TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
MTS COMMUNICATIONS INC. RATE INCREASE /
MODIFICATION TARIFAIRE MTS COMMUNICATIONS INC.
375 York Avenue
375, avenue York
January 10, 2001
le 10 janvier 2001
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
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.
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
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Application for new broadcasting licences for FM in Calgary/
Demande d'une licence de radiodiffusion visant l'exploitation
d'une entreprise de programmation de radio FM à Calgary
BEFORE / DEVANT:
ALSO PRESENT / AUSSI PRÉSENTS:
Hearing Manager / Gérant de l'audience
Secretary / Secrétaire
Legal Counsel / Conseiller juridique
Commission Staff / Employé de la Commission
375 York Avenue
375, avenue York
January 10, 2001
le 10 janvier 2001
TABLE OF CONTENTS / TABLE DES MATIÈRES
SUBMISSIONS BY / SOUMISSIONS PAR
MTS Communications Inc.
PRESENTATIONS BY / PRÉSENTATIONS PAR
Matheson Island Lodge
Social Planning Council
Council of Women of Winnigeg
Consumers Association of Canada
People in Equal Participation Inc.
Manitoba Federation of Union Retirees
Manitoba Society of Seniors
RULING / DÉCISION
PRESENTATIONS BY / PRÉSENTATIONS PAR
Manitoba Keewatinowi Okimakanak
Winnipeg Community Centre of the Deaf
Disabled Women's Networking Winnipeg Group
Canadian Mental Health Association of Manitoba
Member of Parliament for Winnipeg North Centre
Community Action on Poverty
RULING / DÉCISION
Telecommunication Employees Association of Manitoba
Canadian Federation of Students
Manitoba Obliate Justice & Peace Committee
Canadian Cancer Society, Manitoba Division
Manitoba League of Persons with Disabilities
Robert Kayes/Carole Zoerb
REPLY BT / RÉPLIQUE PAR
MTS Communications Inc.
Winnipeg, Manitoba / Winnipeg (Manitoba)
--- Upon commencing on Wednesday, January 10, 2001
at 0900 / L'audience débute le mercredi
10 janvier 2001 à 0900
1 THE CHAIRPERSON: Good morning.
2 This is a public hearing that has been called to examine the amount MTS Communications Inc. will need from its customers to recover income tax expenses for the years 2000 and 2001.
3 My name is David Colville and I am the Vice-Chairman, Telecommunications for the CRTC and I will be Chairman for this proceeding.
4 With me today are Commissioner Barbara Cram, who is the Regional Commissioner for Manitoba and Saskatchewan, Commissioner Andrée Noël, Jean-Marc Demers and David McKendry.
5 At the table to my left are Gino Grondin, who is Commission counsel, and Gary Krushen, the hearing secretary and Director of our Winnipeg Regional Office here.
6 Seated also at the table are Peter Wilson, our Project Team Leader; and John Macri, Director of Regulatory Finance.
7 At this point I would just like to review a few general matters.
8 First, on the subject of sitting hours for today, we intend to take a one-and-a-half hour lunch break around 12:30 and we will reconvene at 2:00 p.m.
9 We will take a 15-minute break in the morning and mid-afternoon.
10 We will begin tomorrow morning at 9:00 a.m.
11 This hearing is going to be conducted in two phases.
12 The first phase, which will be held today, will provide parties with an opportunity to make an oral submission in a more informal setting than tomorrow's one where there is cross-examination of experts on behalf of the company.
13 The Commission will hear all submissions the parties may wish to make concerning MTS' application and, at the end of today, MTS will be given an opportunity to respond to the submissions which they have heard through the day today.
14 The second phase of the hearing, the more formal process, will consist of cross-examination of expert witnesses by registered interested parties, essentially one party, CAC/MSOS, Manitoba Society of Seniors.
15 Prior to hearing evidence during the second phase, we will address any preliminary matters.
16 The Commission has received over 400 written comments from subscribers on this issue, as well as petitions containing over 2,000 signatures. I should note that these submissions will form part of the record of this proceeding and will be considered by the Commission when making its decision.
17 At this point I will deal with the process that we will follow today.
18 Those who have indicated their wish to make an oral submission at this hearing by registering in advance with one of the Commission's offices will be called by Mr. Krushen, the hearing secretary.
