ARCHIVED -  Transcript

TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DEVANT

LE CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET :

REQUÊTE EN VERTU DE LA PARTIE VII

PAR XIT TÉLÉCOM INC.

V.

TELUS COMMUNICATIONS INC.

EN MATIÈRE DE MISE EN PLACE

D'UN RÉSEAU DE FIBRES OPTIQUES POUR LE COMPTE DE

LA COMMISSION SCOLAIRE DE LA CÔTE-DU-SUD

HELD AT: TENUE À:

1 Promenade du Portage 1, Promenade du Portage

Salon Réal Therrien Salon Réal Therrien

Gatineau, Quebec Gatineau (Québec)

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

REQUÊTE EN VERTU DE LA PARTIE VII

PAR XIT TÉLÉCOM INC.

V.

TELUS COMMUNICATIONS INC.

EN MATIÈRE DE MISE EN PLACE

D'UN RÉSEAU DE FIBRES OPTIQUES POUR LE COMPTE DE

LA COMMISSION SCOLAIRE DE LA CÔTE-DU-SUD

BEFORE / DEVANT :

Andrée Wylie Chairperson / Président

Barbara Cram Commissioner / Conseillère

Joan Pennefather Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS :

Stephen Millington Legal Counsel /

conseiller juridique

Lynne Fancy Telecom Staff Team Leader /

chef d'équipe aux

télécommunications

Len Katz Executive Director, Telecom /

directeur exécutif des

télécommunications

Scott Hutton Director General, Competition,

Costing and Tariffs /

directeur général, Concurrence,

établissement des coûts et des

tarifs

Allan Rosenzveig General Counsel, Telecom /

avocat général des

télécommunications

Paul Godin Director, Competition,

Implementation and Technology /

directeur, Concurrence, mise en

oeuvre et technologie

HELD AT: TENUE À:

1 Promenade du Portage 1, Promenade du Portage

Salon Réal Therrien Salon Réal Therrien

Gatineau, Quebec Gatineau (Québec)

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA

Opening remarks by the Chairperson / 1 / 1

Remarques d'ouverture par la présidente

Opening remarks by Xit Télécom Inc. / 5 / 23

Remarques d'ouverture par Xit Télécom

Opening remarks by TELUS Communications Inc. / 16 / 76

Remarques d'ouverture par TELUS Communications Inc.

Questions by Commission / 25 / 122

Interrogatoire par la Commission

Questions by Xit Télécom Inc. / 38 / 192

Interrogatoire par Xit Télécom Inc.

Closing remarks by Xit Télécom Inc. / 57 / 296

Remarques de fermeture par Xit Télécom Inc.

Closing remarks by TELUS Communications Inc. / 61 / 312

Remarques de fermeture par TELUS Communications Inc.

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA

Opening remarks by the Chairperson / 62 / 321

Remarques d'ouverture par la présidente

Opening remarks by the Consumer Groups / 66 / 343

Remarques d'ouverture par les groupes de

défense des consommateurs

Opening remarks by Bell Canada, Aliant & Sasktel / 82 / 429

Remarques d'ouverture par Bell Canada, Aliant

et Sasktel

Opening remarks by TELUS / 95 / 503

Remarques d'ouverture par TELUS

Opening remarks by MTS Allstream / 100 / 532

Remarques d'ouverture par MTS Allstream

Questions by Commission / 104 / 557

Interrogatoire par la Commission

Questions by the Consumer Groups / 191 / 1018

Interrogatoire par les groupes de défense des

consommateurs

Closing remarks by the Consumer Groups / 218 / 1199

Remarques de fermeture par les groupes de

défense des consommateurs

Closing remarks by Bell Canada, Aliant & Sasktel / 223 / 1218

Remarques de fermeture par Bell Canada, Aliant

et Sasktel

Closing remarks by TELUS / 231 / 1261

Remarques de fermeture par TELUS

Closing remarks by MTS Allstream / 235 / 1280

Remarques de fermeture par MTS Allstream

Gatineau, Quebec / Gatineau (Québec)

--- Upon commencing on Friday, February 25, 2005

at 0855 / L'audience débute le vendredi

25 février 2005 à 0855

REMARQUES D'OUVERTURE / OPENING REMARKS

1 LA PRÉSIDENTE : Bonjour et bienvenue à tout le monde. You are all very welcome to this hearing and we say good morning.

2 Je suis Andrée Wylie, vice-présidente, radiodiffusion du CRTC, et je présiderai cette audience. Mes collègues sont, à ma droite, la conseillère Barbara Cram, qui est la conseillère régionale du Manitoba et de la Saskatchewan, et la conseillère Joan Pennefather, à ma gauche. Elle siégeront avec moi aujourd'hui, évidemment.

3 Au cours de cette audience, nous serons appuyés par certains membres du personnel du Conseil, notamment, Stephen Millington, conseiller juridique, à la droite de Barbara; Lynne Fancy, qui est à sa droite, chef d'équipe aux télécommunications; Len Katz, directeur exécutif des télécommunications -- il est en retard, alors, il sera là plus tard peut-être; Scott Hutton, qui vient d'arriver, presque en retard aussi, directeur général, Concurrence, établissement des coûts et des tarifs; Allan Rosenzveig, absent -- they are not impressed by this panel; et Paul Godin, directeur, Concurrence, mise en oeuvre et technologie, qui est à la gauche de madame Pennefather.

4 Pour toute question de procédure concernant l'audience, veuillez vous adresser à Stephen Millington, qui vous aidera.

5 Le Conseil tient cette audience publique dans le but de se prononcer sur une demande déposée en vertu de la partie VII par Xit télécom contre TELUS Communications en matière de mise en place d'un réseau de fibres optiques pour le compte de la Commission scolaire de la Côte-du-Sud.

6 Le Conseil rappelle aux parties que le comité d'audition ne se penchera que sur la question à savoir si les services que TELUS fournit ou fournira à la Commission scolaire de la Côte-du-Sud, soit ceux décrits au paragraphe 29 de la réponse de Telus, et repris par Xit au paragraphe 35 de sa réplique, si ces services contreviennent à l'article 25 de la Loi sur les télécommunications. Les autres questions soulevées au cours du processus sont hors du cadre de l'audience accélérée et elles devront donc être exclues des observations ou des questions des parties.

7 Avant de débuter, j'aimerais dire quelques mots sur le déroulement de l'audience.

8 Et voilà monsieur Rosenzveig. Bonjour.

9 Cette audience est moins formelle que les audiences habituelles dans le secteur des télécommunications et sa portée est plus restreinte.

10 Comme il s'agit d'une procédure accélérée, les intervenants et le public ne participent pas à l'étape de la comparution.

11 Les parties devront d'abord présenter les membres de leur équipe. La requérante, suivie de l'intimée, disposeront chacune de 10 minutes pour présenter leurs observations préliminaires. Elles seront ensuite interrogées sur la demande, d'abord par le Conseil, puis par la requérante suivie de l'intimée, et finalement, à nouveau par le Conseil.

12 Le Conseil n'examinera pas de plaidoyers finals écrits. Les parties auront plutôt chacune 10 minutes à la fin de leur comparution pour présenter leurs observations finales.

13 Tel qu'il est indiqué dans la lettre d'avis d'audience publique, les parties doivent déposer tous leurs documents auprès du Conseil et en signifier copie aux autres parties avant l'audience. Nous ne sommes donc pas disposés à accepter d'autres documents au cours de l'audience.

14 Nous comptons sur votre collaboration afin que cette audience se déroule de façon ordonnée et dans les délais prévus par le Conseil dans sa lettre du 21 février 2005 aux parties concernées.

15 Un sténographe judiciaire préparera un compte rendu textuel de l'audience. Pour que le sténographe puisse produire un compte rendu exact, assurez-vous que votre microphone est allumé lorsque vous parlez. Il s'agit simplement de presser le bouton.

16 Pour savoir comment obtenir une partie ou la totalité du compte rendu, veuillez vous informer à la fin de l'audience auprès du sténographe.

17 Nous vous prions de vous assurer que vos téléphones cellulaires et téléavertisseurs sont désactivés en tout temps lorsque vous êtes dans la salle d'audience.

18 Comme le précise la lettre du Conseil datée du 21 février 2005 sur l'organisation et la tenue de l'audience, nous prévoyons traiter cette demande de 9 h à 11 h ce matin.

19 Nous comptons publier une courte décision d'ici le 9 mars.

20 Nous allons maintenant débuter avec la demande présentée par Xit télécom. Nous entendrons d'abord les observations préliminaires de la requérante, qui dispose de 10 minutes à cette fin. Mais auparavant, j'inviterais la requérante à présenter les membres de son équipe.

21 Je vous remercie et je mets ma montre près de moi sur la table.

22 Alors, voilà, Monsieur Proulx.

REMARQUES D'OUVERTURE / OPENING REMARKS

23 M. PROULX : Voilà! Donc, je me présente. Mon nom est Robert Proulx. Je suis un ingénieur de formation, avec près de 25 ans d'expérience. Je suis le président de Xit télécom et de Télécommunications Xittel.

24 Je suis accompagné, à ma droite, par Nino Sista, un des propriétaires de Télécommunications Xittel, et à ma gauche, par François Ménard, qui est chargé de projet chez Xit télécom.

25 Xit télécom ainsi que la division Télécommunications Xittel sont deux entreprises dédiées à la réalisation de réseaux privés de télécommunication depuis 1997. On opérait auparavant sous un autre nom, sous le nom d'IMS Experts-Conseils, mais depuis 2002, sous le nom de Xit télécom.

26 Ces entreprises ont réalisé des projets de plusieurs milliers de kilomètres au Québec, mais également dans d'autres provinces canadiennes, aux États-Unis, ainsi que dans d'autres pays. Xit télécom réalise des projets en ingénierie-construction, et sa division Télécommunications Xittel réalise des projets-clés en main au Québec et à l'extérieur.

27 Collectivement, on va référer les deux entreprises sous le nom de Xit au courant de la présentation.

28 Le personnel de Xit télécom participe activement à la réalisation du programme Villages branchés du gouvernement du Québec, qu'il a conçu avec le personnel du Fonds de l'autoroute de l'Information du Québec, mais également avec le ministère de l'Éducation et le ministère des Affaires municipales et de la Métropole.

29 Après une phase de contestation de lobbying intense des entreprises de télécommunication dominantes visant à convaincre le gouvernement du Québec de ne pas aller de l'avant avec son programme Villages branchés, nous avons démontré au Conseil que ces mêmes entreprises avaient maintenant comme stratégie de fournir ces réseaux à perte, de façon à empêcher à tout prix un compétiteur de construire des réseaux dans leurs territoires historiques.

30 Le coût pour ces dernières d'évincer les concurrents est relativement faible, en toute proportion, puisqu'une grande partie des coûts totaux d'un projet sur 20 ans est, de toute façon, payable à ces entreprises à titre de frais d'ingénierie, d'inspection de permis et de frais de location pour leurs structures de soutènement quand on parle, par exemple, des poteaux, des torons ou des conduits.

31 Suite à cette situation et en danger de disparaître sujet à cette concurrence que nous considérons déloyale, Xit Télécom a présenté en avril 2003 sa première partie VII au Conseil, demandant à titre de redressement que le Conseil exige de l'entreprise dominante qu'elle se conforme aux règles tarifaires associées à la fourniture de services de fibres optiques, étant donné que ces services sont encore réglementés à ce jour.

32 Cette intervention a donné lieu aux décisions 2003-58 et 2003-59, dans lesquelles le Conseil ordonnait aux entreprises dominantes de respecter leurs tarifs lorsque ces dernières offrent des services de fibres optiques.

33 Le cas de la Commission scolaire de la Côte-du-Sud était directement visé et d'ailleurs cité comme exemple dans la requête initiale de Xit télécom. C'est ce cas que nous allons traiter aujourd'hui.

34 Dans le cas qui nous préoccupe, nous plaidons que TCI a eu recours à un stratagème de prête-nom, ayant pour objectif principal de sciemment contourner les directives du Conseil.

35 Nous notons qu'au paragraphe 17 de l'ordonnance 2005-74 du 23 février 2005, avant hier, dans lequel le Conseil accepte que TCI se désiste de son AMT 358, le Conseil fait mention que la présente audience aura pour but, et je cite :

36 (Tel que lu)

37 À cet égard, nous tenons à faire observer au Conseil que la ratification de l'entente tripartite d'attribution partielle, ce, sans égard au fait qu'elle n'a pas été soumise pour approbation au Conseil à ce jour, a été signée le 14 septembre 2004, en réponse directe à la présente requête de Xit télécom, qui, elle, était signifiée le 8 septembre 2004, soit six jours avant.

38 Nous notons que lorsqu'un client contracte l'installation d'un circuit d'ARM, l'entreprise dominante est réputée fournir un service de télécommunication en date de ce contrat, et ce, sans égard au délai d'installation.

39 TCI aura donc bel et bien fourni des services de télécommunication pendant plusieurs mois sous l'égide de son AMT 358 qui n'a jamais été approuvé par le Conseil et pour lequel le Conseil vient tout juste d'en accepter le retrait.

40 Du point de vue de Xit télécom, le Conseil ne peut tolérer qu'une entreprise qui fait des revenus de près de 8 milliards par année puisse fournir des services de télécommunication réglementés, et ce, sans tarif approuvé par le Conseil, pendant près de deux ans.

41 Or, dans le cas présent, même après avoir enjoint TCI à respecter les tarifs pour la fourniture de fibres noirs, cette dernière a procédé à un arrangement boiteux, laissant croire que ce n'est plus elle qui fournit la fibre mais une autre entreprise de télécommunication, qui, par ailleurs, est, en fait, une entreprise qui agit régulièrement comme sous-traitant pour TCI pour la construction de ses réseaux.

42 De plus, après avoir préalablement tenté de faire croire au Conseil que l'usage d'un prête-nom était sanctionné par le gouvernement du Québec, il est clair que TCI demeure le seul responsable du contrat vis-à-vis la Commission scolaire, puisque c'est TCI qui cautionne le projet et qui continue à fournir l'ingénierie et les services de structures de soutènement et qui assure l'entretien du réseau pendant 20 ans, et ce, à un taux largement inférieur à ceux inscrits à son Tarif général, et donc, en contravention directe avec la décision 2003-58 du Conseil.

43 Nous avons, d'ailleurs, constaté que les travaux avaient été accélérés depuis que notre plainte a été déposée, de façon à mettre le CRTC devant un fait accompli, et espérant profiter d'une exonération. Des cas similaires ont été présentés dans le passé.

44 Nous affirmons que ce type d'arrangement est contraire à l'intérêt public et que l'acceptation d'une telle façon de procéder rend inutile toute intervention du Conseil dans les dossiers reliés à la déréglementation.

45 De plus, nous ne pouvons nous adresser au bureau de la Concurrence puisque ce dernier s'en remet systématiquement à la compétence du Conseil lorsqu'il s'agit de cas reliés aux télécommunications.

46 Nous sommes d'avis que si le Conseil n'intervient pas fermement dans le présent dossier, il laisserait la porte grand ouverte à un abus de la règle d'affiliées, qui ne s'applique pas présentement aux entreprises canadiennes qui ne sont pas sous le contrôle commun d'une entreprise dominante.

47 Par exemple, rien n'empêcherait une entreprise dominante de subventionner un partenaire pour faire offrir des services à perte au public pour ainsi évincer un concurrent non désiré dans un territoire particulier, quitte à racheter le partenaire ou racheter le contrat par la suite.

48 Nous sommes d'avis que dans le présent cas, le Conseil peut constater l'utilisation par TCI d'un sous-traitant qui n'est pas plus un concurrent de TCI que BCE Nextel ne l'était de Bell Canada au moment de la Décision 2002-76.

49 Rappelons alors que le Conseil avait décidé que les concurrents qui ne concurrençaient pas vraiment l'entreprise dominante ne devraient pas bénéficier des privilèges d'abstention aux réglementations accordés aux entreprises non dominantes dans l'ordonnance 95-19.

50 Les éléments particuliers qu'il faut prendre en considération dans le cas de la Commission scolaire de la Côte-du-Sud sont les suivants.

51 Premièrement, qui a effectué la vente du réseau à la Commission scolaire?

52 La vente du réseau s'est effectuée suite à un appel d'offres public, à lequel TCI a répondu avec un projet-clé en main qu'il s'est engagé à fournir et à entretenir le réseau pendant 20 ans à des tarifs inférieurs aux tarifs déposés. Donc, c'est définitivement une offre de TCI à la Commission scolaire de la Côte-du-Sud.

53 Qui est responsable du service versus la Commission scolaire?

54 TCI entretient le réseau et se porte garant de la qualité du réseau pendant ces 20 ans.

55 Est-ce que Électro Saguenay et le groupe Laforte sont des entités liées à TCI?

56 TCI sous-traite la construction du réseau Électro Saguenay et le groupe Laforte, qui sont des sous-traitants habituels de TCI.

57 Est-ce que Électro Saguenay concurrence réellement TCI?

58 TCI s'est engagé auprès de la Commission scolaire à ce qu'il n'y ait aucune augmentation des prix par rapport au prix soumissionné. En ce sens, TCI dicte les prix d'Électro Saguenay et possède donc un contrôle de fait sur cette entreprise dans le cas présent.

59 Nous considérons donc que la prétention de TCI à l'effet que l'offre de services à la Commission scolaire subséquemment à attribution partielle ne constitue pas un groupement qui soit non conforme à la réglementation, est tout simplement non recevable puisqu'il s'agit, en fait, d'une manoeuvre de dernier recours par TCI, ayant pour but d'étirer le temps et ainsi rendre plus difficile l'émission d'une ordonnance de désistement.

60 Nous avons démontré clairement par des calculs clairs que l'imputation de 20 ans des frais récurrents au taux normalement chargé par TCI à son Tarif général rend totalement impossible la construction d'un réseau sans que cette construction ne soit tout simplement à perte par rapport aux prix qui ont été soumissionnés.

61 Xit télécom a démontré hors de tout doute que TCI fournit des services de structures de soutènement à des taux, termes et conditions qui ne sont pas conformes à son Tarif général.

62 À titre d'exemple, notons que TCI permet à Électro Saguenay Ltée de faire utilisation de ses structures de soutènement, ce selon une entente verbale, à des termes et conditions que TCI n'a même pas daigné fournir au Conseil sur une base confidentielle après que celui-ci le lui ait clairement demandé dans son interrogatoire numéro 3 du 14 janvier 2005.

63 Nous constatons qu'il n'est pas possible pour aucune autre entreprise d'obtenir des services de structures de soutènement de TCI au moyen d'une entente verbale.

64 Qui plus est, même après avoir analysé toute la preuve soumise par TCI, il n'a pas encore été possible de déterminer clairement qui fournit les services de structures de soutènement à qui et à quel taux.

65 Nous estimons que TCI doit verser cette information au dossier dans la présente comparution, et nous avons l'intention de poser cette question à TCI.

66 Force est donc de constater que TCI, ayant vendu ses services d'ingénierie pour lesquels les livrables ne sont pas encore complets, elle continue de fournir des services de télécommunication autres que des services de structures de soutènement, et ce, sous l'égide d'une tarification unique et à des taux qui ne permettent pas à quiconque de construire un réseau sans que cette construction ne soit carrément à perte.

67 Nous demandons donc à ce que le Conseil donne suite au paragraphe 37 de la Décision 2003-58 et qu'il ordonne ainsi à TCI de se désister de fournir tout arrangement spécialisé d'ingénierie et de services de structures de soutènement qui n'ait pas fait l'objet d'un assentiment préalable du Conseil.

68 Nous considérons que le Conseil doit agir de façon à empêcher une entreprise concurrente d'être prise en otage par une entreprise dominante qui exerce une préférence indue envers elle-même ou envers une autre entreprise dans la commercialisation de services d'ingénierie et de structures de soutènement.

69 Nous enjoignons le CRTC à refuser ce type de comportement de la part d'une entreprise titulaire et demandons également au CRTC de statuer qu'une entreprise dominante ne puisse financer directement ou indirectement la fourniture de services tarifés par l'intermédiaire d'une autre entreprise dans son territoire, à moins de le faire selon une tarification déposée.

70 Agir autrement pourrait ouvrir la porte à des abus de la part des entreprises dominantes, qui auraient, par conséquent, le libre recours de contourner les directives du CRTC et de bafouer la réglementation.

71 On peut, d'ailleurs, citer deux cas présentement au Québec où des cas similaires ont été présentés où des entreprises dominantes ont fait soumissionner des entrepreneurs qui leur sont liés par contrat pour organiser des projets de fibres optiques.

72 Donc, sur ça, nous remercions le Conseil et son équipe, ainsi que tous les participants à cette audience, de votre attention, et nous laissons la parole à TCI.

73 Merci.

74 LA PRÉSIDENTE : Merci, Monsieur Proulx. Vous êtes exactement à l'intérieur du délai prévu. Très bien.

75 Et qui on a... C'est madame Courtemanche, alors, l'heureuse élue.

REMARQUES D'OUVERTURE / OPENING REMARKS

76 Mme COURTEMANCHE : Bonjour, Madame la Présidente, membres du Conseil, ainsi que le personnel du Conseil qui vous assiste aujourd'hui à cette audience publique.

77 Je vais commencer à présenter mon équipe. Je m'appelle, moi, Sylvie Courtemanche, et je suis la directrice des Affaires réglementaires pour TELUS Québec.

78 Aujourd'hui, je suis accompagnée, à ma droite, par maître Raymond Lacroix, directeur des Affaires juridiques de TELUS Québec; et à la droite de Monsieur Lacroix, monsieur Alain Couette, qui est le directeur de la Planification et de l'Ingénierie des réseaux.

79 À ma gauche, monsieur Jacques Côté, un conseiller senior, Développement commercial, qui agit comme coordonnateur des projets des commissions scolaires; et à la gauche de monsieur Côté, monsieur Gratien Picard, au nom de la Commission scolaire de la Côte-du-Sud et ses mandants, qui agit comme conseiller à la direction générale pour le projet de fibres optiques.

80 Alors, je vais commencer mes remarques préliminaires à ce moment.

81 Madame la Présidente, le TCI adressera aujourd'hui seulement les questions et redressements pertinents à la présente instance, conformément à la procédure établie par le Conseil dans sa lettre du 7 janvier 2005.

82 Ces questions claires et simples avaient été résumées aux paragraphes 34 et 35 de la lettre de Xit datée du 18 octobre 2004, et pour lesquelles la requérante a demandé une décision urgente et expéditive.

83 Je vais sauter les deux prochains paragraphes, Madame la Présidente, parce que je vois, aujourd'hui, dans vos remarques préliminaires que vous aviez bien circonscrit l'audience aujourd'hui et que vous avez rappelé aux requérantes d'aborder uniquement les questions permises par le Conseil. Alors, je vous en remercie.

84 TCI est d'avis que les allégations ainsi que les redressements demandés par Xit peuvent être adressés en répondant précisément à trois questions.

85 TCI est confiante qu'avec ces réponses et ces explications, il sera évident au Conseil que les services offerts en vertu de la cession partielle du contrat respectent en tous points la réglementation en vigueur établie par le Conseil.

86 Commençons donc par la première question.

87 Est-ce que TCI fournit des services de télécommunication en contravention au paragraphe 25(1) de la Loi sur les télécommunications?

88 La réponse est non.

89 Tout d'abord, laissez-moi citer un extrait du paragraphe en question :

90 En l'instance, la vente et l'entretien d'équipements réseautiques sont des services de télécommunication offerts en abstention de réglementation en vertu de la décision de télécom 96-5. L'extrait pertinent de cette décision est la partie VIII.B, troisième paragraphe, qui prévoit ce qui suit :

91 Par ailleurs, le premier paragraphe de cette partie de la décision définissait les équipements CT-MD comme incluant, entre autres, les équipements de données.

92 Étant offerts en abstention de réglementation, la vente et l'entretien des équipements réseautiques n'ont donc pas à être fournis en vertu d'une tarification approuvée par le Conseil.

93 Pour ce qui est de l'entretien des fibres optiques, TCI est d'avis que l'entretien d'équipement détenu par une tierce partie ne constitue pas un service de télécommunication, et cet avis est repris dans une décision du Conseil, la décision 88-21.

94 Or, dans le cas qui nous occupe, les équipements et la fibre optique du réseau de la Commission scolaire et les MRCs ne sont pas la propriété de TCI. De plus, la Commission scolaire et les MRCs va opérer un réseau privé, non relié au RTPC, exclusivement pour ses propres fins.

95 Pour ce qui est services d'ingénierie, TCI désire préciser que les services d'ingénierie associés aux installations du client ne constituent pas des services de télécommunication. Ceci est en raison du fait que ce type de service n'est pas compris dans la définition de « services de télécommunication » tel que défini dans la Loi sur les télécommunications.

96 De plus, il n'existe pas la proximité nécessaire entre les installations de la Commission scolaire et les MRCs, qui seront opérées comme un réseau privé non relié au RTPC et ces services d'ingénierie qui mènerait à la conclusion que TCI offre, dans ce contexte, un service de télécommunication.

97 Finalement, l'accès aux services de structures de soutènement représente, de l'avis de TCI, le seul service de télécommunication tarifé. Ce dernier est offert en accord avec les modalités et tarifs prévus au Tarif général de TCI, section 4.12.

98 Ce service réglementé comprend plusieurs composantes. Entre autres, des taux spécifiques sont approuvés pour les frais de location de poteau et de toron.

99 De plus, le service de structures de soutènement comprend des frais de recherche, des frais de travaux préparatoires et des frais d'inspection. TCI soumet que ces services techniques, qui comprennent de l'ingénierie interne, sont des composantes d'un même service de télécommunication. Ces composantes sont facturées selon « les dépenses encourues, et s'il y a lieu, sur les taux horaires de l'Entreprise », tel que prévu au Tarif général.

100 Les taux de l'Entreprise en question sont facturés uniformément à tous les clients de ce service, sans discrimination.

101 Traitons maintenant de la deuxième question pertinente à l'instance.

102 Est-ce que TCI est en défaut de fournir un ensemble de services, incluant les services de structures de soutènement, selon un tarif approuvé par le Conseil?

103 La réponse est non.

104 TCI est d'avis que les services offerts en vertu de la cession partielle ne peuvent être considérés comme étant un groupement de services puisque tous les éléments de ce service sont dissociables et qu'aucun avantage financier n'a été offert à la Commission scolaires et les MRCs pour l'acquisition de ces services en sus de ce qu'elle aurait bénéficié si elle avait acheté les services séparément de TCI.

105 TCI réitère qu'elle offre toutes les composantes des services de structures de soutènement en accord avec les modalités et les tarifs approuvés à la section 4.12 de son Tarif général.

106 Pour ce qui est des autres services, dont les services en abstention de réglementation et les services autres que de télécommunication, TCI soumet qu'elle les offre à des taux et des prix non discriminatoires, non préférentiels et, par surcroît, en réalisant des marges appréciables au-delà de ses coûts et/ou des prix payés à des tiers.

107 Finalement, pour ce qui est de la troisième question.

108 Est-ce que TCI demeure responsable, en tout ou en partie, de la construction et de la réalisation du réseau en cause?

