is, it's not written down anywhere.
12945 What happens in these kind of cases? Let's say what happens for that example, then: people want the instalment plan, they know there is some kind of an instalment plan, they keep getting different information from different customer service representatives?
12946 MR. KOLESAR: Well, clearly, it's incumbent upon us to give our frontline people all the information that they need to try and help customers as much as they can, whenever they can.
12947 I actually had a situation myself within the last few weeks where a quite rightly upset customer was referred to me. And what I had done -- it was actually my fault -- was when we put the Commission notice with respect to this proceeding into the customer bills, I had neglected to inform frontline people that we had actually done that.
12948 Someone had called in. The representative really didn't know what to do to help this individual out -- this was a real inconvenience to her. It was fairly rapidly escalated up to me. I spoke to her. I dealt with her concern and I very quickly made sure that all the frontline people knew what was going on.
12949 So if there is what you refer to as a systemic problem that comes up of that sort, where the frontline people are not adequately prepared to deal with it, very quickly steps are going to be taken to make sure that that is actually dealt with.
12950 MS MacDONALD: I just want to refer to you your dispute procedure. It's on 19 of your Edmonton book. And you have listed in a very plain language style the steps to follow charges on your bill.
12951 I notice that one of the important terms that aren't there would be that TELUS -- it says in 5:
"TELUS may not suspend or terminate service for disputed charges unless it has reason to believe that you may be trying to evade or delay payment." (As read)
It doesn't have another provision that might read, "TELUS cannot suspend your service for not paying non-tariff charges." I'm just curious that that wasn't put in the dispute procedure that you have set out there. What was the thinking on that?
12952 MR. KOLESAR: I'm afraid I don't really recall what the actual thinking on that was at the time. Certainly that information is contained in here. It's just not laid out in two different spots. And one of the things that we were actually trying to do with these plain language Terms of Service was reduce the amount of cross-referencing that a person would actually have to do.
12953 MS MacDONALD: Now, going back to my questions with regard to systemic problems, this is rather cruel and I'm debating whether to do it. I got an e-mail from somebody, and I got it two days ago, and it happens to be -- I'm from Vancouver. I got an e-mail from a TELUS customer and she is on disability benefits in our province. And she has, obviously, health problems. Her health is precarious. I'm giving you a story because I don't want to be mean.
12954 So this woman, she couldn't afford a deposit and so like many low-income people, she had a roommate, and the phone was in the roommate's name. The roommate died. She spoke to the roommate's sons, who were going to take care of the estate, whatever the estate was. And the son said, you know, "We will make sure -- we will call TELUS and we will tell them that, you know, your phone is going to remain in place." So they did that and they phoned TELUS and TELUS cut her off.
12955 And this woman lives in a rural area, she is on disability, and despite having the call from the sons, they cut her off. She had to travel into town, go to a payphone. And she didn't phone TELUS and talk to them about the problem; she phoned an advocate and the advocate e-mailed me. She got service. She got her service back that night after the advocate talked to TELUS.
12956 I could have approached this question in a different way, but my question is: With respect to customer service, when these kind of things happen to people -- and a phone is an essential service -- would you agree with me that there has to be some kind of quality of service indicator, some kind of outside means, that the Commission can use in order that TELUS does its utmost to ensure that people's essential services will not cut off?
12957 MR. KOLESAR: Just let me preface my answer by saying, you know, there is no good way to ask that kind of a question. Those are difficult situations and ones that some of our frontline people have to deal with every day.
12958 And as a company, we are in a situation where we provide a service and we charge rates and customers pay bills. And there is always going to be some individuals that we have to deal in these type of difficult situations with. And in the situation that you just relayed to me, I mean, I think it's a shame that when whatever happened, happened, that the customer didn't call us back, that when they went to the payphone that they called somebody else.
12959 There are always going to be those kinds of terrible situations where things don't work out the way that the people of TELUS would want them to and where we would dearly love to have those things go a lot smoother than what they do.
12960 I'm not sure what kind of indicator we could put into place or what we can do because these are individuals with individual problems and, I mean, in individual situations, and you can't put some sort of blanket measure into place that is going to help to deal with those kinds of situations. It's really got to be incumbent upon us, as a company, to try and deal with those individuals as individuals when those problems come up.
12961 And our objective every time is to give our frontline people the tools that they need and the training that they need so when these kind of individual situations come up, they can deal with them in the most humane, reasonable, workable way, bearing in mind that we have a certain obligation, certain liabilities, and that we have to protect ourselves, but at the same time, we are in the business of providing service to customers. That's what we want to do. We are in business to have customers and we are in the business to keep every customer that we possibly can.
12962 And when these kinds of situations come up, the only way to deal with them is on a one-on-one situation. And so the way that we try to deal with these situations is have our frontline people as prepared as they can to deal with a myriad of all kinds of situations, some of them the kind of discomforting situations that you have just relayed.
12963 And, you know, I don't think there is any measure you can put into place. You just have to try to prepare your frontline people the best way you can to deal with these people, to deal with these situations, and when problems come up to escalate them up through the system and see what can be done for individuals in their particular situations at a particular point in time. And as far as I'm concerned, that's the only way you can deal with it. You can't not deal with them as individuals at the time. And if -- well, I think I will just end it there.
12964 MS MacDONALD: Now, with respect to what you said, you said, "You know, these are individual circumstances so we can't come up with a measure." But the whole quality of service indicators, those are all individual -- well, I had better not say that, I'm not that familiar with them -- but some of them are individual circumstances that happens, as well.
12965 MR. KOLESAR: Well, just let me say that in behind those quality of service indicators, if there is a failure in the quality of service indicators, there is an individual somewhere. There is a customer that has been impacted.
12966 MS MacDONALD: Right. Exactly.
12967 MR. KOLESAR: We care about those individual customers. And we want to deal with those individual customers.
1030
12968 MS MacDONALD: Right.
12969 MR. KOLESAR: So our approach is arm our frontline people, give them the tools that they need in order to deal with every one of those individuals.
12970 So if somebody is not happy in a given situation in their relationship with us, they can contact us and our frontline people have the authority and the discretion to try and make things right, including the opportunity to provide rebates to individuals or do whatever else the customer might feel is appropriate, within bounds of course. I mean they have to use some reasonable discretion about what they are prepared to do, but we think that's the best way to deal with it.
12971 MS MacDONALD: Right. So your position is that's the best way to do it, but that's not the only way to deal with individual concerns as outlined by some of the other quality service indicators.
12972 MR. KOLESAR: Well, I guess to my mind the quality of service indicators serve a function. They are a, shall we say, hangover from a rate base rate of return world. Is there some reason to continue to do them?
12973 Yes, I think the Commission has a role to continue to monitor. But the reality is in a competitive market such as we are in now, if the indicator says well, you have to meet it 90 per cent of the time, it means 10 per cent of people didn't necessarily get the same level of quality as what the 90 per cent that the indicator said.
12974 That 10 per cent, if there is somebody in that 10 per cent who are not happy, they are going to contact us and we want to deal with them. We want to try to ensure that whatever their quality concern, it is going to be dealt with.
12975 Our preferred approach, again I keep coming back to this -- I know you are probably getting tired of me saying it, but deal with customers as individuals. That's the relationship that we have and that's the way we -- we think that's the best way in a competitive market to actually do it.
12976 MS MacDONALD: Thank you, Mr. Chairman. These are my questions.
12977 THE CHAIRPERSON: Thank you, Ms MacDonald.
12978 We will take our morning break then and reconvene in 15 minutes.
--- Upon recessing at 1032 / Suspension à 1032
--- Upon resuming at 1052 / Reprise à 1052
12979 THE CHAIRPERSON: Ladies and gentlemen, we will return to our proceeding now.
12980 Before we turn to the next party to cross-examine, I would just like to reiterate the point I made earlier about the sitting of this Saturday.
12981 It is our intention to finish the cross-examination of the TELUS panels this week, so depending on the efficiency of the questioning over the balance of today and tomorrow, we may sit Saturday. If we do, we will sit at 9:00 a.m. and sit as long as it takes to finish the TELUS panel.
12982 We will adopt our usual practice of, when we sit Saturdays, of casual dress. I guess what is characterized as business casual.
12983 With respect to the issue of oral argument, we have decided that parties will be given an opportunity to present oral argument. We will do that commencing at 9:00 a.m. on Monday, the 22nd of October. The parties will be given 20 minutes to present their oral argument.
12984 We would note that this portion of the oral hearing is for the presentation of argument. As I mentioned at past hearings, parties are encouraged to resist the temptation to use the opportunity, as you may appear later in the order, to reply to the argument of others. There will be an opportunity for a reply.
12985 The order of presentation will be The Companies, followed by TELUS, followed by the consumer groups and generally -- and specifically we will follow the order we have been using for the cross-examination.
12986 I request any party wishing to present oral argument to notify the Commission of their intention to do so by noon Ottawa time on Wednesday, the 17th, by indicating to the Secretary General of the CRTC.
12987 Now, we have also decided to change the date currently set out for the filing of written argument. As I indicated the other day, we would want written argument to be filed at the close of the day on October 22, so the same day as the presentation of oral so by five o'clock on October 22.
12988 Sort of coincidentally with that then, the Commission has decided to change the date set out in paragraph 59 of PN2001-37 for filing reply argument from the 26th of October to the 31st, 2001.
12989 I would note for next Monday that due to other commitments of the Commission, we need to adjourn earlier on Monday than otherwise planned. So we will commence the hearing on Monday at 8:30 a.m. We will take a one hour break for lunch and finish at 3:30.
12990 Now, with respect to outstanding undertakings, I encourage parties to file any undertakings as soon as possible, but no later than 5:00 p.m. on Friday, the 19th.
12991 I think that's it. Are there any other matters you wish to bring to the attention of the Chair before we return to cross-examining this panel?
12992 No.
12993 Well, then, the next and last party I believe for panel 1A is GT Group Telecom, Mr. Daniels.
--- Pause
12994 MR. DANIELS: Mr. Chairman, may I ask the Secretary -- I'm sorry. I'm not aware of whether an exhibit number was assigned to the TELUS Edmonton telephone directory.
12995 THE CHAIRPERSON: No, it wasn't. Thank you for helping me do my job, Mr. Daniels.
12996 MR. DANIELS: I'm just going to be referring to that.
12997 MR. SPENCER: Thank you, Mr. Chairman.
12998 I have 15 documents. The first document, TELUS opening statement, will be introduced as TELUS Exhibit No. 1.
EXHIBIT NO. TELUS-1: TELUS Opening Statement
12999 MR. SPENCER: Letter dated 9 October 2001 from Mark Kolesar providing the CVs for Mr. Kolesar, Mr. Towner and Ms Shuya will be introduced as TELUS Exhibit No. 2.
EXHIBIT NO. TELUS-2: Letter dated 9 October 2001 from Mark Kolesar providing the CVs for Mr. Kolesar, Mr. Towner and Ms Shuya
13000 MR. SPENCER: Mr. Dennis Weisman's CV, TELUS Exhibit No. 3.
EXHIBIT NO. TELUS-3: CV of Dennis Weisman
13001 MR. SPENCER: Introductory pages of the Edmonton TELUS telephone directory will be introduced as BCOAPO Exhibit No. 3.
EXHIBIT NO. BCOAPO-3: Introductory Pages of Edmonton TELUS Telephone Directory
13002 MR. SPENCER: Introductory pages of TELUS B.C. Telephone Directory, BCOAPO Exhibit No. 4.
EXHIBIT NO. BCOAPO-4: Introductory Pages of TELUS B.C. Telephone Directory
13003 MR. SPENCER: TELUS general tariff original page 16, BCOAPO Exhibit No. 5.
EXHIBIT NO. BCOAPO-5: TELUS General Tariff Original Page 16
13004 MR. SPENCER: Response to undertaking requested by Commission counsel, Ms Moore, transcript reference Volume 6, paragraph 9606, will be introduced as MTS Exhibit No. 2.
EXHIBIT NO. MTS-2: Response to Undertaking requested by Commission Counsel, Ms Moore, Transcript Reference Volume 6, Paragraph 9606
13005 MR. SPENCER: Response to undertaking requested by BCOAPO, transcript reference Volume 4, paragraph 5720, The Companies Exhibit No. 27.
EXHIBIT NO. THE COMPANIES-27: Response to Undertaking requested by BCOAPO, Transcript reference Volume 4, paragraph 5720
13006 MR. SPENCER: Revision to undertaking requested by ARC et al, transcript reference Volume 3, paragraphs 4183 and 4200, The Companies Exhibit No. 16A.
EXHIBIT NO. THE COMPANIES-16A: Revision to Undertaking requested by ARC et al, Transcript reference Volume 3, paragraphs 4183 and 4200
13007 MR. SPENCER: Response to undertaking requested by BCOAPO, transcript reference Volume 4, paragraph 5655, will be The Companies Exhibit No. 28.
EXHIBIT NO. THE COMPANIES-28: Response to Undertaking requested by BCOAPO, Transcript reference Volume 4, paragraph 5655
13008 MR. SPENCER: Response to undertaking requested by ARC et al, transcript reference Volume 1, paragraphs 1551 and 1555, will be The Companies Exhibit No. 29.
EXHIBIT NO. THE COMPANIES-29: Response to Undertaking requested by ARC et al, Transcript reference Volume 1, paragraphs 1551 and 1555
13009 MR. SPENCER: Response to undertaking requested by Commissioner Langford, transcript reference Volume No. 4, paragraph 7097, The Companies Exhibit No. 30.
EXHIBIT NO. THE COMPANIES-30: Response to Undertaking requested by Commissioner Langford, Transcript reference Volume 4, paragraph 7097
13010 MR. SPENCER: Response to undertaking requested by Commission counsel, Ms Moore, transcript reference Volume 4, paragraph 6665, will be The Companies Exhibit No. 31.
EXHIBIT NO. THE COMPANIES-31: Response to undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 4, paragraph 6665
13011 MR. SPENCER: Response to undertaking requested by Commissioner Cram, transcript reference Volume 4, paragraph 6861, will be The Companies Exhibit No. 32.
EXHIBIT NO. THE COMPANIES-32: Response to Undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 4, paragraph 6665
13012 MR. SPENCER: Response to undertaking requested by Commission counsel, Ms Moore, transcript reference Volume 7, paragraph 11171, will be The Companies Exhibit No. 33.