19 If there are other people present today who wish to make an oral submission but have not already registered, please speak to Mr. Krushen and we will try to fit you in, time permitting, through the day.
20 Any participant who is not in attendance when their name is called by the secretary, we will give a call later just to make sure we haven't missed them while they had perhaps stepped out of the room for a minute.
21 At around 10:30 this morning, the Commission will be calling, by telephone, participants who cannot attend but who have expressed their intention to make a representation to the hearing by teleconference.
22 Now, in the interest of ensuring that as many submissions -- and I should say we are quite pleased at the number of people who have indicated their wish to make a representation, but we would ask you to respect the time limit of 10 minutes so that we can provide everybody with an opportunity to be heard.
23 In order to make a presentation, when the secretary calls your name please come forward to the table in front of the room and, when speaking, please make sure that your microphone is on. I will perhaps have to remind a few of that from time to time.
24 Just a note, if anybody wishes to purchase a copy of the transcript, either in hard copy or machine-readable form, to make your wishes known to our court reporter.
25 So that concludes our initial comments.
26 As I say, on behalf of my colleagues, we are pleased to be here in Winnipeg. As a maritimer, it is nice to see some maritime-type weather here in Winnipeg at this time of year and not the cold that I guess you had a short while back.
27 So I will now call on Commission counsel to address some preliminary matters.
28 Mr. Grondin.
29 MR. GRONDIN: Thank you. Thank you, Mr. Chairman.
30 I would like to mention to parties that the public examination room is at the back. It will be open to parties and to members of the public. It is Room 5 East, right over there.
31 The public examination room contains a comprehensive record of this proceeding, as well as copies of the briefing documents prepared by the Commission staff.
32 This document was prepared based on the record of the proceeding up to mid-December. As indicated in that document, it is not intended to contain a complete discussion or summary of the record of the proceeding or the issues that are being examined in the proceeding. So any party that considers that there is a material omission or inaccuracy may file a submission with the Commission setting out their position. Any such submission must be served on all parties participating in this proceeding and the document will be entered as an exhibit at that time.
33 THE CHAIRPERSON: Thank you, counsel.
34 With that, Mr. Secretary, would you call the first parties?
35 MR. KRUSHEN: Thank you, Mr. Chairman.
36 At this time I would like to call Mr. Bill Fraser of MTS.
37 THE CHAIRPERSON: Good morning, Mr. Fraser.
SUBMISSIONS / SOUMISSIONS
38 MR. FRASER: Mr. Chairman, Commissioners, I would like to welcome you to Winnipeg. My name is Bill Fraser and I am President and CEO of MTS Communications Inc.
39 I am pleased to have the opportunity to address you. I would like to begin by setting the stage a little bit for the opinions we will be hearing today.
40 The recovery of MTS' income tax is an issue we have been working on for a number of years. we believe that we have come up with a solution that represents a balanced approach for MTS, our customers and our stakeholders.
41 First of all, we recognize that no one wants rate increases. Unfortunately, they are an unavoidable reality.
42 But there is a broader picture that must be taken into consideration, one that involves not just MTS and our financial requirements, but the telecommunications industry as a whole and some of the trends that have taken place.
43 It is important that we look at the issue from all perspectives.
44 As the Commission is well aware, MTS has gone through a great number of changes over the years. We have gone from being provincially regulated to being federally regulated; we have gone from having a monopoly in all of our markets to total competition; we have gone through a privatization process; and now we are going through a transition to total taxation.
45 All of these things have created tremendous challenges for the industry and for MTS in particular.
46 I realize as well that the Commission has had to manage this transition. No one knows better than you the delicate balancing act that you are asked to perform. You have to ensure that Canadians receive high quality, reliable and affordable service, while at the same time making sure that telecommunications companies remain economically viable in an era of fierce competition.
47 We have seen dramatic changes in the industry, much more dramatic and much quicker than anyone had anticipated. The old Stentor alliance has been dissolved and companies have been forced to go it on their own or forge alliances to maintain their viability.
48 As a result, we have seen the creation of national carriers that didn't exist a few years ago. We have witnessed Telus, AT&T, Microcell and other competitors move into Manitoba and go after our customers. This has forced us to compete aggressively to not only retain our existing customers but to acquire new ones.