109 La réponse est non.

110 Le contrat de cession partielle, déjà soumis dans le cadre de cette instance, est très clair à cet effet. Électro Saguenay Ltée, une entreprise de télécommunication non dominante, non reliée à TCI ni en fait ni en droit, est la seule et unique responsable de la construction et de la cession du réseau à la Commission scolaire et les MRCs.

111 TCI s'est retirée entièrement, définitivement et sans compensation de cette portion du contrat, et ce, à la demande expresse de la Commission scolaire et les MRCs.

112 Par ailleurs, la Commission scolaire et les MRCs, comme il se doit, a pris toutes les précautions nécessaires en demandant de son propre chef et à ses propres conseillers juridiques un avis qui a conclu à la légalité de la cession partielle et à la légitimité du processus d'appel d'offres dans le contexte du présent dossier.

113 Les faits et argumentaires présentés par TCI dans ce dossier sont clairs.

114 Premièrement, TCI ne fournit pas de services de télécommunications en contravention au paragraphe 25(1) de la Loi sur les télécommunications.

115 Deuxièmement, TCI n'est pas en défaut de fournir un ensemble de services, incluant les services de structures de soutènement, selon un tarif approuvé par le Conseil.

116 Et troisièmement, TCI n'est plus responsable, ni en tout ni en partie, de la construction et de la cession du réseau à la Commission scolaire et les MRCs.

117 Pour ces raisons, pour les motifs énoncés précédemment, et ainsi que dans l'intérêt public, TCI demande respectueusement au Conseil de rejeter la requête de Xit visant la publication d'une décision ordonnant à TCI de cesser immédiatement et de s'abstenir de fournir les services que TCI fournit suite à la cession partielle du contrat.

118 Après deux ans d'attente, le projet mérite d'aller de l'avant afin de permettre l'implantation d'un réseau large bande comparable à certains réseaux déjà en place depuis plusieurs années dans les milieux urbains.

119 Je vous remercie, Madame le Présidente, et nous sommes disposés à répondre à vos questions. Merci.

120 LA PRÉSIDENTE : Merci, Madame Courtemanche.

121 Monsieur Millington, s'il vous plaît.

INTERROGATOIRE / QUESTIONS

122 Me MILLINGTON : Merci beaucoup, Madame la Présidente.

123 Je vais commencer avec l'équipe de Xit télécom.

124 Comme madame Courtemanche a mentionné tantôt, au paragraphe B de l'article VII de la décision 96-5, intitulée « Cadre de réglementation pour Québec Téléphone et Télébec », le Conseil a décidé de s'abstenir d'exercer ses pouvoirs à l'égard de la vente, location et l'entretien des équipements CT-O et CT-MD en vertu des articles 24, 25, 31 et 27(1), (2), (4), (5) et (6) de la Loi sur les télécommunications.

125 Aux paragraphes 42 à 46 de votre réplique finale en date du 18 octobre 2004, vous avez indiqué que la vente et l'entretien des équipements de télécom ne sont pas déréglementés.

126 Pouvez-vous nous indiquer les genres d'équipement fournis par TCI dans le cadre de ce projet et nous expliquer pourquoi la décision 96-5 ne s'applique pas à ces genres d'équipement?

127 M. PROULX : Ce qu'on veut démontrer dans le projet ici présent, c'est que les équipements faisaient partie d'un tout, qui comprenait de la fibre optique, les structures de soutènement, l'entretien pendant 20 ans et la fourniture des équipements, et que même en groupant les équipements qui sont théoriquement non réglementés, si on assume qu'ils les ont donnés dans le cadre du projet, fait en sorte que même dans ce cas-là, le prix présenté par TCI pour faire le projet devient encore à perte.

128 Donc, TCI se sert du prix des équipements en disant qu'on les a vendus pas chers parce qu'ils ne sont pas réglementés pour faire augmenter artificiellement le coût des équipements réglementés qui lui sont associés.

129 Donc, c'est un peu sur ce principe-là qu'on veut amener le projet. C'est que, comme c'est partie d'un ensemble, on n'est pas capable de séparer le coût relié aux équipements du coût des structures de soutènement et du coût de la fibre optique, qui, elle, est réglementée, donc, fait apparaître comme étant un coût supérieur pour la fibre optique, en mettant un coût qui est inférieur.

130 Donc, on les a couplés ensemble. Ça fait partie d'un tout, cette proposition-là.

131 Me MILLINGTON : Mais vous comprenez que si les équipements ne sont pas réglementés par le Conseil, le prix qu'ils sont vendus, ce n'est pas dans notre juridiction?

132 M. PROULX : Ah! je suis tout à fait d'accord.

133 François, tu veux répondre à ça?

134 M. MÉNARD : Oui.

135 Sauf selon l'article 27 de la Loi, qui est une préférence indue.

136 Ici, si on calcule le bundle de TCI, le prix des équipements n'est même pas donné. Il y a un don d'argent, il vient avec de l'argent. Les équipements viennent avec un chèque.

137 Me MILLINGTON : Oui, mais je ne parle pas de la question de groupement de services, mais je parle tout simplement de si ces équipements sont réglementés.

138 M. MÉNARD : S'ils sont fournis sur une base stand-alone. Mais ils ne sont pas fournis sur une base stand-alone, ils sont fournis en bundle avec un paquet d'autres services.

139 M. PROULX : J'aimerais ajouter à cet effet-là, par exemple, que si on pousse l'argumentation loin, par exemple, si on avait un projet où il y avait 75 pour cent d'équipements, puis 25 pour cent de services réglementés, il n'y aurait plus aucune réglementation qui tiendrait puisque l'équipement pourrait fluctuer d'un coût comme on voudrait pour dire que les services réglementés sont toujours vendus au coût et que les services non réglementés sont toujours vendus ou donnés pour faire en sorte qu'il n'y a plus aucune réglementation qui tiendrait.

140 Donc, tout appel d'offres où il y a une partie réglementée puis non réglementée, il s'agit de moduler le coût des équipements non réglementés pour faire en sorte que la réglementation n'a plus aucune valeur.

141 Me MILLINGTON : Merci.

142 Ma prochaine question sera pour l'équipe de TCI, et je commence sur le même sujet, c'est-à-dire que vous indiquer, au paragraphe 22 à la page 5 -- et vous l'avez mentionné encore ce matin -- la page 5 de votre énoncé de faits et arguments en date du 26 janvier 2005, que la vente et l'entretien des équipements de télécom sont déréglementés en vertu de la décision 96-5.

143 Pouvez-vous nous indiquer les genres d'équipements fournis par TCI dans le cadre de ce projet et nous expliquer comment la décision 96-5 s'applique à ces genres d'équipements? Parce que, comme vous avez mentionné dans vos commentaires de ce matin, vous avez fait mention des équipements CT-O et CT-MD comme quoi ça inclut des équipements de data, mais c'est toujours, selon la perception du Conseil, c'est des équipements de terminaux, mais c'est noté dans le CT-O et CT-MD, c'est des équipements de terminaux.

144 Est-ce que les équipements qui sont fournis dans le cadre de ce projet se limitent aux équipements de terminaux?

145 Mme COURTEMANCHE : Je vais demander à monsieur Côté de répondre à la question. Merci.

146 M. CÔTÉ : Effectivement, ces équipements sont des équipements de commutation pour un réseau local, ce qu'on appelle le réseau LAN, de façon standard. Ils ont leur fournisseur nommé Cisco. Ce sont des équipements de commutation de données, de transmission de données pour faire circuler l'information sur la fibre optique. Ce sont des équipements de terminaux.

147 Me MILLINGTON : Est-ce que vous pouvez nous fournir une liste complète de ces équipements?

148 M. CÔTÉ : Est-ce qu'on peut la fournir aujourd'hui?

149 Me MILLINGTON : Oui, oui, oui.

150 Mme COURTEMANCHE : On va vous fournir cette liste -- je m'excuse, Maître Millington -- à la fin de l'audience. Nous sommes prêts à vous fournir cette information.

151 Me MILLINGTON : Merci.

152 Ma deuxième question est la suivante. Aux paragraphes 36 à 38 à la page 7 de votre réponse en date du 8 octobre 2004, TCI avance la proposition que l'AMT 148 de TELUS en Alberta, qui réglemente le service d'entretien de l'équipement de télécommunication, soit l'entretien de fibres optiques, se distingue du présent cas puisque le client ultime dans le cas de l'AMT 148 est une compagnie de téléphone, alors que le client ultime dans ce cas est un conseil scolaire qui n'offre pas de services de télécom au public, mais plutôt opère un réseau privé.

153 En citant l'article précis de la Loi sur les télécommunications, quelle est votre autorité pour cette proposition?

154 Mme COURTEMANCHE : Je ne cite... pardon, je vais reprendre mes idées. Mais vous avez raison, nous autres, on s'est expliqué en disant qu'on pensait que c'était en raison du fait que ce n'était pas... c'est un réseau privé et non relié au RTPC.

155 Je ne peux pas vous citer un article distinct de la Loi sur les télécommunications pour cette proposition-là, sauf que, dans la décision 2003-58, vous avez indiqué clairement que les questions de services d'ingénierie et d'entretien seraient décidées dans la décision 2002-76, et suite à cette décision-là, vous avez, le personnel du Conseil, émis une lettre le 30 septembre dernier dans laquelle vous avez dit que ces questions-là ne seraient pas traitées dans le contexte du dossier 2002-76 mais plutôt que le Conseil regarderait le cas par cas et déciderait à chaque cas si oui ou non, dans ce contexte particulier des faits, si ça constituerait un service de télécommunication ou non.

156 Alors, c'est en raison de cette directive-là qu'on a regardé l'instance en cause. On a regardé ce que nos collègues dans l'ouest avaient fait, et on s'est dit, nous autres, on pense qu'on peut se distinguer, que ceci ne constitue pas un service de télécommunication en raison du fait qu'il n'est pas relié au RTPC, que c'est un réseau privé. Alors, c'est notre argument de faits que nous faisons dans le cas pour se distinguer.

157 J'aimerais réitérer aussi le fait que le dépôt de l'avis tarifaire, l'avis de modification tarifaire 148 a été fait par abondance de caution. TCI voulait s'assurer qu'il pouvait offrir le service, et je répète, ça représentait un service sur réseau, qui, lui, est relié au RTPC.

158 Alors, non, je ne peux pas citer une disposition de la Loi, sauf que je fais un argumentaire de faits, qui semblait être à l'invitation du Conseil de dire qu'on va statuer selon le cas par cas. Alors, c'est une interprétation que je suggère au Conseil en l'instance.

159 Me MILLINGTON : Merci.

160 Mais si on accepte votre argumentation, est-ce que vous seriez d'accord que tout réseau privé, admettons, un réseau d'une banque nationale, sera hors de la juridiction du Conseil parce que ça sera un réseau privé?

161 Mme COURTEMANCHE : S'il n'est pas relié au RTPC, oui, ça serait la conséquence de ça, mais nous autres, on dit qu'à ce stade-là, le Conseil s'occupe ou devrait de préoccuper justement des services de téléphonie qui sont accessibles au public, et à ce moment-là, de s'assurer que ces services-là qui sont offerts au public respectent les modalités de la loi.

162 Une fois qu'on a un réseau privé qui est non relié au RTPC, à ce moment-là, il n'a pas à transiger avec le public. Il se sert lui-même. Il se sert à lui, sa clientèle interne. On voit mal où est le tort à ce moment-là. S'il y aurait des préférences indues, il se le ferait à lui-même. Quand on manoeuvre son propre réseau privé et on exclut le monde entier, c'est tout simplement pour se desservir nous. On voit mal pourquoi on devrait s'ingérer pour s'assurer que les dispositions de la loi soient respectées.

163 Me MILLINGTON : Merci.

164 Ma dernière question est la suivante. Vous avez indiqué dans votre énoncé des faits et arguments en date du 26 janvier, au paragraphe 24, à la page 5, qu'au moment de la cession du contrat, les services d'ingénierie faisant l'objet du projet en cause avaient déjà été réalisés par la firme externe, soit les Consultants Laforte.

165 Est-ce que tous les services d'ingénierie nécessaires pour la réalisation de ce projet pour le Conseil scolaire de la Côte-du-Sud sont complétés, et toujours dans le cadre de ce projet, est-ce qu'il est prévu que d'autres services d'ingénierie seront nécessaires à l'avenir, c'est-à-dire au cours des prochaines années, des 20 ans de l'entretien, et avez-vous des arrangements quelconque avec le Conseil scolaire en ce qui concerne leurs besoins futurs en ingénierie?

166 Mme COURTEMANCHE : Merci, Maître. Je vais demander à monsieur Couette de répondre, s'il vous plaît.

167 M. COUETTE : La mandat qui a été donné aux Consultants Laforte comprenait les relevés extérieurs. On parle de l'ingénierie associée aux installations de la Commission scolaire de la Côte-du-Sud. Donc, elle comprenait des relevés extérieurs, la production de schémas généraux, donc, de parcours de fibres, la définition de la distribution de l'assignation des fibres à l'intérieur du câble pour chacun des tronçons, les plans de construction, et l'ensemble des coûts comprenait également la remise des plans tels que construit, c'est-à-dire les corrections des plans suite aux travaux quand c'est non conforme à ce qui avait été prévu dans les plans de construction. Ça, c'est les coûts originaux.

168 Donc, le mandat ne couvrait que les travaux sur les installations du client, sur les câbles de fibres, et l'ensemble... Donc, l'entente avec les Consultants Laforte comprenait l'ensemble de ces travaux-là. L'ensemble des travaux sont, à ce jour, réalisés, à l'exception des travaux de mise à jour des plans tels que construits, qui vont être réalisés après la réalisation des travaux, bien sûr.

169 Me MILLINGTON : Mais est-ce qu'il y aura un autre type de service d'ingénierie à part les services requis pour la construction du réseau? Est-ce qu'il y a d'autre type de service qui peut être sous le titre d'ingénierie qui sera offert au Conseil au cours des années à venir?

170 M. COUETTE : Non. L'ensemble du mandat était limité par ce que j'ai mentionné. La Commission scolaire pourra rajouter qu'ils font affaire eux-mêmes avec des firmes d'ingénierie pour d'autres activités, mais les Consultants Laforte n'ont été utilisés que pour les activités mentionnées, et il n'est pas prévu de les utiliser pour d'autres activités plus tard dans le cadre de ce dossier-là.

171 Me MILLINGTON : Alors, si jamais il y avait d'autres besoins, ça ne sera pas TCI qui est prévue à les fournir?

172 M. COUETTE : Non.

173 Me MILLINGTON : Merci.

174 Ça, ce sont toutes mes questions, Madame la Présidente.

175 LA PRÉSIDENTE : Merci, Monsieur Millington.

176 Madame Cram.

177 CONSEILLÈRE CRAM : Au sujet de la vente d'équipements, est-ce qu'il y avait un contrat entre le vendeur et...

178 Mme COURTEMANCHE : Oui, je vais demander à maître Lacroix de vous répondre sur la question contractuelle. Merci.

179 Me LACROIX : La réponse, c'est oui. Le contrat est constitué de l'appel d'offres qui a été... L'appel d'offres qui a été déposé et la soumission qui a été remise, c'est la loi entre les parties actuellement dans le dossier. Donc, la vente des équipements est régie par l'appel d'offres et la soumission qui a été faite.

180 CONSEILLÈRE CRAM : Merci.

181 LA PRÉSIDENTE : Madame Pennefather.

182 CONSEILLÈRE PENNEFATHER : Madame Courtemanche, vous avez mentionné, je pense, dans votre présentation ce matin la notion de proximité, et je note que c'était aussi un élément de votre réponse du 8 octobre, le paragraphe 38. Pourriez-vous juste m'expliquer un peu plus cette notion de proximité?

183 Mme COURTEMANCHE : La notion de proximité, c'est tout simplement de tenter, si je peux dire autrement, de faire un lien avec l'activité et le service qui est rendu. Nous autres, ce qu'on essayait de dire, c'est qu'on trouvait qu'il n'y avait pas le lien nécessaire suffisant pour dire que, en fin de compte, ceci constitue un service de télécommunication. Si on ne fait pas utilité de ce service-là pour les fins d'un réseau public comme IT, à ce moment-là, on pense qu'il y a un, si je peux utiliser un mot anglais, un disconnect, et à ce moment-là, il n'y a pas la proximité, le lien nécessaire pour faire le tout pour dire à ce moment-là, ça constitue un service de télécommunication. C'est un argumentaire qu'on pense qui est soutenable dans le contexte de l'instance en cause.

184 CONSEILLÈRE PENNEFATHER : Merci.

185 LA PRÉSIDENTE : Merci.

186 Vous avez mentionné, Monsieur Lacroix, je crois, ou si c'est Monsieur Couette, que l'ingénierie, ça incluait la mise à jour. Ça, ça veut dire l'implantation du système seulement, quand on vous a posé la question, est-ce qu'il y aurait des services d'ingénierie après la construction?

187 M. COUETTE : Le mandat essentiel des Consultants Laforte, c'était de produire des plans de construction, donc, d'identifier qu'est-ce qui était à installer où en termes de cadres de fibres optiques. À partir de ces plans-là, Électro Saguenay, qui est maintenant le responsable de la livraison du réseau, fait la construction, et après la construction, à ce moment-là, les Consultants Laforte vont repasser sur le réseau pour faire des correctifs sur des plans juste pour qu'ils soient à jour.

188 LA PRÉSIDENTE : Et ça n'inclura pas TELUS?

189 M. COUETTE : Non.

190 LA PRÉSIDENTE : Merci.

191 Monsieur Proulx ou votre équipe, vous avez maintenant 20 minutes pour poser des questions à TELUS, si vous en avez.

INTERROGATOIRE / QUESTIONS

192 M. PROULX : Merci. Je vais laisser la parole à François.

193 M. MÉNARD : Bonjour. Tout d'abord, jusqu'à ce jour, il a été impossible de déterminer c'était quoi la longueur du réseau qui a été fourni à la Commission scolaire. Il y a une partie du territoire, une grande partie, une grande majorité du réseau qui est dans le territoire historique de TELUS. Alors, nous posons la question, quelle est la longueur du réseau qui a été fourni à la Commission scolaire?

194 Mme COURTEMANCHE : Nous avons fourni la réponse au Conseil, sauf qu'on l'a fait sous clé de confidentialité, et on soutient que cette information devrait être retenue d'une façon confidentielle, sauf que je vous indique que cette information a été donnée au Conseil lors de nos questions qu'on a répondu le 28 janvier dernier.

195 M. MÉNARD : Or, Madame la Commissaire, en réplique, j'aimerais soulever le fait que le 4 septembre 2003, le Conseil a posé ces questions et ordonné à Bell Canada à verser ces informations-là au dossier public dans le dossier des AMT 6761 et 6762 de Bell Canada, qui est le processus qui a subséquemment servi au refus de ces AMT, et qu'il est absolument impossible pour Xit télécom de formuler des commentaires adéquats concernant une quantification du comportement anticoncurrentiel de TELUS si nous n'avons pas cette information-là. Alors, nous vous demandons d'ordonner à TELUS de rendre cette information publique.

196 LA PRÉSIDENTE : Vous êtes d'avis que c'est nécessaire pour répondre aux questions soulevées à l'article 35 de votre réponse?

197 M. MÉNARD : Bien sûr. Comment peut-on qualifier le comportement anticoncurrentiel de TELUS quant à la fourniture de services de structures de soutènement si on n'a pas aucune idée du kilométrage des structures de soutènement qui est fourni. Tout ce qu'il aurait pu faire, c'est s'entendre avec la Commission scolaire pour diminuer la longueur du réseau. Évidemment, ça poserait certains problèmes au niveau du processus d'appel d'offres public, qui fait en sorte qu'un réseau n'est pas supposé de changer de longueur subitement.

198 On a une idée de quelle est la longueur, environ 550 kilomètres. On peut se satisfaire de cette conclusion qu'on a quand même fait un travail d'ingénierie pour déterminer cette longueur. Donc, on utilisera cette valeur dans toutes nos questions subséquentes.

199 LA PRÉSIDENTE : Est-ce que vous avez revendiqué cette exigence, que cette information ne soit pas gardée en confidentialité, avant ce matin?

200 M. MÉNARD : Bien sûr, on l'a demandée à plusieurs reprises au dossier des AMT 358 de TELUS.

201 LA PRÉSIDENTE : Non, je parle du contexte de cette audience.

202 M. MÉNARD : Et ça été précédemment demandé dans notre requête initiale, et évidemment, ce n'est pas un sujet du paragraphe 35 de nos répliques finales, mais certainement... Écoutez, si on ne peut pas avoir cette information-là, on utilisera la valeur de 550 kilomètres dans les questions qui vont s'ensuivre, mais je tiens à faire mention du fait que le Conseil, pour déterminer si un AMT peut être revendu, ne peut pas se privé d'identifier au dossier public quel est le produit qui est fourni.

203 Cela a même été le sujet d'une demande en Cour fédérale que la Cour fédérale a rejeté auprès de Bell Canada. Donc, on doit savoir qu'est-ce qu'on revend. Cette information-là aurait dû être versée précédemment au dossier public de l'AMT 358 avant qu'il y ait un retrait de cet AMT. Donc, on utilisera cette valeur, mais je demanderais quand même que vous la fournissiez.

204 LA PRÉSIDENTE : Est-ce que vous pouvez m'indiquer à quel paragraphe de votre requête vous avez fait mention de la confidentialité? Je ne croyais pas que ce serait moi qui serait la personne à laquelle on poserait des questions.

205 M. MÉNARD : Oui. Bien là, c'est... Écoutez, on n'a pas beaucoup de temps. On a beaucoup d'autres questions.

206 LA PRÉSIDENTE : Oui, allez-y, mais vous pouvez m'indiquer, avant de terminer, exactement où vous avez fait cette revendication-là dans le contexte de l'audience du moment. Allez-y.

207 M. MÉNARD : O.K. Vous serez d'accord de dire quand même que la majorité de ce réseau est situé sur le territoire historique de TCI?

208 Mme COURTEMANCHE : Bien, je pense qu'on est d'accord de dire que la majorité du réseau est en territoire historique de TELUS Québec.

209 M. MÉNARD : O.K. Donc, une fois les longueurs connues, 550 kilomètres, il n'y a qu'une autre question d'une aussi grande importance, et en l'absence d'une réponse à cette question, ça rend presque toutes les autres questions inutiles.

210 Qui facture les services de structures de soutènement à qui, et qui assume le manque à gagner associé à devoir encourir des coûts d'environ un quart de million par année pour fournir tous les services de structures de soutènement sur 550 kilomètres, étant donné que TELUS s'était engagé par le biais d'une réponse à l'appel d'offres à ne pas facturer plus que 61 000 $ par année pour les prochains 20 ans à la Commission scolaire?

211 Mme COURTEMANCHE : Je veux juste rappeler, Monsieur Ménard, que le dépôt qui a été fait initialement a été retiré. Ça fait que le contrat qui est en main maintenant a été cédé partiellement. Comme on l'a dit précédemment, la cession partielle veut dire que maintenant la construction et la cession de réseau vont se faire par Électro Saguenay.

212 Maintenant, en ce qui a trait à qui facture pour les structures de soutènement, je vais demander à monsieur Couette de vous répondre à cette question-là. Vous aviez plusieurs questions. Ça serait peut-être plus facile si on les itemisait une à la fois pour qu'on puisse toutes les adresser.

213 Alors, je vais commencer, qui facture pour les structures de soutènement, Monsieur Couette, s'il vous plaît?

214 M. COUETTE : Conformément aux modalités du Tarif général, les structures de soutènement sont facturées à Électro Saguenay jusqu'à la livraison du réseau.

215 Mme COURTEMANCHE : Et j'ajouterais, elles sont facturées selon les modalités du tarif.

216 M. COUETTE : Selon les modalités et les tarifs.

217 Mme COURTEMANCHE : Oui.

218 M. MÉNARD : Et après la livraison du réseau?

219 M. COUETTE : Après la livraison du réseau, vous comprendrez qu'on sera deux propriétaires dans un même câble.

220 M. MÉNARD : Donc, qui facture les structures de soutènement?

221 M. COUETTE : Donc, le propriétaire des structures de soutènement va facturer les partenaires à l'intérieur du câble.

222 M. MÉNARD : Et comment est-ce que être co-propriétaire d'un câble fait en sorte que la facturation des services de structures de soutènement pour Électro Saguenay varierait? À ce que je sache, un contact sur un poteau, c'est 9,60 $ par mois. À 80 cents par mois par poteau, 9,60 $ par année, puis un toron, c'est 24 cents par span. Donc, en théorie, co-propriété ou pas co-propriété, c'est exactement la même facture qui est envoyée par TELUS à Électro Saguenay?

223 M. COUETTE : La facture envoyée à Électro Saguenay est conforme à 100 pour cent avec le Tarif général.

224 M. MÉNARD : Allez-y.

225 M. PROULX : Mais je veux juste comprendre. Vous dites que, après que le réseau est livré, ce n'est plus Électro Saguenay qui est facturé pour les poteaux?

226 M. COUETTE : C'est-à-dire que, après la livraison du réseau, le réseau appartient, en co-propriété, à la Commission scolaire Côte-du-Sud, qui a ses propres fibres, qui est propriétaire de ses propres fibres...

227 M. PROULX : D'accord.

228 M. COUETTE : ...et TELUS Communications, qui a acquis, dans le réseau construit par Électro Saguenay, un certain nombre de fibres également.

229 M. PROULX : D'accord, mais je voudrais savoir quelque chose. Dans les tarifs qui sont déposés présentement, il y a un tarif que TELUS doit facturer des coûts aux utilisateurs d'un réseau, peu importe le nombre d'utilisateurs.

230 Si, par exemple, sur un réseau de TELUS, on est trois usagers, chaque usager paie le tarif déposé. Vous nous faites pas de réduction si, par exemple, Vidéotron s'installe sur un de nos torons. Donc, vous dites que le service fourni par TELUS à la Commission scolaire n'est pas selon vos tarifs mais qu'ils sont une proportion du tarif parce que vous assumez une partie de ces coûts-là vous-même?

231 M. COUETTE : C'est des règles de l'industrie. Tout le monde fonctionne comme ça. Lorsqu'il y a plus qu'un propriétaire à l'intérieur d'un câble, les frais récurants sont partagés au pro rata des propriétaires, du nombre de partenaires.

232 M. PROULX : Dans ce cas-ci, vous dites que vous n'utilisez pas les tarifs pour facturer l'utilisation de vos poteaux à la Commission scolaire de la Côte-du-Sud?

233 M. COUETTE : C'est-à-dire que la tarification qui a été faite aux partenaires est basée sur les tarifs généraux, mais c'est chargé en proportion du nombre de partenaires, conformément aux règles de l'industrie.

234 M. MÉNARD : Qui est propriétaire de la gaine?

235 M. COUETTE : La gaine est propriété de TELUS, qui est cédée par Électro Saguenay à la fin des travaux, en même temps que la vente des fibres ou l'achat des fibres par TCI à Électro Saguenay.