EXHIBIT NO. THE COMPANIES-33: Response to Undertaking requested by Commission counsel, Ms Moore, Transcript reference Volume 7, paragraph 11171
13013 MR. SPENCER: Thank you.
13014 THE CHAIRPERSON: Thank you, Mr. Secretary.
13015 Thank you, Mr. Daniels. The microphone is yours.
13016 MR. DANIELS: Thank you.
EXAMINATION BY / INTERROGATOIRE PAR
13017 MR. DANIELS: Good afternoon.
13018 I was wondering if I could begin unfortunately, but we won't spend too long, with the Edmonton TELUS telephone directory which I believe is Exhibit BCOAPO-3. I was tempted to start with a couple of questions about the CPR pages and first aid, but I think I will skip that and just turn your attention to article 24, the limitation of TCI's liability.
13019 To be honest, this question, as in the cross-examination in the panel this morning earlier, we were paying closer attention to this document than perhaps we should have in other times. I really just wanted to turn your attention to article 24.9 which says:
"TCI does not guarantee that a specific portion of TCI's telecommunications network will remain compatible with any of the customer's facilities or equipment. TCI is not liable if it changes a portion of its telecommunications network or any of its facilities or equipment." (As read)
13020 Really, just to understand, how does this -- does this provision apply to carriers and, in addition, if so, how does this interact with, I believe it's Telecom letter Decision 9411. I might be getting that reference wrong, but the requirement for network notification.
13021 MR. KOLESAR: I think, Mr. Daniels, you have caught me totally off guard with this question. I'm not really well prepared to give you a very good answer on it, so I would prefer to respond to your answer by way of an undertaking and get back to you on it. I'm not sure I can give you a very cogent response to that question.
13022 MR. DANIELS: That's completely understandable and that's entirely acceptable. As I said, I would have given you more notice if we had realized but we were reading the document along with everyone else this morning. With that, we can now put this document away.
13023 Once again, I am prepared to ask my questions generally, unless I specify otherwise, to the entire panel.
13024 I would like to begin with just a simple question. Is the panel aware of Group Telecom's proposal, its quality of service proposal?
13025 MR. KOLESAR: Yes, we are.
13026 MR. DANIELS: And, specifically, are you aware what Group Telecom proposes is that penalties be applied to services provided to CLECs and that the penalties be measured and paid specifically to a CLEC affected?
1105
13027 MR. KOLESAR: Yes.
13028 MR. DANIELS: And that Group Telecom's proposals only relate to indicators that were finalized in Decision 2001-217?
13029 MR. KOLESAR: Yes.
13030 MR. DANIELS: You are comfortable with the characterization that those six were the ones that were finalized?
13031 MR. TOWNER: Sorry, you said six?
13032 MR. DANIELS: Group Telecom has proposed six indicators, that there be specific remedies for six indicators, the ones that we understand to be finalized in Decision 2001-217, which is a document I have handed out. We don't need to turn to it, but I have handed it out if you wish -- need to review it.
13033 MR. KOLESAR: Just for the sake of greater clarity could you just very quickly give us a rundown of which six they are?
13034 MR. DANIELS: Certainly. The six indicators in Group Telecom's proposal -- and unfortunately, I don't have the exact copy in front of me, although you can find a reference to this if you have Group Telecom's proposal. It might be worthwhile pointing out because it does provide a nice summary of the -- if someone could pass that to you could turn to Appendix 1 of Group Telecom's proposal and then we can go through all of them.
--- Pause
13035 MR. DANIELS: Just to be clear here, in Appendix 1 we have a number of indicators listed, all of which have been established to be measured on a CLEC-specific basis. So are we comfortable with that?
13036 MR. KOLESAR: Yes. These are the ones that are CISC work as well, right?
13037 MR. DANIELS: That is correct.
13038 MR. KOLESAR: Okay. But some of these have interim status and some of these have final status.
13039 Would you agree with that?
13040 MR. KOLESAR: Yes, I would.
13041 MR. DANIELS: And specifically, the proposed remedies which are outlined in this document only tie to the six that have final standard. Just to help with your reference here that would be indicator 1.8, 1.9, 1.10, 1.11, 2.7 and 2.8.
13042 MR. KOLESAR: So I take it from that the six that you are identifying are all from the new category, not three of the existing mandated measures that we have today?
13043 MR. DANIELS: Sorry, when you say three of the existing mandated measures that you have today are you referring to the ones that predated the recent --
13044 MR. KOLESAR: Yes.
13045 MR. DANIELS: -- the Decision 2001-217?
13046 MR. KOLESAR: Yes.
13047 MR. DANIELS: Yes, I am referring to the six finalized ones that were finalized in Decision 2001-217.
13048 MR. KOLESAR: Okay.
--- Pause
13049 MR. DANIELS: At this point, I would like to turn to paragraph 82 of TELUS' evidence. I'm not sure. Everyone has to get their copy in front of them. I am happy to read you the statement.
13050 At paragraph 82 you state:
"The Commission's current compliance measures, which include the ongoing monitoring of quality indicators and the publication of quality results, adequately serve to encourage the incumbents to take the necessary steps to improve quality measures that are below standards." (As read)
13051 So as I understand it this paragraph here is relating generally to retail quality of indicators. Am I correct?
13052 MR. KOLESAR: No, that actually would relate to both resale and competitor -- and well, the competitor or what is often referred to as the wholesale part of the market.
13053 MR. DANIELS: So it's TELUS' position that establishing -- that it is a good idea to establish indicators, monitor indicators, but not penalize for breaches of indicators.
13054 Am I understanding that correct?
13055 MR. KOLESAR: I think the best way to characterize our position is that there are market incentives in place both at the retail level and at the wholesale level that the Commission can rely upon to ensure that levels of quality will be maintained and that the appropriate market levels of quality will be determined and maintained.
13056 MR. DANIELS: In that regard, can I have you just turn then for a moment to TELUS -- Interrogatory TELUS(CallNet)900?
--- Pause
13057 MR. DANIELS: Are you ready, Mr. Kolesar?
13058 MR. KOLESAR: Yes.
13059 MR. DANIELS: Now, as I understand it, in 900-C the question that was asked by CallNet was related to whether the quality of service indicators for competitors that have just been established and have yet to be implemented, how can TELUS be assured that no penalties are required. That was the question. The answer was in Decision CRTC(2001)366 which I have also handed out, but I don't believe we need to turn to at this moment:
"The Commission has approved the indicators on an interim basis and has indicated that a review of all data collected will be conducted after one year, at which time the Commission would determine both the appropriateness and reasonableness of the indicators." (As read)
13060 Before I go on, let me just stop there. So the reference there to Decision CRTC(2001)366 is in reference to all of the indicators that are interim.
13061 Is that correct?
13062 MR. KOLESAR: Yes.
13063 MR. DANIELS: And we have agreed that six indicators were finalized in an earlier decision, Decision 2001-217?
13064 MR. KOLESAR: That is true.
13065 MR. DANIELS: Okay.
13066 So this last line says:
"Until such time as sufficient data have been collected with respect to The Companies' performance it is premature to find that penalties are required." (As read)
13067 Now, that answer is given in the context of these interim indicators so I am wondering what is your position with regards to the finalized indicators.
13068 MR. KOLESAR: The intention of what we were trying to say there is actually considerably broader than that. It would really require the Commission to make a determination that market forces were not working as a means of ensuring an appropriate market level of quality in the wholesale market before the Commission should make a determination that it needed to remedy something and look potentially to imposing penalties.
13069 We don't think that there is -- that the Commission is actually in a situation where it needs to do that. There is no indication, there is no clear understanding at this point, that there is a remedy needed that the market has indeed failed and that penalties are required at the wholesale level.
13070 If the Commission were to make a determination on more information that a penalty was required we would suggest that the Commission needs to be mindful of what the potential impact of the penalties that might be put into place are and it needs to consult and to think about the best way to structure those penalties.
13071 It is our view that the penalty schemes that have been put forth, and in particular the penalty scheme that has been put forth by GT, may not be the best type of penalties being put into place should a determination be made that penalties would be required.
13072 MR. DANIELS: I think it would be helpful if for the rest of this cross-examination that we just make sure that we are all understanding certain indicators properly.
13073 MR. KOLESAR: That's fine.
13074 MR. DANIELS: Because I know these numbers get confused for me and I have been concentrating on this lately. It might be helpful to turn back to that Appendix 1 of the Group Telecom proposal and let's just make sure we have a common understanding of what a couple of these finalized indicators measure.
--- Pause
13075 MR. KOLESAR: Sorry.
13076 MR. DANIELS: Yes, I'm just waiting for you, to have it in front of you.
13077 MR. KOLESAR: Yes, it's here.
13078 MR. DANIELS: Okay.
13079 So if I understand it correctly, indicator 1.8 measures when a new unbundled loop -- how long it takes to provision a new unbundled loop. Is that correct?
13080 MR. KOLESAR: Yes.
13081 MR. DANIELS: And 1.9 is when you are migrating, so you are taking a customer and you are saying switch that loop from -- generally, it would be in TELUS territory -- from TELUS over to a CLEC. Is that correct?
13082 MR. KOLESAR: Yes, it is.
13083 MR. DANIELS: And perhaps you could explain what indicator 1.10 measures? I know this one is slightly more complicated so I thought I would put the onus on you to describe it.
--- Pause
13084 MR. TOWNER: Well, the description or the definition is fairly clear in terms of the requirement to port numbers over, for local number portability. So is that not clear?
13085 MR. DANIELS: Well, it's clear to me.
13086 MR. TOWNER: Okay.
13087 MR. DANIELS: I understand it. I just want to make sure that we are all understanding.
13088 So this is a situation where a CLEC such as Group Telecom would be obtaining a customer, providing it over their own facilities, and that all that -- what this measures is the time in which and the ability of the ILEC to port the telephone number from its side over to the CLEC, but no facilities are involved. Is that correct?
13089 MR. TOWNER: Correct.
13090 MR. DANIELS: So this would be --
--- Pause
13091 MR. DANIELS: Thanks. That's helpful because I will be referencing back to these indicators.
--- Pause
13092 MR. DANIELS: At this point in time, maybe it's worthwhile if we pull out TELUS -- Interrogatory TELUS(CRTC)1503.
--- Pause
13093 MR. DANIELS: Are you ready for me to proceed or do you want to take a moment to read the answer?
1120
--- Pause
13094 MR. DANIELS: I'm actually only interested in the first couple of lines, the 1503(a). As I understand it, what it reads here is:
"TELUS has considered The Companies' RSQG proposal and regards it to be unnecessary." (As read)
13095 I take it that's a reference to the residential service quality guarantee that The Companies have proposed.
"Both actual and threatened competition and the accompanying necessity to maintain customer satisfaction for every service, the TELUS group of companies offers will provide an adequate incentive to maintain the quality service that customers demand." (As read)
13096 I took us to this Interrogatory because I wanted to -- I think it helps clarify your comments earlier about relying on market forces or market incentives which is, I believe, the term.
13097 So this is what you were talking about in terms of relying on market forces and market incentives, am I correct?
13098 MR. KOLESAR: Yes and that applies both in the wholesale and the retail end of the market that -- yes. So I will say yes.
13099 MR. DANIELS: So in both those markets, the ability of actual competition as well as threatened competition are the forces that make penalties unnecessary.
13100 Is that correct?
13101 MR. WEISMAN: Yes. If I can clarify, at the retail level, the idea would be that competitive local exchange carriers, CLECs, can choose their preferred level of quality at the wholesale level and, once they make that choice, subject to the condition that they are willing to pay the cost associated with provisioning the level of quality they choose and it's technically able to be provided, that discretion at the upstream or the wholesale level will provide a market level of quality at the retail level.
13102 Also, with respect to the wholesale level, if competitor services are priced efficiently which is at a level that recovers the actual phase 2 costs and allows for a mark-up and provides for the opportunity to recover embedded costs, there will be no incentive for the ILEC to favour either the wholesale customer over the retail customer.
13103 In addition, as I understand it, Mr. Towner's organization is set up as a profit centre and in addition to providing competitor services, he also provides through his organization additional services with even higher mark-ups.
13104 And finally, I understand there is a mutual dependence between ILECs and CLECs. CLECs may buy from, say, TELUS in region and, in turn, the ILEC might purchase facilities from the CLEC out of region and it's those forces that we are referring to here.
13105 MR. DANIELS: So for those forces that we are referring to here, I take it that you are suggesting that for a CLEC that wishes to lease loops, it's the alternatives that are available?
13106 MR. KOLESAR: Actually, I think I will let Mr. Towner answer this.
13107 MR. TOWNER: What do you define as alternatives? What do you mean by that? Sorry.
13108 MR. DANIELS: I'm not really sure. I'm asking you that question.
13109 MR. TOWNER: Okay.
13110 MR. DANIELS: The suggestion is that there is market forces here.
13111 MR. TOWNER: Yes.
13112 MR. DANIELS: There is leasing local loops.
13113 MR. TOWNER: Yes.
13114 MR. DANIELS: So I'm trying to understand what market forces are we talking about
13115 MR. TOWNER: Okay. So my organization, Global Trading Partner Solutions, which has been created new this year to treat the wholesale markets base, is succinctly different than how it was in the past in terms of demand, serve and react. We believe that our ability to be successful in a profit centre and drive value to our company is based upon our delivery to give the essential or mandated service at a quality of service level that is benchmarked in the industry as being the best in class and, based upon that, we will be able to leverage that quality of service technique to look at other alternative services in the market place for customers of ours which are our competitors and like.
13116 So if we don't perform on these services, we don't expect you are going to come to us on choice.
13117 MR. DANIELS: What alternative does a CLEC have for the L&P stand-alone service?
13118 MR. TOWNER: Well, in terms of specific indicators, that might not be true. But if you look at the whole base of capability of CLECs building out in region, more so the ability to go to essential services -- not all at this point in time, but over time, hopefully, that would be the case for choice -- there will be an opportunity to go there.
13119 So if we don't build that understanding and relationship with our customers today that we are going to deliver on what they need, why would they come to us for anything else in region or out of region as we build our capabilities? And the growth area we see in wholesale for TELUS' out of region in the wholesale space.
13120 MR. DANIELS: But I just want to be clear here. There is no alternative for an L&P stand-alone, with indicator 1.10. I have no choice as a CLEC but to go to the ILEC, right?
13121 MR. TOWNER: I understand on that point, too and we are not against indicators on that case. And if your reference to three existing indicators that are mandated wholesale measures today tell us in 2001 are at or exceeding all three of those indicators, year-to-date 2001, month over month, so our intention is to provide that level of service on any indicator.
13122 We are just in the position that we don't believe penalties are the way that we are going to drive our business forward. It's on our ability to serve you as a customer.