49 It must also be remembered that of the nine major telephone companies that existed when the Stentor alliance dissolved, only three, one of which is MTS, are still independently Canadian controlled. We have not only survived these forces, we have been successful: successful because we believed we could compete and that Manitobans were better served by having us become a strong regional player in a global industry.
50 In addition to these challenges, MTS faced added pressures that other telcos don't. For instance, Manitoba is a large province with more than 60 per cent of its population concentrated in Winnipeg.
51 The costs in terms of serving that geography and the sparseness of the rural population create challenges that others may have, but not to the same degree.
--- Power interruption / Interruption du pouvoir
52 MR. FRASER: For example, if this rate increase is granted, Winnipeg may have higher rates than Toronto or Montreal, but their telephone company doesn't serve Northern Ontario or Northern Quebec. MTS serves all of the communities in Manitoba's northern and remote regions.
53 We also hear from individuals who say they just want basic telephone service, who don't care about new services, and who don't want to see any increase in their rates. But that is simply not possible. We can't live in a state of suspended animation, with a "status quo" network and rates. The industry has evolved, and we have to change along with it. Our customers demand it.
54 MTS has introduced many modernizations to our network that have improved service and presented customers with more options. From province-wide digital switching and individual line service, to the most comprehensive community-calling program in Canada, to toll-free Internet access through your telephone line.
55 And just like any basic utility service, modernizations are borne by the entire customer base. We can't isolate one group of customers. We must keep pace with our rapidly evolving industry. It is all part of building a progressive province with advanced infrastructures that allow the people of Manitoba to compete on a global basis.
56 I firmly believe that the proposal we have put before you is a fair and reasonable compromise.
57 First of all, there is the reality of income tax. All companies have to generate revenues to pay their expenses. When a company takes on a new expense -- whether it's an increase in the cost of supplies, transportation, natural gas or taxes -- that expense, or a portion of it, is passed on to customers. It's how business operates.
58 Both the CRTC and Industry Canada have recognized that income tax is a recoverable expense from business operations.
59 In a recent letter on the subject of MTS' application, Industry Canada pointed out that MTS' rates had to be adjusted to reflect the company's income tax expense.
60 As of last July income tax is a new corporate expense for MTS, so we have to raise our residential and business rates to cover this additional cost.
61 As you know, MTS does not keep any of this money but passes it on directly to government.
62 MTS is not expecting customers to cover the full amount of its income tax expense. If we actually passed on the entire amount, the increase would be $13.60 per month. Obviously this would not be reasonable, so we have struck a balance between raising residential and business rates and absorbing part of the cost ourselves by cutting expenses, streamlining operations and increasing efficiencies.
63 We have reduced the size of our company by more than 40 per cent, from over 5,600 employees in 1990 to fewer than 3,300. We have amalgamated our wireline and wireless companies. We have also realized significant savings and operational efficiencies through our alliance with Bell. We have made every effort to increase our overall revenue base.
64 While our customers have benefited from our efforts to keep local rates down, they have also profited significantly from competition in the long distance market. MTS has lowered its long distance prices by more than 70 per cent since competition was introduced. This has meant significant savings for the majority of our customers.
65 Because higher long distance rates were used to subsidize the high cost of local service, there is now less revenue to put towards subsidizing local service. Local rates across the country have been increasing as a result.
66 Overall, MTS' residential phone rates in Manitoba remain well below cost. Currently the average rate for residential local service in Manitoba is $22 per month, whereas the average cost of providing that service is $34 before tax. The increases we have applied for will help bring these prices closer in line with costs.
67 Let me give you the national perspective on local rates.
68 Residential phone rates in Canada currently range from approximately $20 to $34.50 per month. The rates MTS has applied for are well within the range of what the CRTC has approved in other provinces.
69 The proposed new rates of $21.45 to $25.02 would put us in the middle of that range.
70 Further, every one of Canada's publicly traded telecommunications companies has the ability to build a tax expense into its approved rates. Local rates at Telus, Alliance and Bell Canada cover 70 to 75 per cent of the cost associated with delivery of local service, including corporate income tax. MTS' local rates, on the other hand, currently cover 65 per cent of the cost of local service when including tax.
71 Our proposed increase would put MTS' rates at the same 70 to 75 per cent level.
72 In summary, corporate income tax is a legitimate business expense and is reflected in the rates of all of Canada's publicly traded phone companies. MTS has made every effort to minimize the impact of this new expense on residential customers and is only asking for rate increases to cover a portion of the cost.
