ARCHIVED -  Telecom Order CRTC 97-1668

Telecom Order

Ottawa, 14 November 1997

Telecom Order CRTC 97-1668

On 3 September 1997, The New Brunswick Telephone Company, Limited (NBTel) filed an application under Tariff Notice (TN) 665, for approval of Special Services Tariff Item 2024, NBTel Dynamic Long Distance Market Trial. The company filed an amendment to its application on 23 September 1997 under TN 665A.

File No.: TN 665

1. On 7 October 1997, AT&T Canada Long Distance Services Company (AT&T Canada LDS) requested that the Commission deny NBTel TNs 665/A.

2. AT&T Canada LDS submitted that NBTel is conferring a preference on itself by using screen-based telephone display as its preferred communications channel and that NBTel should be willing to allow alternate providers of long distance services (APLDS) to participate in the market trial by permitting them to advertise a similar service to their customers and other potential users via screen-based telephone display.

3. AT&T Canada LDS submitted that the proposal constitutes bundling of competitive toll services with optional local services and that the Commission, pursuant to Telecom Order CRTC 97-1345 (Order 97-1345), determined that such bundling would provide an undue advantage to the Stentor owner companies.

4. AT&T Canada LDS submitted that the proposed service provides NBTel with too much discretion in levying charges. It would allow NBTel to specifically target individual residential consumers for special pricing because certain customers possess the capability of receiving screen-based text on their telephone. AT&T Canada alleged that it is unclear whether all participants in the proposed market trial would be offered the same pricing at all times.

5. AT&T Canada LDS noted that the Commission has ruled in the past that regulated entities subject to its jurisdiction should not be able to have absolute discretion in the way they offer services.

6. AT&T Canada LDS stated that NBTel's competitive segment will realize benefits from being able to use a utility segment service to communicate the Dynamic Long Distance Service to its customers, and it is unclear whether NBTel's utility segment is being fully compensated by its competitive segment for the use of the screen-based telephone display service.

7. On 15 October 1997, NBTel submitted reply comments stating that it had hired a display-based marketing company to create and administer the use of the communications channel, and to manage the advertising program, and that this company had purchased the necessary telecommunications services from NBTel at tariff prices. NBTel stated that the underlying service is Suppressed Ringing Service, which is a General Tariff Item, and that it does not believe there are any split rate base or contribution issues related to the trial. NBTel stated that it understands and believes that such an activity can be replicated, and assumes that AT&T Canada LDS either has or could acquire the technical expertise needed to use the underlying tariffed service in a manner similar or identical to NBTel.

8. NBTel submitted that AT&T Canada LDS' approach to a joint market trial is not acceptable given that the information that NBTel expects to realize from the trial is competitively sensitive.

9. NBTel submitted that AT&T Canada LDS' allegations of bundling of toll services with optional local service are flawed. NBTel submitted that having a prerequisite or eligibility requirement for a service offering is not bundling and noted that the advertising of a service is not an optional local service. NBTel further submitted that under AT&T Canada LDS' theory, NBTel could not offer long distance service to any customer who obtains terminal equipment from NBTel and that this was not the intent, direction or a requirement of the Commission's determinations in Order 97-1345.

10. NBTel stated that it intends to offer all participants the same terms and conditions for each offering period, and submitted that the past Commission rulings cited by AT&T Canada LDS are not relevant in this case. NBTel argued that Section 25 (1) of the Telecommunications Act (the Act) which specifies that "no Canadian carrier shall provide a telecommunications service except in accordance with a tariff filed with and approved by the Commission that specifies the rate or the maximum or minimum rate, or both, to be charged for the service" provides the appropriate legislative authority to the Commission to approve TNs 665/A.

11. With respect to AT&T Canada LDS' assertion that the proposed market trial involves the bundling of optional local and toll services and is in contravention of the determinations in Order 97-1345, the Commission notes NBTel's submission that the advertising of the promotional rates on screen-based terminal equipment is conducted by a marketing company active in display-based terminal equipment advertising. Further, the Commission notes that Suppressed Ringing Service, the underlying network functionality that enables such marketing, is available through the company's General Tariff on a stand-alone basis. The Commission therefore considers that the proposed market trial does not contravene the principles set out in Order 97-1345.

12. The Commission notes that NBTel's proposal would allow for the charging of toll rates between $0.05 and $0.15 per minute, such that one rate is applicable during any offering period. Given that NBTel will offer all participants in the market trial the same prices, terms and conditions for each offering period, the Commission is satisfied that the market trial is not unduly discriminatory.

13. The Commission considers that since the underlying service is available, there is no basis for a requirement that AT&T Canada LDS participate in the trial.

14. The Commission considers that the proposed offering is a market trial of limited scope and duration and meets the guidelines for market trials outlined in Telecom Order CRTC 95-453.

15. In light of the foregoing, the Commission orders that:

The proposed tariff revisions are approved, for a period of six months.

Laura M. Talbot-Allan
Secretary General

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