13123 MR. DANIELS: I promise you we are going to have a chance to discuss TELUS' performance on those indicators.
13124 But before we do that, maybe we could, at this point, turn to -- actually, we don't even probably need to turn to it, but there is a reference in TELUS(AT&T) Interrogatory 504. This is where it is suggested that:
"In any event, TELUS Global Trading and Partner Solutions has explored providing service level agreements with competitors." (As read)
13125 So I just had a couple of questions related to that.
13126 The first is -- once again, I'm going to refer to a document that I handed out, so it can be treated as an exhibit, but I'm not sure anyone needs to turn to it -- in Decision CRTC 2001-238-2. There, we find the loop rates and including, am I correct in saying that the cost of leasing a type A loop in band B in Alberta is $14.29?
13127 MR. TOWNER: To the best of my knowledge.
13128 MR. DANIELS: Okay. I mean we can -- I have handed out the document. So we can just --
13129 MR. TOWNER: Okay.
13130 MR. DANIELS: There is no issue.
13131 But the quantum here won't matter for the purposes of this question.
13132 What I want to know is does the $14.29 of a type A band B loop include the cost of repair?
13133 MR. TOWNER: I don't know that answer.
13134 MR. DANIELS: Maybe someone else in the panel could confirm that.
13135 MR. KOLESAR: I'm not sure what you mean by "include the cost of repair".
13136 MR. DANIELS: When I lease a local loop and I pay $14.29 every month, if the loop goes down and it's TELUS' fault, do I have to pay for the repair or is that included in the $14.29?
13137 MR. KOLESAR: As in -- I'm sorry. I'm not 100 per cent certain of exactly the costing that went into that loop. But it's basically a phase 2 cost plus a mark-up. But I believe that if the loop goes down and it's our fault, then we fix the loop.
13138 So to the extent that the lease of the loop part of the service would include us repairing it if it was our fault that it went down, then I guess you could conclude that the cost is in there. But whether or not it's actually accounted for in the calculation, I can't tell you.
13139 MR. TOWNER: I will just add to that.
13140 To my knowledge, on all of our services with a monthly recurring rate on that, service restoration is part of that service.
13141 MR. DANIELS: So just to be clear, service restoration, including a commitment to repair that loop in 24 hours, in 80 per cent of the cases, is that correct?
13142 MR. TOWNER: I would have to validate that, but that seems to be the case for that type of service.
13143 THE CHAIRPERSON: Excuse me, Mr. Daniels. I apologize for interrupting your cross-examination. But something has come up and I would suggest that we take our lunch break early today. I realize it's a bit unusual. It's 11:30 now. So I'm going to propose we take our lunch break now and reconvene at 1:00. Again, I apologize for interrupting your cross-examination.
13144 MR. DANIELS: Not a problem.
13145 THE CHAIRPERSON: Thank you.
--- Upon recessing at 1130 \ Suspension à 1130
--- Upon resuming at 1303 / Reprise à 1303
13146 THE CHAIRPERSON: Order, please, ladies and gentlemen. We will return to our proceeding now.
13147 Are there any preliminary matters before we turn to questioning by Mr. Daniels? No.
13148 Mr. Daniels. Again, I apologize for interruption your cross.
13149 MR. DANIELS: No problem. Thank you, Mr. Chairman. I would just like to take a moment to thank StenoTran for having been kind enough to provide me as well as share with TELUS just the transcripts of the last few pages so that we can pick up exactly where we left off. I feel, though, maybe it's fair -- best if I just summarize for everyone, you can correct me if I am wrong.
13150 I had asked -- we had agreed that the cost of leasing a type A loop and band B in Alberta was $14.29 and that, regardless of whether the Phase 2 cost study actually included repair or not we didn't explore that. We did agree that there wasn't going to be a separate bill, that repair would be -- that's what the customer pays and repair is include in terms -- from the customer's perspective, they are not going to see another bill if there is any repair on that service.
13151 I believe that's where we had left off. Are you, gentlemen, comfortable with that?
13152 I shouldn't say just "gentlemen".
13153 MR. KOLESAR: Yes, that's fine. I think that's a fair representation of where we were.
13154 MR. DANIELS: And with that in mind at the time -- and we don't necessarily need to turn to this again -- the interrogatory that was open at the time was TELUS(AT&T)504, in which -- forgive me as I turn to where TELUS had stated that TELUS Global Trading and Partner Solutions has explored providing service level agreements with competitors.
13155 I guess my first question then is: Has TELUS reached a service level agreement which I would call an SLA -- if we can be comfortable with that term -- has TELUS reached an SLA with CallNet?
13156 MR. TOWNER: Not to my knowledge, no.
13157 MR. DANIELS: With AT&T?
13158 MR. TOWNER: Not to my knowledge, no.
13159 MR. DANIELS: And with my client Group Telecom?
13160 MR. TOWNER: No.
13161 MR. DANIELS: Would you agree that a service level agreement relating to the indicators that we have talked about would require a CRTC approval?
13162 MR. TOWNER: The policy that we have around SLAs would be that we would not be able to provide SLAs on any tariff service. So SLAs would be around products and services that are not tariffed.
13163 MR. DANIELS: I see, I am sorry. So, if I go back to -- and I believe it is worthwhile for us to open up to this interrogatory TELUS(AT&T)504. So if we could get that in front of us.
--- Pause
13164 MR. DANIELS: As I read this question from AT&T, it was asking to discuss the advantages and disadvantages of establishing a service quality guarantee plan for competitive services to include CISC intervals and standards that have been approved by the Commission. And the answer, in the last line, was:
"In any event, TELUS global trading and partner solutions has explored providing service-level agreements with competitors." (As read)
13165 But as I now understand, and I just want to be clear on this, those SLAs -- that reference is not relevant to CISC intervals and standards such as the six finalized indicators?
13166 MR. TOWNER: My knowledge on discussions would be only around products and services that are not tariffed today, not to say that, in my experience, we have marketing people working with the customers as well, there could be discussions that I am not aware of.
13167 MR. KOLESAR: If I can jump in here. To date, the service level agreements that we have with large customers, to the best of my knowledge, are of the type that Mr. Towner has referred to. We have not to date -- and I would like to characterize it as completed a negotiation with either CallNet, AT&T or Group Telecom for a service level agreement.
13168 That does not mean that we would be opposed to entering into a service level agreement. That might actually depart from the specific standards that have been set. But certainly, any agreement of that sort would have to be filed with the Commission for approval as a -- I believe the term that we used to use was a "special assembly". We have a new terminology for it.
13169 MR. TOWNER: Customer specific arrangement.
13170 MR. KOLESAR: So, I believe what Mr. Towner was referring to was that to date, the history of SLAs in TELUS have not included departures from tariff because there is just an increased degree of complication because then you would have to get changes to the tariff approved for a specific customer but this does not mean that we would not be prepared to entertain those types of agreements with CallNet, GT or AT&T. It just means we would have to get them approved.
13171 MR. DANIELS: Now, we mentioned before that you are familiar with Group Telecom's proposal and, in that sense, would you agree with me that Group Telecom's proposal would be something that could be approved by the Commission, applies to all. It could actually be in the general tariff if necessary?
13172 MR. KOLESAR: If I have heard your question right, your proposal with respect to penalties could be included in a tariff if the Commission chose to and applied across the board, is that what you are asking me?
13173 MR. DANIELS: Yes.
13174 MR. KOLESAR: Well certainly, that is true. It is within the Commission's power to do that.
13175 MR. DANIELS: Once again, I am going to refer to a line in paragraph 84 of your submission. I don't think it's necessary for everyone to turn to it. It says in it:
"Consequently, if the Commission determines that it is necessary to remedy reductions to service quality levels, TELUS considers that 'direct forms of compensations to customers affected by poor quality are preferable'."
13176 I understand that you are suggesting here direct forms of compensation to the actual injured party is TELUS' preferred route in terms of any remedies that the Commission chooses to impose as a result of this proceeding?
13177 MR. KOLESAR: Yes, that is true. And when we referred to that, we were, to be honest with you, more specifically referring to our relationship on the retail front. But it's equally true that we would want to deal with -- and I think I should perhaps let Mr. Towner speak to this -- but we would want to treat our wholesale customers in the same way as we treat our retail customers and to be able to deal on a one-to-one basis with them in an attempt to make right whatever they thought was a shortcoming in terms of quality.
13178 And we are not convinced that a one-size-fits-all approach that is being suggested by GT is the right way for that to be dealt with and that, in a market driven situation, which I would suggest we are in, in the wholesale market, we would not -- we would want to have the flexibility to deal with individual customers one on one and to build that relationship. And I think I will let Mr. Towner chime in here.
13179 MR. TOWNER: I don't know how much you are aware of the organization that we put in place for 2001 for TELUS but to treat this wholesale market. But RCO brought a fellow by the name of Joe Grech who used to be with Unitel and AT&T to address where we wanted to go as a stand-alone business unit with growth targets. And within that, we put in an organization that has a dedicated marketing sales and customer care, being myself.
13180 Part of my business model is to put in -- and I have put in 30 per cent increase in resources this year to treat this base, and putting in relationship management. So I mean I have relationships with my counterparts in GT, for example, your V.-P. of Carrier Relations, Ian Hunter. And reciprocally, we put a service management team at the operations level that meet monthly with GT on service issues and we have action registers on service improvements that are kind of reciprocal. So, just to add some notes for you.
13181 MR. DANIELS: But once again, you are familiar with Group Telecom's proposal and Group Telecom's proposal does call for direct forms -- direct compensation to the injured party, is that not correct?
13182 MR. KOLESAR: Yes, that is true.
13183 MR. DANIELS: Would it surprise TELUS to learn that CLECs -- some of them give refunds for late service, for example for provisioning if the customer's service is late in being provisioned.
13184 MR. TOWNER: Sorry. Could you just repeat the question?
13185 MR. DANIELS: Certainly. Would it surprise you to learn that some CLECs will give refunds to their customers if they are late in provisioning a new service such as voice service?
13186 MR. TOWNER: No, it would not surprise me.
13187 MR. DANIELS: Would it surprise you to learn that some CLECs have lost customers because of the delays in their ability to provision new services?
13188 MR. TOWNER: No, that would not surprise me.
13189 MR. DANIELS: I think we talked about this a little bit before but we are in agreement that there were some indicators that were finalized in Decision 2001-217. And for those indicators that were finalized as well as the ones that were made interim, the reports for those indicators -- am I correct in saying that TELUS was ordered to start tracking these indicators in the third quarter of this year, 2001?
1315
13190 MR. TOWNER: Just to be clear, we are talking about the 16 new ones for the wholesale space?
13191 MR. DANIELS: Yes.
13192 MR. TOWNER: Okay, not the previous three?
13193 MR. DANIELS: That's right.
13194 MR. TOWNER: Okay.
13195 MR. DANIELS: And of those, the third quarter just ended, but when will TELUS have the first report available?
13196 MR. TOWNER: Okay. I guess per the Commission, our requirement to provide those measures are, I believe, November the 15th.
13197 MR. DANIELS: Right. So unfortunately -- and not a problem -- we don't have those before us now. But there are some other indicators that we do have in this proceeding. And as you mentioned before, some of them relate to competitors.
13198 Would you agree with me that those are 1.6, 1.7 and 2.6?
--- Pause
13199 MR. TOWNER: Yes, I would.
13200 MR. DANIELS: And before taking everyone to what all three of those are, since 1.7 relates to alternative providers of long distance service and PIC, would you agree with me that CLEC would be more concerned with 1.6 and 2.6?
13201 MR. TOWNER: Would be more concerned with 1.6? Sorry, say that again.
13202 MR. DANIELS: And 2.6, considering that 1.7 relates to the long distance indicator.
13203 MR. TOWNER: I would imagine so, for you, in your case, yes.
13204 MR. DANIELS: And now the issue, as I understand it with 2.6, is that the company was not able to separate this indicator from the retail offering, so 2.6 hasn't been tracked until this year.
13205 Is that correct?
13206 MR. TOWNER: That would be prior to my time, but, you know, I'm not privy to that information, so -- go ahead.
13207 MS SHUYA: Yes, that's correct.
13208 MR. DANIELS: So it's fair to say, then, that from a CLEC perspective, the only indicator that we have some experience on this record is 1.6?
13209 MR. TOWNER: I would imagine so.
13210 MR. DANIELS: Great. So at this point, let's see how we did in 1.6.
13211 In that regard, I would like you, if you could pull out -- this is CRTC Exhibit 15A.
--- Pause
13212 MR. DANIELS: Do you all have this exhibit in front of you?
13213 MR. KOLESAR: Yes, we do.
13214 MR. DANIELS: So the one I'm looking at here, 15A, is, I believe, a revision from the original CRTC-15. So this one just deals with -- it's a one-pager that deals with TELUS.
13215 Now, when I look at this -- this is a CRTC-prepared document that is meant to summarize, as I understand it, the various indicators that TELUS has reported on and how many of their misses it has, and it breaks it down in each year, 1998, 1999 and 2000, as well as between TELUS, formerly BCTel, and TELUS in Alberta. Do you have the same understanding of the document?
13216 MS SHUYA: Yes.
13217 MR. DANIELS: And so if I grow down -- and I think we have agreed that the indicator 1.6 is the only one we have some history of here -- from a CLEC perspective, we can see the results of TELUS during the last three years.
13218 And before I ask you some questions, let's just -- I want to get some Companies' caveats out of the way. There was no ice storm in 1998 in TELUS territory that would have any impact on this quality of service, is there?
13219 MS SHUYA: That's correct.
13220 MR. DANIELS: And there were no strikes in 1999 or any other year that would have a significant impact on the quality of service?
13221 MS SHUYA: That's correct.
13222 MR. DANIELS: Okay. So now 1.6, as far as I understand it, this is the competitor installation appointments met. So this refers to provisioning on time competitor service. Am I correct?
13223 MR. TOWNER: On voice, right?
13224 MR. DANIELS: On voice services.
13225 MR. TOWNER: Yes.
13226 MR. DANIELS: And so if I look at TELUS B.C.'s record, in 1998, I see five misses; 1999, five misses; and in 2000, one miss, for a total of eleven misses out of the 36 months. Is that correct?
13227 MS SHUYA: That's correct.
13228 MR. DANIELS: And there is another document -- and I don't want to put this document away, so I think we might be moving a little back and forth between this other document -- is an Interrogatory TELUS(CRTC)3500. And it might be worthwhile pulling that out so that we can compare the two.