73 Even with the proposed increases MTS' rates will remain well within the range of rates approved across the country.
74 Canada is one of the best served countries in the world with respect to telecommunications. In terms of quality of service Canada consistently ranks number one or two on quality measures. Canada also has extremely competitive telecommunications rates.
75 I believe that this has been accomplished through the diligence of the Commission to continually balance valid but competing policy and social objectives with competitive market realities.
76 I also believe MTS is as capable as any telecommunications company. We are proud of our long history and how our people have responded to this difficult transition period. Even with our outstanding talent and commitment to providing the highest quality service possible, we will not succeed if we are not treated the same way other telcos are. The bottom line is fairness.
77 I respect the expertise of the CRTC and am confident that the facts of this case will speak for themselves.
78 Thank you for this opportunity to address you.
79 THE CHAIRPERSON: Thank you, Mr. Fraser.
80 Mr. Secretary, the next party, please.
81 MR. KRUSHEN: Thank you, Mr. Chairman.
82 I would now like to call Ms Ute Senf.
83 Is Ms Senf in the room?
--- Pause / Pause
84 MR. KRUSHEN: Apparently not. I will call her name later.
85 I would now like to call Mr. Marc Collette.
86 THE CHAIRPERSON: Good morning, Mr. Collette. Welcome.
PRESENTATION / PRÉSENTATION
87 MR. COLLETTE: Good morning; bonjour.
--- Foreign language spoken / Langue étrangère parlée
88 M. COLLETTE: Mesdames et messieurs, je m'appelle Marc Collette. Je suis propriétaire de l'Auberge de l'Ile de Matheson qui est située à environ 180 kilomètres au nord de la ville de Winnipeg.
89 Je suis un Métis autochtone.
90 I will continue my statement in English so everybody in the room can understand.
91 I wish to advise you that I have left my hospital bed yesterday and arrived from the north because of the importance I put in delivering this brief to you, the Members of the CRTC.
92 Does MTS have the right to increase local rates?
93 I say absolutely not, because of poor service.
94 In the last three or four years since privatization, MTS has put my small aboriginal tourism business through hell, which is not a strong enough word to explain what I have been through because of the rates.
95 The only reason for the kind of treatment that myself and my community have had to suffer through is because MTS has total monopoly over the local system. They treat their customers like serfs in their own little fiefdom. The following are the consequences I pay, and continue to pay, dearly for simply asking for an apology from Manitoba Telecom Services.
96 The first consequence. When I asked to change long distance companies for better rates, I was lied to and misled for one whole year by MTS. People in the community have had to wait between six to twelve months or longer to get a phone line, which was not the case when MTS was a public body. We never had any of those kinds of problems.
97 Fortunately, we have had no disastrous consequences by the fact that some people don't have phone lines.
98 It took five days to reconnect my down phone line at one point.
99 After asking for an apology for hanging up on me when I was quite polite to them in explaining my situation, I offered to wait a week for an apology before calling the CRTC. On the day that I was to call the CRTC my business phone was cut off. I gave them a week, from one week to the next. And the day that I was to call the CRTC, MTS cut off my business phone line.
100 This is how they feel about you as an authority.
101 When I phoned to ask the reason for this tactic, I offered to pay the rest of my bill, which was not that much. I told the operator that this line was extremely important to the survival of my small aboriginal tourism business. The operator laughed and hung up on me again.
102 Then I phoned Mr. Krushen, offering to pay my small bill at a meeting with the higher-ups at MTS. He made up his mind immediately on the phone and judged me unfairly, without investigating first.
103 In the last two years I have lost my business phone line. I have not lost my business, but my phone line I have, and my personal phone line. I have lost tens of thousands to as much as hundreds of thousands of dollars of business.
104 Finally, I believe MTS has ulterior motives for destroying my small aboriginal tourism business. I believe MTS is in a major conflict of interest. With a government funded tourism project nearby, ten kilometres away from me, which was built when privatization happened with MTS -- there was a major conflict of interest with a government funded tourism project nearby with possibly up to millions of dollars of grants and permits from the previous Conservative provincial administration who have direct family ties to MTS.