236 M. MÉNARD : Alors, vous comprendrez que la gaine dans le cadre de fibres optiques, c'est ce qui permet aux fibres optiques d'être accrochés à un poteau. Les fibres optiques ne tiennent pas dans le ciel. Il n'est pas possible à une gaine de fibres optiques d'être installée sur un poteau sans que cette gaine-là doive faire l'objet d'un droit d'attache au poteau, et c'est visiblement un service de télécommunication parce que, par exemple, une compagnie de titulaire qui aurait vendu tous les fibres optiques dans son câble et tout ce qui resterait dans son câble, c'est une gaine, serait quand même réputée, au sens de la décision 2003-58, fournir un service de fibres optiques.

237 Ce n'est pas parce qu'ils ont transféré les propriétés de tous les fibres optiques dans un câble par cession qu'il n'en demeure pas moins que la gaine... TELUS vient d'avouer que TELUS demeure propriétaire de la gaine pour les prochains 20 ans et qu'il ne facture pas les services de structures de soutènement pendant 20 ans à la Commission scolaire, ce qui permet à TELUS de facturer 61 000 $, alors que nous, si on avait à... quand nous avons soumissionné, on a dû tenir compte de quelque chose qui est beaucoup plus proche de un quart de million de dollars par année pendant 20 ans, et ça, on considère ça inacceptable.

238 J'ai une autre question.

239 M. COUETTE : Peut-être précisé que la règle que j'ai définie n'est pas une exception, n'est pas propre à ce dossier, et est extrêmement courante. On a des câbles dans lesquels on a des fibres dont la gaine apparient à Cogeco. Cogeco paie les frais d'attache à TELUS, à Bell, et recharge une partie des frais d'attache au pro rata du nombre de partenaires qu'ils ont dans les câbles.

240 On a la même chose avec Bell. C'est extrêmement courant. Dans certains cas, on assume les frais d'attache et on refacture les autres partenaires, et dans d'autres cas, c'est le propriétaire de la gaine qui assume les frais d'attache et qui refacture ses propriétaires. C'est une règle de base pour définir c'est à qui à payer les frais d'attache prévus aux modalités du Tarif général.

241 Mme COURTEMANCHE : Et les modalités du Tarif général sont effectivement appliquées. C'est le point à se souvenir.

242 M. COUETTE : C'est même prévu au niveau du Tarif général qu'un titulaire peut refacturer mais qu'il demeure responsable, au niveau du Tarif général, du paiement des attaches.

243 LA PRÉSIDENTE : Allez-y.

244 M. MÉNARD : Oui. Ensuite, je veux attirer l'attention du Conseil concernant la notion de groupements et la référence que TELUS a proposé pour argumenter que le groupement de services de structures de soutènement et d'ingénierie n'est pas un groupement qui doit faire l'approbation d'un tarif approuvé par le Conseil, qui est, somme toute, quand même l'argument principal de notre revendication au paragraphe 35 pour lequel on demande une ordonnance de désistement.

245 Je pense qu'en réponse du fait que TELUS admet ne pas facturer la totalité de son tarif de structures de soutènement à la Commission scolaire, c'est une preuve en soi qu'il y a non conformité avec son Tarif général, mais considérant que ça, en plus, c'est fourni avec de l'ingénierie, comment ne pouvons-nous pas conclure que ce groupement, ce bouquet, ce bundle d'ingénierie et de structures de soutènement est à perte?

246 On vient de comprendre que le service de structures de soutènement est fourni à perte. Donc, par définition, le service d'ingénierie est fourni à perte. TELUS argumentait que, en référence à la décision 2003-49, qu'on croit qui est citée hors contexte, on avait plutôt référencé la décision 2004-51, dans laquelle le Conseil avait dit qu'un groupement est défini selon la notion de tarification unique.

247 Alors, ma question est à savoir, TELUS, est-ce que vous êtes d'accord pour dire que quand vous avez soumis une réponse à l'appel d'offres, ça constituait une tarification unique?

248 Mme COURTEMANCHE : Pour ça, un contrat qui est en main, à ce moment-là, il y avait une composante pour la construction et la cession du réseau et aussi les autres services de télécommunication qui étaient prévus en vertu du contrat. Alors, je ne comprends pas...

249 M. MÉNARD : Le montant soumissionné au total pour 20 ans égale X, donc, tarification unique?

250 Mme COURTEMANCHE : Un instant, je vais laisser monsieur Côté rajouter à ce niveau-là.

251 M. CÔTÉ : Dans la structure de l'appel d'offres, que vous connaissez d'ailleurs, dans la réponse à l'appel d'offres, on devait systématiquement détailler chacun des éléments qui faisait partie de la construction et de demande du client, c'est-à-dire les équipements, l'entretien des équipements, l'entretien de la fibre et droit d'attache, et la construction de la fibre et la gestion. C'était détaillé à ce niveau-là.

252 M. PROULX : Ce qu'on veut faire valoir, c'est que l'appel d'offres comme tel était basé sur un coût unique qui comprenait tous ces éléments-là, c'était le moins cher, comprenant tous ces équipements-là ensemble, c'est sur cette base-là qu'on était choisi, qu'était choisi le soumissionnaire retenu. Donc, c'était une seule tarification comprenant un paquet d'items, qui étaient itemisés, mais qui faisaient un total qui était une seule facturation pour le projet en entier, incluant 20 ans.

253 LA PRÉSIDENTE : Est-ce que vous avez d'autres questions?

254 M. MÉNARD : Bien là, je n'ai pas obtenu la réponse, mais je présume qu'ils sont d'accord que c'est une tarification unique.

255 Mme COURTEMANCHE : On ne devrait pas présumer rien.

256 M. MÉNARD : Je voudrais maintenant poser la question concernant l'entente verbale intervenue entre TELUS et Électro Saguenay concernant l'utilisation du service de structures de soutènement. On a versé au dossier public une copie du contrat qu'on a présentement, contrat qui dit, d'ailleurs, qu'un taux horaire, qu'on n'est pas d'ailleurs capable d'avoir de TELUS dans l'ouest, mais qui, au Québec, est connu est au contrat de...

257 LA PRÉSIDENTE : Est-ce que vous avez des questions, Monsieur?

258 M. MÉNARD : Oui, et c'est ma question, c'est à savoir, est-ce que c'est ce même taux horaire qui est utilisé, que nous devons payer lorsque des services d'ingénierie par TELUS ont été vendus à la Commission scolaire?

259 Mme COURTEMANCHE : Je vais demander à monsieur Couette de répondre, s'il vous plaît.

260 M. COUETTE : Le Tarif général prévoit des modalités, c'est-à-dire que, pour ce qui nous concerne, c'est Électro Saguenay, c'est des -- je vais retrouver exactement l'expression -- c'est des frais de recherche et de traitement des demandes de permis, d'une part, et des frais d'inspection pour s'assurer que... nous, on va aller inspecter les travaux pour s'assurer que les normes d'installation ont été respectées dans le cas prévu au Tarif général.

261 De la façon que c'est déterminé, c'est en cas par cas. C'est-à-dire qu'on va faire une évaluation de ces coûts-là et on va la soumettre au demandeur, et s'il accepte les frais demandés, à ce moment-là, on procède aux travaux, on octroie les permis, il procède aux travaux, et on fait l'inspection et on facture pour ce qui a été convenu au niveau des frais. Cette évaluation-là est basée sur les coûts réels estimés et le taux horaire utilisé par l'Entreprise.

262 M. MÉNARD : Qui est le même que celui qu'on paie présentement?

263 M. COUETTE : Qui n'est pas nécessairement le même qui est payé dans votre contrat. Je n'ai pas fait référence... je n'ai pas en tête exactement le taux horaire, mais c'est ce qui est usuellement utilisé. Je ne peux pas vous dire exactement le taux qui a été utilisé, mais...

264 Mme COURTEMANCHE : Le taux, c'est que... Je pense le point à dire, c'est que nous autres, on applique le taux horaire qui est applicable à ce moment-là d'une même façon à tout le monde. On ne varie pas le taux horaire. Je pense que c'est le sens de votre question. Donc, on ne varie pas ça là. Le taux horaire, lui, il peut varier, mais une fois qu'il est varié, on l'applique à tout le monde de la même façon.

265 M. COUETTE : Je ne peux pas vous confirmer que le taux horaire appliqué a été celui que vous avez dans votre document, mais c'est effectivement le même taux horaire qui a été utilisé pour tout le monde, parce qu'il faut comprendre que le contrat dont on parle reproduit presque textuellement les modalités du Tarif général.

266 M. MÉNARD : Qui n'inclut pas le taux horaire?

267 M. COUETTE : Qui n'inclut pas le taux horaire, mais qui est le même qui a été appliqué à tout le monde et qui a été appliqué à Électro Saguenay.

268 M. MÉNARD : Merci.

269 LA PRÉSIDENTE : Voilà qui termine vos questions. Nous vous remercions.

270 Allez-y, Madame Courtemanche.

271 Mme COURTEMANCHE : Nous n'avons pas de questions, merci beaucoup.

272 LA PRÉSIDENTE : Merci.

273 Monsieur Millington, vous avez d'autres questions.

274 Me MILLINGTON : Oui, j'aurais une question pour madame Courtemanche.

275 Vous avez mentionné pendant vos commentaires que le réseau du Conseil scolaire n'est pas branché au RTPC. Est-ce qu'il n'y aura pas accès à l'internet de ce réseau-là?

276 Mme COURTEMANCHE : Je vais demander à monsieur Côté de répondre.

277 M. CÔTÉ : Oui, effectivement, il est prévu que ce réseau-là soit raccordé pour les besoins strictes des commissions scolaires et des MRCs au réseau internet.

278 Me MILLINGTON : Effectivement, c'est connecté au...

279 M. CÔTÉ : Pour l'utilisation propre et privée de ses mandants.

280 Me MILLINGTON : Mais vous êtes d'accord, c'est connecté au RTPC pour avoir accès à l'internet?

281 M. CÔTÉ : Bien, ma définition, et je m'excuse si ma première... ma définition du réseau RTPC, c'est un réseau commuté.

282 Me MILLINGTON : Mais dans un réseau d'internet, il n'y a pas de routers?

283 Mme COURTEMANCHE : Je vais demander à monsieur Couette de rajouter, s'il vous plaît. Merci.

284 M. COUETTE : Si on parle de configuration technique, typiquement, c'est qu'il va y avoir un accès internet de rentrer au siège social ou à la tête de pont du client, et l'ensemble des usagers auront accès à l'internet via le réseau privé, qui est un réseau LAN, utilisant la fibre optique. Donc, il n'y a pas d'interconnexion comme telle, c'est juste que les gens ont accès aux services qui sont amenés à la tête de pont.

285 Me MILLINGTON : Et un moment donné, les utilisateurs vont être connectés à l'internet et vont passer par des routers et d'autres commutateurs de data pour avoir accès...

286 M. COUETTE : Oui.

287 Me MILLINGTON : ...à l'internet? Donc, effectivement, il y a une connexion, bien que ce n'est peut-être pas directe, mais il y aura une connexion quand même au RTPC?

288 M. COUETTE : Mais pas dans le but d'en refaire la revente ou de...

289 Me MILLINGTON : C'est pour les utilisations privées, disons, ou pour les utilisateurs dans le réseau, mais il y aura quand même une porte de sortie au réseau?

290 M. COUETTE : On va faire une analogie de la même manière qu'un PBX, qui est un terminal, a accès au réseau interurbain.

291 Me MILLINGTON : O.K. Merci.

292 LA PRÉSIDENTE : Madame Cram, vous avez d'autres questions? Non.

293 Madame Pennefather? Non, merci.

294 Nous vous remercions. Nous vous entendrons maintenant en observations finales.

295 Monsieur Proulx.

REMARQUES DE FERMETURE / CLOSING REMARKS

296 M. PROULX : Oui.

297 Ici, je pense que le cas qui nous préoccupe surtout, c'est de regarder c'est quoi le service qui est rendu à la Commission scolaire?

298 La Commission scolaire a été en appel d'offres, en demandant un réseau de fibres optiques, son entretien pendant 20 ans, incluant les équipements. La décision 2003-58 dit que pour le faire, TELUS aurait dû utiliser ces tarifs pour faire la proposition, ce qu'il n'a même pas fait.

299 Alors, par un montage qui cède le contrat pour la durée de la construction à un autre entrepreneur, qui lui est lié parce que c'est son entrepreneur habituel, qui n'est pas un concurrent de TELUS, et par la suite, après la construction, ce réseau-là est retourné complètement à TELUS, on voit bien que ce n'est qu'un arrangement pour contourner la réglementation 2003-58, parce que, de fait, TELUS reste totalement redevant envers la Commission scolaire du service de l'entretien du réseau pendant 20 ans, et ils n'utilisent pas leur tarif déposé pour ça.

300 Donc, c'est très dangereux, cette façon de procéder là, parce que tout le monde pourrait faire ça dans le domaine. Pour les items qui sont réglementés, on le cède à quelqu'un, puis quand c'est fini, on le reprend. C'est exactement le contournement que nous, on reproche.

301 Deuxièmement, quand on parle d'un réseau privé, nous avons actuellement réalisé 13 mandats de commissions scolaires au Québec, et la majorité d'entre elles, sinon toutes, ont, ou vont, installé la téléphonie IP sur leur réseau pour utiliser la téléphonie. Donc, ces réseaux-là sont utilisés par les commissions scolaires pour faire de la téléphonie, pour se connecter à un endroit au RTPC, et même, d'ailleurs, on le voit dans les discussions présentement en télécommunications.

302 De plus en plus, la téléphone va fonctionner sur IP. Donc, de dire que c'est un réseau qui n'est pas connecté, ce n'est pas vraiment vrai, parce que, dorénavant dans le futur, tout va fonctionner sur ce genre de réseau-là, et c'est ce que les commissions scolaires font.

303 Alors, autre affaire également qu'on pourrait dire par rapport à ça, c'est que s'il y a une tarification différente quand on travaille avec TELUS ou qu'on travaille avec quelqu'un d'autre, jamais aucune entreprise au Canada va pouvoir compétitionner avec un dominant parce qu'un dominant dit que moi, si je vous vends un réseau, je vous facture seulement la moitié des frais des poteaux, tandis que si c'est un autre, je suis obligé de facturer la totalité des frais de poteaux, et selon l'argument de monsieur Couette, c'est donc dire que si, par exemple, je m'installe sur un poteau où il y a déjà d'autres télécommunicateurs, je devrais payer seulement une partie des frais de poteau, on devrait diviser les frais parce qu'on est plusieurs.

304 Ce n'est pas le cas du tout, et au contraire, chaque utilisateur des structures de soutènement paye le plein prix tarifé. Donc, il y a un problème à ce niveau-là.

305 Puis nous, on maintient que la seule raison pour laquelle TCI a fait une cession partielle à un sous-traitant qui lui est lié avec d'autres contrats, c'est pour contourner la règle 2003-58 et que si on autorise ce genre de comportement-là, il n'y aura plus de compétiteurs au Québec qui vont pouvoir faire des installations. Alors, il s'agirait d'abolir cette possibilité-là, et tout le monde travaillera à revendre des services de télécommunicateurs dominants puisqu'il n'y a aucune possibilité...

306 Il faut voir également que dans cette proposition-là, la majorité des coûts qu'un non dominant doit payer pour offrir des services à une commission scolaire sont des coûts qu'on doit nous-même payer à l'entreprise dominante. Alors, si celle-ci se permet de les offrir à un coût différent quand c'est elle qui offre les services, il n'y aurai plus de compétition possible dans n'importe quel secteur en télécommunication à cause de ça.

307 Donc, c'est en gros... D'ailleurs, une dernière chose que je voudrais faire valoir, c'est qu'une des raisons pour lesquelles Xit télécom et Xittel étaient intéressées à soumissionner sur ce projet-là, c'est justement pour être capable d'offrir des services de télécommunication dans les régions. C'est ce qu'on fait dans d'autres projets, où une fois les réseaux installés, on travaille pour amener d'autres services de télécommunication aux régions.

308 Le fait de l'empêcher amène des... permet à TELUS d'éviter des pertes de revenus. Donc, le coût pour elle, même en payant la moitié des frais récurants, est presque nul puisqu'elle évite l'entrée d'un compétiteur dans ses régions. Donc, c'est un comportement totalement pour empêcher la compétition, et c'est une concurrence qu'on juge déloyale.

309 Je vous remercie beaucoup.

310 LA PRÉSIDENTE : Merci, Monsieur Proulx.

311 Madame Courtemanche.

REMARQUES DE FERMETURE / CLOSING REMARKS

312 Mme COURTEMANCHE : Merci. Je vais être très brève.

313 Tout simplement pour souligner la raison qu'on a formulé notre réponse à l'appel d'offres de la façon qu'on l'a fait, c'est parce que c'était expressément prévu dans l'appel d'offres qu'on cherchait un partenariat. Alors, c'est tout simplement pour expliquer cette composante-là.

314 Et de toute façon, je pense qu'à la base de ce qui a été soumis à date, les documents écrits, les questions qui ont été posées par le Conseil par écrit, ainsi que les questions qui ont été posées aujourd'hui à l'audience publique, que le Conseil peut juger en pleine connaissance de cause. Alors, on s'en remet à vous.

315 On vous remercie beaucoup de votre attention et on vous félicite encore pour cette procédure accélérée. Nous trouvons que c'est une excellente façon, justement, de régler des questions en litige comme aujourd'hui. Alors, on vous remercie beaucoup.

316 LA PRÉSIDENTE : Nous vous remercions tous, toutes les parties de votre coopération. Tout ça s'est passé exactement dans les délais prévus.

317 Alors, nous nous attendons à émettre une décision, comme j'ai dit ce matin, d'ici le 9 mars.

318 Alors voilà, nous vons remercions et bon retour, ceux qui doivent nous quitter. Vous avez une bonne journée pour voyager.

319 M. PROULX : Merci beaucoup de votre attention.

--- Upon recessing at 1002 / Suspension à 1002

--- Upon resuming at 1126 / Reprise à 1126

320 THE CHAIRPERSON: We are ready.

REMARQUES D'OUVERTURE / OPENING REMARKS

321 Bonjour et bienvenue à tous. Welcome to all the parties to this proceeding.

322 Je suis Andrée Wylie, vice-présidente, radiodiffusion du CRTC et je présiderai cette audience. Mes collègues, à ma droite, la conseillère Barbara Cram, conseillère régionale du Manitoba et de la Saskatchewan; et à ma gouche, la conseillère Joan Pennefather, et toute les deux siégeront avec moi aujourd'hui pour cette audience.

323 Over the course of this hearing we will be assisted by a number of Commission staff, including among others, to the right of Madam Cram, Stephen Millington, Legal Counsel; and to his right, Lynne Fancy, Telecom Staff Team Leader; Len Katz somewhere in the audience, Executive Director Telecom, who is already late, and it is only his first week.

324 Scott Hutton at the back, Director General, Competition, Costing and Tariffs. Allan Rosenzveig, our Legal Counsel, General Counsel, Telecom; and Paul Godin, to the left of Madam Pennefather, Director of Competition, Implementation and Technology.

325 Please don't hesitate to contact Mr. Millington if you have any procedural question with respect to the conduct of this hearing.

326 The purpose of this oral public hearing is to adjudicate a Part VII application by the Consumer Groups seeking CRTC intervention in the matters of diallers and modem hijacking.

327 Before we begin, I would like to say a few words about the administration of this hearing.

328 This hearing, as you know, is less formal than traditional telecom hearings and much narrower in scope. Due to its expedited nature, intervenors and the general public will not participate in its oral phase.

329 The parties will be asked first to introduce the members of their respective teams. The applicants, followed by the respondents, will have the opportunity of opening remarks, as shown on the agenda. Following these remarks the applicants and then the respondents will be questioned on matters related to the application, first by the Commission, followed by questions to each other and ending with the Commission's final questions.

330 The Commission will not entertain written final argument; rather, parties will have an opportunity at the end of the hearing to make final oral submissions.

331 Voilà monsieur Katz.

--- Laughter / Rires

332 THE CHAIRPERSON: The Notice of Public Hearing letter indicated that the parties must file all documents with the Commission and serve them on the other parties prior to the hearing. We are therefore not inclined to accept any additional documents at this stage.

333 We realize that we have a very large group today and therefore we are counting on the cooperation of everybody to ensure order throughout the hearing and in accordance with the timeframes outlined by the Commission in its letter to the parties, dated February 21, 2005.

334 There is a verbatim transcript of this hearing being taken by the court reporter. In order to ensure that the court reporter is able to produce an accurate transcript, please make sure that your microphone is turned on when speaking, simply by pushing the button under the microphone.

335 If you have any questions on how to obtain all or parts of this transcript, please approach the court reporter at the end of the hearing.

336 We will like all of you to ensure that your cell phones and pagers are turned off at all times while you are in the hearing room and, as indicated in the Commission's organizational conduct letter of February 21, 2005 to which I have made reference, we plan to consider this application from about this time to 3:00 p.m.

337 We intend to issue a brief written decision by March 9th.

338 We will now begin with the application by the Consumer Groups. We will begin with opening remarks by the applicants, who will have 15 minutes to make their presentation.

339 Before beginning their remarks, I would ask applicants to introduce the members of their team.

340 Mr. Lawford, you are in charge. You can introduce members of your team, and of course it is up to you how you use the 15 minutes. If you all participate, that is acceptable to us.

341 And there is translation as well, if some of you prefer addressing the matter in French. Thank you.

342 Mr. Lawford.

OPENING REMARKS / REMARQUES D'OUVERTURE

343 MR. LAWFORD: Thank you, Madam Chairperson, esteemed Commissioners and representatives of the companies, Commission staff and most especially victims of modem hijacking.

344 My name is John Lawford and I am counsel for the Public Interest Advocacy Centre.

345 To my left is Marie-Hélène Beaulieu, also a lawyer at Option Consommateurs; and Philippe Mercorio, an analyst at l'Union des consommateurs. We are the applicants collectively.

346 Seated directly behind me is Ms Elizabeth Ginn, who is a modem hijacking victim who has come here today.

347 To her immediate left is Mr. Chris Lewis of Nortel Networks, who is our computer expert.

348 To his left is Mr. David Cox, who is here observing today.

349 I have a preliminary procedural point to deal with and that is in reference to the motion we brought earlier in the week. We will not be addressing that issue during this hearing. We would just like to put on the record that we would like to preserve that issue without prejudice for any future application.

350 We are here today to talk about fraud. Modem hijacking is a scam. It is not simply a matter of one person owing the bill.

351 Modem hijacking is not complicated to understand in the sense that all you need to have is a phone line and a computer connected to it. The process of modem hijacking is fairly simple. A computer program on your computer changes your Internet dial-up number to a long distance phone call number, makes calls and the subscriber is then charged.

352 I think it is fair to say that most subscribers' first reaction is one of total shock to receiving a dialler bill. We at the Consumer Groups have taken many calls from irate and quite upset customers. Their initial problem with this dialler program situation is one of confusion and very quickly after that one of frustration in trying to deal with their local service provider and long distance provider, their phone company.

353 A very few hardy souls do actually persevere toward getting some form of payment, some sort of forgiveness on this bill. But a lot do not. Those people just pay their bill and try to let it pass.

354 The phone company's initial message is always the same. It is you who owe this amount; it is your problem and you are out of luck.

355 From there they may offer a discount of some form. It is quite variable across the companies, but the basic message is you are out of pocket and you must pay.

356 We have three very clear differences between the companies' positions and ours.

357 First of all, the companies say the customers absolutely owe these amounts and we say they actually do not and they should not.

358 Second, the phone companies say that they are not really involved but rather it is the Internet service providers who should be here today, or that they have no control over traffic that they send overseas.

359 However, we think they are deeply involved and that they should be responsible for these charges.

360 Finally, these companies today are here to tell you that there is nothing that you can do about it; that the situation is under control and that we should all go away today with no further action.

361 We say you can do something about it and we are here to ask for that.

362 The problem is not small. We have statistics on file with the Commission from the interrogatories, from our own records and from Phone Busters indicating that the number of people who have been logged by all those systems comes in the thousands and the amounts can be extrapolated into the millions. This is for 2004.

363 The problem is not new. Complaints for diallers have come in for many years although they have peaked I think it is fair to say in the last year in particular. However, we have indications that for at least two years this has been a problem and probably closer to five.

364 The problem is not getting better. It is not going to solve itself. And that is why we are here today as well.

365 When a country code, for example, is blocked, that is an immediate signal to the fraudsters to change from that country to a different number, or a different country; if the individual number is blocked they change to the individual number.

366 So the problem is not one of treating symptoms; it is a systemic problem and we need to put something in place so there is an incentive for the people who are best placed to fix the system -- that is the phone companies -- to do something about it. And we would like to have a financial incentive.

367 End users have very little control over that system. They have control to a certain extent over their own system. They are dealing with a learning curve. But the actual systemic problem of these diallers, how they work, why the fraud works, is really in the companies' hands.

368 This problem won't go away either. We believe that if it came out in this forum with diallers for the last four or five years, it will reappear in some other form, perhaps through VoIP. We will see. We are concerned that we will be back here in three or four years to do this all over again unless we come to a slightly different approach than the companies have taken so far. That has been user bears the brunt of fraud in the system.

369 We would like to have a decision from you that recognizes the principle that customers are not always initially responsible for fraud in that system.

370 I think victims when they look at this from the outside can't believe it. They see it as an internal sort of machine. You have the telephone companies that get to decide how much fraud is acceptable within their networks. You have the actual fraudsters who hit anyone and everyone. However, their effect is often upon the most vulnerable, hitting them hardest.

371 They have serious financial consequences. Bills are, on average, from the Phone Busters' statistics, $325. That is a serious amount of money for people.

372 Telco response, to be honest, has been slow. We have raised the issue with them over the years. It has been very much halting. The response is variable across the country and across the companies, indicative of a situation where it is not 100 per cent to the advantage of the companies to solve it in a coordinated way.

373 Telcos now are claiming the Commission has forborne from long distance regulation, so that avenue appears to be closed to consumers as well. They don't feel they can come to you.

374 Finally, the result of all this machinery is that fraudsters are free to continue the scam and will continue the scam and there is nothing we can do about it, and consumers are going to pay the bill.

375 We see consumer frustration but we see it slightly differently because we have a principal point of view that fraud in the system is not acceptable; that the Commission can find that zero tolerance is the only proper level of tolerance for fraud within the system.

376 We feel the Commission can see that the telcos are the linchpin in this and that Internet service providers and customers are peripheral to this particular problem.

377 It is interesting that the main long distance providers, local service providers, are also the main ISPs in Canada. So we are sure they are uniquely placed to understand this.

378 The billing system for long distance phone calls is a very extensive financial network. At the moment it is set up such that there is no contemplation of fraud. We feel this is not a responsible way to run the system and that once fraud has been shown to be a possibility, there must be some sort of mechanism for chargebacks. And that does not exist.

379 That chargeback mechanism is the responsibility of the companies.

380 There is no doubt that the dialler traffic which is generated and is paid does make money for the companies. They probably have no trouble covering the costs of people who do complain, although we don't have those numbers on the record.