--- Pause
13229 THE CHAIRPERSON: Just give us that reference again, Mr. Daniels.
13230 MR. DANIELS: Okay, no problem. It's TELUS(CRTC)3500.
--- Pause
13231 THE CHAIRPERSON: Go ahead.
13232 MR. DANIELS: And in that regard, just -- first of all, I believe this is a document that was actually produced by TELUS which sort of captures the same information that actually the CRTC has summarized in that other document. We are both comfortable with that.
13233 MS SHUYA: That's correct.
13234 MR. DANIELS: But in addition, to flip through some of the attachments -- and I know there is a number -- if we turn to Attachment 4 to this interrogatory, this is where we begin the notes, which explains, as I understand it, explains why TELUS might have missed some of the indicators that it missed.
13235 Is that correct?
13236 MS SHUYA: That's correct.
13237 MR. DANIELS: And with reference to BCTel or TELUS B.C. -- I'm not really quite sure how to refer to it these days -- but with reference to them, what we have in Attachment 4 through 6 is their notes for 1998, 1999 and 2000, respectively.
13238 Is that correct?
13239 MS SHUYA: That's correct.
13240 MR. DANIELS: And in any of these notes -- and I can give you a minute to flip through it -- but when I flip through it, I didn't see any reference to an explanation of 1.6, why we -- any miss for 1.6.
13241 Is that correct?
13242 MS SHUYA: That's correct.
13243 MR. DANIELS: All right. So, then, let's turn and take a look at what we are doing in Alberta.
13244 If I go back to my 15A -- and I would suggest people not to put away your TELUS 3500 -- if I look in Alberta, here I see that in 1998, ten months were missed for 1.6; in 1999, nine months were missed; and in 2000, four months were missed, but there was also another two months where no indicator was available.
13245 So is that correct?
13246 MS SHUYA: That's correct.
13247 MR. DANIELS: And if I want to find my explanations here for why we missed the indicators there, I would have to go back to that TELUS(CRTC)3500 interrog and those explanations would be found in Attachments 7 through 9. Is that correct?
13248 MS SHUYA: That's correct.
13249 MR. DANIELS: And when I look at Attachment 7, for example, there is an explanation of indicator 1.6. And lo and behold, the reason why you missed it was due to -- it's large incidents of customer-requested changes to the original due date. Are you with me? Do you see that statement?
13250 MS SHUYA: Yes, I do.
13251 MR. DANIELS: But it's not exclusively that. Sometimes you had -- and I can take to the reference to it, it would be on page 4 of Attachment 8 -- sometimes it was organizational changes that was responsible for missing that indicator?
13252 MS SHUYA: That's correct.
13253 MR. DANIELS: Now, first of all, the statement that it's a large incidence of customer-requested changes, is there a document somewhere where we set out how many -- what percentage were responsible for -- that the customer requested the changes to the original due date that caused the miss?
1325
13254 MS SHUYA: What I would like to offer as an explanation for what has been happening with this particular indicator is the following. First, I would like to establish the fact that going into this price cap regime, this is a brand new indicator that was established.
13255 For the first year while we were measuring this particular indicator, we were in fact having to deal with a number of coordination issues in terms of the company would be establishing appropriate installation appointments and for a variety of reasons, often the customers requesting these particular installations were not ready.
13256 So that would have required us to in fact count this particular service order as a miss and then have to re-establish the indicator. So it took us a number of -- quite a period of time in which to establish more effective processes between the two organizations in order to have met this indicator consistently.
13257 Your reference to a couple of months where the data is not available. That's a result of a harmonization project that was under way within the organization where a number of the systems that where we normally got the information from were unavailable because of conversion that was under way.
13258 It was not an attempt on our part in any way not to report the information. They were just interim issues that we were dealing with.
13259 I would also like to point out that over the last year there has been a significant improvement in terms of our company's ability to make this indicator month over month.
13260 MR. TOWNER: If I could, Mr. Daniels, I would like to add part of the reason the focus again, as I had given previous testimony about our organization, is to make sure that we hit our indicators. Again, for 2001 every month has been exceeded. We are at a year to date for this year at 98.5 per cent on an objective of 90 per cent.
13261 I should also point out that these and other indicators are linked to every one of my management teams' performance pay as well, so we are serious about what we are doing with the measures going forward and the organization we have around this.
13262 MR. DANIELS: I do have a couple of questions to go back to, but I was interested in your last statement. It's tied to -- you said that your sales or somebody's -- their incentives are tied.
13263 Why is that important to have incentives tied?
13264 MR. TOWNER: Why is it important? Because you get what you measure. You know, if you don't put a focus on this type of stuff, it would not be perceived as priority. So I am trying to reiterate here that what we are doing in our organization is around metrics and quality performance for our customers.
13265 MR. DANIELS: And that would be financial?
13266 MR. TOWNER: Yes, it would be.
13267 MR. DANIELS: Thank you.
13268 MR. WEISMAN: Mr. Daniels, I think it's also important to point out that where market incentives can work and work well, there is no need for regulatory penalties or the like to substitute. That's why I think it's important to give this an opportunity to see if the market can work the way we anticipate it will and the way Mr. Towner's organization has been set up to respond to CLECs.
13269 MR. DANIELS: Indicator 1.6, now there is a more specific indicator in terms of 1.8 and 1.9 in terms of provisioning loops.
13270 Is that correct?
13271 MR. TOWNER: Yes.
13272 MR. DANIELS: But just to be clear, I think there was a reference that 1.6 was new in the price cap, so it's not, as Mr. Kolesar stated earlier in reference to some other indicators, it's not a hangover from the rate base rate of return days.
13273 MR. KOLESAR: Sorry. With respect to which one? 1.6.
13274 MR. DANIELS: Yes, 1.6. Earlier I heard --
13275 MR. KOLESAR: 1.6 is new, yes.
13276 MR. DANIELS: It's new for the price cap. And we have agreed that 1.8 and 1.9 are now more specific. There is a -- once again maybe it's worthwhile, unless you were here for my cross earlier of Bell where we turn to GT Exhibit No. 5. At the time in the document we looked at the indicator.
13277 So maybe it's best that we just take a quick look at that indicator for a moment. That's GT Exhibit No. 5.
--- Pause
13278 THE CHAIRPERSON: While the panel is looking for the document, let me just note for the record the reason we adjourned early this morning was that Commissioner Langford was feeling ill. I had indicated to him if he continued to do so this afternoon, he could step back to our room in the back where we have an audio feed from the floor here, so he is continuing to listen to the proceeding as it goes on.
13279 MR. KOLESAR: Okay. It's here.
13280 MR. DANIELS: And this document is the business process industry working group CISC document that adopted -- defined the quality of service indicators, some of which are interim and some of which are final.
13281 Do you agree with that?
13282 MR. KOLESAR: Yes.
13283 MR. DANIELS: I would like you to turn to page 3, which is a page we did not discuss with The Companies, but it's a similar point to something we discussed with The Companies.
13284 This is where we lay out the indicators for 1.8 and 1.9. Is that correct? You are comfortable with that?
13285 MR. KOLESAR: Sorry. This is on page 3?
13286 MR. DANIELS: I hope I have the same document as you.
13287 MR. KOLESAR: Page 3 for me is the Table of Contents. I just wonder if we are looking at the same thing here.
13288 MR. DANIELS: I hope so.
13289 MR. KOLESAR: Just so that I'm clear, I'm looking at GT Group Telecom Exhibit 5. It's entitled "Insulation Testing and Maintenance Guidelines for Unbundled Loops".
13290 Is that the right one?
13291 MR. DANIELS: That's not the document I have in front of me, but that's not to say that I have the right --
13292 MR. KOLESAR: That explains it.
13293 MR. DANIELS: -- that I have the right exhibit number.
13294 Can I ask, Mr. Secretary, if you can just confirm. What is the proper reference to -- I thought it was GT Exhibit No. 5, but just so that everyone can find it. I'm looking for a document that has the title at the top "File IDBPRE02AA.DOC".
13295 THE CHAIRPERSON: That's Exhibit No. 7, Mr. Daniels.
13296 MR. DANIELS: My apologies.
13297 THE CHAIRPERSON: That would be the consensus report, quality of service indicators.
13298 MR. DANIELS: Yes. That's exactly the document --
13299 THE CHAIRPERSON: Exhibit No. 7.
13300 MR. DANIELS: -- I am turning to.
13301 Thank you very much, Mr. Chairman.
13302 MR. KOLESAR: Okay. I think we are both on the same page now.
13303 MR. DANIELS: Are we on page 3 then?
13304 MR. KOLESAR: Yes.
13305 MR. DANIELS: Great. Sorry about that.
13306 So if I look at it, this is where we lay out indicators 1.8 and 1.9.
13307 MR. KOLESAR: Yes, it is.
13308 MR. DANIELS: Which are finalized indicators. Then on the second page there, on page 4, I should say the next page over, once again we find that the business process group recommended that certain loop orders be excluded from the measurement when the due dates were missed.
13309 The first point was as a result of a facility shortage, but the second point was for reasons attributable to an end customer or a CLEC.
13310 Is that correct?
13311 MR. KOLESAR: Yes, it is.
13312 MR. DANIELS: And that was adopted and approved by the Commission in Decision 2001-366, I believe. Is that correct?
13313 MR. KOLESAR: I think that's true.
13314 MR. DANIELS: We can agree that indicator 1.8 and 1.9 are not going to have situations in which the CLEC misses the date -- sorry, the ILEC misses the date because of -- with reference to customer requested changes. That's not going to be captured by that indicator, not going to be a problem.
13315 MR. KOLESAR: When you say not going to be captured, are you suggesting that in the data that we see here that that's not captured there, or on a going forward basis it's not going to be captured.
1335
13316 MR. DANIELS: What I am suggesting is only -- is that in your explanations that you have provided in TELUS(CRTC)3500, not always, but sometimes, you have indicated when you actually offer an explanation for missing the indicator you have said that it is as a result of a large incidence of customer-requested changes. What I am asking is, under indicator 1.8 and 1.9 that will not be an issue? That can't be the reason for missing that indicator.
13317 Is that correct?
13318 MR. KOLESAR: On a going forward basis, now that we have got our processes working right, I think Mr. Towner would agree that that is true.
13319 Is that correct?
13320 MR. TOWNER: I am not familiar with how this measure is being derived right now, because it is being worked internally. But my view would be on any customer miss or any due date performance indicator that is missed as a result of the customer cause that would be excluded from the measure.
13321 So it is the measure that should be reported as truly the Telco's performance on due date met and anything the customer causes, it would be excluded from the measure.
13322 MR. DANIELS: Right. So the excuse that I am reading here, which as we established we don't necessarily have the proof of, but the excuse that I read here is not going to apply to indicator 1.8 and 1.9?
13323 MR. TOWNER: I would imagine it's not. Defining that measure the way we just did it should not be part of that if we are talking about what you will be looking at as a report in November.
13324 Is that your question?
13325 MR. DANIELS: That was my question.
13326 MR. TOWNER: Okay.
13327 MR. DANIELS: And thank you, Mr. Kolesar, for helping my cross.
13328 At this point then, I would like to turn back to that 15A, Exhibit -- CRTC Exhibit 15A because, as we have expressed here, we only have information and there is only one indicator for the CLEC that is 1.6. We have discussed that, but there are some other indicators there.
13329 For example, I am looking at indicator 2.2(a). Now, am I correct in understanding that this measures the repair appointments met?
13330 MS SHUYA: That's correct.
13331 MR. DANIELS: And this is the one that may -- that also has some competitor into it but the vast majority would be retail customers?
13332 MS SHUYA: That indicator does include CLEC orders.
13333 MR. DANIELS: And when I look at that line there I see that in Alberta, for example -- let's start with Alberta this time in 2.2(a). If I go to just to the summary at the previous 36 months, that Alberta missed only two out of 36 months on that indicator.
13334 Am I reading this correctly?
13335 MS SHUYA: That's correct.
13336 MR. DANIELS: So that's not perfect level performance. That's pretty good, isn't it?
13337 MS SHUYA: We think so.
13338 MR. DANIELS: Now, in B.C. we seem to have a number 36 out of 36. We didn't make it once in 1998, 1999 or 2000.
13339 Is that correct?
13340 MS SHUYA: That's correct.
13341 MR. DANIELS: Is it also true to say that TELUS is required to provide this level of service?
13342 MS SHUYA: Yes, it is.
13343 MR. DANIELS: This is an example of establishing a standard, monitoring a standard, but not having a penalty applied.
13344 Is that also correct?
13345 MS SHUYA: Could you repeat that question, please?
13346 MR. DANIELS: Is this an example of where these -- an established -- a standard was established, it was monitored and reported but no penalty was associated directly with the violation of that penalty, of that standard?
13347 Is that a correct characterization of 2.2(a) in B.C.?
13348 MR. KOLESAR: You know, I am not sure that I would exactly characterize it that way. I mean, it's certainly clear, the facts do speak for themselves. On the B.C. side there has been an ongoing challenge to try and maintain that particular indicator, but I'm not sure I would characterize it as there was no penalty per se.
13349 What I would suggest is if there is that -- if the marketplace is certainly going to be exacting a form of penalty on us, if those customers who had expectations related to that performance were not met, and true, we have had a tough time with that one and where our customers have indicated that they are not happy with us we have, of course, had to try and deal with their individual concerns.
--- Pause
13350 MR. DANIELS: Now, turning back for a second to the six indicators, the finalized indicators, new ones as you have mentioned, as we -- we both have agreed that these reports aren't due out until November 15th but when they are, are they going to be in a form similar to that which I have here at TELUS(CRTC)3500?
13351 MR. KOLESAR: I'm not quite clear on your question. Do you mind to repeat it, please?
13352 MR. DANIELS: No problem.
13353 I'm wondering when that report, that first report -- unfortunately, I don't have it here -- but I am assuming that the first report that comes out in November 15th is going to have -- is going to be pretty clear to read as to whether TELUS met its standard or not, for each individual CLEC it is going to be able to determine that with the report it gets.
13354 Is that correct?
13355 MR. KOLESAR: To the best of my knowledge, yes.
13356 MR. DANIELS: So for each indicator it will be broken down for each month whether TELUS met that standard or not as it relates directly to that CLEC.
13357 Is that correct?
13358 MR. KOLESAR: Yes, I think that is true.
13359 MR. DANIELS: So once again, I would like to make the same assumption that we discussed with The Companies. If the CRTC were to adopt Group Telecom's proposal and the ILEC were to breach some of its indicators, one of these six or more than one of these six, we agree that the CLEC would receive that info.