105 I know I will continue to feel the wrath of MTS, especially after reading my brief to you, because I live in this province and I know they control the phone lines. I strongly believe it is your responsibility, Members of the CRTC, to investigate this entire affair.
106 I am willing to pay the few dollars that I owe MTS, at a meeting, which I told Mr. Krushen and told the MTS people. I will meet at a meeting with Mr. William Fraser, who is sitting right here, and Mr. Tom Stephanson, if they have an ounce of leadership and courage in their bodies to resolve these outstanding issues through fairness and justice.
107 Mr. Fraser mentioned fairness at the end of his statement. I think individuals have the right, too, to fairness and justice.
108 He talks about fairness. We want the same thing, the Aboriginal people, the French people, the Métis people, all those that are members of this community and the province of Manitoba. We want the same fairness that he is asking for.
109 Thank you very much. Merci.
110 THE CHAIRPERSON: Merci, Mr. Collette.
111 Mr. Krushen...?
112 MR. KRUSHEN: Thank you, Mr. Chairman.
113 I would now like to call Mr. Eric Penner.
--- Pause / Pause
114 THE CHAIRPERSON: Good morning, Mr. Penner.
PRESENTATION / PRÉSENTATION
115 MR. PENNER: Thank you.
116 I am a little nervous. I have not done this before.
117 I would like to thank the CRTC for the opportunity to present today. This is my first presentation to try and sway an opinion in a public forum. I have never made any calls to radio stations or letters to papers, nor had any correspondence with an MLA or an MP.
118 I will be up front. I don't think they should be allowed any increases. I will try to elaborate on that.
119 They need to provide some better customer service. One thing I found interesting is that they are going to try and not accept cash any more, which to me is an interesting concept.
120 They also need to provide some evidence of their measures that they say they are doing to cut costs, et cetera.
121 A little bit on my background. I have a rural upbringing. I come from Steinbach. I have apprenticed through the trades, and I have gone back to school as an adult and found a job position.
122 Before I went back to school I was living here in Winnipeg on Beverly Street, which is not the nicest area of the city. The place that I lived in at periods of times there were mice on the third floor, four or five fires in the three years I lived there. My car was stolen twice.
123 At the time that I moved into that apartment I debated on the expense of a phone and found out that it was a necessity for calling the police, calling the fire department, calling exterminators. It is something that was required.
124 I will talk about the landline, the phone line.
125 It should be a reliable easy source of communications when there are difficulties and emergencies.
--- Pause / Pause
126 MR. PENNER: I have been through a life threatening medical problem. Due to a lack of possible medical services' expertise here in Canada, I was sent to the U.S. and my family was told that I would not return.
127 I lost about 45 pounds in three weeks, came back with a feeding tube to my heart. You have to excuse me. It's very difficult.
128 THE CHAIRPERSON: Do you want to take a break, Mr. Penner, and come back a little later?
129 MR. PENNER: No. I will try and keep going. Thank you.
130 Okay. I stayed with a wonderful person who looked after me while I was having trouble and found out that the phone line exclusive was very necessary -- oh, boy. The phone stopped working one day and we called MTS from a pay phone to provide repairs. They wouldn't send anyone to repair the phone.
131 My problems didn't appeal to them, a life-threatening situation, where any other people on the telephone line, elderly people, it didn't matter, they weren't going to send anybody out.
132 They actually called back the next day to say the problem was caused by them. MTS has, in my experience, never provided customers service. They just don't seem to be able to do that.
133 After I got through that problem, I came back to the city, started working. Then I would call back to Steinbach and all of a sudden I would start getting a message when I would call that all lines were busy, please try again.
134 In calling the Operator, the Operator said "Well, you should call repair". I called repair. After several times, three or four times, finally they told me "Well, the line is good. Tough luck. There's just too many computers on the line". Well, that was only after my calling them. They never did call back.
135 A while later my brother had rolled his car in the United States. We received a call from a health care facility to a family member and the call was cut off. We don't know why, if it was a U.S. problem or an MTS problem.
136 I tried to call the Sheriff's department in the States. Again, the same message, "Sorry, all lines are busy". I called the local RCMP for some help. The same message, "All lines are busy".
137 After going through the Operator many times, finally getting hold of the people, we got some information on my brother and what happened. After a week or so in the States hospital, he came back here to Manitoba and is still in hospital here.