381 To add insult to injury, we wanted to point out that they are even companies which are asking consumers now to pay for improving security on their line because the system is insecure. So systems and services are now going to be offered which supposedly cut down on your fraud risk.

382 Finally, we believe that the Commission can make variance orders and has the jurisdiction here to cover what we are asking for.

383 I want to go back to our three points of difference with the companies: first of all, whether the consumers actually owe these amounts.

384 The terms of service involved are largely the same across the companies. The wording I am going to choose is from Bell's 9.1:

385 We believe this language clearly contemplates a human actor who made the decision to make this call. This issue has arisen previously in another form in the Cantel versus Bell decision that was Telecom Order CRTC 97-1406.

386 In that decision the Commission stated at paragraph 28:

387 At paragraph 31:

388 And in paragraph 29:

389 The language in the Terms of Service in French is similar and puts an emphasis on the word "qui".

390 We feel the Cantel case is directly comparable to the modem dialler situation. The Commission has said that in a situation of fraud they want to have someone making a decision, a human actor to be involved in order to cut down on the possibility of fraud.

391 With modem hijacking we are saying the same thing: that no human in a large number of cases is actually consenting to the modem dialling the number, which is then billed.

392 Either there is no opportunity to consent or the consent form, if there was one, was materially misleading. But in most of the cases the consumer is not even aware that the connection is being made.

393 Second, I am going to turn now to the respondents involvement with the problem.

394 They are effectively acting as collective agents for fraudsters. Modem hijackers are well aware that the local telco will bill for and take customer service calls on modem diallers. Yet despite all that, the telcos continue to collect these amounts.

395 Second, companies do make money on sending these dialler calls out, and we know that the volume of that is large. We don't know if they could cover all of the complaints that come in 100 per cent, but this is likely.

396 Third, the phone companies have reason to be suspicious as to the fraudulent nature of these calls. They are to odd destinations. The phone companies see large traffic spikes.

397 Unless an Internet Web site were very successful, indeed it would be difficult to generate that volume of calls to these destinations without fraud or misrepresentations. More importantly customers call the phone companies to complain that these calls are unauthorized and fraudulent. So they have thousands of people calling them saying "I didn't do this".

398 The only way to ensure that this fraud is drummed out of the system is to put the full financial burden upon telcos. A $400 bill doesn't seem a lot for Bell or TELUS or the other companies to forgive, but it can be a crushing blow to consumers.

399 Companies are better placed to accept the loss and they are in big need of incentive to change the international exchange system for long distance calls to include a chargeback mechanism.

400 Companies are well placed to warn customers on bill inserts, on Web sites and during customer service calls especially.

401 A financial penalty for not alerting people adequately will encourage the companies to make more of an effort.

402 It is true that modem hijacking is a global problem, but we would like to call on the Commission to make Canada a leader in this situation. Other regulators are watching us today. We understand that The Netherlands regulator is about to commence a telecom hearing on this. The public utilities commissions in the United States are becoming active in this area, and there is an FCC open docket.

403 I also want to make the point that international phone calling through modem dialling is an avoidance of the 976/900 regime which the CRTC has already set up to protect consumers in this sort of situation.

404 We are effectively asking for the same type of regime for these long distance calls. But the fraudsters know that and they avoid those rules by now using long distance calls as opposed to 976 calls.

405 I will get away from the technical part of it now and just try to --

406 THE CHAIRPERSON: I hope you are aware, Mr. Lawford, that you are getting close to the end of your 15 minutes.

407 MR. LAWFORD: Yes. I have about three minutes.

408 To turn to the responsibility of victims, many are not as tough as Mrs. Ginn who is here today and do just give in and pay their bills. I want to say that first, so we have consumers subsidizing this problem for the last two or three years.

409 The companies are here to say that modem hijacking is completely the responsibility of customers. Customers can't understand this adequately. They are not well placed to deal with it. In two similar systems, the credit card system and also the cheque clearing settlement system, those people, the end users are not responsible. It is a similar situation to what we have here, so we believe that billing in this situation should include a chargeback mechanism, and that is a company responsibility.

410 The problem with consumers is that companies say they consent to this. We say that consumers have not consented to this in large numbers. We say that the problem has changed since the phone companies have first noticed it, and now dialler programs are being delivered without any notice to consumers at all.

411 Mr. Chris Lewis is here to describe how that is possible, and he has also done that in his affidavit.

412 We now maintain that the majority of dialling victims have a completely surreptitious dialler. And the other ones who have seen a dialler contract, if you will, a lot of those contracts are misleading. They do not state, for example, that your modem speaker will be turned off; that this thing will dial by itself in the middle of the night; that it is not also dialling for every Internet connection you make rather than just the one you are talking about in the initial offer.

413 Finally, the companies are asking consumers to disprove that they are liable for these calls. We think they are confounding two issues.

414 The first one is the issue of consent. The consumer has said they have not consented. What more evidence can they possibly offer up to counter that than their word. What more do the companies want?

415 Just because there may be a term of service which argues that you have liability for all calls from your phone, which we say there is a different interpretation of, that does not mean that you have given consent. That is a different issue.

416 The companies have seen the people who have taken the time to call and complain have not consented.

417 THE CHAIRPERSON: Mr. Lawford, can you make sure now that you --

418 MR. LAWFORD: Finish?

419 THE CHAIRPERSON: Yes.

420 MR. LAWFORD: We think the Commission can order 100 per cent dialler forgiveness in the future for all customers who have had this problem under section 24 of the Telecommunications Act.

421 We would invite you to consider a similar order for calls which are presently being disputed by customers on the basis that this is unjust discrimination, especially in relation to basic toll customers but for other customers as well.

422 We would like to see the Commission consider the other remedies which we have asked for in our submission through this proceeding.

423 Finally, we think that the Commission can make a declaration of law under section 52 of the Telecommunications Act that the interpretation of the liability clause is such that these amounts are simply not owed.

424 We would invite the Commission to be flexible in terms of other remedies which they might order with regard to this problem. Thank you.

425 THE CHAIRPERSON: Thank you, Mr. Lawford.

426 Next we will hear from Bell Canada, Aliant and SaskTel.

427 Who is going to be the leader for this? There is 15 minutes. I assume you can split it amongst yourself as you find acceptable.

428 Mr. Elder?

OPENING REMARKS / REMARQUES D'OUVERTURE

429 MR. ELDER: I guess I will start off.

430 THE CHAIRPERSON: If there is more than one person, please introduce your team.

431 MR. ELDER: Actually, the first person I will introduce and then I will ask him to introduce the rest.

432 THE CHAIRPERSON: And any overuse of the time, the fight is amongst yourselves, not with us.

433 MR. ELDER: Okay, duly warned.

434 I am David Elder. I am Vice-President, Regulatory Law, with Bell Canada.

435 I would like to introduce Pierre Luc Hébert, who is counsel in our group. I would ask Pierre Luc to introduce the rest of our team.

436 MR. HEBERT: Thank you.

437 First of all, to my left is Scott Collyer, who is Director of Consumer Marketing, and who also in the interim is Director of Toll Services, Long Distance Tolls. So he will be able to address issues dealing with toll, as well as to international settlement.

438 In the row behind us is René Pouliot, who is a security consultant who just retired from Bell Canada. Until December he was Associate Director, Corporate Security for Bell Canada.

439 Right behind me is Elain Stohnbrogniault(ph), who is Manager of Client Services at Bell. He is in the group that handles customer complaints.

440 Mr. Elder will deliver our opening statement, and after his there will be an opportunity for SaskTel and for Aliant to add.

441 MR. ELDER: Thanks, Pierre Luc.

442 Good morning, Madam Chair and Commissioners.

443 In accordance with directions of Commission staff, and as you noted, I will deliver these opening remarks on behalf of Bell Canada, SaskTel and Aliant. I will refer to these collectively as the companies.

444 The companies submit that the issues for determination in this proceeding are these: First, does the Commission have the jurisdiction to grant the relief requested by the applicants? Second, if it does, have the applicants established that it is appropriate to grant this relief?

445 Turning to the first question, at the heart of their application the relief requested by the applicants focuses on the liability of a toll subscriber for long distance charges respecting calls made on the subscriber's telephone line.

446 The relief requires the Commission to make a determination respecting the terms of a contract for a service from which the Commission has largely forborne from regulation. In Telecom Decision 97-19 the Commission granted broad forbearance to the toll services offered by the companies. Let's recall the scope of this forbearance.

447 First, the Commission no longer approves or specifies the rights for toll services, nor does it retain the power to make findings respecting just and reasonable rates for toll services other than basic toll or toll services in areas without equal access.

448 I would note that there is nothing on the record of this proceeding to indicate that any dialler complaints are from subscribers with basic toll service or in areas without equal access.

449 Next, while the Commission retains some powers respecting undue preference, the Commission limited the application of these retained powers to issues relating to network access and resale and sharing. This case is about neither network access nor resale and sharing.

450 Moreover, even if subsection 27(2) were applicable to the situation at hand, there is no discrimination here, let alone unjust discrimination.

451 Next, and significantly, the Commission has explicitly forborne from the ability to approve or prescribe any limitation of liability respecting the use of toll services.

452 Finally, while the Commission retained the power to impose conditions under section 24, any such conditions must necessarily be forward looking only.

453 With due respect to the Commission, in light of its forbearance determination some seven years ago, the companies submit that the Commission simply has no legal authority to grant orders relieving subscribers of the obligation to pay for toll services provided to date, nor to require the companies to simply absorb such outstanding charges.

454 Accordingly, this relief must be denied.

455 Turning to the second question for determination in this proceeding, even where the Commission has the authority to grant forward looking relief, the companies submit that the applicants have failed to establish that it is appropriate to do so.

456 The companies note that the applicants in this proceeding bear the burden of establishing each element of their case, adducing credible evidence in support of each such element, and clearly demonstrating how each remedy sought will serve to resolve the alleged concerns and why it is appropriate to impose these measures on the respondents.

457 The companies submit that the applicants have failed in this regard.

458 In fact, the applicants have adduced little true evidence of any kind in this proceeding save a couple of Web links and the affidavits of a single complainant and a computer security worker.

459 To be clear, unsupported allegations and unsworn statements do not constitute evidence. The companies wish to emphasize that today's hearing is about clarification and testing of that evidence as filed. It is not and should not be an opportunity for the applicants to bolster their case with fresh evidence about which the respondents had no notice or opportunity to rebut.

460 It is submitted that the applicants' evidentiary record, such that it is, falls short of demonstrating that any of the relief requested is warranted, even where the Commission has the jurisdiction to grant the relief.

461 Moreover, as the companies' submissions demonstrate, there is no compelling policy rationale for granting the relief requested. It is worth emphasizing that the companies appear today as interexchange carriers, since it is in this capacity that we are respondents to the applicants' claims.

462 IXCs are in the business of providing telecommunications connectivity between local exchanges, whether these are across town, across the country or across the world. To an IXC's network, all of these calls look essentially the same. A call is initiated by the calling party, is routed via one or more TSP's facilities to the called party, and is billed at the prevailing usage-based rate.

463 The TSP providing toll service to the calling party bills and collects the necessary fees from the calling party, keeping a portion of these charges and remitting them to the carrier for which the originating TSP handed off the call.

464 Toll calls can be initiated by a number of terminal devices connected to user lines, including standard telephone sets, fax machines, modems, satellite set-top boxes, utility meters and other telemetry devices. The installation and operation of all of these devices is necessarily within the sole control of the telephone account holder, a fact that has always been recognized by the CRTC.

465 This long-standing assignment of liability to subscribers for calls made from their premises only makes sense. It is unsound law and inappropriate public policy to assign or deflect liability to a third party who has no knowledge or control of the call initiating end of a subscriber service.

466 We note the following in this regard.

467 One, as IXCs, the companies have no way of knowing what equipment subscribers connect to their telephone lines, including telephones, faxes, modem-equipped computers or other devices.

468 Two, for those subscribers who have connected a modem-equipped personal computer to their telephone lines, we have no way of knowing whether these PCs are protected by security safeguards, including password protection, firewalls and anti-virus or anti-spyware software. Nor do we have any way of knowing whether any such installed programs are correctly installed or upgraded.

469 Three, while we know who our own Internet customers are, for the vast majority of our toll subscribers we have no idea whether or not they even have Internet access, let alone who their Internet provider is.

470 Four, we have no way of knowing to whom subscribers may allow access to their premises and whether such persons may also access their telephone line and any equipment connected thereto, with or without the subscriber's permission.

471 If we have no knowledge or control of the foregoing, it would be highly inappropriate to make the companies, and implicitly the full body of their subscribers, liable for the charges incurred through the wilful or negligent acts or omissions of the few.

472 And let's be clear: Calls are being made, circuits are being used and charges are being incurred requiring payment by the companies to international carriers in most cases months before any charges are disputed by subscribers.

473 Contrary to the insinuations of the applicants, this case is not about the security of our telephone networks, and this is not about fraud within our system. In fact, our networks do exactly what they were designed to do and what they have done well for decades: connect callers with called parties.

474 If in the case at hand there is fraud, misuse, negligence or insecure facilities, these do not apply to our telecommunications network or services. Rather, they relate solely to the installation and operation of user-provided equipment.

475 Make no mistake. This case is not about toll charges or IXCs or even ISPs. It is about PC security and subscriber behaviour. Neither of these is the responsibility, as a matter of law, of the IXCs; nor is there any rational policy basis for making these the responsibility of the IXCs.

476 Notwithstanding the above, the companies are not blind or unsympathetic to the complaints of the subscribers. On the contrary, we have stepped up to the plate to help protect our subscribers. We have significantly reduced charges owed by eliminating most or all of our share of the revenues from disputed calls. We have provided subscribers with information resources and undertaken advertising and notice campaigns. We have implemented screening procedures on unusual calling activity and direct dial blocking to significant modem dialler destinations.

477 In fact, early next week Bell Canada will be adding another new country to the block list. I can't even pronounce it -- Niue. It is another island in the South Pacific. I can spell it for you.

478 In summary, the companies submit that the Commission lacks the jurisdiction to grant much of the relief sought and that, in any event, the applicants have failed to demonstrate that this relief is appropriate.

479 In light of all of the foregoing, the companies submit that the application of the consumer groups should be denied.

480 Thank you for your attention.

481 I would like now to hand it over to Dan Campbell to add a few words on behalf of Aliant.

482 MR. CAMPBELL: My name is Dan Campbell. I am counsel for Aliant Telecom Inc.

483 With me is Mr. Michael Craig, who is a manager of Consumer Services with Aliant and in previous positions has had marketing responsibility for consumer market. So he is quite familiar with the issues that we are talking about today.

484 The issues have been canvassed in detail by David, so I am not going to go over all of them. There are, however, some interests which are of particular interest to Aliant.

485 First, it has to be noted that there is no evidence on the record of a single dissatisfied Aliant customer. Last year there was a small number of complaints brought to the attention of the CRTC's regional office in Dartmouth and each was resolved to the satisfaction of the customer.

486 The complaint customer groups have not indicated that they have received complaints from any customers of Aliant. There is therefore no basis for any regulatory action against Aliant.

487 Second, Aliant submits there is no basis for any regulatory action at all. Although the respondents are here in their capacities as local exchange carriers, no local services are involved. The services involved are long distance services, both of them forborne from regulation and for good reason. These are very competitive services. These parties have no market power.

488 Aliant took the steps it did in response to its customers' complaints -- and those steps are described in our filings -- not because it had a regulatory obligation to do so but because it operates in a very competitive market in all its businesses.

489 These include its Internet service business, its long distance business and its local service business.

490 Aliant attempts to distinguish itself from these competitive markets by the way that it responds to its customers and it knows that the way it serves its customers in any one of these competitive markets will affect the way it is perceived in the others.

491 It should come as no surprise to anyone that the responses of the ILECs have not been uniform. Each one is responding to its own market conditions and its judgment as to how best to serve those markets. That is the way competitive markets work.

492 This is far from being evidence that forbearance should be rescinded as the complainants imply or suggest. In fact, it is evidence of the competitiveness of the markets and that the Commission was correct in its determinations.

493 Most important, though, the problem here is one of the customer's terminal equipment: his or her computer. It is either carelessness of that computer in accepting downloads or, as the complainants assert, malicious software that is installed surreptitiously. But only the customer, the computer user, can control these risks.

494 The proposal before you is to arbitrarily and artificially transfer the losses to the carriers in order to give them an incentive to try and influence customer behaviour while at the same time removing any incentive from the customer to change that behaviour.

495 This is irrational and unworkable.

496 Madam Chair, we will take no more of your time but we will be glad to respond to your questions. Thanks very much.

497 THE CHAIRPERSON: This completes the presentation of the companies.

498 Mr. Schurr, you have three minutes left.

499 MR. SCHURR: This will surprise Ms Cram but I have nothing to add at this point.

500 THE CHAIRPERSON: I was going to say if you want more, you have to appeal to Mrs. Cram.

501 MR. SCHURR: I have tried.

--- Laughter / Rires

502 THE CHAIRPERSON: We will now hear from TELUS, Mr. Woodhead. And you can't use his three minutes.

OPENING REMARKS / REMARQUES D'OUVERTURE

503 MR. WOODHEAD: Okay.

504 Thank you. My name is Ted Woodhead, and I am the Director of Regulatory Matters at TELUS.

505 Seated to my immediate left is Anne Bowen, Director Consumer Solutions; and to her left is Sam Donaghey, Operations Manager, TELUS Corporate Security.

506 Behind me and assisting us is Pamela Jones, Senior Regulatory Advisor.

507 I will attempt to be brief and apologize in advance if I cover previously covered ground.

508 We are here because many people have phone lines that are either partially or entirely dedicated to accessing the Internet. These customers can be dial-up Internet customers or high-speed customers who use a phone line attached to their modem for sending facsimiles. They can be TELUS customers, cable customers or customers of a variety of other providers, including resellers. These customers use the Internet to access information and sometimes paid content services.

509 Paid content service providers sometimes use diallers as a method of receiving payment. In essence, the end customer downloads a dialling application and the dialler, once installed on the end customer's computer, initiates a call that is charged at the prevailing rate. The content provider settles with a foreign telecom provider in order to receive its fees for service.

510 Many legitimate services with transparent business practices utilize diallers as a method of securing payment from Internet customers. The use of diallers generally in this way is not in dispute in this proceeding.

511 What seems clear from the record of this proceeding is that there have been occurrences where Web sites or pop-up advertisements or diallers installed from e-mails sent to end customers emanating from a small number of foreign countries have resulted in downloaded diallers on computers that have resulted in disputed international toll charges.

512 What is unclear and what will never become clear is whether the download of these diallers was consented to by end customers or not and whether the downloads were in respect of information or services that end customers actually consumed.

513 The record is clear that TELUS has no contractual relationship with any of these Web site operators, Internet advertisers or e-mailers.

514 The record is also clear that when disputes began to rise in early 2004 TELUS took proactive steps to provide both its toll and Internet customers with tools and information designed to protect them from high toll charges associated with diallers.

515 What has TELUS done?

516 TELUS instituted a program for modem dialling complaints effective June 1, 2004. If customers dispute charges due to modem diallers since June 1, 2004, TELUS has taken the following actions.

517 If customers subscribe to TELUS' CallGate service, a service that is unique to TELUS, TELUS will waive 100 per cent of the long distance charges on first occurrence for the applicable modem hijack calls. Or if the customer declines CallGate service, then 50 per cent of the applicable long distance charges are waived on first occurrence.

518 CallGate is a service that permits customers to control through PIN numbers who can access toll service or if any toll service can be accessed at all without first entering the PIN. This is a real time solution to this problem.

519 In addition, TELUS began blocking all direct dial calls to four foreign countries on July 1, 2004. It currently blocks all direct dial calls to three countries, including fax calls, but all data calls to three countries and number ranges in ten countries. TELUS blocks both entire country codes and laterally has begun blocking number ranges within country codes.

520 TELUS continues to monitor calling patterns to certain high international rate destinations and blocks number ranges as circumstances present themselves.

521 TELUS has instituted a media and customer awareness campaign. TELUS issued targeted bill messages to all residential customers in June and July of 2004.

522 TELUS sent targeted messages to its Internet subscribers, as well as posting advisories on TELUS Web sites, and this is an ongoing activity.

523 TELUS offers a full suite of Internet service protection tools to customers, including firewall protection, virus protection and spyware protection, as do many other providers.

524 It follows that we ask what impact these measures have had.

525 Since October of 2004 when TELUS implemented a system to specifically track modem hijacking complaints, we received eight complaints. Year to date, we have received three complaints.

526 Clearly TELUS' program has been effective. All of this has occurred irrespective of the current application. The reason that TELUS' reaction has been effective is because it recognizes the reality that customers must be vigilant about their Internet usage but also because the highly competitive provision of toll and Internet access services all in a forborne environment demands that we respond with the necessary tools and information in order to serve and keep our customers.

527 TELUS has responded proactively for its customers. The obvious reduction in complaints and adjustments related to the issues raised by the consumer groups is a testament to that fact. All of these statements are duly supported on the record of this proceeding.

528 That concludes TELUS' opening remarks.

529 THE CHAIRPERSON: Thank you, Mr. Woodhead.

530 We will now hear from MTS Allstream.

531 Ms Crowe.

OPENING REMARKS / REMARQUES D'OUVERTURE

532 MS CROWE: Thank you, Madam Chair.

533 My name is Jenny Crowe and I am Counsel, Regulatory Affairs for MTS Allstream.

534 Sitting to my left is David Huras, Manager, Security, Toll Fraud, in our national Allstream division.

535 Next to him is Paul Lamoureux, who is very good to come at the very last minute. He is Technical Support Representative, Customer Care in Manitoba, in our MTS division.

536 Behind me, sitting on the couch, is Lecia Simpson, who is an analyst in our Regulatory Affairs Department.

537 We have already heard a fair bit about Internet diallers and modem hijacking, so I won't describe what the problem is. I think we all know how it works now.

538 MTS Allstream's position is very similar to the positions you have just heard from the other respondents. Customer vigilance is the key to combating modem hijacking. It is ultimately the customer who has control over the calls that are made using the long distance service, and it is ultimately the customer who bears responsibility for any charges for those calls.

539 As with viruses and other threats disseminated over the Internet, the most effective method of combating modem hijackers is for Internet users to be vigilant when they are surfing the Internet and to employ and regularly update security safeguards to ensure that they do not download unwanted programs from the Internet.

540 Because the respondents in this proceeding do not control the use of a customer's telephone line or Internet connection, MTS Allstream has no means of preventing our long distance customers from downloading automatic diallers, nor can MTS Allstream tell how a long distance call has been initiated: whether a customer has dialled the long distance number manually for legitimate purposes, whether the customer has consented to the use of an auto dialler to dial the long distance number; or whether the customer is unaware that they have engaged in auto dialler.

541 Nonetheless, MTS Allstream has taken reasonable measures to inform our customers of the threat of modem hijacking and to attempt to minimize the impacts of surreptitious diallers. In fact, MTS Allstream has voluntarily, as a matter of good business practices, undertaken most of the measures that the consumer groups are now asking the Commission to impose on the respondents.

542 First and foremost, MTS Allstream has undertaken measures to inform customers about Internet diallers. This was done as soon as it became apparent that the use of Internet diallers was increasing.

543 More specifically, on May 20th last year MTS posted an alert on its Web site, which remains on MTS's Web site, describing the way in which auto diallers and modem hijackers work and providing customers with tips on how to avoid the problem.

544 Also, for a period in May and June last year when the problem of Internet diallers seemed to be peaking, MTS also played a prerecorded alert to all customers who contacted MTS via the company's interactive voice response system, warning customers about dialler programs.

545 MTS also printed a message in its July 2004 billing statements further cautioning customers about diallers and directing them to visit the alert for more information.

546 In addition to warning customers to protect themselves and giving information on how that could be done, MTS began blocking known overseas Internet dialler numbers on May 18th last year in order to try and defend customers against potentially unwanted calls to these numbers.

547 Soon after, on June 2nd, MTS began blocking entire country codes where a high proportion of the calls to that country were revealed to be dialler numbers.

548 In our national Allstream division, which I will just say receives few complaints regarding Internet dialler charges, also began operator interception of calls made to certain countries in August of last year.

549 Further, as a goodwill gesture to our customers, on June 1, 2004 MTS also began waiving 100 per cent of long distance charges associated with Internet dialler calls on a one-time, first-time basis. For customers who had disputed such charges prior to the implementation of this policy, MTS reimbursed the charges retroactive to January 1, 2004.

550 Still, heightened customer awareness and vigilance, combined with the targeted blocking of known dialler numbers and certain country codes, seems to have had an impact. In the month of December our MTS division received only one dialler-related complaint, while our national Allstream division did not receive any complaints.

551 While MTS Allstream has taken measures to inform and protect its long distance customers from surreptitious diallers, it is ultimately the customer that is in control of the use of their Internet and long distance services and it remains the customer's responsibility to guard themselves from threats disseminated over the Internet, such as modem hijacking.

552 For these reasons, MTS Allstream submits that the application should be denied.

553 Thank you very much. We would be pleased to take any questions.

554 THE CHAIRPERSON: Thank you, Ms Crowe.

555 Before we proceed to the questioning, for fear that you think you will be exposed to cruel and unusual punishment we will take a break around 1 o'clock or around that time, depending on whether it makes sense to break then or not. We will take a ten-minute break at approximately that time.

556 Mr. Millington.

QUESTIONS / INTERROGATOIRE

557 MR. MILLINGTON: Thank you, Madam Chairperson.

558 I would like everybody to turn to the consumer group's submission for this hearing, specifically paragraph 78 where the consumer group lays out its prayer for relief. It is enumerated by letters (a) to (m).

559 MR. WOODHEAD: Excuse me, counsel, what was the date of that?

560 MR. MILLINGTON: It is the 26th of January, 2005.

561 MR. WOODHEAD: Thank you.

562 MR. MILLINGTON: I would like everybody to follow along on this, because I will be asking all of the respondents to comment individually in respect of the answers that Mr. Lawford or whomever on behalf of the consumer group gives. When your time comes up, I will be asking you to start with your reaction to the comments made by the consumer's group.

563 Are you going to be answering the questions, Mr. Lawford?

564 MR. LAWFORD: Yes.

565 MR. MILLINGTON: Starting at paragraph 78(c) -- I am going to skip the first two which relate to rebates and using as a context the submissions made by the respondents with respect to the initiatives that have already been undertaken by the respondents in respect of this problem and the statistics which we may argue about but which tend to show a decrease, at least to some extent, in the frequency of these complaints. These are statistics both that have been submitted on the record by the respondents and statistics that CRTC has received with respect to its own complaints.

566 I would like you to go through one by one the elements that you are requesting, starting with item (c), and speak to it a little bit and give us some clarification as to why you think this is required, given what the respondents have already done, from the point of view of a justification perspective.

567 MR. LAWFORD: Starting with (c), this is bill inserts.

568 Customers notice things which come in their phone bill. It is a highly effective way of reaching everyone. People who are unlikely to navigate to a phone company's Web site just to check out their security warnings now that they are there, but something that is printed with their bill, they open their bill and they see it. It is a highly effective way to get the message across.