13360 Is that correct?
13361 MR. KOLESAR: Yes.
13362 MR. DANIELS: And that the CLEC could then take that info and create a bill based on that info using the CRTC adopted Group Telecom formula.
13363 Is that correct?
13364 MR. KOLESAR: I'm assuming that they could create a bill, yes.
13365 MR. DANIELS: And TELUS would be able to check that bill based on the document that it had sent to the CLEC.
13366 Is that correct?
13367 MR. KOLESAR: I don't know if we have the actual processes in place to do it but, I mean, we can assume that such processes could be put into place, yes.
13368 MR. DANIELS: If there was any problem TELUS could challenge that, the bill, if it wasn't accurate based on its own numbers.
13369 Is that correct?
13370 MR. KOLESAR: Well, I think we probably could, but what we would prefer if you are going to engage in any form of penalties or if you are -- if the Commission is going to -- if the Commission considers that some form of penalty is required because the market is not having a sufficient effect on the relationship between TELUS and its wholesale customers, we would like to see an independent audit of some kind done so that the Commission has adequate comfort that there is a problem that needs to be resolved.
13371 So although, I suppose, we could put processes into place, part of the problem is there is always going to be some opportunity for us to have a disagreement about what the amount of that ought to be and what the appropriate redress ought to be. If there is a sufficient indication that the market is not working to discipline that relationship that TELUS wants to have with Group Telecom or AT&T or CallNet we would want to ensure that the process to determine what that redress should be is an appropriate one.
13372 But the view that we have is that we would rather deal with you as an individual customer and deal with your concerns one on one rather than resort to the somewhat blunt broad brush one size fits all approach that says, "Well, I will just give you a bill and you pay me the bill and then we will all be happy." Because if it gets to that stage we don't have the kind of relationship with you as a customer that we really want to have here.
13373 So yes, we could probably create a process where we could possibly track and attempt to verify, but I should probably let Mr. Towner jump in here as well on this.
1340
13374 MR. TOWNER: I thought you were doing pretty good.
13375 But, you know, we believe that it's going to undermine our relationship and our ability to build strong relationships with our customers which are the competitors and out of region, reciprocally, is true as well. It adds another level of conflict management and we believe it's just not on.
13376 As you are probably aware, in Group Telecom's case, we are a larger customer of Group Telecom than Group Telecom is of us and, you know, we are very supportive of the CLEC model. Right? And we want to see it successful. So that's our view.
13377 MR. KOLESAR: If I can just return to this point, part of the problem with the sort of scheme that is being suggested here is it really becomes a potential, at least, revenue source for the CLEC as every time we miss, the CLEC is going to be compensated. And we are not sure that that puts into place the sort of incentives that are really going to make the market work great or the relationship between TELUS and our customers.
13378 So we would strongly urge that the better approach is let the market deal with it by giving us an incentive to deal with our customers on a one-on-one basis, our wholesale customers and deal with whatever redress is appropriate for their specific situation at any given point in time. And that's the very reason why GTPS was formed and it's the very reason why Mr. Towner has engaged in the task that he has to manage that relationship.
13379 MR. DANIELS: At this point in time, I would like to turn to another aspect of Group Telecom's proposal and that is that Group Telecom, I take it you are aware, has proposed that the Commission be prepared to impose penalties for non-indicators for other services where no indicators are available.
13380 Let me just break that down. Some of those will be CLEC services which are not presently being measured. An example of that would be the Norigen and Building Wire Decision. Are you comfortable -- you are aware of that?
13381 MR. KOLESAR: Sorry. I just kind of lost the whole flow of that one. Would you mind repeating it again?
13382 MR. DANIELS: No problem.
13383 Group Telecom has also proposed -- I will take it slow and we will have to do it bit by bit.
13384 Are you aware that Group Telecom has also proposed that the Commission be prepared to impose penalties or state its willingness to impose penalties for other services that aren't measured by these 16 indicators?
13385 MR. KOLESAR: That they would impose penalties on whom?
13386 MR. DANIELS: On the ILEC for breaching of its obligations for these services which aren't being measured by these indicators.
13387 MR. KOLESAR: So what you are asking me is am I aware that that's part of the Group Telecom proposal and the answer is yes.
13388 MR. DANIELS: Right. And some of these have referred to other rules like win-backs, affiliate rule violations. But another one of those that was mentioned by Group Telecom was co-location. Are you aware of that?
13389 MR. KOLESAR: Yes.
13390 MR. DANIELS: Just before I turn to an exhibit, and I think you know which one I'm going to -- sorry, interrogatory response on co-location, I want to make sure we have a common understanding of co-location intervals.
13391 Until very recently, am I correct in saying that the co-location intervals for setting up a co-location for a physical co-location is six months?
13392 MR. KOLESAR: Yes, I think that is true.
13393 MR. DANIELS: And it's three months for a virtual co-location.
13394 MR. KOLESAR: I think that is true as well, yes.
13395 MR. DANIELS: With that in mind, I'm wondering if we can turn to another Interrogatory, TELUS(CallNet)902.
--- Pause
13396 MR. DANIELS: Do you have that available to you?
13397 MR. KOLESAR: Yes, we do.
13398 MR. DANIELS: As I read this, this interrogatory sets out the amount of co-locations you have built for CLECs in Alberta and B.C. And so the number in B.C. during the price cap period is -- is it 80 I believe?
13399 MR. KOLESAR: Yes.
13400 MR. DANIELS: And in Alberta?
13401 MR. KOLESAR: I believe it was 110.
13402 MR. DANIELS: One hundred and ten. And in this interrogatory, you were asked to state the percentage of completion that were completed within six months. When I look at that, I see in Alberta that only 56.4 per cent were completed within six months. Am I reading that correctly?
13403 MR. KOLESAR: Yes, you are.
13404 MR. DANIELS: And in B.C., a staggering 18.75 per cent were completed within six months. Is that correct?
13405 MR. KOLESAR: That is true also.
13406 MR. DANIELS: That is measured against six months.
13407 MR. KOLESAR: Yes, it is.
13408 MR. DANIELS: And some of these 110 co-locations in Alberta and 80 co-locations in B.C. are virtual?
13409 MR. KOLESAR: I don't know if that's true or not, if they are.
13410 MR. DANIELS: Perhaps I could ask for an undertaking that you could examine how many of those were virtuals and then what I would be interested in is a breakdown of how many of those virtuals were completed within the three months' time period.
13411 MR. KOLESAR: I will see if I can get that. If we have that breakdown, I would be more than happy to provide it to you.
13412 MR. DANIELS: What penalty was paid for TELUS despite -- let's assume that they are all six months, they are all physical in B.C. only, making less than 20 per cent on time?
13413 MR. KOLESAR: None that I'm aware of.
13414 MR. DANIELS: At this point in time, I would like to take a look at an example of a case of one specific CLEC and for that, I'm going to turn to an exhibit I have handed out which is a document dated September 22nd, 2000, C-1 Communications.
--- Pause
13415 MR. KOLESAR: Sorry. Is that the one from September 22nd or November 22nd? There are --
13416 MR. DANIELS: September 22nd.
13417 MR. KOLESAR: September 22nd? It's here.
13418 MR. DANIELS: And that's the letter from an application to the CRTC from Jonathan Daniels, whoever he is.
13419 Now, this is from C-1 Communications and this is -- or I should say C-1.com Inc.
13420 They were a CLEC, you would agree?
13421 MR. KOLESAR: Yes, they were.
13422 MR. DANIELS: They have since gone bankrupt.
13423 MR. KOLESAR: Yes, they have.
13424 MR. DANIELS: In this document, I'm wondering if it would be helpful -- we can discuss several things in it -- but it would be helpful from a visual perspective if people could turn to page 12 which is Appendix B of this document.
--- Pause
13425 MR. DANIELS: Now, as I understand this document, in Appendix B, we find a list of the application dates that C-1 made for TELUS physical and virtual co-locations. Are you reading the document in the same way?
13426 MR. KOLESAR: Yes, I am.
13427 MR. DANIELS: And as I understand it, this is a document where C-1 filed to the CRTC asking for an intervention because there were a number of months that were delayed in terms of the provision of these co-locations and those months are listed at that point in time in the column -- the last column on page 12.
13428 Do you read that the same way?
13429 MR. KOLESAR: Yes, I do.
13430 MR. DANIELS: In addition, when you read through some of the history that is outlined here -- and I can turn you to the pages, but I gather that you have read this beforehand and we can avoid having to turn to every page to see this -- as I understand it, what happened is there was dispute between C-1 and TELUS about its application dates in the first couple of months of 2000 and that led to Commission staff mediation.
13431 Is that correct?
1350
13432 MR. KOLESAR: Yes, I think that is true.
13433 MR. DANIELS: And it was staff mediation between actually Axxent as well because they had similar problems, C-1 and TELUS with CRTC staff mediation, is that correct?
13434 MR. KOLESAR: Yes, it is.
13435 MR. DANIELS: And through that, they made some compromises and some dates were chosen, and the first dates of co-locations to be handed over to C-1 were set after this staff mediation was July 6?
13436 MR. KOLESAR: Yes.
13437 MR. DANIELS: Is that correct?
13438 MR. KOLESAR: Yes, it is.
13439 MR. DANIELS: And this staff mediation went on for a couple of months, did it not?
13440 MR. KOLESAR: I was not there but I will -- subject to check, I think I can agree that that's true.
13441 MR. DANIELS: And then what happened was, on July 4th, two days before the first of set of co-locations were to be handed out, TELUS informed C-1 that it was not able to hand over those co-locations, is that correct?
13442 MR. KOLESAR: I believe that that is true. I was not personally involved but certainly the text of the application states that, from C-1's perspective, that that's what actually occurred.
13443 MR. DANIELS: And at the time, TELUS informed C-1, it wouldn't even be able to tell them at least for another week when they could actually hand over those dates -- those co-locations that were due in two days.
13444 Is that correct?
13445 MR. KOLESAR: I don't know because I wasn't there but certainly, the application from C-1 says that that was what the case was.
13446 MR. DANIELS: And eventually, C-1 felt the need, on September 22, without going through the whole history, to actually file to the CRTC to seek the CRTC intervention.
13447 Is that correct?
13448 MR. KOLESAR: Yes, it is.
13449 MR. DANIELS: C-1 wasn't able to launch its service without co-locations being handed to it, was it?
13450 MR. KOLESAR: Depending on what kind of service they were going to launch, I would assume no.
13451 MR. DANIELS: But C-1 was actually in the business of doing a DSL invoice through leasing local loops. So, within the context of those types of service, it wouldn't have been able to launch service, would it?
13452 MR. KOLESAR: That's certainly true, yes.
13453 MR. DANIELS: So, it wouldn't surprise you to learn that co-location delays contributed to C-1 not being able to meet its business plans?
13454 MR. KOLESAR: Well, I'm certainly going -- not going to accept any liability for the condition that C-1 may have found itself in. But what I will offer is that I believe, if we had had GTPS in place at that time and if Mr. Towner's organization had been in place at that time -- and, in fact, that was the very reason why TELUS moved to the GTPS model and the very reason why we have somebody like Mr. Towner, was so that this type of situation would not occur. And that situation did occur at that time.
13455 The company had a challenge in putting all the building blocks into place that were required to put all the processes in place to build the relationships with CLECs that would be required to deliver on co-location. There was a lot of miscalculation because we really underestimated the number of requests for co-location that we would get.
13456 And the reason why we moved to the model that we have moved to now is because this kind of thing is simply unacceptable from a business perspective in the market we are in, in the wholesale market that we are in. We need to make sure that we are going to provide the kind of service to CLECs that they expect and that's the very reason why we have taken the steps that we have to make sure that these kinds of unfortunate situations are not going to occur.
13457 MR. DANIELS: And would it surprise you to learn that one of the factors of C-1's ability to receive future financing or further financing and therefore result to being in bankruptcy was its inability to meet its business plan?
13458 MR. KOLESAR: I am afraid I can't speak to the specific situation of C-1 with respect to what those particular factors might have been.
13459 MR. DANIELS: I was interested in your statement that it's unacceptable from a business perspective, these issues -- these results that we are looking at. I would like to know, is it acceptable from a regulatory perspective?
13460 MR. KOLESAR: I am not sure what you mean by that. If you mean that the Commission should take steps to re-regulate or to regulate quality of service in a way that is going to potentially have implications to how the market itself is going to unfold, then I would suggest no.
13461 I mean, I think the Commission has a role, I think the Commission has a role to monitor quality. I think the Commission has a role to monitor the process of competition. But I think also the Commission should be cognizant of the fact that the market is going to ultimately bring a lot of pressure to bear on all market participants to form business relationships.
13462 And our approach and the kind of model that we have put into place with the creation of GTPS is to actually ride that market wave and forge those relationships in the wholesale market. It's a vibrant, attractive part of the market. We have created a profit centre specifically for the purpose of trying to capture as much of that wholesale market as what we can and we believe that the Commission needs to be mindful of how that market unfolds but should really give the market a chance to really develop and see where it's going to ultimately go.
13463 And just let me add that these kinds of problems or concerns that have been raised, particularly in the unfortunate situation that we had with C-1, have really been a function of the parties figuring out how they were going to work with each other, putting into place a whole new market relationship that hadn't previously been there. And I think that market relationship is going to continue to develop, is going to continue to improve and so we think that the Commission should let the market -- let the wholesale market develop.
13464 MR. TOWNER: I would like to add as well to Mr. Kolesar's reference to GTPS and I think it's important for the Commission to be noted that this year's performance for TELUS on co-locations, we have had 19 projects year to date and TELUS has hit the commitment 100 per cent of the time on the co-location intervals for this year. So, I just add that in.
13465 MR. DANIELS: Mr. Chairman, thank you for the opportunity. That concludes my cross-examination of this panel.
13466 THE CHAIRPERSON: Thank you, Mr. Daniels.
13467 Mr. Secretary.
13468 MR. SPENCER: Thank you, Mr. Chairman. I would like to enter four documents.
13469 The first one is Decision CRTC 2001-238-2, will be identified as GT Group Telecom Exhibit No. 11.
EXHIBIT NO. GT GROUP TELECOM-11: Decision CRTC 2001-238-2
13470 MR. SPENCER: A letter dated September 22, 2000 from Jonathan Daniels regarding Part VII application requesting the Commission to make certain orders against TELUS Communication Inc. and TELUS Communication B.C. will be entered as GT Group Telecom Exhibit No. 12.
EXHIBIT NO. GT GROUP TELECOM-12: A letter dated September 22, 2000 from Jonathan Daniels regarding Part VII application requesting the Commission to make certain orders against TELUS Communication Inc. and TELUS Communication B.C.