138 You also get charged for Operator-handled calls. Well, my parents have always paid cash for everything they have done. I followed in their footsteps, always paid cash until I ran into some of this MTS stuff where they keep insisting that you need another form of payment.
139 My dad passed away approximately ten years ago and my mom had to learn how to use a cheque. Well, at 96 she would write cheques to "Cash" and then go out to pay all her bills, including MTS, in cash.
140 In the apartment that my mom resided we had a lifeline installed. It's a land-line phone device. I guess it's for elderly people and for disabled people to be able to call if they have an emergency. One of the requirements is there are daily checks by the person who has it to respond to the lifeline to say they are okay.
141 Recently there was no response to the system when she was paged. The lifeline personnel called a neighbour across the hall, got no response, called a family member to go check. They were about a block away. No response. Called another family member. No response. Called another family out of town. No response.
142 Finally they called me. I answered. I said I would phone someone to go to her apartment and check. The response I got was "All lines are busy". When I tried to call people back, all lines were busy. Thank you.
143 I apologize for being so emotional, but it's just tough. The phones should be reliable. MTS has said it would be reliable. I have found it is not that reliable.
144 I have some recommendations. I would like to see that they are required to provide 24 hour customer service that resolves problems, not just lip service. I would like to say my mom is doing fine. They will have to do this before they kill someone.
145 I would also like to say that they should accept cash for any and all transactions at any of their outlets, including their mobility outlets, for any bills for services and require them to provide some proof that they are, you know, cutting costs and providing benefits to their customers.
146 I would just like to say that its Manitoba Telephone Services, not Manitoba Telephone Systems as they used to be, the old entity. I remember many years ago when I was young I first apprenticed here in Winnipeg. I came in looking for a place to stay. I went to use a pay phone. At that time they were ten cents. Complained about the fact that I made several phone calls that day and one of those phone calls I never got my ten cents and I never got to make a phone call.
147 I talked to the Operator. The Operator said she couldn't return my ten cents, but they did send me a postcard in the mail with a dime taped to it. With no cash policy, how are they going to return a quarter?
148 I worked in a rural service base for a while. One of the customers was a local person who worked at Manitoba Telephone System. He was getting his vehicle serviced there. A lady came in in tears because her phone didn't work.
149 We introduced the two, on a Saturday, her phone -- thank you very much. I hope I have made an impression. Sorry for being so emotional.
150 THE CHAIRPERSON: No problem, Mr. Penner.
151 MR. PENNER: Thank you.
152 THE CHAIRPERSON: Thank you for your presentation. I am glad to hear your mother is well. Mr. Penner noted he was nervous in opening the presentation. The whole purpose of today's hearing is to be informal. We are just here to listen. I appreciate sometimes it's a little difficult speaking into a microphone and being transcribed and so on, but as I say, we are just here to listen to what your comments are.
153 I can't take away all of the nervousness, but I would suggest that there is no need to be really nervous in front of us. We are just plain folk like you are.
154 Mr. Krushen, the next presenter, please.
155 MR. KRUSHEN: Thank you, Mr. Chairman.
156 The next presenter is Mr. Harold Dyck of the Social Planning Council.
PRESENTATION / PRÉSENTATION
157 MR. DYCK: Mr. Chairman, Members of the Commission, thank you for this opportunity to appear before you to raise our concerns about the proposed rate increases. Welcome to Winnipeg. I was glad we could arrange a bit warmer weather for you.
158 I will, because of the length of our brief, glide over a few parts, but you have a written copy in front of you. I'm sure you will take all points we raise under due consideration.
159 My name is Harold Dyck. With me is Christine Ogaranko who works as a full time researcher for the Social Planning Council. By way of further introduction, I should also mention for purposes of identification that I am also one of the two Manitoba Board Members for the National Anti-Poverty Organization and work with a number of local groups and organizations dealing with poverty issues. It's around those issues that we wish to focus the attention of our brief today.
160 The work conducted by the Social Planning Council of Winnipeg is focused on social policies and has an impact, either positively or negatively, on the citizens of Winnipeg. Subsequently, the Social Planning Council of Winnipeg is pleased to have this opportunity to present its views to the CRTC regarding the proposed increase in telephone rates by MTS.