569 We are asking that that is done. We would like to have all the methods we could to warn people, but we think that people are not necessarily going to navigate to Web sites from the company and read every bit of information about how to protect themselves on their own.

570 If they get it in their face in their phone bill, they will have a look at it and they will consider it.

571 The forgiveness policies, the first notice for people is when they get the problem and they call and the problem has to be explained to them. The customer service representative wants them off the phone and they don't have time to give them a full answer.

572 If that bill insert has the kind of detail that we would like, then that first call, it is less likely that all that information will have to be given to that customer at that time.

573 Moving on to (d): Customers look to the white pages, front pages, for billing information. We ask for the same thing with basic toll. We are asking for this as well. If they have a billing problem, people know to go to the front of the white pages to look and see what is the answer. It is something that everyone has. They can find it there. They have an initial feeling of what is going on before they have to make that call saying: I've got it. What can we do?

574 Appropriately trained customer service staff: We have very variable reports from consumers about how they are treated, varying mostly to "you've got to pay it" and being very curt with them.

575 This is a very stressful situation for people. The experience of Mrs. Ginn and others have been that you are basically given a thinly veiled threat that you have to pay this thing, and any other information you get out of them is highly problematic for them to deal with and they don't have the time to deal with it.

576 That is not proper customer service. This is a serious issue. It costs a lot of money for people. They are very upset, and we would like to have some guidance from the Commission about the front-line people who are the first people that customers are going to talk to.

577 We are going to move on to the question about CallGate, but we see that as a type of service that we absolutely disagree with: linking of security service to someone who has a security problem. It is an offer being made after you have the problem.

578 A customer has no choice, no real choice in that situation to decline a monthly charge to counter a network problem when they really have one specific billing issue. In our submissions we called it consumer blackmail, and we stick by that. The difference between hundreds of dollars off and taking a $4.95 service, or a $3.95 or whatever it is, per month is a lot different.

579 The collection notices that go out to those disputing diallers' charges are just as upsetting to them as any other person who might get a routine administrative charge, except these victims think they don't owe anything. It just would help customers if they know that their dispute with the company is being acknowledged.

580 On the one hand the company is saying yes, yes, you are a dialler victim. On the other hand, they keep getting sent these reminders that you have to pay; this amount is owed. There is no acknowledgement that they have disputed the charge is what I am saying.

581 We are asking that those people who dispute their charges are treated in a separate fashion, some sort of line on the bill that says we know that you have disputed these charges. That is really what that is about.

582 I think that (h) is one that we do hope the Commission can do; and that is tracking of modem charges, people with modem problems. We had trouble doing this proceeding and we had trouble getting accurate numbers. It is a big enough problem, a serious enough problem that we need those statistics in order to find out if this problem is going down.

583 Sure, there has been a lowering, on the evidence we have, of the number of calls in months, the most recent months. But there is nothing to stop those from going back up once the modem dialler writers figure out that certain countries are being blocked.

584 But we will never know unless there is a central place where these things are all dumped into and we can do a proper analysis.

585 Security tools are becoming more available. I notice that some of the respondents do have pages which have outside links. Consumers at this point need to have some guidance and a simple Web page, one page, is helpful to get them to the right place. Some training for customer service people to get them these security tools. They need direction to them. They don't necessarily have to be provided by the companies as long as the company gives them an option of another free tool somewhere else and gives them guidance as to where to find it.

586 We are hoping that all of the measures that the companies have taken in terms of public education will continue, but without an order we are concerned that those will peter out once the companies find that fraud is at an acceptable level. We don't consider there is any acceptable level in this. So we would like to have the Commission monitor what efforts they are making to keep this in the public eye.

587 MR. MILLINGTON: Excuse me. I don't really need to hear you on (l) because it is a sort of catch-all. And (m) we will deal with in a paper proceeding outside of the context of this proceeding. So I don't need to hear you any more.

588 MR. LAWFORD: Thank you.

589 MR. MILLINGTON: I didn't mean to cut you off. I just didn't want you to go on.

590 MR. LAWFORD: No. That's fine.

591 MR. MILLINGTON: Thanks so much.

592 I would like to now turn to Bell Canada and give Bell Canada an opportunity to respond to those comments made by Mr. Lawford.

593 MR. ELDER: I guess I will walk through them just as you have.

594 MR. MILLINGTON: As you wish.

595 MR. ELDER: Is that what you are asking for?

596 MR. MILLINGTON: Well, what I want to hear about is these are prospective looking remedies. The position of the respondents to this point is that steps have been taken to address this problem.

597 I think my take away from the general position of the respondents is that the steps that have been taken to date are adequate and have addressed the problem, and what the consumer groups are advancing is that those steps are not adequate.

598 So I would like to hear each of the respondents on whether what they have done to date is adequate and perhaps a bit of a cost/benefit analysis generally about these other steps that are being requested by the consumer groups on a going forward basis.

599 MR. ELDER: I guess starting with our request for an order of 100 per cent forgiveness on a going-forward basis --

600 MR. MILLINGTON: No. We are going to start at (c).

601 MR. ELDER: Well, starting with (c), I think we looked carefully at what we thought an appropriate communication vehicle would be to get at the right subscribers for this, remembering that as a telephone company we have many more telephone subscribers than we do Internet subscribers.

602 So we thought in fact a bill insert was maybe not the best way to go; that in fact a bill insert about telephony would not be the best vehicle to advise people about security of their personal computers.

603 We chose to do this through other vehicles. We did send an e-mail to Sympatico subscribers. We embarked on a national advertising campaign in a number of prominent newspapers. We thought that was a better and more targeted way of notifying customers than a bill insert.

604 Bill inserts are not particularly cheap. There is a lot of stuff in the bill, and it would mean moving other things out of there to accommodate that sort of request. We are not sure that it would be the best way to do it.

605 I guess we have a similar response about printing modem dialler information the white pages directories. Again, primarily we are talking about a problem with people securing personal computers and watching where and how they surf. I am not sure that turning to the front of the phone book would necessarily be where people would turn for that information.

606 There already is information in there about our terms of service, customer liability for calls and how to dispute those calls. I am not sure that we need to go any further than that. And again, there are some significant expenses tied to adding pages to the intro pages.

607 Presumably in any kind of communications campaign the emphasis would be on prevention. I thought I heard Mr. Lawford say that it would be useful to have information in the white pages so that when you got to a dispute, you could go to the white pages and know that there were such things as modem diallers and that's why you had these high bills.

608 I don't know that that is particularly useful. Presumably it is more useful to know before you get those calls what to watch out for and how to avoid it.

609 To tell you the truth, I am not quite sure what is being asked for here with respect to (e) in training customer service staff to deal with modem complaints. We have trained our staff to deal with modem complaints. It may be that we take a different line. We take the view that subscribers are liable for these calls, and a lot of customers take the view that they are not.

610 I don't know where we go from there or what additional training we provide to our customer service reps in that regard. If there are specific suggestions, there are certainly things that we will consider. We are always open to doing things better if there is a key message that is being left out or a key piece of information.

611 We would be receptive to hearing specifically what that would be.

612 The time forgiveness I don't think is really an issue that applies to Bell Canada at the moment. We don't have any services like that.

613 I would note, however, that this is precisely the regime that is in place right now for 900/976 for first time forgiveness of charges; that you are required to subscribe to blocking for 900/976. That is under a Commission-approved tariff.

614 I am also not sure, maybe I will ask Scott if you have anything to respond to in terms of refraining from sending collection notices. I am assuming this is just to refrain from sending collection notices where a dispute is still pending as opposed to just the customer thinks they don't owe it and we think they do.

615 Do you have anything to add there, Scott?

616 MR. COLLYER: I don't think so. I think the challenge that we have here is if we were to modify our billing system for the numbers of customers we are talking about where we are in dispute, the costs to make those modifications would greatly exceed the amount of collectible that we would be looking at trying to recover.

617 What we will do is when a customer actually does get to the Executive Care Team level, we will follow up with personalized correspondence that speaks to the customer's situation specifically and address the collection activity that we are trying to undertake.

618 MR. ELDER: Thanks, Scott.

619 Tracking complaints, certainly we do track some complaints now.

620 Ernesto, do we track these complaints now separately for modem diallers? Are they separate?

621 MR. IMBROGNO: Yes, they are.

622 MR. ELDER: We are doing some of this tracking now. I think our preference would be -- we have that information ready, and if it ever became an issue, we could certainly provide it.

623 I am a bit less enthusiastic about filing regular reports. As you may know, we file a lot of reports. I think frankly it is a lot less work for us and for the Commission if we can try and focus those as much as we can and maybe provide that information on a requested basis.

624 About pursuing changes to the interconnection regime and contracts, this is a very difficult thing for us. This is about asking in the international arena what is a fairly small regional telephone company to change the world. I am not sure that we are the people to do it. Frankly, I think it may be better to try and get this moving and have it looked to by an organization perhaps like the ITU.

625 Therefore, I am wondering whether this type of initiative or request or suggestion should in fact be made to Industry Canada, who is Canada's representative on the ITU and could raise that as an agenda item. I would think that would be a better way to go.

626 In terms of providing reasonable security tools free or at a cost to subscribers, we certainly provide a wide range of security tools now at some cost to our Internet subscribers. There are packages involving firewalls, virus protection, spyware protection. Those are all available right now to our own Internet service subscribers.

627 In terms of continuing or improving public education, I am not sure what the improving means. Certainly the Web resources and material that we have, we intend to continue with and augment. We intend to continue with the type of blocking that we are doing.

628 As I think Ted said earlier, a lot of these things will go on because of the business from the customers we have and not so much because of a Consumer Group application or a regulatory direction.

629 I guess that takes me to the end.

630 MR. MILLINGTON: Thanks very much, Mr. Elder.

631 I would like now to turn to the submission from the --

632 MR. WOODHEAD: Excuse me. Did you want me to go through?

633 MR. MILLINGTON: We will give you more time to prepare, I thought.

634 MR. WOODHEAD: Thank you.

635 MR. MILLINGTON: I would rather finish with each respondent and then each one of you can start that way.

636 The Consumers --

637 MR. SCHURR: Do you want to hear from SaskTel?

638 MR. MILLINGTON: No. I am going to finish with Bell first, and then I will give you each a turn to go through the same list in the same order.

639 If you turn to the submission from the Consumers Group, dated December 10, 2004, and specifically to the affidavit filed by Mrs. Ginn -- do you have it?

640 MR. ELDER: I have that; thanks.

641 MR. MILLINGTON: Item No. 3 says:

642 Paragraph No. 4 says:

643 If we flip to Exhibit "C" to that affidavit, it is a letter where Mrs. Ginn indicates that she has received a bill from Bell in the amount of $603.21, dated I guess the 4th of November, 2004. She indicates that she has paid $56.57 out of that $603, which appears to cover her local service for that month as well as a long distance call to Fergus, Ontario.

644 I would ask you to turn then to the next document in the package, Exhibit "E", which is the collection notice sent by Bell Canada to Mrs. Ginn and specifically to the second full paragraph on that collection notice, which starts with:

645 And then skipping a paragraph:

646 I am wondering whether you would agree that a reasonable interpretation of that notice by the average subscriber would result in that subscriber believing that their services could be, might be disconnected by Bell.

647 MR. ELDER: Well, I think in fact some of those services could be disconnected by Bell. I guess the question is which services in this case would those be.

648 I would say to you that the services that we might be in a position to discontinue would be her toll service in this case.

649 MR. MILLINGTON: I just point out that it says "some or all of your Bell Canada services". I would take away from that, just reading it as a regular consumer, that I could lose all of the services. It is contemplated that all of the services could be disconnected, including local service.

650 MR. ELDER: Mr. Millington, it says "some or". This is a standard notice that is sent out to subscribers with respect to all of the products and services that we offer, some of which are forborne and some of which are regulated. It is on one bill, so we try to prepare some generic language that would cover off all the situations.

651 That is why we were clear to put in the "some", "some or all", so as not to suggest that all of your services would be disconnected.

652 MR. MILLINGTON: I hear your point, but I would also draw your attention to something I think you are pretty familiar with, which is Article 22.2 of your Terms of Services, which says:

653 And, as well, to Decision 2004-31, which came out in May of last year, which says in its Conclusion in paragraph 59 -- and I will read it for you:

654 I would suggest to you, Mr. Elder, that the evidence here is that Mrs. Ginn had made payments for her tariffed services and that the collection notice that was sent to her following those payments would leave her, and I think most people, with the understanding that if she did not pay her non-tariff service bill, her long distance bill of some $600, that she was likely to lose her local service because what would be the point of quoting a $55 reconnection charge in the collection notice were it not for the reconnection of her local service which was one of her services that she takes from Bell Canada?

655 MR. ELDER: I'm sorry, I missed your question.

656 MR. MILLINGTON: It was a statement and you can agree with it or disagree with it.

657 I would suggest to you, Mr. Elder, that the plain reading of the collection notice would result in the understanding in the average consumer customer that they wuold be at risk of disconnection of their local service, which to me flies in the face of the Commission Decision 2004-31 and your own Terms of Service in Section 22.2.

658 MR. ELDER: Well, I guess --

659 THE CHAIRPERSON: Mr. Millington, will you allow me to put it in a question mark: Is this generic notice only applicable to the less than 2 per cent of subscribers who don't take local telephone from Bell?

660 MR. ELDER: Is this notice --

661 THE CHAIRPERSON: Well, you say it is generic to say "or all" and to talk about connection. So presumably it is a generic notice but that would only be applicable to those who don't take their local telephone from Bell, because they could lose all of their services. But it can't include local.

662 MR. ELDER: This is for all of our subscribers. This notice goes to all of our subscribers.

663 THE CHAIRPERSON: Mr. Millington, perhaps you can make it clearer.

664 MR. ELDER: Sorry.

665 THE CHAIRPERSON: Well, if it is a generic notice saying "all of your services", I suspect Mr. Millington has just read the decision that says the local cannot be disconnected for failure to pay toll.

666 MR. ELDER: Right.

667 THE CHAIRPERSON: You called it a generic notice to all of your subscribers, but the generic nature of it would only apply to those who don't take local from you since you can't disconnect local.

668 MR. ELDER: Well, it also applies in situations of partial payment and no payment at all. So there are cases where we have received no payment at all, and people will get exactly the notice.

669 THE CHAIRPERSON: That would be another situation.

670 MR. ELDER: In which case you would get disconnected, including your local.

671 THE CHAIRPERSON: I suspect, though, the generic nature of it was in relation to the decision that Mr. Millington read, and it gives an impression which is contrary to that decision.

672 MR. MILLINGTON: But in this case with these facts with this subscriber, the conclusion reasonably to be drawn from the notice would be that her local service was at risk for non-payment of her toll bill, when it says "all".

673 MR. ELDER: I would think that a reasonable person reading this notice would recognize the generic nature of the wording and that it was meant to apply to a variety of services.

674 If you look at the language in the first paragraph, we are not even sure if you have paid or not paid. It is set up with a lot of possibility, and we are very careful to say "we may have no other alternative". We are not saying we will. We are also very careful to say "to discontinue some or all of your Bell Canada services".

675 It is set up this way obviously for administrative simplicity, and we thought we were very careful to add language to indicate to subscribers that we were not threatening to disconnect their local service due to non-payment of a non-tariff account.

676 MR. MILLINGTON: We will agree to disagree.

677 MR. ELDER: Okay.

678 MR. MILLINGTON: I would like to next turn to Aliant and give Aliant the opportunity to respond to the submissions made by Mr. Lawford, if that is okay with you.

679 MR. CAMPBELL: Thank you, Mr. Millington.

680 Many of these things Aliant is doing already or doing perhaps in not precisely the way they are demanded here, but Aliant has addressed them.

681 Where we part company is the idea that these communications with customers with competitive services would be mandated, and presumably supervised, by the CRTC, which we think is quite unnecessary.

682 The bill inserts, Aliant didn't do bill inserts. It has tried to communicate with its customers in a variety of ways, and it didn't think this was a particularly effective one. We did have presentations on the regional supper TV show and there were stories in the press and a variety of other ways of getting the message out.

683 This is only one very small part of the problem of malware in computers. Viruses and worms and all the other things that do damage in your computers, people are becoming increasingly aware of them. This is just one small example of it.

684 Aliant has tried to communicate that to its customers, but we are not sure that it would be useful to mandate that it be done in any particular form.

685 The same thing applies to the white pages directories. I am not sure that is where people would go to look for advice on their computers, but I suppose it is one possible way. If Aliant thinks that is a useful way, they would be glad to do it.

686 Appropriately trained customer staff, again I am not sure how the Commission would mandate and supervise appropriate training of customer staff to deal with modem complaints.

687 The first thing we had to train the staff to do is to recognize that there were dialler complaints, because of course customers don't call in to say I have a dialler problem. They call in and say I have long distance calls that nobody in my house admits to making. So they have to recognize that they are dialler problems and tell people how to get this thing off their computer or refer them over to the Internet help desk to get the advice to how to clean your computer. That is part of the work done in the call centre.

688 Refrain from time forgiveness with other security services, well, Aliant doesn't do that. Frankly, it doesn't strike us as an unreasonable thing to do. The objective here is to help the customers change their behaviour to remove the risk to themselves. This doesn't seem like a bad thing to do at all.

689 Refrain from sending collection notices to those disputing dialler charges. This has not of course been an issue for us. We do fundamentally believe that these charges are due and that the normal collection process can and should apply.

690 Require respondents to track modem hijacking complaints, as of March 4th Aliant will have a separate code in their recording system where calls are identified as modem issues and they will be separately tracked.

691 Require respondents to pursue changes to interconnection regime. Well, if one thinks of King Kanut ordering the sea to go back, if British Telecom and AT&T and MCI have not been able to do anything about this, the idea that Aliant could do something about this is really far fetched. And the idea that we would be ordered to do it is equally far fetched.

692 Provide reasonable security tools free. Aliant does on its Web site link to some of the better known free security tools: Spybot search and Adware, some of the better free ones. Aliant is providing some of the commercial ones on a commercial basis. I think that is a reasonable thing to do.

693 To continue to improve their public education awareness campaigns and materials. Aliant is continuing to improve or trying to improve its programs. But again we do not believe this is something that can and should be mandated and supervised in a competitive market.

694 Michael, anything to add?

695 MR. CRAIG: Obviously I agree with everything you say there, Dan. I will try to add some specific examples to some of the items here.

696 In terms of item (e), I would offer the comment that at this point there is nothing on the record and there is nothing that I, from an operations perspective, am aware of to indicate that our customer service representatives are having difficulty dealing appropriately with these calls.

697 The calls are dealt with very directly in terms of the Aliant policy is first to identify that it is a modem dialler situation and it is done typically by referring to the telephone number indicated on the phone bill and the history we have in dealing with these. The step is very clear. It is a two-step process: we provide a 100 per cent credit the first time for the customer; and -- and customers aren't unwilling to do this -- refer them on to our help desk to help them understand how to clean their computer from the device that is causing the problem and keep it clean in the future.

698 So there is nothing whatsoever that would indicate to me that we are having difficulty appropriately dealing with customer complaints right now in our market.

699 Item (f) in terms of time forgiveness, I would just repeat the point that Dan made: that it seems perfectly reasonable to look to a customer to take steps to protect themselves. That is the point of this.

700 By way of analogy, our approach is to provide a first-time credit. So if a customer takes no steps to protect themselves and has these problems on their bill month after month after month, then our view would be to say that they are responsible for those charges and not protect them month after month when they fail to protect themselves.

701 What (f) refers to does seem quite reasonable to us.

702 On (g) I don't have any particular comment.

703 On (h), yes, we are implementing systems to track those adjustments that are being made, and that will be in place March 4th.

704 On (i), Dan and I obviously know each other too well. He thought King Knut; I thought Archimedes trying to lift the boat without the lever. If somebody could actually globally show us what the lever was to fix this problem for people, we would be more than happy to fix the problem. It is just the fact that it is an insolvable problem from the point of land on which we stand.

705 In terms of the last few items here, require respondents to provide reasonable security tools free or at cost, there are some things we are continuing to evaluate internally today.

706 One of the services we offer, our toll restriction service, we are currently working through some improvements to that that would provide customers with greater flexibility. Today you cannot have toll restriction on the zero side of calling without restricting all zero calling. We are working through a process where we are going to enable customers to restrict zero-plus, zero-minus, zero-one, zero-one-one separately as opposed to having to restrict all or nothing in terms of calling that starts with zero.

707 We are also doing the business case at this point to determine whether or not we will request the Commission's tariff approval to provide that service free of charge and free of service charge to customers.

708 Those are things we are thinking of as we continue to work through the process of dealing with this issue.

709 I guess all and all, I would look at the items that are being requested in terms of relief and again point out that, as far as we can tell, there is nothing on the record and there is nothing in our experience to indicate that any further action is required to address the needs of the customers we are serving in Aliant's territory.

710 Thank you.

711 THE CHAIRPERSON: It is exactly 1 o'clock, so we will take a ten-minute break. We will be back at 1:10.

--- Upon recessing at 1300 / Suspension à 1300

--- Upon resuming at 1310 / Reprise à 1310

712 THE CHAIRPERSON: Order, please.

713 Mr. Millington.

714 MR. MILLINGTON: Thank you very much, Madam Chairperson.

715 Mr. Campbell, I am going to refer everyone to the joint response filed by Aliant, Bell Canada and Telebec, filed 15 November 2004, paragraph 59. This was filed in French.

716 In paragraph 59 it deals with the rebate program that Aliant offered to its customers starting in May of 2004 and over the course of a series of months the program was modified.

717 What I would like you to do is to take us through the Aliant rebate program in terms of what was offered to which groups of customers in terms of percentage of rebate and to whom it was given and the various steps.

718 I think some of this is on the record, but to freshen it up for everybody this afternoon, could you take us through what Aliant offered over the period of the rebate program.

719 MR. CAMPBELL: Mr. Millington, I am going to ask Michael to deal with that.

720 MR. CRAIG: Sure, Mr. Millington.

721 We instituted our policy on the 15th of May. Direction was given to the front line customer service people at that time to implement the new policy on the 13th of May, and it took anywhere from two to four days to get implemented, given the fact we were in the midst of a work stoppage that varied by province.

722 At that time our policy was to deal with customers who complained about the situation go forward, as well as as far back as was practical; so sort of any current disputes that we had typically received in the kind of March-April timeframe leading up to May 15th.

723 So that is who was covered by the policy we put in place on the 15th of May.

724 At that time we were receiving calls from sort of three groups of customers: groups of customers who were our Internet customer but not our long distance customer; customers who were our long distance but not our Internet customer; and customers who were customers with us for both Internet and long distance.

725 So from day one when that new policy was put in place, we would not provide credit to a customer who was not our long distance customer. We didn't feel it was incumbent on us to address that for the customer. They had another recourse they could pursue. We provided a 100 per cent credit for first time charges for customers who were either our long distance or our long distance and Internet customer.

726 One time from a practical point of view may stretch over two billing periods, because obviously the day on which we had a discussion with the customer about the situation, educated them about it and tried to provide them either with protection or the means to protect themselves at the PC level, there may have been charges incurred but not yet billed.

727 So for a customer who called us saying they had $40 worth of charges on their bill, if on the next month's bill additional charges came through that were incurred prior to the date we had a conversation with that customer, then those were also credited at 100 per cent.

728 The conversation we had with our customers was I think very clear. We tried to make clear the point that the calls were made either by the customer, by the customer's equipment, by somebody in the customer's household. It is difficult for us to tell. But that clearly from our perspective, the customers were liable because the calls were made from their telephone.

729 At the same time, we wanted to do the right thing for the customer.

730 Sorry, this is in the course of the conversation we would have had. So the point we would have tried to make clear for the customer was that while we were not accepting liability for the calls, we did want to do the right thing by them and recognize the relationship we had with that customer.

731 So the third thing we would have been addressing in that call was actually referring the customer on to our Internet help desk, if they were our Internet customer. That would enable our technical help people to go through the customer's computer with them and either clean the system of what was likely the cause of the problem and/or point them towards other things they could obtain to help protect them in the future; so referring them off to free sites to get anti-spyware services -- we were not offering an anti-spyware service at that time -- or referring them to take a look at the suite of Internet security services that we did provide at that time, so anti-virus, parental controls and a personal firewall service.

732 We obviously in introducing this policy were uncomfortable to a certain extent with two aspects to it.

733 The tools that we are using, the blocking of whole countries and the crediting of 100 per cent, are clubs. They are very broad, unsophisticated ways to deal with this problem. We don't think that in the long term they are sustainable in terms of the way that they balance effects on the various customer groups. And we don't think they are advisable in terms of truly the most effective protection customers have is what they can do for themselves at their computer or through services they can obtain from their various service providers.

734 It was from the get-go a concern of ours that we find a way to gracefully manage our way out of both 100 per cent credit and full country code blocking.

735 The plan was that we would first narrow the scope of customers to whom we would extend the credits, to say okay, now we are only going to credit customers who are both our Internet and our long distance customers. Then ultimately we would implement another step and another step and another step to be determined, but something along the lines of then narrowing the credit perhaps from 100 per cent to 50 per cent to zero per cent and ultimately finding a way to extract ourselves from this situation.

736 I don't think we have put it on the record, but we also hoped that at some point we would be able, through a combination of customer education and everything else going on in the market, to move away from blocking of whole countries because we really do believe that while we are protecting some customers, we are either inconveniencing or harming others.

737 That is sort of the chronology of where it went.

738 Interestingly enough, the direction that we provided in August to implement that policy was never implemented by our front line people. Having made the move from marketing to customer services, I understand now the power of the customer service person to not do what you tell them to do.

739 We were in the midst of our five-month work stoppage at that time, and as a result the people on the front line either didn't take notice of or for whatever reason did not implement the change. So today if you are an Internet customer of somebody else, you are still getting that 100 per cent credit even though our policy is that you would not.

740 THE CHAIRPERSON: What you tell her or him to do?

741 MR. CRAIG: Pardon me?

742 THE CHAIRPERSON: You said what you tell her to do. Maybe you should add "or him".

743 MR. CRAIG: I'm sorry. I will have that added.

--- Laughter / Rires

744 MR. MILLINGTON: So it is your position then that your policy would have provided for 100 per cent compensation to those customers who were both LD and Internet customers but in fact that was never implemented and that all long distance customers, irrespective of who their ISP was, were getting 100 per cent forgiveness.

745 MR. CRAIG: Yes, and I have to put the caveat out there that I couldn't swear 100 per cent. There may have been the person on the front line who actually paid attention to the direction we provided in August and implemented it that way.

746 But in all my investigation after talking to different service representatives and reviewing it with the managers and reviewing the credits that were processed, it appears that that direction was never implemented and we certainly did process credits for people who were not our Internet subscribers.

747 So I can assert it coming from one direction that we continued to provide credits. I can't assert that there was not an individual customer who we denied that credit to.

748 MR. MILLINGTON: The reason I raise this is that if we look at the response to the interrogatories from the consumers group, dated 28 January 2005 -- and I believe it is the first interrogatory, on page 2, under the heading of "Aliant", the consumers group advance the proposition that:

749 I would like your comments on that.

750 MR. CAMPBELL: In a word, they are wrong. Section 27(2) doesn't apply at the retail level to either of these competitive services. It has been forborne in both cases.