13471 MR. SPENCER: We also have two undertakings from CRTC. The first is Undertaking to TELUS regarding competitive segment services, that will be entered as CRTC Exhibit No. 26.
EXHIBIT NO. CRTC-26: Undertaking to TELUS regarding competitive segment services
13472 MR. SPENCER: And also Undertaking to The Companies regarding competitive segment services will be entered as CRTC Exhibit No. 27.
13473 Thank you.
EXHIBIT NO. CRTC-27: Undertaking to The Companies regarding competitive segment services
13474 THE CHAIRPERSON: Thank you, Mr. Secretary.
13475 I believe then those are all the parties who had indicated an intention to cross-examine this panel, so with that, we will turn to Commission counsel Moore.
EXAMINATION BY / INTERROGATOIRE PAR
13476 MS MOORE: Thank you, Mr. Chairman.
13477 I would ask you first to refer to your evidence at page 32 and, in particular, paragraph 81. So in that paragraph, you state as follows, and I will omit the footnotes:
"There is no evidence in the academic research of a systematic relationship between any degradation in service quality and the adoption of incentive regulation. On the contrary, the evidence suggests that any reductions in service quality are likely due to the impacts of the introduction of competition and industry rationalization and restructuring and that these adverse consequences are temporary." (As read)
13478 And then, in your footnote to the last sentence, you mention that:
"Quality of repair and installation suffered in the United States after the AT&T divestiture." (As read)
13479 I wonder if you could please elaborate on what you see as the specific links between industry rationalization and restructuring and reductions in service quality.
13480 DR. WEISMAN: The implementation of accommodative competitive entry policies requires very substantial changes in the network and coordination among participants. Similar changes occurred in the period of divestiture where there were significant asset transfers and recoordination carriers that were once end carriers now had to form interfaces between a long distance segment and a local segment splitting up the regional Bell operating companies into that point seven regional Bell operating companies and spinning off the long distance arm AT&T, those coordination difficulties as in 1994 divestiture which are similar with regard to the implementation of accommodative competitive entry policies and the ILEC-CLEC relationships.
13481 MS MOORE: So in your view, while there may be a link between, as you term them, accommodative competitive entry policies and temporary service degradation, there is no link with price incentive regulation per se. You draw the distinction, you say the adoption of incentive regulation in and of itself, even though it may or may not play a role in accommodative entry policies, itself does not lead to any type of quality service problems?
13482 DR. WEISMAN: Yes. The two studies that are listed there, one performed by Dave Sappington, who is now the chief economist at the FCC, and I have spoken to both authors about these study results and their conclusions are that with the models that they have looked at and the data that they had to look at, there is no conclusive evidence that there is a statistically significant relationship between degradation and service quality and the adoption of incentive regulation.
13483 MS MOORE: You also mention in that paragraph that the adverse consequences are temporary and I wonder what kind of time frame you are referring to.
13484 DR. WEISMAN: My thinking at that point that these were temporary was in drawing the link between the 1984 divestiture where those problems were transitory and the recognition that these coordination problems and systems changes take time to work out. So, it is my expectation that they would be transitory in nature.
13485 MS MOORE: Can you put some type of estimate on the time frame that you think these things would reasonably be resolved in? Is it a matter of months, of years?
13486 DR. WEISMAN: Well, let me put it this way. I believe they should be transitory in nature. I am not an engineer, I don't know specifically the nature of these coordination problems, if they turn out to be more than transitory in nature, I would think there would be a role for the Commission to play and understanding the underlying implications for those results.
1410
13487 MS MOORE: Thank you. I would like to turn to an interrogatory response but I think you need to turn this up. It's The Companies(CRTC)1504. And in that response, The Companies have stated that a Verizon-type of plan could penalize the company for non-persistent quality of service problems. And I wonder if TELUS takes the same view of a Verizon-type plan and has any concern about being penalized for non-persistent problems that are outside of your control.
--- Pause
13488 MR. KOLESAR: We are not quite sure what you mean by that question. And when you refer to a "Verizon-type model," I'm assuming you are referring to something like the Rhode Island model.
13489 Is that right?
13490 MS MOORE: That's correct. That's another name for the Verizon plan is the Rhode Island approach, which contains a Q-factor. And The Companies, in their interrogatory response, suggests that that type of approach, in their view, can end up penalizing the company for factors which are beyond their control, such as natural calamities. And I wonder if you would share that concern.
13491 MR. WEISMAN: I am not quite sure this is getting to your question, and if it's not, please, follow up.
13492 Generally, you know, as an economist who has looked at this, and as the service quality issue has become a major one in this proceeding, I have looked a good deal at the economic literature. And unfortunately the literature doesn't help us out here. It tells us that there is no evidence of this relationship between degradation and service quality and incentive regulation.
13493 One of the reasons that I contacted both authors of these studies was to ask them if they had plans or had they -- in some results, not indicated in their paper, had they looked at various quality of service penalties to determine their effectiveness. And they had not because there were difficulties putting the time series together.
13494 The problem, in general, with the Q-factor is that, in general, you can get rather perverse incentives with the Q-factor, that, first of all, it's a relatively blunt instrument. There is no guarantee that those that were actually harmed would, in fact, receive any type of remedy under this plan.
13495 There may be actually transitory incentives where you could actually get a reduction in investment in service quality. And if you look at a quality of service factor, and the underlying incentive mechanisms, it's very close to a revenue sharing plan. And a revenue sharing plan has a number of properties associated with it, but also some severe negative properties. And one of those is that it will actually encourage the firm to cut back on investment in quality.
13496 Interestingly enough, the State of Oregon, which was one of only two states in the United States that had experimented with revenue sharing plans, had some of the most significant quality of service problems of any state in the country. So there is some evidence in the literature on revenue sharing and the adverse quality effects of revenue sharing, generally.
13497 MS MOORE: Thank you.
13498 If you could turn to TELUS(CRTC)1502, at page 1 of 2.
--- Pause
13499 MR. KOLESAR: Okay, it's here.
13500 MS MOORE: In that interrogatory response, TELUS reiterates its view that if the Commission were to deem that a quality of service mechanism is necessary, that direct customer rebates are the most effective form for such a mechanism.
13501 TELUS also states at the bottom of page 1 of that response that if the Commission determines that it is necessary to remedy reductions in service quality, TELUS proposes to add a provision to the Terms of Service to allow for rebates for installation or repair appointments not met.
13502 And I note that TELUS has used the phrase in that response "remedy reductions in service quality," and I wonder if, in your view, this proposal that you put forward seeks only to remedy poor service, or does it also, in your view, provide an incentive to meet or exceed the minimum Q of S standards?
13503 MR. KOLESAR: What our proposal does is it provides an incentive for us to maintain quality on an individual customer basis, because whenever we miss, there is an individual customer somewhere.
13504 The reason why we zeroed in on these two is because in the research that we have done with our customers, what they have told us is, "If you guys make a promise, we expect you to live up to it." So if we miss a repair, if we don't do an installation on time, there is a very clear one-to-one relationship with that customer.
13505 And we have empowered our frontline people to do what they need to do for individual customers. And the purpose of putting the change into our terms was to make sure that customers were more well informed, that we are certainly prepared to deal with any concerns that they might have with respect to not completely meeting their expectations with respect to quality.
13506 I'm not sure that answers your question.
13507 MS MOORE: I'm not sure either, but perhaps I will reframe.
13508 So, in your view, the proposals that you put forward, clearly you state in your interrogatory response, are meant to remedy reductions in service quality, but, based on what you have just said, I think you are saying that you also do see that that type of proposal does lead to an incentive, on the part of the company, to meet the standards?
13509 MR. KOLESAR: Yes, it does. And that incentive is really bolstered by a fundamental market incentive that we have. We are compelled by competition in the marketplace to try and make sure that every customer is happy with our level of quality and with the service that we provide to them.
13510 So we are of the view, first of all, that competition on all fronts, in every market that we are in, and the requirement for us to maintain our brand reputation with respect to quality in every market we are in and the requirement to make sure that every customer, as an individual, is happy with us, gives us a tremendous incentive to maintain quality.
13511 So the proposals that we have put forth here are part of a larger incentive that we have. It's a very specific one, aimed at specific customers, making sure that we are doing the things that we need to do to keep specific customers happy, but it's really bolstered by the fact that in the marketplace, as a whole, there is a tremendous incentive upon us to make sure that every customer is happy.
13512 MS MOORE: Now, I appreciate that your position is that there is no need at this time for a specific quality of service component in the Commission's price regulation regime. So I appreciate that, but I will ask you to assume that, nevertheless, the Commission might determine that some form of a Q of S component is required.
13513 And I wonder if you would have any comments on the advantages or disadvantages of a Q-factor type of approach versus rebates that may not be customer specific, but may be more along the lines of what The Companies have proposed with their residential service quality guarantee, or even possibly some combination of those approaches.
13514 MR. KOLESAR: Okay, I think I will let Dr. Weisman speak first, and then may add to that.
13515 MR. WEISMAN: A key tenant of the TELUS price regulation plan is that we believe there is an opportunity to allow the marketplace to establish levels of quality. And the idea is that if CLECs are allowed at the upstream or the wholesale level to choose their preferred levels of quality and then enter the retail market, they will establish for the retail market the appropriate level of quality. And it may be some combination of high quality and high price and other providers entering with low quality and low price.
13516 And I understand that a great deal of effort has gone into these indicators and why they are important and significant, but we do not know whether they are market-based indicators or not. And this process would reveal whether some indicators are too high, other indicators are too low, from a market perspective, and that would provide the requisite level of discipline. So just as accommodative entry policies are self-regulating with respect to price, they are also self-regulating with respect to quality.
13517 There is some danger that when you peg either artificially low prices and/or artificially high levels of quality that you will actually serve to discourage efficient entry, and that is inconsistent with my understanding of the Commission's long-run objective of fostering a greater reliance on market forces for providing the requisite level of discipline.
13518 MS MOORE: Now, if you had to choose between a Q-factor which actually affected the overall price cap index or some type of rebate approach that wasn't tied directly to the price cap formula, do you see advantages or disadvantage to one or the other?
13519 MR. WEISMAN: I'm not in favour of Q-factors. I think that the problem is that while they may cause prices to fall, assuming the price cap constraint is binding, there is no guarantee that those parties that may have received inferior quality service will actually realize the benefits of that.
13520 And my recollection is that there is some evidence of that from the plan in Rhode Island, that while the Q-factor was put in, there was no link to ensure the customers that actually suffered from poor service quality actually benefitted. Whereas, a rebate plan is very targeted. When there is a problem, the customer has the opportunity to avail him or herself of the rebate. And I think you can be assured that they have received at least some remedy for the harm they have suffered.
13521 MR. KOLESAR: That doesn't mean to say that the rebate proposals that's been put forth by The Companies is the best form, because it actually has a lot of the same shortcomings that a Q-factor has. There is no direct relationship between the rebate itself and individual customers who feel that they are not getting the kind of quality that they should get.
13522 It will really function in much the same way as a Q-factor does. All that happens is the calculation of the amount of rebate to be paid to all customers is calculated in a different way. But it really kind of functions exactly the same way as a Q-factor does, and that's why we are proposing that the company be given the flexibility to deal with individual customers and to provide, where appropriate, whatever form of redress for that individual customer may feel that is appropriate to them at that time, given their particular situation.
13523 So there is a nice one-to-one relationship there and it's very market driven.
13524 MR. WEISMAN: If I could follow up -- and cut me off if it's not helpful -- but upon realizing there wasn't a great deal of information in the economics literature regarding the effectiveness of these plans, I initiated a number of calls to regulatory commissions around the country and the U.S. to try and gain a little bit better understanding of what was driving some of the problems with the service quality -- and some of the problems have been severe. And I think a number of points are worth noting with regard to what I was told.
13525 And I think one thing that's clear is that there is no single common theme that pervades all of the service problems. If you talk to a Southwestern Bell region or a U.S. West region or a Verizon region, it's not a single factor that explains the quality problems.
13526 The Q-factor discussion, most staff members that I talked to, were not convinced that it had the desired effect. Interestingly enough, what they did believe had the most important effect in motivating the company was actually the public relations aspect of poor quality and that that seemed to be a significant motivator.
13527 And while some states that had long been under price caps had severe problems, other states, for example, like Southwestern Bell, in talking with their commission staffs, they have apparently weekly conference calls and the issue of service quality has never ever come up on one of those weekly conference calls as a major issue.
13528 So there is significant variability, and, as a result, the remedy might have to vary from region to region.
1425
13529 In addition, the institutional differences between Canada and the U.S. are striking in this regard in the sense that as a matter of economic theory, the fact that the ILECs participate in complimentary markets, Internet access, long distance and wireless that provides significant discipline to provide what customers want.
13530 In Canada we have vertically integrated providers of both local and long distance telephone service, but at the current time in the U.S. only seven Bell operating companies have the ability to provide Internet or long distance, so they are foreclosed from markets that might otherwise provide a very strong discipline to provide higher levels of quality.
13531 MS MOORE: You mentioned that in your view the reasons for service quality products vary, but there is no monolithic reason or explanation. You mentioned that remedies vary from region to region.
13532 I wonder in your view whether there would be any reasons to treat competitor quality of service concerns differently from consumer quality of service concerns in light of the comments that you have made.
13533 MR. WEISMAN: The nature of accommodative entry that essentially allows competitive local exchange carriers to choose their preferred level of quality in the wholesale market we have argued, and I believe, that this will establish market levels of quality at the retail level.
13534 In order for that model to function, it is essential that there be no type of discrimination, that the ILEC provide the facilities on a reasonable basis, that there be no systematic problems after the initial transitory problems are taken care of, problems in providing that.
13535 If competitor services are priced at efficient levels, there will be no incentive to attempt to impede rivals in the downstream market. You see massive penalties in some sense -- there is a need in the United States for penalties because they have employed a standard that has absolutely no economic principles in it.
13536 I'm sorry, I feel passionate about this issue. But they have mispriced their services, they have distorted the relative profitability of providing wholesale vis-à-vis retail services and they have in some sense been forced to move to this penalty structure because they have destroyed the very economic incentives that would have policed it to begin with.
13537 So all of these problems with regard to whether a CLEC is getting the ideal level of service or a level of service comparable to that which is provided to the ILEC can be taken care of simply by the efficient pricing of competitor services.
13538 When you depart from that model, you have to put in place all of these incentive mechanisms to stop the ILEC, not that this would actually happen, but there will be an incentive that's created to act disproportionately toward a CLEC vis-à-vis its own customers.