161 In August 2000 MTS raised its residential rates with the approval of the CRTC by $3 per month. Less than six months later, MTS is proposing that residential telephone rates be raised a further $3 per month. This translates into an increase of $6 per month or an overall increase of 24 per cent to the average homeowner's telephone bill within a five month period and, I might add, that there are GST and PST charges on top of that.
162 Citizens who have lower fixed incomes, such as some single parents and some elderly persons, will be hardest hit by these increases as their real incomes have not increased over the past number of years.
163 Related to the issue of the proposed telephone rate increases, MTS' move to eliminate or at least severely restrict the consumer's option to pay cash for telephone bills. Again, it is the consumer with low-end or fixed incomes who are affected the most by this policy change as they are less likely to have chequing accounts or debit cards due to costs associated with such services. It is evident that MTS is taking advantage of its monopoly position on local telephone service delivery and reducing the accessibility of its services to a certain segment of the population.
164 Winnipeg's extreme climatic conditions render telephone services to be a necessity and not a luxury. Each citizen of Winnipeg should be afforded equal access to telephone services in order to fully participate in society. Telephone services are necessary for persons seeking employment, for effective supervision of children and youth, and as a means for all persons to access social support networks.
165 To ensure equal access to the necessities of life, in this case telephone services, the Social Planning Council proposed the following recommendations:
166 That the CRTC does not approve the proposed $3 increase and residential telephone rates; and, that it withdraws its interim approval for the previous $3 increase in residential telephone rates.
167 That the CRTC review MTS' policy to restrict the ability of consumers to pay in cash for their telephone bills; and that the CRTC ensures that any additional costs associated with the cash payment option be covered by MTS.
168 Manitoba Telecom Services is proposing to increase its residential rate by $3 per month in addition to the interim increase of $3 effective August 1, 2000. As mentioned before, this represents an overall $6 or 24 per cent increase in less than five months.
169 For senior residents of Winnipeg receiving a fixed income and families on social assistance, this increase is particularly disconcerting as their incomes have not increased.
170 This also holds true for the working poor, that is, the persons whose employment income is not adequate to acquire the basic needs of life, such as food, shelter, clothing and education.
171 Between 1989 and 1999, social assistance benefits in constant dollars for couples with two children, by way of example, fell by 27.3 per cent, and lone parent families experienced an 18 per cent decline in benefits.
172 The average household income decreased by 13 per cent in constant dollars between 1986 and 1996. The income for elderly households also decreased during the same period by 2.7 per cent.
173 This is based on our own researcher's analysis of CPI statistics.
174 The rationale provided by MTS for its proposed rate increase is that it needs to recover income tax expenses for the years 2000 and 2001. Thus, MTS is essentially proposing that the tax burden be shifted to consumers, including low income consumers, as they will fund payment of additional taxes through the increased cost of services, and that with MTS' transition from a Crown Corporation to a privatized organization it receive favourable tax treatments from the Province of Manitoba.
175 It is, therefore, unfair for MTS to assume that low income consumers that drive their organization should be responsible for this cost.
176 I will just glide over the section on the impact of the restricted cash payment policy other than to reiterate that to us it reflects a decline in services along with rising costs, and that it particularly victimizes people on low and fixed incomes.
177 I will go right through to our conclusion.
178 Manitoba Telecom Services should be providing access to essential telephone services to all Manitobans who want it. It is part of the CRTC's mandate to ensure that services are provided in an equitable manner. This means that the CRTC is responsible for ensuring that the barriers encountered by citizens of Manitoba in acquiring telephone services should be identified and eliminated.
179 Clearly, the proposed increase in telephone rates and cash payment policies serve as barriers to the equity in MTS' service delivery. On this basis, the Social Planning Council of Winnipeg asks that its recommendations are enacted, and they are restated as follows:
180 That the CRTC does not approve the $3 increase in residential rates and withdraws the previous $3 increase.
181 That it reviews the policy to restrict the ability of consumers to pay cash.
182 And that it ensures additional costs associated with the cash payment option be recovered by MTS.
183 Now if I might add just a few personal comments.
184 I should mention also, by way of, what I should have said right at the beginning, introduction, I am also one of those people that happens to live on welfare and is in a position that I cannot afford telephone service. I think I speak very clearly on that very large sector of our community which numbers on the hundreds of thousands in Manitoba who, with the rapid steady increases in phone rates, are being increasingly placed in a position where we cannot afford this kind of service, that it is increasingly becoming a privilege and not a rate. We believe this is something that has to be looked at very closely.