751 It is not clear whether they are looking at the local carrier -- the local carrier isn't involved -- or they are looking at the ISP, which has been completely forborne, or the long distance carrier.

752 Even if you were satisfied that it was discriminatory, our strong view is that it is certainly not unreasonably discriminatory in the very competitive markets that we are dealing with here.

753 MR. MILLINGTON: How can you justify treating one group of long distance customers differently and say it is not unjust simply on the basis of the different services that they take?

754 MR. CAMPBELL: Because these are two intensely competitive markets. These credits are being given on the basis of customer relations, not on the basis of any obligation. This is a customer relations driven process, and that is a perfectly reasonable customer relations decision to take.

755 MR. MILLINGTON: Is it Aliant's policy to maintain or to actually ensure that this new policy be implemented, which is the differential treatment of forgiveness depending on whether you are both an Internet customer and a long distance customer?

756 MR. CRAIG: The steps that I outlined to you to first narrow the scope and then reduce the credit would continue to be our approach go forward, obviously subject to any determination that comes out of this process.

757 But yes, we believe fundamentally that the two tools we are using today are not the right tools for the long term and need to be backed away from in a fairly orderly way.

758 MR. MILLINGTON: Are you in the process of training your customer service reps to deal with these complaints or to process these complaints as per the policy then?

759 MR. CRAIG: As of today, we have made no further change. So the direction that I would assume, based on their failure to implement the previous direction, our representatives are following is that customers today are still getting 100 per cent first time credit without regard to whether they are our long distance or our long distance and Internet customer.

760 Subject to the CRTC ruling that we cannot pursue that sort of gradual withdrawal from where we currently are, then yes, in the future we will narrow the scope and reduce the credits to move away from the current regime because we don't think it is the right long-term regime.

761 MR. MILLINGTON: Did you want to add something?

762 MR. CAMPBELL: No.

763 MR. MILLINGTON: Mr. Woodhead, can you give us your comments on the consumer group's prayer for relief that we have dealt with a couple of times.

764 MR. WOODHEAD: You bet.

765 Starting with (c), as I noted in my opening remarks, TELUS has sent out two bill inserts on this issue and will continue to send them out as the circumstances present themselves to do so.

766 With respect to (d), in terms of the white pages, our evidence is that this particular problem is not as widespread as the applicants would have you believe. Our data show that the actions we have taken have dramatically reduced the customer impact of the dialler complaints that were prevalent in May of this year.

767 I say that only because when you look at the things in the front pages of the telephone book, it is very targeted to specific issues that are broadly based and qualitatively, I think, have more impact across the general body of subscribers as opposed to the subset of subscribers here.

768 At the end of the day, could we put it in the front pages or could we not? Sure, we could but one of the benefits of organizing the front of the telephone book in the way it is, is because customers can find information that is directly important to them and directly important to the general body of subscribers.

769 It is not that some subscribers may not like to see something about modem hijacking in the front of the book, but other subscribers may want to see information about something else. At a certain point you sort of clutter the field, and I am not sure that that is necessarily the way to do it.

770 I think the way that TELUS has done it is the correct way in that we sent bill inserts to our whole residential base. That pretty much captures the vast majority of subscribers of TELUS in British Columbia, Alberta and the TELUS Quebec territory.

771 In addition to all of those other things, in addition to that, we have done targeted messaging on the current newsletter to all our Internet customers. It is on the portal. There are targeted messages sent to the Internet customers. We feel that is the most effective way of doing it.

772 I guess those would be my comments on (d).

773 As to appropriately trained customer service staff, personally as a prayer for relief I find this sort of vague and ambiguous outside of the fact that I personally disagree with this.

774 And Anne can pipe in here at any time.

775 We do in fact train our customer service reps. Our customer service reps have been fully trained on the program that we have implemented to deal with this. We have to make sure that those people absolutely know what our program is. But they do. They have implemented it and they have implemented it -- and I don't want to keep parroting this thing -- but implemented it in a forborne competitive environment across two services that are largely forborne.

776 So I don't believe that that needs to be mandated.

777 I guess (f) specifically relates to us because we are the only ones that have implemented this intelligent application, if you will, or service with CallGate.

778 This conceptually -- because Mr. Lawford and I disagree as to the direct analog between 900 service, 976 service and modem hijacking. But conceptually our solution here is completely identical to 900 service.

779 When a customer calls disputing charges for 900 services, the rules state that the customer will be 100 per cent forgiven if they accept 900 call blocking, which just totally nukes, if you will, their ability to access 900 services.

780 To be fair, in the 900 case, that is a free service. But the reason it's a free service is because we can chargeback those disputed charges to the content service provider, the 900 service provider. We are kept whole. So it is not an issue.

781 As TELUS has said in the evidence, and as I said, I believe -- I think I alluded to it in my opening remarks -- that isn't the case here. I don't have a contractual relationship. I don't stand in privity to any of these content service providers with an ability to claw back or charge back to them these disputed charges.

782 Quite frankly -- and I understand Mr. Lawford's point -- $3.95 for a service that is quite different than some of these other solutions allows the complete flexibility for the customer to handle either on a targeted number basis what calls can be made from that terminal or you can block everything, or you can slice it and dice it and have some members of the family having more access than others, and that sort of thing.

783 I don't believe that there is any mischief here in what Mr. Lawford has characterized as time forgiveness. It is creating the right incentives for customers.

784 I understand that this is a difficult problem, but the customer has a responsibility here and in trying to deal with these problems it is imperative, whether it's us or whatever it is that you do, that you create the right incentive so that people handle this problem appropriately. That is what we have tried to do proactively with this CallGate solution, which incidentally was not introduced because of modem hijacking. We have had that in our service portfolio for quite a while.

785 Anne may want to speak to that.

786 MS BOWEN: We introduced CallGate as a flexible option for customers to control chargeable calls in their households for 900 service and direct dial calls. It was in response to customers wanting much more flexibility than we were able to provide with total blocking and unblocking.

787 So customers have the option to go into a telephone directed short menu. They can choose various options. The option that we always recommend for control of unwanted diallers is a total block of DDD calls while they are on their computer. Once they are off their computer, they can go back in, change the setting with a single entry, with their PIN number, and then they can make long distance calls if they would like to.

788 It is the only solution that we have found that we think works completely for these customers.

789 It was not introduced as a security tool. It is a call management tool. We believe that it works. But it also assists the customer in understanding and taking responsibility for what they do on the Internet and what gets downloaded onto their computer. It could get downloaded again but it will not function as long as the total block on DDD is in place.

790 So I think it is our attempt to provide a balance with customers between understanding that they are disputing these calls, which they may or may not have made, and taking responsibility for that.

791 MR. MILLINGTON: Before we leave CallGate -- sounds like some of the other "gates" we've had -- I want to look at the response to interrogatories again from the consumers group, the same document as before, January 28, 2005.

792 The last one relates to TELUS and CallGate. I will just read it for everybody.

793 Could you respond to that allegation of unjust discrimination?

794 MR. WOODHEAD: Well, I fundamentally disagree with it. As I laid out, the Commission imposed a regime for 900 services that does precisely the same thing. That particular 900 regime has been in place, if memory serves, for at least a decade and it is not unjustly discriminatory.

795 What it gives customers a choice to do is to take a service that will block all of these things to their computer or not. It is their choice. If they take it, they get 100 per cent forgiveness; if they don't, it is 50 per cent forgiveness on a one-time occurrence and everybody goes off and lives their life the way they did before.

796 I just fundamentally don't think that that is unjust discrimination, particularly because it exactly mirrors an existing Commission remedy.

797 MR. MILLINGTON: Thanks. We can carry on with the rest of the whole list then.

798 MR. WOODHEAD: Actually, on (g), to be honest with you, I don't know what our policy is. So I am going to ask Sam or Anne if they could speak to that, because I am not aware.

799 MR. DONAGHEY: With response to (g), when customers receive a collection notice, it is an automatic notice that is sent. It is not actually something that a human actually sends themselves. For the first notice, it is an automatic notice that our billing system sends out. There would be no way of knowing whether the customer was just -- there is no way of delineating the difference between disputed voice calls and actual modem hijack calls.

800 Currently, there is nothing in place which would address (g).

801 MR. WOODHEAD: The only thing I would add to that is that we operate pursuant to the disputed charges provisions of the applicable terms of service. Customers have the right to dispute charges. Those disputes are investigated and remedial action taken as required.

802 For (h), I won't spend too much time there because in my opening remarks we, as of October, have a specific tracking mechanism for monitoring these types of complaints. How that works is there is a field that when you phone into a call centre, on the screen pops up almost instantaneously with the person answering all your call detail and variety of fields where they can enter in particular codes for complaints.

803 So if you are disputing some particular issue, there is a code you enter and the system automatically tracks it.

804 I also won't try and cover too much ground. I would echo the same thing. TELUS is a regional ILEC. I believe it was Mr. Campbell who said that people may think we are big, but we are not Deutsche Telecom, we are not British Telecom, we are not Nipon Telecom. Quite frankly, a lot of these large international carriers just refuse to discuss this with carriers the size of TELUS.

805 Require respondents to provide reasonable security tools free or at cost to subscribers. In terms of security tools, again we are talking about the Internet and we are talking about Internet access. Carriers around this table all offer security tools or a suite of security tools to their customers at a variety of price levels. There are also companies like McAfee and Norton who offer firewall anti-virus, spam, spyware stuff. There is free spyware software available on the Internet, and there is a lot of it.

806 Again Mr. Campbell alluded to one, Adware, which is freely available and downloadable.

807 Should the companies be required to offer these commercially available or freely available suites for no cost? We have costs in developing those solutions and marketing them, and so on and so forth. So I would just say I don't believe that is a reasonable outcome.

808 Then the last one about public education, again TELUS, as I said in my opening remarks, has done hundreds of interviews. We have done regional interviews in all media: radio, television, print media. We have done national stories on this. We have it on our various Web sites. We have it in targeted bill messages to our Internet customers. We have done billing inserts on this.

809 I think we are there, and I don't think there is a lot more to be done. A lot of this activity is ongoing.

810 Anne may want to add to that.

811 MS BOWEN: I think that TELUS's strategy as a leading Internet service provider is to educate customers.

812 The education process goes on and I tracked it as far back as 2001 where we discussed on our Currents Newsletters to all of our Internet customers the various types of security issues that they may face while they are using the Internet.

813 That program and process has evolved. It is available our Web sites. You can look at modem hijacking in great detail on our Web site and what you can do to protect yourself from it; issues around anti-spyware, all of these issue; anti-viral protection. All of those issues are dealt with on a regular and recurring basis. That was done as recently as January of 2005 in the newsletter that we sent to our Internet customers.

814 The reason we did bill inserts to the entire base of our customers is we have no idea what Internet service provider some of them have, so we wanted to make sure that they were aware that if they had other services with us that they could be impacted. So we will continue to do bill inserts and targeted bill messages as well.

815 I do not see that policy changing. Having customers that are satisfied with their Internet experience overall and how it relates to other services is a major strategy in terms of how we implement and deploy Internet.

816 I guess the only other comment I would make about the costs of providing some of these services for free, I think for all of us who have a computer, it is a dynamic market. The Internet is dynamic and it creates a lot of opportunities for all kinds of things that some of us do not want on our computers and it is an expensive process to keep up to date with that. So it will continue to be something we do and want to be leading edge on, but there are costs associated with that.

817 MR. MILLINGTON: Thanks very much.

818 SaskTel?

819 MR. SCHURR: Thank you. I think you will find a great similarity between people who live very close to the ocean and those who don't live close to it at all.

820 On the first point in (c) to require ILECs to create and distribute bill inserts, we have done it. We have made two mailings -- one is a bill insert, as I say, one is a separate item -- to all of our residential customers. That, as Anne said, covers everybody, all Internet suppliers, informing them of the Internet -- of the modem hijacking, Internet diallers situation and advising them to consult computer experts.

821 I don't agree with point (d) -- and as I say, in continuing to do this I would think that we would take an assessment of the reasonableness of continuing to produce more and more of these bill inserts.

822 If you notice from our evidence in response to interrogatories, we have 2,508 inquiries -- I say the word "inquiry" because we didn't track complaints, and also those customers who we tracked and went back and advised them that they had excessive calls to certain countries did they understand it and offered them the one-time first-time rebate. So I don't know how many of those there were, but the people who were contacting them said "many".

823 So we take an assessment of whether or not there was a sufficient problem at hand that we would have to introduce new bill inserts to better educate and advise our customers.

824 From the evidence from June to December in the number of inquiries with respect to modem hijacking that we have received, 21 of them or some 20 of them, it wouldn't seem to me that it is advisable for the company to -- it would be reasonable for the company to expand the time and energy to further circulate bill inserts.

825 Require the respondents to print complete modem dialler information in the front of their telephone books.

826 I don't agree with that, because as I understood what "complete" was it would be complete and up to date. Telephone directories are published annually. That would mean that the City of Regina would have some set of information that would be 12 months in advance of what other areas would have with respect to the current state of modem diallers.

827 Appropriately trained service staff to deal with modem complaints.

828 Beginning in May of 2004 we instituted the training program and continue advising our CSRs on how to deal with complaints from customers, and those are to basically explain what it happening, to advise them what action to take, and to tell them that they will be contacted by someone in the next couple of days to explain further about modem hijacking and to offer them this 50 per cent one-time first-time credit.

829 I don't have much comment. We are doing (f) and I don't think we would intend to do what is described in point (f).

830 As Ted, I am not familiar with what we do with respect to the disputed dialler charges that would continue to be disputed. I don't know that any have. I have checked with our communications and our PR group, as well as information from CAC, and nobody has received any complaints from customers who have been offered this 50 per cent one-time first-time credit.

831 We are continuing to track the modem hijack complaints, but that is about all I have to say to that one.

832 If you think Bell and TELUS are small -- and we are so far from the ocean --

--- Laughter / Rires

833 MR. SCHURR:  -- it just wouldn't be -- we don't have any voice in international transport. In fact, all of our international transport is carried through Bell Canada.

834 To provide reasonable security tools free or at cost.

835 We aren't doing that now. We are considering offering other security tools. We are referring customers to those that are free on the Net and advising them that there are other forms that they can purchase.

836 It is a very competitive market and I would find the suggestion that the telephone companies would offer things that are available on a competitive marketplace for free to be anti-competitive.

837 And at cost. Well, I don't think the people who are offering the Adwares are offering it at cost. There would have to be a reasonable mark-up.

838 Again, my same position with respect to reasonableness would apply with the continue to improve their public education programs. Again, I think the results that we have experienced have indicated they have been very effective to date.

839 MR. MILLINGTON: Thank you. I guess we can finish up with MTS Allstream, which is also far from the sea.

840 MS CROWE: We are, though I guess our national business goes coast to coast.

--- Laughter / Rires

841 MS CROWE: I will start going. I'm sorry, I haven't let you ask the question yet, but I assume you want me to run --

842 MR. MILLINGTON: I asked right at the very beginning.

843 MS CROWE: Okay. We will run through the same requests that the Consumer Groups have made. I will start off, but I will ask Mr. Huras and Mr. Lamoureux to jump in where they can.

844 Starting with (c), bill inserts. We haven't done bill inserts but in July last year we did include a billing statement identifying that we were aware of the modem or Internet dialler situation and making customers aware of it.

845 Again, we will probably do that again if we feel there is a need for it. I don't know. It depends what the future holds. It is in our best interest to make customers aware of situations as they arise and I guess that is all we really have to say about that one.

846 (d) requiring respondents to print information in the white pages.

847 MR. HURAS: I will caveat this by saying Allstream obviously doesn't print white pages, MTS would however. But if I remember correctly, the white pages and the yellow pages are already pretty thick books, so if we were to start putting the specifics -- and the words "fraud" and "scam" have been used with this modem hijacking today.

848 There are many other ways to defraud using telephony services. There is PBX hacking, there is voicemail hacking, all kinds of things. To date we have never been required or asked to print the details on those at the front of the white pages. I'm not quite sure I see the difference between that and this one, and if we did it would be a very thick book and my daughter would be above the dining room table instead of just at the right level if she was sitting on it.

--- Laughter / Rires

849 MS CROWE: All right.

850 (e) appropriately trained customer service staff to deal with modem complaints.

851 I think we feel we have trained customer service staff to deal with modem complaints. Our front-line service representatives underwent specific training last summer on how to deal with Internet dialler issues and to make sure that they were up to date on what this was.

852 I believe on our Internet side new customers --

853 MR. LAMOUREUX: I have to add to that, Jennifer.

854 Right at this time all of our new MTS Internet residential customers are receiving -- not only are they receiving the set-up of their Internet services, they are also receiving notification, information regarding Spyware, viruses, dial-up modem hijackers and anything that can pertain to harmful items on their computers at this time.

855 We also have an instant support tool on line which is a virtual tool customers can use and we do recommend for the customers when they do sign up that they are -- well, we do recommend that they go to that location, ask any questions that they want of it, and it will respond accordingly and give them links to appropriate measures to help them in that action.

856 MS CROWE: So we are training our customer service staff, both when new Internet customers come onboard and in respect with existing long distance customers, to be familiar with the issue of Internet diallers and to be able to respond appropriately to any inquiries they receive.

857 Let's see. (f) require respondents to refrain from tying forgiveness.

858 We are not currently tying forgiveness to the take-up of any other services we offer.

859 (g) the collection notices. I believe Mr. Lamoureux has information on that.

860 MR. LAMOUREUX: The MTS Division of MTS Allstream currently does not send a collection notice at this time unless it goes beyond the normal timeframe of, I believe it is 90 days.

If a customer does complain about the bill, the bill is automatically stopped within a due process and then we check the legitimacy and investigate the process through whether or not it is a dialler that has activated and considered the bill to be increased. At that point, if it has been proved to us, then we do credit the customer of all the charges.

861 MS CROWE: (h) tracking modem hijacking complaints.

862 We are tracking them now. I don't think we have any problem with tracking those statistics.

863 (i) requiring respondents to pursue changes to the interconnection regime. I don't know that we have much to add that the other respondents haven't already said.

864 The interconnection regime involves many, many players. We only have direct contractual relationships with one player in that regime.

865 We don't have directly contractual relationships with the whole world's worth of telecom companies. There is a limited ability to put in the types of clauses that Consumer Groups have asked for.

866 At the same time, I would just reiterate that there is a lot of legitimate traffic that is made to these countries, even some of the countries that we have blocked that the blocking has caused us problems because there are customers of ours who want to make a lot of phone calls to those countries. We need to have these relationships in order to serve our customers.

867 (j) security tools that we could provide free or at cost to subscribers.

868 MR. HURAS: Security tools can be a very big word. You have already heard about some of the measures that have been taken with us and with the other carriers and that we blocked country codes.

869 We have blocked down to specific numbers where we know the numbers involved in this situation.

870 We have done operator-intercept where an operator will listen for modem tone and disconnect the call if they do hear modem, which led to some of the complaints we heard about, the blocking from some of our customers.

871 We also have divisions within Allstream that deal specifically with data and security systems. They can sell packages.

872 But it is important to remember, especially for the Allstream side of this MTS Allstream arrangement, that Allstream is mostly businesses. I had 20 cases of this all last year and those were all little mom-and-pop shops that still had dial-up modem.

873 When you are talking about things like this from my perspective, most of these guys are big pipelines, huge customers, government agencies, big companies, that this kind of a thing, it is already included in the services that we provide them.

874 We are not in the business of selling necessarily individual firewall, individual virus protection, individual Spybot, Adware-type situations. There are already companies out there that do that and we do refer to these customers that complain about this or inquire about this to companies such as that.

875 MS CROWE: And finally, the Consumer Groups ask that the Commission order us to continue and to improve public education in awareness campaigns and materials.

876 I would just reiterate what the other respondents have said, that we feel we are doing that and we continue to do that. It is in our best interest to continue to inform and education our customers and we don't see any need for such an order.

877 Thank you.

878 MR. MILLINGTON: Those are my questions, Madam Wylie.

879 THE CHAIRPERSON: Thank you, Mr. Millington.

880 Commissioner Cram...?

881 COMMISSIONER CRAM: Thank you, Madam Chair.

882 I wanted to start with, I think it is you, Mr. Campbell. In your submission of January 26th at page 6, at paragraph 22, you were talking about call ceilings for sort of total limits.

883 I guess I need to know a little more about this. Is this done manually or via computer?

884 MR. CAMPBELL: The point I was trying to make there was that the suggestion was that there would be a separate limit for dialler calls, but dialler calls are just calls where no fingers press the buttons. There is no way of identifying a dialler call as different from any other call. The only way you can identify these things is by, I guess, investigation. If you go on the computer and find a dialler that is programmed with that number, you could then say it is a dialler call.

885 COMMISSIONER CRAM: My question was: Is this done manually or do you do this tracking with a computer system of some sort?

886 MR. CRAIG: Aliant system really is in two parts. The billing system automatically produces a report that says: This telephone number has utilized this many minutes and re-rates those according to basic toll schedules. So it doesn't provide an accurate account of what the customer's end bill will be, it provides an accurate account of what their end bill would be if they have no long distance plan.

887 That information is provided for our credit services group and that is all automatic up until that point. When it gets to the credit services group, the credit services people then apply a manual management process to basically take it and say: What does the potential amount of charges look like? What is the credit history of this customer? Is this something to worry about when you put those two things together? Is there anything else unusual?

888 It looks at a variety of subjective steps that take place and it becomes manual at the point of the report arriving in the credit group.

889 THE CHAIRPERSON: So how do you establish the ceilings, what they are, the amount of the ceilings?

890 MR. CRAIG: It is sort of an ancient history question probably as to how that original ceiling was established. I couldn't honestly say whether it was established by a reference to sort of a median point in terms of customer bills or a median point of customers bill who had gotten into trouble in the past or whatever.

891 But the important part, where the rubber hits the road in this process, is the manual side of it. That is a subjective process of taking it and saying: What is the creditworthiness of the customer and is this amount a problem for that customer.

892 I'm sorry, that is an incomplete answer I know.

893 COMMISSIONER CRAM: So you initially have a number that sort of starts the alarms and then you look at should you be concerned because this customer always pays or whatever, and that is the subjective part at the end?

894 MR. CRAIG: Yes. I guess I would suggest that as many customers as have run into the modem dialler issue and as significant an issue that is for those customers, in any given month it would be much more common, based on my experience, for some other life event to cause a change in your toll calling.

895 For example, if you have a death in the family, if there is an earthquake in a part of the globe, if there is a whatever, that much more frequently changes the calling pattern of the customers. That much more frequently changes the calling patterns of our customers than this particular phenomenon.

896 The people who manage those credit reports obviously are able to apply a little bit of judgment and if they see a country or a number that is known or whatever, then there is that additional opportunity for us to recognize this.

897 But the managing of this process is done within an existing process and there really is no ability to distinguish, until it gets to the point where somebody is looking at a telephone number or a country report that a particular change in somebody's calling behaviour is related to an automatic modem dialler or some other life event or choice that they have made.

898 COMMISSIONER CRAM: How often is this process done in relation to a customer, any given customer in a month? Twice? Three times? Is it weekly?

899 MR. CRAIG: The high toll notifier report is reported daily I believe. That, I guess, is one of the issues that we are faced with, is that it is not a cumulative report. So you would, as a customer, have to have a significant amount of calling within one day, or a two-day or a three-day period. I apologize, I am not 100 per cent sure of its -- I am quite sure it is daily -- in order for you to really appear on the radar screen.

900 COMMISSIONER CRAM: It really is, it sounds -- you didn't start this whole process clearly because of this, of the modem hijacking. You did it -- I mean, it is a way to manage your accounts receivable.

901 MR. CRAIG: I guess what I would say in maybe sideways answering your question is: I don't think we would do anything in terms of building a brand new system to deal with this process. This problem just simply isn't prevalent enough in our market given the steps that we have taken.

902 It didn't warrant any sort of system or major expenditure that goes against the entire base of customers. This is something that we are today managing at an individual customer level and doing a decent job of that I think.

903 COMMISSIONER CRAM: Yes. But what I am saying is, doing this toll -- what should I call it -- review, you have it as a way of managing your accounts receivable and ensuring your bad debts aren't going to kill you.

904 MR. CRAIG: Yes. This one particular tool was originally built to manage credit for customers. The customer of course benefits from that, that the credit doesn't get damaged if we jointly manage that better together.

905 But the only things that we have put in place from a system point of view to try to deal with this current issue is the few special ad hoc reports we tried to run in the April/May timeframe to mention the problem -- we have discontinued those -- and the tracking stuff that has been put into our system to allow us to individually track adjustments made for this problem versus all the other kinds of adjustments that we make.

906 COMMISSIONER CRAM: Mr. Elder, is your system much the same as described?

907 MR. ELDER: It is much the same. I don't know, Mr. Pouliot if you want to offer any comments on that, but we similarly have reports that are kicked out on a daily basis, manually reviewed.

908 COMMISSIONER CRAM: Daily, yes.

909 MR. ELDER: There can be gaps over weekend periods, in the cases that we don't have sort of seven day a week staff reviewing them, but it is a very similar process.

910 COMMISSIONER CRAM: Mr. Schurr, do you have the same thing in God's country?

--- Laughter / Rires

911 MR. SCHURR: I don't know. I know that certain analyses are done of customer's records, billing, pre-billing, and when they -- I believe when they reach certain levels that are -- and I don't know what those levels are, more on the basis of what the creditworthiness of the entire customer account is rather than the specific calling that is being done.

912 We use that process to do the historic review of customers who had suspicious calls but didn't come and inquire about them. What I don't know, in fact, I don't know that that is going on forward. I know that accounts are referred to credit review based on prebilling amounts and those thresholds I believe would be based on the creditworthiness of the account itself.

913 COMMISSIONER CRAM: Ms Crowe, would that be the same with MTS, also in Gods's country?

914 MS CROWE: Of course.

--- Laughter / Rires

915 MS CROWE: We do have systems in place in Manitoba, in God's country. I will just let David Huras maybe respond a little more fully.

916 MR. HURAS: Yes. It is pretty much the same between both companies I believe. There are two levels where we can detect that we have fraud systems and we have billing systems. The billing systems will feed groups like the credit and collections department, the fraud systems will feed the fraud departments, and the two shall interact where necessary.

917 So the fraud system will work on specific number, on destinations, on durations and destinations, combinations thereof, the billing system tends to do more to do this thresholding, hitting a certain dollar limit, minute limit, whatever you would like to call it, and the groups will work on those reports as they come to them.

918 Fraud system is pretty much real time, five minutes or so after the call completes. The billing system there is daily, weekly, monthly reports that can spit out.

919 COMMISSIONER CRAM: Mr. Woodhead...?

920 MR. WOODHEAD: I will pass that over to Mr. Donaghey.

921 MR. DONAGHEY: Currently with the billing system there is nothing up until the customer is being treated that will look at their calling pattern for the previous month. There is nothing in real time or pre-billing.