13539 I think that incentive can be taken care of if there is correct efficient pricing of competitor services which is actual Phase 2 cost, plus a mark-up that allows for the opportunity to recover embedded costs.
13540 As soon as you depart from that, you create the very incentive that a penalty is designed to correct, but you don't have to go that way. It can just be a pricing issue.
13541 MS MOORE: And with respect to perhaps certain consumer services for which there may not be a competitive market, what would be an appropriate remedy or incentive mechanism in case of persistent quality of service problems?
13542 MR. WEISMAN: Well, for example, you might expect that competition will not surface in the residential area for some time in, say, higher cost areas. I believe it's still possible to look at where competition does materialize, the levels of quality that are provisioned in those markets, and then attempt to infer adjusting for such exogenous characteristics as geography, what reasonable levels of quality might be for those areas that have not yet experienced competitive entry.
13543 So I still think there is greater information available to judge whether the indicators in place are consistent with market levels appropriately adjusted for exogenous characteristics and where they are not. So I think it does give us additional information, even if competitive entry in those areas does not actually take place.
13544 MS MOORE: In terms of how -- you have spoken to how to ensure that the service indicators are adjusted appropriately for the context in which they are in terms of competitiveness or lack of competitiveness, but in terms of a lack of a competitive market, what serves to discipline service problems?
13545 MR. KOLESAR: Well, I think there is a misconception with respect to the term "a lack of a competitive market". Even in those situations where a customer only has one choice, let's say for basic local access, in most situations they still have a myriad of other choices for collateral services that they can get either from TELUS or from somebody else. A case in point would be long distance.
13546 If they are not happy with the quality of service that we are providing them for basic access, they aren't going to want to take anything else from us. It's actually interesting that Ms Lawson from ARC was quoted in a recent newspaper article recognizing that fact.
13547 She said well, if they are not happy with these guys, they aren't going to buy other services. I think it's just the nature of the market.
13548 Sorry, I just had to bring it up.
13549 There are market pressures on TELUS again to make every customer happy, even if they are captive because no customer is captive for everything that we would like them to be our customer for and we are in the business of having customers.
13550 Well, I think I have said it all. I will just stop there.
13551 MS MOORE: At this juncture I will ask you to turn to CRTC Exhibit 15A, to Table 8.
13552 MR. KOLESAR: It's here.
13553 MS MOORE: I just have two questions in this regard. You have already spent some time on this with Mr. Daniels.
13554 First, I would like to discuss indicator 1.5, access to business office, and indicator 2.5, access to repair bureau. With regard to indicator 1.5, in addition to several months of misses in previous years for both B.C. and TCI, TCI has reported below standard for four of the first eight months of this year.
13555 I note that in your September 14 report you stated that organizational and system process changes contributed to missing the standard. I just ask you to elaborate in further detail what was involved there and what actions have been taken to ensure complaints going forward.
13556 MS SHUYA: I just would like some clarification. Are you speaking to indicator 1.5 for TCI?
13557 MS MOORE: That's correct.
13558 MS SHUYA: Can you please repeat what you had read in the explanation report, please.
13559 MS MOORE: My understanding is that an explanation was provided suggesting that organizational and system process changes contributed to missing the standard. I was just looking for more detail in what was involved with that.
13560 MS SHUYA: I have no further explanation on that at this time.
13561 MS MOORE: Could you undertake to provide an explanation?
13562 MS SHUYA: Yes.
13563 MS MOORE: Thank you.
13564 Finally, with respect to this table, you have heard me discuss with other parties with respect to indicators 2.2 and 2.6 the fact that separate reporting is required as of third quarter. I just wonder if you are onstream to achieve that or, if not, what the problems might be.
13565 MS SHUYA: Yes. We are onstream to do that.
13566 MS MOORE: Thank you.
13567 Those are my questions, Mr. Chairman, but my co-counsel has a question. I will turn it over.
13568 MS TURMEL: I have one question regarding the consumer bill of rights. In your response to interrogatory The Companies(CRTC)25September4500B, you have indicated that:
"Customer feedback has confirmed that the content and the presentation of TELUS terms of service has made the information both consumer-oriented and useful." (As read)
13569 You also stated that this feedback was obtained through focus groups. I would like to know if these focus groups were formal or informal.
13570 MR. KOLESAR: Just before I answer that, could you please define what you mean by "formal" versus "informal".
13571 MS TURMEL: Was it a casual survey?
13572 MR. KOLESAR: No. When we set out to create the plain language terms of service, we set out with a very specific purpose and the purpose was to create what at that time, we believe, was the first plain language terms of a service that had ever been done.
13573 We brought in outside experts. We brought in a gentleman, a Professor from the U of T who is an expert in plain language. We worked with him over a period of about six months to create them.
13574 During that time in order to ensure that our objective of trying to create something that would be useful, meaningful and as understandable as possible, we actually formed some customer focus groups specifically for the purposes of really taking some plain language terms of service out for a test run, give it to people, ask them what worked for them, what didn't work.
13575 I see Mr. Grieve just came back in. He was actually one of the people who was engaged in this exercise at that time. He told me that a big part of the impetus for how it finally turned out was there was a gentleman at one of these focus groups -- as you might expect, it was done in the Province of Alberta, and this guy had a cowboy hat and everything.
13576 He sat there through the whole thing. At the end of the focus group exercise, he kind of sat back and said "Why don't you just tell me this: my rights, my obligations, your rights, your obligations". As a result of that input, a bunch of light bulbs went on and we went back and completely rewrote it into much the form that it is in now.
13577 Subsequent to that we then did some more specific focus groups to see how it actually worked.
13578 Our statements in the response to that interrogatory are based on the knowledge that we gained from those very specific interactions with customers.
13579 MS TURMEL: Thank you.
13580 Are there any reports relating to these focus groups?
13581 MR. KOLESAR: I don't know. We would have to look back. If we have any -- this was the 1992, 1993 time frame. We will certainly look and see if we have them. If we do, we would be happy to provide them, but if we don't, they may just be gone. I'm just not sure.
13582 MS TURMEL: Thank you.
13583 Those are my questions, Mr. Chairman.
13584 THE CHAIRPERSON: Thank you, counsel.
13585 Mr. Kolesar, my experience in university is that a professor who is an expert in plain language is an oxymoron.
13586 We will take our afternoon break now. It's a little early, but we started earlier this afternoon. We still have a few questions from the Commissioners, so this panel will stay.
13587 We will take our afternoon break for 15 minutes.
--- Upon recessing at 1538 / Suspension à 1538
--- Upon resuming at 1458 / Reprise à 1458
13588 THE CHAIRPERSON: Order, please, ladies and gentlemen. We will return to our order of proceeding now.
13589 I would just like to note for the record that Commissioner Langford is still somewhat ill and is continuing to listen to the proceeding from the back room where we had the audio feed from the floor here. I take it from your earlier silence that that is acceptable to the parties.
13590 Okay. Then we will turn to questions from Commissioners. We have a few questions, I believe.
13591 Commissioner Cram.
13592 COMMISSIONER CRAM: Thank you, Mr. Chair.
13593 I wanted to go back to, Mr. Kolesar, the Terms of Service. Would it be fair to say that the issue in redrafting them was more for clarity, not necessarily -- and clarity, I mean everybody knows they are entitled to one phone book, but maybe now the time has come that you have to say you are not entitled to two, although by saying you are only entitled to one implies you are not entitled to two.
13594 Was that the real purpose of the whole revamp?
13595 MR. KOLESAR: Well, I think there were really two purposes there. One was obviously clarity, the other one was relationship-building with customers. So I think at the heart of what we were trying to do is probably captured in those two things.
13596 COMMISSIONER CRAM: And when I talk about a bill of rights I talk about something that would mean that -- not only the normal Terms of Service rights but there might be other rights such as a right to notification of changing prices of optional services, for example. I am intrigued by the issue of the notification that you will be told in subscribing to this plan you haven't chosen the lowest price plan.
13597 Would you or would TELUS object to participating in a process like the BMT process to establish some of that criteria for a bill of rights?
13598 MR. KOLESAR: No, we would certainly be willing to take part in that process.
13599 COMMISSIONER CRAM: Because The Companies did so I sort of thought I better ask you.
13600 MR. KOLESAR: Oh, yes, and I think we are actually involved in a process of that sort now if I am not mistaken.
13601 COMMISSIONER CRAM: Oh, that is the BMT one.
13602 MR. KOLESAR: That is the one, yes.
13603 COMMISSIONER CRAM: And then I wanted to talk about being a consumer and your concept of dealing with people on an individual basis. Do you not think that there is the consumer who is not happy -- and I am talking residential, right -- somebody who is not happy, somebody who is really angry and somebody who is happy?
13604 Of the two of them, the ones that are not happy and really angry, a lot of them would not choose to contact you and say, "I'm not happy." They would prefer to do what I do, which is tell 10 people how awful you are and, you know, it goes on 10 and 10 and 10. I'm not going to bring up my personal experience but, I mean, that is what normally happens in consumer relations.
13605 So to me I have a hard time understanding how you are dealing with the individual, can deal with those who are disaffected or really angry and who simply will not even talk to you.
13606 MR. KOLESAR: Well, I think that in probably 100 per cent of the cases where a customer was at the point that they were so angry with us that they would not talk to us about their concern or their problem, probably means that they did already talk to us about their concern or their problem and that we would have had an opportunity at least to make some kind of an attempt.
13607 I have trouble seeing where a customer would just say, "You know, I'm so angry at those guys" that they would not attempt to talk with us. I mean, there may well be some customers who would do that, but I think that if it gets escalated to the point that a customer is that upset with us they have had some contact with us and we may very well have not been as responsive to them as we would have liked to have been and so it has escalated to the point where they are that upset.
13608 But you make a very good point about customers that are upset aren't just going to tell us. They are going to tell somebody else and somebody else and somebody else. That's not a good situation for us. That's, again, one of the reasons why in a competitive world we have to protect the good name of the TELUS brand and we need to do everything we can and make sure that every individual customer is treated in such a way that they aren't going to be upset with us.
13609 COMMISSIONER CRAM: And you say it's our job to monitor.
13610 I notice, Dr. Weisman, when you were talking about the regulators that the whole concept of the Q-factor of whatever you want to call it was the public relations issue.
13611 MR. WEISMAN: That the public relations fallout from poor quality of service seemed to be a significant motivator, that was the view of at least five different staff members that I talked to on five different commissions, yes.
13612 COMMISSIONER CRAM: M'hm. Would TELUS object to printing their annual quality of service indicators and their adherence or non-adherence on an annual basis in your phone book?
13613 MR. KOLESAR: We haven't actually given much thought to that. Would we be prepared to put that in to our phone book?
13614 COMMISSIONER CRAM: You do have a little notation, and I know my eyes are getting worse, about how you do have to do them and I can get a copy if I, you know, write to or something, but in terms of the -- the issue has to be what is the purpose of these indicators and the purpose of the indicators is to have at least a minimum standard to follow.
13615 MR. KOLESAR: Right.
13616 COMMISSIONER CRAM: And to me it would serve a salutary -- well, more than a salutary -- it would serve a consumer information point of view if I can't reach the -- you know, the office after two minutes, I want to know what you are doing about it and what you did last year and what you are doing this year. I don't know that you have that standard, let alone that you track it.
13617 MR. KOLESAR: Right.
13618 COMMISSIONER CRAM: I mean, it would certainly -- consumers will become more knowledgeable, but what's wrong with that --
13619 MR. KOLESAR: No, there is nothing wrong with that.
13620 COMMISSIONER CRAM: -- if you are going to live up to the standards anyway.
13621 MR. KOLESAR: I think we would be prepared to do that provided that we could do it in a way that would genuinely educate the customer so they would know what these meant and that it would be information to them that they could actually use and that would fairly represent us.
13622 So with those caveats, as long as they are sufficiently well informed to do a reasonable interpretation of that, and as long as it is done in such a way that fairly represents us, I don't see that we would be opposed to that if it is something that the Commission thinks would be done or should be done.
13623 COMMISSIONER CRAM: I want to go on to your -- and if I understand it, your concept is that in both the wholesale and retail markets that actual and threatened competition is what makes you want to have a higher quality of service and is that -- that's the concept?
13624 MR. KOLESAR: In a nutshell we are compelled by competition to try and maintain a level of quality that is going to ensure that individual customers are happy with us and want to continue to remain TELUS customers. So it's, I guess, a different way of saying that.
1510
13625 COMMISSIONER CRAM: Yes, because that is what you said in TELUS(CRTC)1503.
13626 You have talked about actual and threatened competition. In my mind, that has got to be a subjective thing. If I'm paranoiac, I would worry about the threatened competition. If I'm not paranoiac, I wouldn't worry about it.
13627 Is there some quantifiable thing we can use? If the competition is at 10 per cent, 20 per cent, and the competition threatens to be or can make itself available to, is there anything quantifiable in that?
13628 MR. KOLESAR: I will turn to Dr. Weisman perhaps to give his thoughts on this too.
13629 But you know, I don't know if it really is quantifiable. And I take your point on -- well, depending on what your degree of paranoia is, you might be more or less concerned about the "threat" of competition --
13630 COMMISSIONER CRAM: That's right, I used that word --
13631 MR. KOLESAR: That's fine.
13632 The reality of the marketplace is that there is always a degree of at least competition for collateral services. There is the -- even if a customer is only buying one service from us, there is the potential that somewhere down the road they are actually going to buy more. And our relationship with that customer is going to have an impact. You, yourself, said: "Well, look it, you know, if I'm not happy, I will tell ten people and they will tell ten people".
13633 So the competitive market really does put the fear of God into you with respect to trying to do everything you can to make sure that your customers are happy. That threat of competition, as you put it, is there all the time. It's there because you have got other services that you may sell to that customer or that customers enter their -- you know, somebody else who they know.
13634 I mean it's just there. It's kind of basically all around us. It's nice to think that, gee, you know, wouldn't it be nice to have some sort of quantifiable number where I will have extra -- where I might feel more certain that the competitive market is actually working. I think Dr. Weisman is going to tell you well, there really isn't one. It just works. It's just out there. It's just happening and it's increasing all of the time.
13635 As we see even more competition in the Canadian market develop, the disciplining impacts of that competition are going to continue to work on us, on the companies that we compete with and we are all going to be driven to keeping as many customers, our customers, as we possibly can for everything that they might want to buy.
13636 I guess I will let Dr. Weisman see if he can give you a more academic answer to whether or not there is a quantum there.