922 But I believe that is something that they are considering sometime next year perhaps.

923 COMMISSIONER CRAM: So people always pay their bills out in the west or something?

924 MR. DONAGHEY: That would be nice, yes.

925 COMMISSIONER CRAM: Of course we know the west is wonderful, but --

--- Laughter / Rires

926 COMMISSIONER CRAM: So I don't understand.

927 MR. WOODHEAD: Currently there are no automated reports that look at a consumer's usage day over day to look for a spike pre-billing, but they do do random manual-type checks. The system just doesn't -- we can't do it automated at this point and we are implementing an automated solution, but they can where they detect these spikes, do manual sort of checks, but it is a huge effort to do that.

928 COMMISSIONER CRAM: That's very interesting, a telephone company getting automated. You are getting automated and when is that system going to be in place?

929 MR. DONAGHEY: That is coming on line with our new billing system which we are starting to implement the third quarter of this year.

930 COMMISSIONER CRAM: I had a question, but it was only for my own personal use because I have a fax modem that is connected to my hi-speed, but I will ask Ms Crowe later.

931 Mr. Woodhead, at paragraph 43 of your final submission January 26th, I didn't understand what you meant when you said:

--- Pause

932 MR. WOODHEAD: I'm sorry, you want me to respond.

--- Laughter / Rires

933 COMMISSIONER CRAM: I wanted you to tell me what you really said.

934 MR. WOODHEAD: Yes. What I was getting at there was, for example, not all of the carriers necessarily around this table block the same countries, because it hasn't been that -- our traffic maybe was going to some different countries than Bell traffic or people's -- you know, we are looking at different kinds of Web sites.

935 I don't know what the deal is, but it ends up that we actually have different problems to address than maybe some of the other ones.

936 COMMISSIONER CRAM: Okay. So the issue would be that we could give an order saying ILECs should do the blocking --

937 MR. WOODHEAD: To Estonia, Latvia, Hawaii --

938 COMMISSIONER CRAM: Yes, if we gave a different criteria, where if 30 complaints have shown up and they were all one specific place, when it gets to 30 then you have to block, you wouldn't have a problem with that?

939 MR. WOODHEAD: What actually I would have a problem going forward with country code blocking, as I said -- and I think some others around the table may have addressed this, but country code blocking, when you block out entire countries -- let's go back to first principles almost.

940 The object of telephone networks are to be interconnected and the object of telephone networks is not to truncate communication between two destinations.

941 So, as someone else said, when you block an entire country code you block out communication other than operator-assisted communication to that country. You might say "So what, because TELUS, for example, makes these customers where we have blocked entire countries go through the operator, but we charge them the regular rates".

942 COMMISSIONER CRAM: Right.

943 MR. WOODHEAD: Where this is a problem is for data calls, if you are trying to fax one of these countries and you are a legitimate business, it is a legitimate communication. When you block an entire country code all of the data is out of there, because an operator isn't going to get a call from a fax machine who is trying to handshake with he or her and send that fax onto that country. It is a problem.

944 I will get to the end of your question there. What we have done is institute -- I mean it has evolved over time and Sam, his group, has instituted number ranges within a country code so that you totally don't wipe out the whole country.

945 I will give you a real example. Guyana was one of the countries that at one point was blocked. The Consulate for Guyana in Vancouver found that not so amusing when they were trying to fax stuff back into Guyana and were unable to do so.

946 That is just one example, because you can imagine there is trade and legitimate trade and economic activity going on, business activity going on between these countries and other countries and us.

947 So to go to your legal point, if your question is: Do you have the authority and jurisdiction under section 24 to prospectively put conditions on what we do, I guess you do, but it is in the what you do that is the real question.

948 COMMISSIONER CRAM: Yes.

949 MR. DONAGHEY: The one thing I have found too in the blocking is the blocking that we have had to do -- I can only assume that due to the Web site content and the language that that is in is specific to the people or the culture in that area. So the stuff that I have blocked I am assuming is more likely to be associated to an English Web site. Whereas Bell who has had to block something, say, to a country that might be redirecting diallers due to the Web site contact being in French, it is more likely that their consumers are going to hit those Web sites than a TELUS customer. It is even different from countries that the States have blocked with Spanish-speaking people.

950 COMMISSIONER CRAM: Yes. That is a good point.

951 I just had one more question and it is to you, Mr. Elder. It is your response to interrogatory, the fourth interrogatory. I don't know if you necessarily need to even read it.

952 Is this like CallGate?

953 MR. COLLYER: Yes. We are looking at implementing an outbound call blocking service that would give customers basically the same functionality as what CallGate offers, password control, a beta block, zero plus, select one plus, overseas calling, 900 and 976, plus we are looking at adding the ability to block specific numbers.

954 An example would be, say you have a teenage daughter in the house and you don't want her calling her boyfriend any more, in theory you could program that number into your call block service.

955 MR. MILLINGTON: Good plan. How much are you going to charge for that one.

--- Laughter / Rires

956 COMMISSIONER CRAM: Thank you. Thank you, Madam Chair.

957 THE CHAIRPERSON: Thank you.

958 Commissioner Pennefather...?

959 COMMISSIONER PENNEFATHER: Thank you, Madam Chairman.

960 I just wanted to follow up on Commissioner Cram's questions on call blocking. It had been an area I was curious about and since she has me duly trained I was going to start in Saskatchewan, but in fact if I could ask a general comment from everyone.

961 We have made the statement I think in most of the submissions that call blocking -- I think Mr. Craig mentioned it -- is not necessarily going forward the ideal solution. I believe TELUS also made the point -- but you are doing it and there is a list of countries.

962 Mr. Schurr, your comments, I believe in the January 26th response at paragraph 15 have even gone to the point of identified exchanges within the country.

963 And later at paragraph 19 you say:

964 My question is, on what criteria currently are you blocking calls to countries? At what point do you decide we will do this? Because, as Ms Crowe said earlier, there are some down sides in terms of customer frustration. It is the point made on a going-forward basis that this is inappropriate.

965 But can you explain to me why you decide to undertake call blocking, and perhaps the other --

966 MR. SCHURR: That is security. It is our Security Department in conjunction with the other telephone companies and the marketing groups that make the decision on which countries we will be blocking in total.

967 COMMISSIONER PENNEFATHER: Based on how many complaints?

968 MR. SCHURR: Based on how many calls are being placed there, if there have been complaints, not necessarily with us. There is a good deal of sharing of information on the number of complaints that are occurring among the ILECs. I don't know about the sharing with the other companies.

969 COMMISSIONER PENNEFATHER: How would you differentiate between a hijacked modem dialler and a --

970 MR. SCHURR: A fax machine.

971 COMMISSIONER PENNEFATHER:  -- legitimate direct dialler?

972 MR. SCHURR: You can't.

973 COMMISSIONER PENNEFATHER: You can't. So when you make the decision to block the country, calls to the country or to designated codes, it is a an assumption that it is modem hijacking?

974 MR. WOODHEAD: If the complete country code is blocked it is reasonable to believe that there is sufficient traffic to various destinations in that country to warrant blocking the entire country code. That has to be weighed against how much traffic is there normally going to them.

975 Like Australia. A prime example we have is, you don't want to block Australia because there is too much "legitimate" traffic going there. It is an increased cost and inconvenience for our customers, as well as for the company because they revert to an OH, to an operator handled call. That takes time.

976 So in that particular case, particular NMXs or NMX groups or exchanges were picked because of complaints or because of activity that was detected by security groups in SaskTel and elsewhere.

977 COMMISSIONER PENNEFATHER: Did you want to comment on that, Mr. Woodhead? Because in one of your responses you do note the impossibility of differentiating between modem hijacking and legitimate use of direct diallers, so I'm curious to know if you have any comment on why -- at what point in time you make the decision to block a country code.

978 MR. WOODHEAD: I will start and then I will pass this off to Sam, because he is the guy who actually undertakes that and would be the best --

979 One of the ways that we know that there are legitimate diallers or, for example, people even who may be even dialling using the same application as some of the people that Mr. Lawford is referring to is when you block you get a call saying "Why can't I get through to", whatever that Web site is. "What are you guys doing? I like that stuff", whatever it happens to be.

980 Anyway, with that I will pass it along to Sam.

981 MR. DONAGHEY: Typically I will receive either a customer complaint or a notice from an industry group that a new number or a number range might be a potential mode of hijacking termination. At that point I will test, I will actually physically phone the number myself and listen for a fax tone.

982 Because quite often in these countries that are hosting these sites that we are blocking, quite often there is actual adult voice chat rooms in the same near number ranges, so you have to first call and make sure that it is an actual modem trying to handshake.

983 Then, at that point, once I hear that there is a modem tone, I will run a traffic report to see if the traffic trend matches that of known hijacking traffic, and if it appears to be affecting more than just the customer who is complaining we will block it the next day. If it's not, I will keep it on the radar and I will periodically review it to see if it has become escalating as a possible termination.

984 COMMISSIONER PENNEFATHER: I'm just curious, Mr. Elder, if you had any comment on the criteria you use to institute -- I think what you said is nine overseas destinations at the moment?

985 MR. ELDER: I am going to lateral that over to Mr. Collier to answer, if I may.

986 MR. COLLYER: Thank you. Actually I think it soon to be 10 with the introduction of Niue. It is a really good working example for us, because a lot of these places we haven't even heard of. I have to go to the CIA's Web site and a World Fact book and find out who is there.

987 The Island of Niue is an atoll in the South Pacific that has 2,400 people on it, and when you compare and contrast our call volumes going from Bell-served territories going to an island in the South Pacific with 2,400 people on it, it becomes pretty easy to make a decision.

988 That being said, we have actually had some push back, in particular from the Cook Islands. We had Telecom New Zealand who is a carrier that was terminating in the Cook Islands approach us last fall to talk about our entire blocking of that country because it was their strong belief that we were impairing tourism there, that people couldn't fax in hotel reservations and everything else.

989 We denied them out of caution, saying we would continue with the blocking. We understand your issue, but it is our belief that customers from Bell territory probably aren't going to take an 18-hour flight to the Cook Islands to vacation there, so maybe we could solve this with a telephone call and we have the operator intercept there that works in place.

990 Where we do have some issues, the idea of blocking ranges of specific numbers, because it is our belief that these guys are working with the in-country telephone company as partners in crime, for lack of a better way to describe them. What we are afraid of is, if we block a particular range of telephone numbers that they will just go to the telephone company and say, "Okay, it appears that NMX-0001 to 10,000 is blocked. Can I have another range of numbers?"

991 We are very afraid of that relationship with the company. So for countries like Austria, where we have taken the decision to partially block ranges, we are ever vigilant working with our partners in security to see if there is other traffic that is potentially a modem dialler that is terminating on other ranges of numbers that we haven't blocked. So it really does become this giant game of Whack a Mole for us in trying to get these guys.

992 COMMISSIONER PENNEFATHER: Okay. Yes, I was going to get to Austria, because if we wanted to take examples of countries which we don't assume are not -- you know, where they wouldn't make that many calls to, if we put that aside, which is an assumption I guess, and we say Austria or Australia, I assume that you are vigilant because it is a problem. It is a problem to the company.

993 MR. COLLYER: Well, absolutely. It is a customer service issue. We are trying to act in the best interests of our customers when we do take these decisions. We have had issues with Austria, but any mainstream destinations like Spain; New Zealand has popped up on the list, Australia has popped up on the list. We will, as I said, take a look at blocking ranges of numbers in conjunction with our partners in security and continue to monitor. Because, again, we believe that this business is highly mobile, whether it is moving from island to island in the South Pacific or working in-country and just changing ranges of numbers.

994 COMMISSIONER PENNEFATHER: Thank you. Thank you, Madam Chair.

995 THE CHAIRPERSON: Thank you.

996 We haven't forgotten about you, Mr. Lawford. I do have a question for you.

997 I think this morning I heard you say that you wanted the Commission to institute a regime for modem hijacking similar or the same -- I think you said "the same" as for 900 and 976 calls.

998 I suspect that in the list of the relief you are seeking from (a) to (m), that would fit under (b), and where you think there should be forgiveness of 100 per cent of auto dialler charges.

999 Aliant, in its 26 January submission at paragraph 12, and MTS, just as examples, in its submission of the same date at paragraph 5 discussed the regime that now exists between them and the providers of 900, 976 services.

1000 How do you expect that to work, to have a regime that is like the one in 900 and 976 calls? What would you want us to order to make it the same?

1001 MR. LAWFORD: To make it the same.

1002 THE CHAIRPERSON: Yes.

1003 MR. LAWFORD: The primary one is a first-time forgiveness.

1004 Why would that work? That would work because --

1005 THE CHAIRPERSON: So at paragraph (b) of 78 in your submission of January 26, do I take it, then, that it is what I have to add, a one-time forgiveness?

1006 MR. LAWFORD: With the caveat that we are asking for those people who have bills which straddle two billing reports that they, as I believe Aliant talked about, get forgiven up to the date that they are aware of this thing, when they make their call. So there might be a straddle bill.

1007 We were also concerned about people who just need a bit more help and have trouble getting rid of this problem in the future. I believe in one of our submissions we asked for a call ceiling as well on ones after the first-time forgiveness of $200.

1008 Now, that is not the main point. The main point is the first-time forgiveness to copy the 900 and 976 regime so that international calls can't be used to, if you will, bypass that regime, so they are using international calls instead of 976 calls to do the same thing, because effectively that is what is going on. So we would like a parallel system.

1009 From a user's point of view, from a customer's point of view it looks, "Darn the same, a big call, it didn't do it and why am I having to pay for it. Give me a break, I will fix it up." Yes, so it is first-time forgiveness.

1010 THE CHAIRPERSON: So it would be the same to the customer, but what about to the provider of service, which in this case is the ILEC, who doesn't have a relationship with the provider?

1011 MR. LAWFORD: I understand that point and am somewhat bemused by the talk about small companies in the room.

1012 The idea is to put a financial incentive on the main phone providers in Canada do push back and to require changes to interconnection regime, whether it has to be done over a number of years or whatever, and that in that period, yes, we are saying that the policy that we are asking for is that they bear the cost.

1013 To this point consumers have borne the cost. So we are saying from now on stop and we want the companies to bear the costs so that a charge-back mechanism or something similar, or a stop to the problem is put in instead.

1014 THE CHAIRPERSON: Any other, Mr. Millington, at the moment?

1015 We will now proceed with the Consumer Group's questions. You have 30 minutes, after which we will take another break because we are obviously going to go beyond 30 minutes, even by God's country time.

--- Laughter / Rires

1016 THE CHAIRPERSON: You may be well advised, Mr. Lawford, where you feel it appropriate, to direct your questions specifically at one company or the other. Otherwise, we may have multiple answers to each question, which you may not even yourself find necessary.

1017 Go ahead.

QUESTIONS / INTERROGATOIRE

1018 MR. LAWFORD: Thank you. I will begin with Bell Canada and I will direct my first questions to Mr. Collier.

1019 Can you tell us the first indication that you had in your experience with modem diallers? When did you first become aware of the problem at Bell?

1020 MR. COLLYER: I think the company has had evidence of modem diallers dated back to 2000 or 2001. It has sort of ebbed and flowed. We have dealt with it during that time period. Then in the spring of 2004 is where we saw a rather large spike in the volume of modem dialler traffic.

1021 MR. LAWFORD: But the trend has generally been up?

1022 MR. COLLYER: Pardon me?

1023 MR. LAWFORD: The trend has been up since 2000?

1024 MR. COLLYER: No actually, it has pretty much stayed very, very steady. I have actually been managing the international portfolio since 2000 and it, for the most part, has been steady, with seasonality in terms of one month being up over another and then during the spring of this year, that is when we saw volumes really take off.

1025 MR. LAWFORD: Can you tell me how you identify something as a suspect modem dialler number?

1026 MR. COLLYER: We actually rely in a lot of cases on customers actually pointing this out to us for new destinations.

1027 As well, our security team, with Mr. Pouliot and his group and the people actually sitting around the table here, we are all talking and sharing information back and forth with each other with respect to modem dialler destinations and other types of security concerns.

1028 MR. HEBERT: Just if I can supplement, as was mentioned earlier, for the company on the network XNT or as the traffic is generated we have no way of determining whether it is data, voice or, if it is data whether it is generated by a dialler, a fax or some other function. So it can be we can find some information after the fact only.

1029 MR. LAWFORD: So you will take the customer's word for it that that is a modem dialler number, or at least you are listening to them at that point.

1030 The destinations that you have seen, they change or do they stay constant?

1031 MR. COLLYER: I think for San Tome we have seen history on since about 2001. The Island of Niue is another destination that we have seen as a sort of regular destination. Some of the places that we have taken decisions to block, Tuvalu, Tokelau, Cook Islands, Guinea Bissau, we did, when we saw an inordinate increase in traffic going to those destinations as the San Tome and Nehru traffic was actually beginning to die down.

1032 MR. LAWFORD: You spoke about a reluctance to block number ranges. Wouldn't that be the most effective way of dealing with the problem?

1033 MR. COLLYER: For a mainstream overseas destination like an Australia or an Austria I would certainly agree, because we would be impairing a lot of legitimate natural traffic. For destinations that it is in the company's judgment that we don't have a lot of historical traffic going there, we have taken the decision to block the country, because again it is our belief that the service provider is more than likely working in partnership with the in-country PTT and if we were to block a particular range of numbers we would just see them reposition their trunking so that it was pointing to another range of numbers. And with the speed of change on the Internet, they would come out with, you know, a new modem dialler application that would just repoint the user to that range of numbers.

1034 MR. LAWFORD: So if it is difficult to track down, then would it not seem logical to try to deal more with your next hop, the person who sends the traffic to these places and try to put some sort of pressure upon them to identify suspect number ranges?

1035 I don't know who your first hop is.

1036 MR. COLLYER: We have about 15 -- actually 12 carriers that we are currently working with that we are repositioning traffic to on a day-by-day or a week-by-week basis. We have had long-standing and long-term contract agreements with them. They are the first stop in a series of stops that that call may make before it actually transits in-country.

1037 So we have the traffic that we aggregate on our gateway switches that we hand off to our toll providers based on time of day and destination and rating where that traffic is going to be handed off to, and then what they do with that traffic to get the traffic in-country, it may actually be handshaked off to a series of carriers before it ever gets to the country.

1038 So for us to try to get some kind of settlements or reparation mechanism established with them, we could go to the first layer of the onion, but there are multiple, multiple layers after that. The way our settlements work, we actually are paying settlements to our international carrier generally a month before we have even billed the customer and are starting to collect from the customer.

1039 MR. ELDER: An international carrier is quite insulated from these complaints. They are not dealing directly with any member of the public.

1040 MR. LAWFORD: What I guess I am getting at is, a question to either one of you: Is there a bunch of black hat and white hat international carriers out there, as in you get a majority of your modem dialler complaints when they get sent to this particular first carrier?

1041 MR. COLLYER: No, I wouldn't say that at all.

1042 MR. LAWFORD: Are you sure of that? Is there any way to figure that out?

1043 MR. COLLYER: It is my personal experience, but the way that international carriers go, particularly when you are talking about a tier 3 international destination where we don't necessarily have a bilateral arrangement with them where we are swapping minutes back and forth, honestly once we get beyond the first carrier we have no idea who that call has been handed off to.

1044 MR. LAWFORD: So for calls such as Mrs. Ginn's, when you look at a phone number there is printed on it for San Tome, you just look as far as the country code and it is the interconnector carrier's job to check up on the numbers and send it to the right place?

1045 MR. COLLYER: Yes. How our routing would work is it would -- 011 would point it towards our international gateway switch and then it would be based again on time of day consideration, traffic consideration, waiting consideration. It would be handed off to one of a series of carriers that would terminate that -- well, would then take the call off of our network and then it would be pointed at least in the direction of the country to which it is being terminated.

1046 What happens to the call after that is, we have delivered the call to them, we have paid our settlements in exchange for them to carry the call, and how they terminate the call is how that carrier chooses to terminate the call.

1047 MR. LAWFORD: Okay. Thank you.

1048 I am going to turn my question now to -- I guess it is Mr. Pouliot at the back -- about the billing policy of Bell or the forgiveness policy.

1049 Can you describe this best rate forgiveness program from when it was first instituted to now? Have there been any changes in what a customer has to do to get that discount?

1050 MR. HEBERT: Can we just confer which of our witnesses is actually in the best position to answer your question?

1051 MR. LAWFORD: Sure. Okay.

1052 MR. HEBERT: I think it is a question that belongs more to Mr. Collyer.

1053 MR. LAWFORD: Absolutely.

1054 MR. COLLYER: Sir, can I get you to repeat --

1055 MR. LAWFORD: The idea I am trying to ask you is when Bell's best rate plan for a modem dialler problem went into effect, what did the customer first have to do to get that best rate when it was first implemented and what do they have to do now?

1056 MR. COLLYER: I believe the best rate policy -- and this is personal recollection -- was instituted some time in 2000 and 2001 when we had -- I won't say anecdotal because I mean obviously these are serious customer concerns when it is impacting a customer, but when we first saw traffic, modem dialler traffic appearing and customers were denying all knowledge, we had to put a policy in place.

1057 That policy was to look at the rate that the customer had based on when the time of day that they placed the call and then reduce that to our best savings plan rate that we had in market at the time.

1058 So that was put into place either 2000 or 2001 as we realized that we had to develop a policy to address modem diallers.

1059 MR. LAWFORD: I guess what I was getting at was: What level of your customer service did the customer have to complete?

1060 MR. COLLYER: Initially in dealing with the complaints we would have a customer call into our 310-Bell Customer Service Centre, they would be referred to a senior rep within that centre and then the call was then escalated into the Executive Care Centre.

1061 So at each time we would have a conversation with the customer to try to probe and fact find as to how they could have made these calls, you know, do they have computer equipment connected to their telephone --

1062 MR. LAWFORD: But was the policy offered at the customer service level or the managerial level or only at the executive customer service level?

1063 MR. COLLYER: The way the escalation process worked was, it went from the CSR in 310 to a senior clerk within the 310 organization and then into the Executive Care Team. So where the final reduction was made was within the Executive Care Team.

1064 MR. LAWFORD: So I have had to make at least three calls?

1065 MR. COLLYER: No, it would be within the course of the same call. So what would happen is --

1066 MR. LAWFORD: But I have spoken to three people by that point?

1067 MR. HEBERT: You would have been passed off to three people, that is correct.

1068 MR. LAWFORD: Would you have any idea of what it would cost Bell to give 100 per cent dialler forgiveness based on the most recent months of numbers to all of its customers?

1069 Is that some number you can give me?

1070 MR. HEBERT: No. As we mentioned earlier, we don't know exactly how much traffic is created by dialler calls.

1071 MR. LAWFORD: Based on the complaints that you have had? I see in the answers to the interrogatories, there was a spike there of about 500 or so in July or August and it has gone down now to 60 or 80 or something along those lines.

1072 MR. HEBERT: What we have on the record is, we have the number of complaints that we felt were due to modem diallers, or at least we believed -- based on customer relationship we voluntarily offered the best rates to, thus providing our interrogatory response.

1073 And we have the average forgiveness, which is -- the average bill disputed was $70-odd, so if you multiply that by how many complaints there were, I guess that would be the volume that possibly is due to dialler calls in 2004.

1074 MR. LAWFORD: I am going to turn back, and maybe it is a question for you Pierre-Luc, or perhaps for David Elder.

1075 In the very first response of Bill, the one in French in November, you made a statement to the effect that -- here, I will just grab it -- that as long as -- that customers are responsible for their calls on the terms of service as long as there hasn't been fraud -- as long as a fraud hasn't been clearly proved I think is the actual wording.

1076 What would you think a customer had to do to prove fraud?

1077 MR. HEBERT: What do we mean by "fraud"?

1078 I guess the way we look at this policy -- and I will ask Monsieur Pouliot to complement my answer -- is something that has to do with our network not functioning as designed or our network's integrity being breached. It is not -- it doesn't address something that happens on the subscriber's premises within the subscriber's control.

1079 MR. LAWFORD: So that means "fraud" within your network from maybe your people?

1080 MR. HEBERT: Not necessarily. As an example, if somebody climbs up a pole and puts alligator pins and then pretends that they are you phoning, then it is not something the subscriber can control in his home.

1081 MR. LAWFORD: How different would someone climbing up a pole and sticking two connects on -- how would that be different from a completely surreptitious dialler?

1082 MR. HEBERT: We would not expect the subscriber to look outside and control the pole in the middle of the street, but our position is for the subscriber, in this case for a dialler call, the subscriber has control whether he is plugged into the Internet, what kind of security devices they have on their own home computer, how they have installed it and what size they are using.

1083 MR. LAWFORD: Did you ever have a fraud program -- and I guess I will address it again to you, Pierre-Luc -- for calling cards? What is the calling card fraud program?

1084 MR. HEBERT: I wouldn't say it is a program, but we have a policy on how to address disputed calls relating to calling cards.

1085 MR. POULIOT: I will go in French, okay?

1086 M. LAWFORD: Oui.

1087 M. POULIOT: Juste pour vous toucher, au niveau des cartes d'appel, on peut comparer ce produit-là à une carte de crédit parce qu'elle peut être utilisée à travers le monde.

1088 La carte d'appel comprend des numéros et puis un numéro -- un PIN -- personnalisé pour la carte d'appel.

1089 Donc, ces cartes-là peuvent être utilisées à travers le monde et on a un processus, je dirais, comparable à ceux des cartes de crédit pour contrôler l'utilisation des cartes d'appel à travers notre réseau ou à travers le monde, finalement, qui vont être utilisées, parce qu'une carte d'appel qui est utilisée à travers le monde doit venir chez nous pour valider la carte.

1090 Donc, on a des moyens en place pour être capable de voir s'il y a de la fraude qui peut se produire avec une carte d'appel.

1091 M. LAWFORD: C'est-à-dire, donc, que vous n'avez pas la même chose pour les cartes d'appel que pour les « dialers », qu'on a vraiment deux systèmes -- deux niveaux -- de rabais.

1092 M. POULIOT: Pour répondre à votre question, la première des choses, je dois faire une mention. C'est que, quand on parle de « modem dialer », dans tous les cas qu'on a visités -- moi, j'ai été témoin d'au-delà de 300 cas qu'on a regardés avec nos clients bien entendu, parce qu'il n'y a pas d'autre façon de vraiment trouver des sites à part d'avoir une discussion directe avec le client.

1093 Dans tous les cas qu'on a visités, les avis étaient là. Ils étaient là présents. Il y avait deux avis qu'on voyait couramment, soit l'avis de 18 ans pour visionner le contenu lorsqu'on parle de ce qui est relié avec la pornographie ou les sites d'adultes et puis vous aviez aussi les questions comme quoi que vous étiez pour accepter le « download » sur votre PC.

1094 Si vous regardez aussi, la Commission a gardé les notes qui ont été émises aussi par la Gendarmerie royale et puis la SQ. La même réponse a été donnée par eux.

1095 Sur tous les sites qu'ils ont visités, les notes étaient là pour faire attention, comme quoi vous deviez avoir 18 ans et puis qu'un « download » va être fait sur votre PC.