13637 MR. WEISMAN: Commissioner Cram, when you asked me your question, I was reminded of a quote from an economist by the name of Joseph Schumpeter that was written 50 years ago and the quote says: "Competition disciplines before it attacks".
13638 I think that's important particularly in light of the Commission's accommodative competitive entry policies such as unbundled loops and co-location and number portability.
13639 The idea is that these barriers to entry have been removed and if TELUS or any ILEC should provide a price/quality/feature/functionality combination that customers do not like, I believe this Commission has put in place all of the procedures that need to be in place to provide that level of discipline.
13640 So the competition really occurs on a number of different dimensions. There is actual competition in the market. There is that threatened competition because the barriers to entry have been removed and there is the competition from what I will call complimentary competitive markets. For example, a number of the letters that I read that were sent in to TELUS attest to the fact that if they are not pleased with their pricing, they will choose another wireless provider or another long distance provider. I think that imposes another form of discipline.
13641 So it comes in a number of different ways. I can't give you a quantum because when those entry barriers are removed, what the theory would say is that there is no single number because you have put in place everything that needs to be put in place to provide the requisite level of discipline.
13642 COMMISSIONER CRAM: You see because the counterbalance to all of that, the actual and threatened competition is what I would call inertia, having been the monopolist for how many years, I think it said 100 years in the Globe and Mail today, and the issue of anybody really moving if they are unhappy.
13643 And so I look at that, when you say, you know, that the marketplace disciplines, I say the counterbalance to that is the lack of consumer sort of inertia. Would you say that would be a fair thing in terms of residential?
13644 MR. WEISMAN: I think with regard to customer inertia in the studies that I have seen, there is some degree of that and I'm not an expert in that area. But I will give you an example that I think is somewhat interesting.
13645 I have a number of graduate students that appear to support themselves by switching between long distance carriers and collecting the $5 and $10 cheques.
13646 My only point would be that once you have in place these accommodative competitive entry policies, if there is a concern -- and there appears to be from the letters -- that if we don't like what you are doing, we are prepared to switch, if you are not providing the right level of quality or the right quality/price mix, these letters certainly attest to the fact we are ready to move on.
13647 So I understand what you are saying. It is certainly a phenomenon in the markets. But I think that it all depends on the price/quality mix you are providing to that market and giving the customer the incentive to either stay with you or move on.
13648 COMMISSIONER CRAM: But it, likewise, I can assume, can't be measured. In terms of equality of weight or counterweight to the marketplace discipline issue, neither one of those can be measured.
13649 MR. WEISMAN: I'm not familiar with -- I believe I have heard references to some of the studies, but I'm not familiar with them.
13650 COMMISSIONER: Good. Thank you.
13651 And then, Dr. Weisman, you talked about the temporary or transitoriness of quality of service dipping and then you said if it is more than transitory, then we may have to do something.
13652 What is transitory? Twenty-four months?
13653 MR. WEISMAN: With respect to, for example, I believe -- correct me if I'm wrong -- I believe the discussion was regarding competitor services at that point in time.
13654 COMMISSIONER CRAM: Yes.
13655 MR. WEISMAN: We stated actually, as I recall, in the last price cap case, and I think TELUS states it in here that there is an ongoing role for the Commission to monitor competition policies and I think what goes hand in hand with that is the procedures and the coordination in providing those competitor services.
13656 So once those procedures are up and running and there is a fully functioning competitor services market, then when that takes place, I would expect some of those transitory problems to go away if Mr. Towner's organization functions as I understand its objective is to function. And if that doesn't happen, I think there is a role for the Commission and if the Commission has concerns that competitors are not getting the services they have asked on a timely basis, if there is any type of impediments put in front of competitors that prevent them from competing in the retail market, penalties might be appropriate at that point in time.
13657 COMMISSIONER CRAM: The reference was to paragraph 81 of the TELUS submission and it was about a link between industry rationalization and quality of service. It didn't really talk wholesale/retail.
13658 And so my point is when you say if it's not a transitory issue, is two years transitory? Three years transitory?
13659 It's paragraph -- I'm sorry -- 81, when you were talking about it as a temporary problem.
--- Pause
13660 MR. WEISMAN: That paragraph was referring to the fact that these studies attest to the fact that there appears to be some degradation in quality associated with local competition.
13661 I think that I can't give you a quantum. I wish I could. I'm not an econometrician or a forecaster per se. I think that once the procedures are in place and the monitoring on the part of the Commission attest to the fact that this competitor service's market is functioning, then I think you should expect those quality levels to return to the indicators. If they don't, then it's obviously not a transitory problem and more attention on your part, I think, would be called for and in order.
13662 COMMISSIONER CRAM: So if I look at infamous 15A exhibit and in good faith, as a regulator who, you know, theoretically, truly tries to do what it should be doing, what would you do if you saw indicator 2, 2A at 36 misses in B.C. and 2, 2B at the same? So 100 per cent miss in three years.
13663 To me, it doesn't matter what indicator it is. The question is after three years of 100 per cent miss, what would you advise us to do if you were our expert?
13664 MR. WEISMAN: Well, let's just sort this out. If it were a competitor services issue, I would ask Mr. Towner why his organization isn't delivering better service. I think he has indicated that he has an objective to do that.
13665 As I have indicated, if competitors are having more than transitory problems in acquiring the facilities they need, the competitor services, then there is a role and penalties might be appropriate.
13666 On the retail side if, in a situation like that, if the company did not have a reasonable explanation for why they could not hit that target or if it were some interface problem between a CLEC and an ILEC, I cannot tell you in good faith that some sort of penalty in that respect wouldn't be appropriate.
13667 COMMISSIONER CRAM: Thank you, Mr. Chair.
13668 THE CHAIRPERSON: Thank you, Commissioner Cram.
13669 MR. KOLESAR: Sorry, just before we move on, if I can maybe add something to an answer that I gave with respect to whether or not we would be prepared to publish the quality of service results in the phone book.
13670 There may actually be better ways to achieve the same outcome. One of the problems with using the phone book as the vehicle for providing that kind of customer -- that kind of feedback to customers is they are published periodically. So they don't all come out at the same time and that may lead to some complications if that is what we choose to use.
13671 There may be places such as the TELUS web site where that could be put or some other vehicle that could be used to provide that kind of information that may actually work better than the phone book.
13672 COMMISSIONER CRAM: Have a mail-out with the bill?
13673 MR. KOLESAR: You could certainly do it that way too.
13674 THE CHAIRPERSON: Commissioner McKendry?
13675 COMMISSIONER McKENDRY: Thank you, Mr. Chair.
13676 Mr. Kolesar, I just wanted to ask you a couple of questions that relate back to the discussion you had with Ms MacDonald this morning. You discussed with her two cases where your customers had a complaint and in order to get the complaint resolved, in one case, it was elevated to your level, the Assistant Vice-President level, this was an individual, I took it, who had a question about the billing insert and the frontline person wasn't aware of the billing inserts and it got up to your level. And I took it from what you said that, in fact, the customer had a legitimate concern and you were able to resolve that.
13677 The other one that Ms MacDonald put to you was a disabled person who had her service disconnected apparently because her roommate whose name the phone had been in died and the phone had to be transferred to her. And, as I take it, ultimately, her phone was reconnected after an intervention by an outside party.
13678 What I took from your discussion with her was that you felt these situations were best dealt with by the frontline people because they were individual problems that a quality of service indicator really couldn't deal with effectively.
13679 Do I understand correctly that your view is these are best dealt with through the frontline people?
1525
13680 MR. KOLESAR: I think that is the best way to actually deal with any individual is, obviously, on a one-to-one basis. So, yes, I think that's a fair representation.
13681 COMMISSIONER McKENDRY: The frontline people, I take it, are people that work in a call centre for TELUS.
13682 Is that right?
13683 MR. KOLESAR: The frontline people are the people that you get when you call us. So whether you call us because you have a complaint, whether you call us because you want to ask a question, whether you call us because you want a phone, when I refer to frontline people, it's those people in those specific calls centres that would, ultimately, pick up that call.
13684 COMMISSIONER McKENDRY: So these people would deal with -- they are in a call centre and they would deal with a variety of matters ranging from questions about getting service or quality of service or questions about their bill and so on --
13685 MR. KOLESAR: Yes.
13686 COMMISSIONER McKENDRY: -- it covers the whole range?
13687 MR. KOLESAR: Yes. Or if they are not -- if they are not well equipped to deal with the specific issue, like, let's say it's an issue with respect to their bill, they can very rapidly hand that call off to a person who would be able to pull up that customer's account and deal with them on their bill.
13688 COMMISSIONER McKENDRY: I take it, though, the hand-off procedure didn't work in these two cases -- and, presumably, if there was two cases, there is others, as well. What happened, then, with respect to the hand-off procedure, where, presumably, these customers indicated to the individual in the call centre that they weren't happy with whatever the decision the company was taking? They didn't get handed off, I take it, to somebody else?
13689 MR. KOLESAR: Well, to be honest with you, I mean, I don't know the specifics of the situation that Ms MacDonald raised, but I did undertake to get in touch with that person to see what actually did occur.
13690 In the situation that I dealt with last week, the individual contacted us and the frontline person was not even aware that we had put the bill insert in because I had neglected to get that information out. She, then, got handed off to somebody else, who also wasn't able to help her, who, in turn, was trying to find a way to help this person out. This led to a degree of frustration on behalf of that individual and somebody eventually figured out, that, well, Mark's the right guy to talk to 'cause he knows about this price cap case, get him to call her back. And so I, then, called her back and had a discussion with her.
13691 I, then, realized that I hadn't given our frontline people the kind of information that they really had to have, and in this situation I actually provided this woman with one month's rebate on her bill to make up for all the time and trouble that she had gone through trying to get information that I should have made sure was there. So that was how that one was ultimately resolved.
13692 COMMISSIONER McKENDRY: And given the range of matters that the frontline people have to deal with, I assume they are under some time pressure when somebody calls in -- not to stay on the line with them for a undue length of time?
13693 MR. KOLESAR: Well, to be perfectly honest, no, they are not. The approach that we take is want them to deal with the customer's problem to the best that they can. And they aren't sitting there with some kind of a timer that says, "You have to get off this call."
13694 Now, what we have done is we have tried to put processes into place so that we can do efficient hand-offs, so that when people call in, we can try to respond to their call quickly. But once we actually have them, the information that we have from customers is they would prefer to get a knowledgeable person to talk to, who is going to work to resolve whatever issue they have. So we try to err on the side of trying to help them when they actually call us, and so there is no set time that they have to get off the phone by.
13695 COMMISSIONER McKENDRY: I guess all of this leads to my last question in this area: has The Company given any consideration to establishing some sort of ombudsman-like position or giving somebody that's already there that kind of function to deal with problems that could be handed off that don't seem easy to resolve. For example the person with a disability who, on the face of it, may be required by the company's rules to have a security deposit or something like that, but once one looks into it, perhaps there is an extenuating circumstance where it wouldn't be asked for in that particular case.
13696 So I'm just wondering if you have examined whether or not you can avoid having problems elevated to you or having an intervention from an outside advocate by having a function like that within the company.
13697 MR. KOLESAR: I'm not, personally, aware of whether we have looked at that kind of an approach. It's certainly an idea that I would be willing to take back.
13698 My one caution is that you probably just can't have one ombudsman; you would need some sort of ombudsman function to deal with those kinds of situations.
13699 To be honest with you, I don't know if it's an idea that we have actually thought of. And it may very well be one that would be very worthwhile to look into. But I guess our approach has been trying to give our frontline people, as well as every manager, as much discretion to deal with specific customer situations as we can, in the hopes that they will be able to deal with the one-to-one relationship that they have with the customers that they talk to. So that may be something worthwhile for us to actually look at, though.
13700 COMMISSIONER McKENDRY: Thanks.
13701 Dr. Weisman, I had a question for you. I notice in your resume in "Work in Progress," you have a paper that is in progress. And it's called, "Is There Hope for Price Cap Regulation?" That's a rather tantalizing and provocative title, given what we are given here and I wonder if you are in a position yet to -- do you have a conclusion yet? Is there "hope for price cap regulation"?
13702 MR. WEISMAN: Well, if you will notice, Commissioner McKendry, I think the "hope" is in quotation marks in the reference, and the paper is concerned with what the taking standard is under a price cap regulation regime as opposed to a rate of return regulation regime.
13703 My views expressed in that paper are suggesting that taking standards should differ. I believe there is a good deal of hope for price cap regulation, provided that the commitments that we all agree to going in are maintained on both sides. I think it's clearly a superior regulatory regime. I think there are great benefits for all stakeholders and I'm optimistic. But it resides critically on the commitment on the part of both the regulators and the firm to live up to the terms of the agreement.
13704 COMMISSIONER McKENDRY: Thanks.
13705 Thanks, Mr. Chairman.
13706 THE CHAIRPERSON: Thank you.
13707 I believe those are all the questions from the Commissioners, then, for this panel, and, indeed, all the questions for this panel. So that will conclude our questioning and you may step down, except for Dr. Weisman, and I guess you are going to be with us.
13708 We will take a five-minute break just to allow the panels to switch around.
--- Upon recessing at 1532 / Suspension à 1532
--- Upon resuming at 1542 / Reprise à 1542
13709 THE CHAIRPERSON: Ladies and gentlemen, I just wanted to indicate, as has been evident, Commissioner Langford is not feeling well and has been listening in back to the proceeding as it has gone on for the afternoon. But he has now decided that he wants to go and see a doctor because of the state of his illness. So we are going to adjourn for the day and we will reconvene tomorrow morning at nine o'clock.
13710 And I might note that regardless of this -- well, hour and 20 minutes, I guess, that we are adjourning early today that it's certainly evident from the pace of our questioning today that we would have to sit on Saturday, in any event. So I can say with certainty, I think, unless there is a huge collapse in cross-examination tomorrow, which I doubt will happen, that we will commence with this panel tomorrow at 9:00 a.m. and we will be sitting on Saturday, as well.
13711 So I apologize for the inconvenience to the panel, and, indeed, to all the parties in the room, but it's somewhat unavoidable, I think.
13712 So we will adjourn for the day, then, and reconvene at 9:00 a.m. tomorrow morning. And I would just remind you that we are having the teleconference tomorrow afternoon with, I think it's about seven or eight parties, as well. So we will have to interrupt the cross-examination of this panel for that. And I apologize for that, as well.
13713 So we will see you tomorrow morning.
--- Whereupon the hearing adjourned at 1545, to resume on Friday, October 12, 2001 at 0900 / L'audience est ajournée à 1545, pour reprendre le vendredi 12 octobre 2001 à 0900
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