1096 MR. ELDER: If I could just add to that?

1097 MR. LAWFORD: Sure.

1098 MR. ELDER: Unfortunately I didn't get all of that, but I think there are two quite distinct products, the calling card and toll service that is dialled from a subscriber's residence. I think that has a lot to do with how we treat those. We need to recognize that they are different products.

1099 There is an inherent mobility in a calling card. That call can be dialled from anywhere when you have the right set of digits. It is a very different thing than calls that are dialled from a subscriber premises, whether that is dialled directly by the subscriber or by a device that the subscriber has attached to their line.

1100 MR. LAWFORD: Okay, thank you. I think I should move on. One very last question for Bell and then we will move.

1101 On your initial response in French which I was speaking about, in the attachments which has all of the supposed language, at about page 85 I guess -- it is marked page 85, top right corner -- it has the actual warning here.

1102 The wording is the following:

1103 This is in your attachment to the response, Appendix 1, the very long one. Where is that? Is that 15 November 2004. Is that right, or do I have them mixed up?

--- Pause

1104 MR. LAWFORD: It is marked "page 85" in the top right-hand corner on my copy, the 26th of November. January, sorry. That attachment, if you have it before you now.

1105 It says:

1106 Blah, blah, blah:

1107 I suppose they mean "a connection":

1108 Blah, blah, blah.

1109 On reading that kind of language, does it appear very clear that your modem will dial at night, that it will turn your speaker off, that it will dial when you are not there, that you are dialling more than one call in any way? Does that not suggest, that wording, that you are about to make one call for which you are changing your settings once?

1110 Wouldn't a reasonable person come to that conclusion on reading that disclaimer?

--- Pause

1111 MR. HEBERT: Assuming it will at least make one call. I don't know whether this dialler would do anything more than that.

1112 MR. LAWFORD: Okay. I would like to ask some TELUS questions before we run out of time.

1113 The first question would go, I guess, to Anne.

1114 Can you tell me if you tell people about your policy which is tied to CallGate before they have a dialler problem, or are they only informed of that policy once they get a dialler problem?

1115 MS BOWEN: We started informing customers about the potential for unwanted dialler downloads as early as April of 2003 and it started then. We also instructed our service representatives to discuss it with customers if they called about dialler issues.

1116 So you are saying you do advertise the connection --

1117 MS BOWEN: We have done it consistently.

1118 MR. LAWFORD:  -- the connection beforehand?

1119 MS BOWEN: We do.

1120 MR. LAWFORD: Do you think it is really something that a customer needs to be told, that they need to do some cleanup of their computer once they are faced with a $300 bill, because one of the policies Mr. Woodhead said behind this was to lead people along or instruct them in some way.

1121 Does it not seem more that they would already know that they have a problem at this point and that adding this is a little insult to injury, that you have to take this service to get rid of your charge? This is CallGate.

1122 MR. WOODHEAD: The customers, Internet customers have been advised of this since 2003 in numerous and monthly newsletters and targeting messages. So they are being advised and they obviously have not taken the steps to go into "My Programs" or the "Control Panel" and monitor what their ISP connection is.

1123 MR. LAWFORD: So CallGate is being used as a financial stick, if you will, to convince them, since they haven't listened to what they have been reading, or should have been reading?

1124 MS BOWEN: CallGate is a very small niche service even now and customers have taken it voluntarily to control downloads and to control charges on their bill.

1125 It is financially expensive for the customer, for the customer and the company, to deal with their complaints afterwards. It is a very expensive process. So we are encouraging them to take responsibility upfront.

1126 Which we do when we sell Internet to customers as well. We do discuss anti-viral protection, anti-spyware protection, and if they are a dial-up customer we do ask the serve reps to talk to them about taking CallGate then.

1127 So we have had a long-standing policy to deal with this.

1128 MR. LAWFORD: I guess I just have one question for Mr. Donaghey.

1129 You send your first hop traffic where?

1130 MR. DONAGHEY: It depends on the destination, it depends on the cost -- and I am not the one who makes these decisions -- it depends on the completion rate to that country at any given point in time.

1131 We have carrier arrangements with a number of carriers. We have carrier arrangements with Arbinet, which is a clearing house, so you have no idea who is actually completing your traffic. You just know that Arbinet is who is taking your traffic. It is a clearing house where all international carriers can connect to and they post international completion rates on there.

1132 MR. LAWFORD: Okay, thank you. I am going to turn to SaskTel, if you don't mind. I'm sorry to get close to the hour.

1133 How did you identify all of the victims, people who you thought had had a modem dialler problem?

1134 MR. SCHURR: As I said, we went back through historic toll records and examined the call detail of those toll records. When they were directed at -- at that time, country codes that were identified that were being blocked -- remember this happened in May and June we put our first set of blocks in on four countries May 12th.

1135 So we looked at the records, if they were destined to the suspicious countries, we then contacted the customer. If that customer hadn't already contacted us, we contacted the customer.

1136 MR. LAWFORD: You actually contacted them.

1137 Did you keep that list of customers who you gave 50 per cent to?

1138 MR. SCHURR: No.

1139 MR. LAWFORD: No? Would it be possible to recreate it if you were asked to give them the other 50 per cent back, with some effort?

1140 MR. SCHURR: Can I take that under advisement?

--- Laughter / Rires

1141 THE CHAIRPERSON: We all will.

1142 MR. LAWFORD: Thank you.

1143 I should ask Aliant, and I guess it would be for Mr. Craig, your intention, I understand it, is to wind down the dialler's forgiveness program, is that correct,over the next while?

1144 MR. CRAIG: I think you have to separate the tool from what we are trying to accomplish. Right now we are thinking that is an appropriate way for us to proceed.

1145 The thing we are trying to accomplish is to, in the first place, reduce the number of instances of this and, in the second place, make sure that the customers with whom we have relationships continue to have a positive relationship with Aliant.

1146 So our intention, yes, is to wind that down. If the first step we take we find that is harming either the reduction in the instances that occur or the customer relationships that we have, there is nothing to say we are going to continue to pursue that policy.

1147 Our focus is not on the tactic, our focus is on the outcome.

1148 MR. LAWFORD: Thank you. Can I just ask, I guess you Jennifer, about MTS's 100 per cent policy at the moment for first-time forgiveness. Is that something that you are going to wind down?

1149 MS CROWE: We don't have any current plans to wind down. If we find it is no longer needed in the future or we determine it is no longer successful in helping the situation at all, I don't know what we may decide in the future.

1150 MR. LAWFORD: Would there be an acceptable level of dialler calls that you would live with?

1151 MS CROWE: I don't think we have thought of it in those terms yet.

1152 MR. LAWFORD: Okay. How am I for time? Done?

1153 THE CHAIRPERSON: Two more minutes.

1154 MR. LAWFORD: Two more minutes, all right. If it is not unallowed I may revisit one or two people.

--- Pause

1155 MR. LAWFORD: Can I perhaps ask Mr. Collyer if you know, how many complaints the Customer Service 301-Bell kind of level you get recently a day, since you said you started to track them?

1156 MR. COLLYER: Recently, as in how recent?

1157 MR. LAWFORD: As in give me, if you have, January/February 2005 or December/January 2004/2005.

1158 MR. COLLYER: I think what we have is what we have put into our --

1159 MR. HEBERT: We have information going to January 27, 2005.

--- Pause

1160 MR. COLLYER: My very last question: Have you dealt at all with any police forces, international investigations, anything to do with modem diallers, or has that not happened yet?

1161 MR. HEBERT: No, we have been in contact with the RCMP and the Sûreté de Québec and, as we have put in our submission, the conclusions they have reached was that the best solution was really to make the customer aware and vigilant in what they do on the Internet. They have -- both entities have concluded this was not fraud.

1162 THE CHAIRPERSON: Mr. Lawford, would you like one minute to look at the rest of your questions and see which ones you can't live without asking?

1163 MR. LAWFORD: If you will allow me, absolutely. Thank you, Madam Chairperson.

--- Pause

1164 MR. LAWFORD: This if for Mr. Collyer, or perhaps for both Bell counsel.

1165 If you are willing to accept the word of the user that they have a modem dialler call for the purpose of tweaking your system, why can't you accept the word of the person that they have an illegal modem dialler on their system, that they have had fraud? I can't see the difference.

1166 MR. ELDER: I think the difference lies very much with the consequences.

1167 So on one hand we are accepting the word of people that they have had modem dialler calls to put in place a call blocking screen to default operator-assisted dialling, the effect of which may be to inconvenience some subscribers, but they will still be able to make voice calls.

1168 On the other hand you are talking about us just absorbing significant amounts of money that we do have to pay to international carriers.

1169 I think that is where the distinction lies, Mr. Lawford.

1170 MR. LAWFORD: Very, very last question. Just swing it around the whole table: Has anyone approached the International Telecommunications Union in any fashion, or Industry Canada, in order to go to the International Telecommunications Union?

1171 MR. ELDER: I have approached people at the staff level at Industry Canada and spoke to them about the problem. They indicated some interest and we have sort of made tentative arrangements to follow up on a briefing.

1172 I think we have also been contacted by Industry Canada who was monitoring this hearing and was interested in the submissions made and the outcome.

1173 THE CHAIRPERSON: Thank you, Mr. Lawford.

1174 We will now take a 10-minute break and come back with the ILEC questions.

--- Upon recessing at 3:02 p.m. / Suspension à 15 h 02

--- Upon resuming at 3:17 p.m. / Reprise à 15 h 17

1175 THE CHAIRPERSON: Order, please.

1176 We will now proceed with the questioning by the respondent of the applicant. We will start with Bell Canada, Aliant and SaskTel, and again there is 30 minutes for the three of you. I expect you have some type of gentleman's agreement as between yourselves. If you haven't, well, you will have to figure it out.

1177 Go ahead, please.

1178 MR. ELDER: I believe we have such an agreement, and I don't believe any of us has any questions to ask.

1179 THE CHAIRPERSON: Thank you. I won't have to adjudicate this then.

1180 Mr. Woodhead, for TELUS?

1181 MR. WOODHEAD: No questions.

1182 THE CHAIRPERSON: Ms Crowe?

1183 MS CROWE: We have no questions.

1184 THE CHAIRPERSON: Mr. Millington?

1185 MR. MILLINGTON: I have a mouthful of peanuts.

1186 THE CHAIRPERSON: That is not a question.

--- Laughter / Rires

1187 MR. MILLINGTON: I have been told that I haven't asked questions, I have just made statements -- and I have just made another one -- but I have no further questions.

1188 THE CHAIRPERSON: Commissioner Cram?

1189 COMMISSIONER CRAM: No, no further questions.

1190 THE CHAIRPERSON: Neither do I.

1191 We shall now proceed with the last portion, which is the closing remarks.

1192 Are you ready, Mr. Lawford?

1193 MR. LAWFORD: Almost.

1194 THE CHAIRPERSON: Let me know when you are and then the clock starts ticking.

1195 MR. LAWFORD: I understand.

1196 THE CHAIRPERSON: Fifteen minutes.

--- Pause

1197 MR. LAWFORD: Okay.

1198 THE CHAIRPERSON: Go ahead.

CLOSING REMARKS / REMARQUES DE FERMETURE

1199 MR. LAWFORD: Thank you.

1200 As I said in the opening, we are here today to tell the Commission and to ask for your assistance with a fraud that customers have called companies about and attempted to get resolved.

1201 We, as the Consumer Groups, would like to make the proposition that fraud in any form should not be tolerated through the network system, through whatever system the phone companies have to deliver phone calls, whatever the complications of finding it and rooting it out, because the Commission has already said that victims should not have to pay for that type of fraud, even under the terms of service, even as they are written, and that companies should make all efforts that they can when they set up a system, when they change a system, to minimize fraud risk.

1202 I don't see it here and we are asking the Commission, at least on a going-forward basis. to counter that problem by giving consumers, customers, a 100 per cent forgiveness of all dialler's charges, which the Commission can impose as a condition under section 24 of the Act, in order to spur the companies to make systemic changes. Those might include going to the International Telecommunications Union or working with Industry Canada or similar efforts to take that first step.

1203 Everyone says they are too small here to make any effect on the way the world works, but that thousand mile journey starts with a single step. I don't think that if the Commission asks all of the companies to go ahead and to put pressure back up the line on this one that something won't move.

1204 So we would like to have the first step, which also benefits customers, be forgiveness of charges to give a financial incentive to have this happen.

1205 Secondly, competition is not going to solve this. We have to get around this forbearance problem, because customers can't go anywhere where they are safe. This will follow them to whatever carrier they choose. Modem diallers don't care whether I have TELUS, Bell, SaskTel, MTS, Aliant, whatever. It just dials the country code, gets out of the country and completes the call and you are billed.

1206 How can I, as a customer, pick a company that will save me from that; only if that company is working towards changing the fraud, drumming it out of the system.

1207 Finally, we only, I believe, have just scratched the surface of this problem. It is one which will come up in other contexts. It is a problem which will morph and change. The companies have said that the destinations change, that they block a range and then the range changes and somebody goes after a different range. It is too complicated for people at their own end to guard against that. As much as we can try to insulate their machines, the fraudsters will be working to go around those insulations and to set up the fraud again in a different place.

1208 So we need this to be attacked at the root level rather than at the symptom level.

1209 I think the company suggesting that you just don't keep your machine clean or that you have consented to all of these things is saying that there is a symptomatic problem which we can solve by asking people to do better, customers.

1210 We are saying there is a systemic problem, it is a disease, it needs to be dealt with at a disease level, which is getting companies to work with their interconnectors, analyze where this traffic goes and try to get some kind of agreement to have a charge-back mechanism to them put financial pressure back up the line to the next people in line.

1211 The amounts of money are not small. The number of people getting hurt is growing and will stay -- at least stay constant and will certainly grow if scammers figure out a way around direct dial blocking.

1212 We don't want the consumers to continue to have to live with this problem. It doesn't seem reasonable based on the simple fact that the liability rules which we have had for people in the past were designed in a time when this wasn't possible. The only thing that you could have in the past that came up as a charge that you did not recognize was somebody else in your house making a call that you didn't authorize. That is why the way the tariff language that is now in the Terms of Service is written that way. It says:

1213 That is a good policy now in relation to fraud, because it puts a person between the fraud and the fraudster, and that cuts into automated fraud which is done through computers, diallers, switches connecting things remotely and the whole large infernal system which I have spoken about.

1214 Consumers don't have -- can't file for an exogenous adjustment to cover this. They need your protection. They have paid the bill thus far and we are asking for, at least in the future, this financial burden land on the companies to get them to look at this systemically.

1215 That is our conclusion.

1216 THE CHAIRPERSON: Thank you, Mr. Lawford.

1217 We will move now to the companies, Bell, SaskTel and Aliant. You have 15 minutes between the three of you.

CLOSING REMARKS / REMARQUES DE FERMETURE

1218 MR. HEBERT: We will leave time for Aliant and SaskTel, but I guess for Bell David and I will share the closing statements.

1219 I guess the one thing I want to emphasize is, I noted in the Consumer Group's Statement of Argument in the Orders Requested, they say that even if customers are liable, nevertheless the companies or the IXEs should have a forgiveness policy so they should absorb some of the costs.

1220 I am curious as to why that incentive is there. We believe that it is the subscriber really who is in control of his computer, of the software that is on, of the sites they visit and of who goes on the computer for instance in the household, who should be responsible, and we think the best incentive is for that period to then develop vigilance with respect to the use of the devices.

1221 In terms of incentives, Mr. Lawford mentioned CallGate, which is a device that is in place to prevent the customer from having repeat problems, a bad stick. Nevertheless, putting the burden on the companies, even when the customers could be liable would be a good stick, because it would force us to supposedly be able to negotiate international changes.

1222 Something I note too is that Mr. Lawford, in his opening remarks, stated:

1223 I'm not sure where Mr. Lawford finds evidence on the record for this. Mr. Pouliot referred you to hundreds of cases that he has investigated where consent was required. Mr. Woodhead spoke of complaints from disappointed users of services who consented to the service and are now disappointed they can't access it any more.

1224 As well, the Commission asked the Consumer Groups in interrogatory to:

1225 The Consumer Groups did not answer that question. They failed to distinguish between the different types of complaints.

1226 In the requests, the release that they seek in terms of credits, refunds and forgiveness, they also don't distinguish between whether consent was given or not, certainly not the way the order is requested and the way it is written.

1227 I thin it would be a wrong incentive to allow those credits or those refunds when customers are liable, especially when on the record there certainly are a lot of customers who engage into -- who subscribe to the service or seek those services willingly.

1228 MR. ELDER: I just have a few remarks to add to that. First, I would just like to comment briefly on some of the evidence that was filed by the consumer groups and what that really establishes, what we can take from that.

1229 The affidavit of Ms Gynn establishes only that a single subscriber incurred toll charges to San Tome that she denied making and that she was dissatisfied with Bell's handling of her complaint. It suggested that these charges were the result of a modem dial, but there is no evidence as to which program was involved, when and how it was downloaded, whether the program required user consent to be installed or to operate and whether any other persons had access to Ms Gynn's premises and computer equipment prior to the disputed calls being made.

1230 The affidavit of Mr. Lewis suggests the general proposition that modem dialler programs may be downloaded or activated without a user's consent, but does not provide any clear and specific examples of one of the company's toll subscribers having such a dialler installed or activated on their line.

1231 In fact, if anything, Mr. Lewis' affidavit serves to demonstrate that there are a wide variety of dangerous Internet users against which those users should be vigilant.

1232 It is submitted that the applicant's evidentiary record, such that it is, falls short of demonstrating that any of the relief requested is warranted, even where the Commission has the jurisdiction to grant that relief.

1233 Early on, I think in his opening remarks, Mr. Lawford also indicated he thought that the companies were in the best place to fix that problem. We would vigorously disagree with that.

1234 We think in fact the best place to fix this problem is at the originating end of the call and at the PC and that if there is a solution, we think the best solution is to have protections in place and well informed consumers, perhaps followed by an international forum that could fundamentally alter the way that toll traffic, international toll traffic is carried.

1235 Let's be clear. The Consumer Groups aren't really talking here about eliminating fraud. They are talking about passing responsibility onto bystanders that happen to have deep pockets. They argue that this is an incentive to change the international regime.

1236 In fact, if we thought we could change the international regime, and readily change it, I think we would. I think the reality is, we don't think we can change the international regime. So this incentive really amounts to a penalty to the company.

1237 Just to be clear, as IXEs we can't file for an exogenous variable either because our rates aren't regulated in that way.

1238 So those would conclude my remarks.

1239 MR. CAMPBELL: Thank you, Madam Chair.

1240 May I remind everyone to be conscious of the gap between the assertions and the evidence that have been placed before you.

1241 In the opening statement my friend asserted that "most diallers are installed surreptitiously". There is no evidence of this. No evidence. Not only is there no evidence that most of them are installed surreptitiously, there is no evidence that any of them are installed surreptitiously. Not one.

1242 They take the position that when the diallers have been accepted this is based on a form of notice which is fraudulently deceptive. There is no evidence of that. Not one.

1243 We have the evidence of the Bell security people that in all the cases that they have inspected there was always an acceptance, and in many of the cases when the family inquired they found that somebody really was seeking the special content that was offered by these sites.

1244 You recall that many of these calls made through diallers are desired by the people who made them, who are looking for this content and looking for it repeatedly. It is wrong to impose a blanket solution and saying that all these calls are bad. It is very difficult to distinguish between the ones that are intended and the ones that are not.

1245 The assertion, though, that I found most troubling was the assertion that the ILECs are deeply involved in the conduct that is described as fraudulent. Any assertion of fraud on the part of the parties around this table is one that should be made very explicitly and proved very strictly.

1246 Here it is made in a casual way and it is not proved at all. Not one whit of evidence. That assertion, Madam Chair, should be withdrawn.

1247 The issue is really one of changing customer behaviour, to encourage customers to practice safe surfing. This is just a very small part of the problem of malicious software on the Internet. People are aware of it, people are encouraged broadly to have appropriate security on their own computers, and the companies around this table have done their part in trying to help educate consumers and to make some of these products available to them.

1248 My friends referred to the Cantel case. That case was very different from what we are talking about here. In that case it was Bell's system that was hacked. In this case, the network has worked exactly as it is intended to work. It is the customer's system which is affected by outsiders or by carelessness of the customer. The case is very different and shouldn't be relied on blind.

1249 But ultimately we come back to what my friend refers to as the forbearance problem which is getting in the way of his requests.

1250 Madam Chair, there is no forbearance problem. These are very competitive services. Forbearance is mandated in those circumstances by section 34 and it would be wrong to reconsider that. It would be very wrong to reconsider that on the basis of the skimpy record on the face of this proceeding.

1251 Madam Chair, we just ask that these complaints be dismissed. Thank you.

1252 THE CHAIRPERSON: Thank you, Mr. Campbell.

1253 Mr. Schurr...?

1254 MR. SCHURR: Thank you Madam Chair.

1255 Just to briefly echo some of the things that have been said, SaskTel's opinion is that this issue, problem, is not readily solved by blocking direct dial calls.

1256 As the number of country codes increases, or the number of selected areas increase, it increases the inconvenience to our customers, costs through to the companies.

1257 It is SaskTel's fervent view that the solution to this is that customer's attention to his use of the Internet, safety devices on his PC, and to continue to update those because, as Rene will tell you, they are evolving.

1258 I guess that would be it. Thank you.

1259 THE CHAIRPERSON: Thank you.

1260 Mr. Woodhead...?

CLOSING REMARKS / REMARQUES DE FERMETURE

1261 MR. WOODHEAD: I will try to be brief.

1262 There has been an ebb and flow to this application. It has been filed, withdrawn, refiled, withdrawn, amended, and at the end of the day it cuts a wide swath, making allegations about 27(1), 27(2), and all of that has collapsed into today, where the Consumer Groups are before you in some vague and ambiguous way asking you to impose some condition under section 24.

1263 I, like Mr. Campbell, have grave concerns about TELUS being accused of blackmail, of TELUS being accused of somehow being implicated in fraud. This is not the Tribunal to make those determinations, irrespective of the fact, as Mr. Campbell said, there is not one shred of evidence on the record of this proceeding that would support that.

1264 In fact, there is not one shred of evidence on the record of this proceeding that there is fraud involved here at all by any party in attendance here or anywhere else who isn't in attendance.

1265 Some of the things that we have heard today, and I think there was some confusion, partly because in one of the broad allegations that are made by the Consumer Groups that, well, you know, there is a regime for 900 services, so this is somehow exactly the same.

1266 But there are fundamental differences between the 900, 976 regime and this modem dialling that comes from foreign destinations. The difference is that we are in privity of contract as carriers with these 900, 976 providers, and we have the ability to charge back any of these disputed calls.

1267 Back 10 years ago when the Commission dealt with 900 and 976 services, that was a fundamental part of that whole mechanism.

1268 None of that exists here. So the notion that somehow it would be possible to impose some sort of hardcap of $200 on the service is entirely different than under 900 and 976 services. This hardcap would affect every line in this line, whether it be a single line residential line, whether it be a business line, and it would be nearly impossible to implement. In fact, for TELUS today it could not be implement, but it would involve every single direct-dial international call leaving this country.

1269 The Consumer Groups talk a lot about responsibility, but not a lot about customer responsibility. What TELUS -- and I was saying to you earlier and some of these things were echoed by Pierre-Luc -- is honestly when looking at these sorts of issues, whether you are a company or you are the Commission, there is this delicate balancing of incentives.

1270 Getting the incentives right is vitally important. That is what -- it may sound self-serving, but that is what TELUS was intending to do with its program.

1271 We happen to have -- and there was much made of it -- a service called CallGate that I really call -- that has nothing to do with modem hijacking, that has been in existence for five or six years. It is a toll control tool that has built-in flexibilities so that you can do those things that I was telling you you can do.

1272 TELUS provides a waiver a charges, it provides all of these other things, it provides a -- if you don't want any of that, it still waives, despite the fact that in our view we are not responsible for this, it does not emanate from our network, we still provide a 50 per cent rebate.

1273 Those rebates are intended, on a one-time fully rebated basis or on a one-time semi-rebated basis, an incentive for consumers to take control of their terminal equipment, to take control of their Internet experience.

1274 It is awareness, and it is awareness of media just like any other media. The Internet isn't some thing out there that has a big fence around it and should be dealt with in any other way than any other media.

1275 So from TELUS' perspective it has gone and implemented a program that provides those incentives. And for all of the relief that Mr. Millington took me through, for all of the relief requested, but for one or two dealing with white pages, TELUS has already implemented these programs.

1276 So at the end of the day, given that this whole application is predicated on some notion of fraud, which has not -- I repeat, not been proved -- I would submit that, you know, it is as much perhaps about toll avoidance as it is about modem hijacking.

1277 On that basis, I would submit that this application should be denied.

1278 THE CHAIRPERSON: Thank you, Mr. Woodhead.

1279 Ms Crowe...?

CLOSING REMARKS / REMARQUES DE FERMETURE

1280 MS CROWE: Thank you, Madam Chair, Commissioners, Commission staff.

1281 Just first in the interests of furthering customer education I wanted to respond to Commissioner Cram's question about her fax modem and her hi-speed Internet connection.

1282 I take it the question was, even though you don't have dial-up Internet whether an auto dialler could be connected to your -- could be downloaded to your computer and could automatically dial numbers through your fax modem?

1283 COMMISSIONER CRAM: Not that I go onto porn sites at all, just for clarity.

--- Laughter / Rires

1284 MR. MILLINGTON: It is the on-line gambling sites.

--- Laughter / Rires

1285 THE CHAIRPERSON: Horoscope.

1286 MS CROWE: And horoscope. And I'm sure that you also have up-to-date programs to catch any surreptitious downloads as well.

1287 But theoretically, yes, if there is a phone line attached then you could use an auto dialler to access those horoscope sites, or it could be vulnerable to surreptitious auto dial outs. You need to have programs installed to check for these things.

1288 Having said that, I will now go into the rest of our closing.

1289 I guess we would just like to simply reiterate that it is customer vigilance that ultimately is the key to combatting modem hijacking.

1290 MTS Allstream cannot control the Internet content or what is downloaded from sites that are visited.

1291 We also repeat what other respondents have said here, that we are not participating in any fraud. It is not MTS -- MTS Allstream has no control over the auto dialler and no relationship with whatever entity is putting these on the Internet.

1292 At the same time, MTS Allstream has taken what steps it can to inform and educate customers about Internet diallers, and it is in our own best interest to do so and to help as far as we are able to assist customers in addressing these kinds of problems.

1293 So I would just conclude that we are doing what we can and we will continue to take measures that assist customers. We see no need and very little utility in the Commission making any of the orders requested by the Consumer Groups however.

1294 Those are our comments. Thank you.

1295 THE CHAIRPERSON: Thank you, Ms Crowe.

1296 That completes our agenda. Before adjourning I would like to thank my colleagues for their support, the staff for their invaluable help, the court stenographer for keeping our words on the page, the interpreters for keeping them in both languages and, last but not least, the cooperation of the parties.

1297 It is probably the largest expedite we have had to date. You are so well behaved we may have them again.

--- Laughter / Rires

--- Whereupon the meeting adjourned at 3:47 p.m. /

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