185 Mr. Fraser commented earlier this morning that MTS provides services to all Manitoba consumers. Well, as I say, I speak on behalf of hundreds of thousands of Manitoba services who are not better served, as Mr. Fraser said, by the changes that are taking place in MTS over the past several years.
186 He spoke in terms of building a progressive province and that MTS' approach is helping in building a progressive province. I cannot see that happening where he and his company is creating conditions that deny service to hundreds of thousands of people in Manitoba who depend on but cannot afford telephone service.
187 I will express the wish that the effort to keep rates down are equivalent to the efforts that are expended by MTS to increase shareholder dividends. While they play the high end of the stock market, they ignore the need to sit down with representatives of the community, of low and fixed income people, again numbering in the hundreds of thousands, to discuss and reflect the needs of that sector of our community. That is something that I believe you need to compel MTS to address.
188 Because of the absolute 100 per cent monopoly on local phone service and the 80 per cent monopoly on long distance service, MTS is able to exploit that area of its customer base where it has that total monopoly with the consequences of that monopoly and its impact on people on low and fixed income.
189 I can't help but wonder that if there was a truly competitive environment existing in the home service in the long distance market in Manitoba whether MTS would be seeking this amount of an increase. Perhaps what should be examined by the Commission is: what are the conditions that prevent competition from happening at the local level that would help keep these kinds of rates down?
190 These are the consequences of monopolization by a private company: that the consumer is taken for granted; and, that there is a feeling that costs could be passed on at will to the consumers, particularly those who can least afford it, in order to subsidize growing profit shares.
191 I thank you for your time and consideration today and ask you seriously to take under consideration the recommendations of the Social Planning Council and would be glad to answer any questions you might have.
192 THE CHAIRPERSON: Thank you, Mr. Dyck.
193 I think Commissioner Cram does have a question.
194 COMMISSIONER CRAM: Just a few.
195 What is the PST in Manitoba?
196 MR. DYCK: Seven per cent.
197 COMMISSIONER CRAM: So if we ordered a $6 increase, that would be 14 per cent above that.
198 MR. DYCK: That's correct.
199 COMMISSIONER CRAM: MTS, in a letter dated June 23rd to the CRTC, referred to:
"...an allowance for basic telephone service available on request from Employment and Income Assistance..." (As read)
200 Which is apparently a provincial government agency:
"...for those qualifying for income assistance that meet necessary criteria and require telephone service for medical or safety reasons, if they don't have enough income or resources." (As read)
201 Are you aware of that plan at all?
202 MR. DYCK: I'm aware. Part of what I have been doing for the past year -- I am not aware of that particular policy by MTS. For the past year, I have worked on --
203 THE CHAIRPERSON: No. It's a government policy.
204 MR. DYCK: Okay. It's a government policy.
205 The government does provide, under certain conditions, access to phone service. The past year I have functioned as an advocate for people who live on social assistance, on a voluntary basis, and I have handled dozens of cases, hundreds of calls attempting to assist people with problems they have.
206 Quite often, one of the requests I do get are people that need to access telephone service. It is an extremely difficult process and a lot of people that I am convinced have needed that kind of service are denied by employment and income assistance access to that kind of service.
207 But again, it also comes down to that it is a selective policy and, again, it becomes a privilege only if you produce very detailed doctors' reports to back up your claim that it is an absolute medical emergency. The tendency is to deny that kind of service to low income users and people on welfare. So it is an extremely limited policy.
208 I am not familiar with the policies in all provinces, but Saskatchewan, for example, has proffered to the low income community a policy whereby there is a more affordable access to service. There are some limitations on the service provider, and this is something that should be considered. There would be long distance call blocking in exchange for no cost for installation of service, and there are reduced rates available for people living on a low income, whether they are the working poor, the elderly, or people living on social assistance.
209 Again, I have to reiterate the point that MTS does not seem to have any particular interest in talking to those sectors of the community and looking at ways and means of addressing the needs of those communities, and I hope the CRTC would take that into account.
210 Twenty per cent of the population of Winnipeg lives under what is considered the poverty line. Most of those people do not qualify, if they are on social assistance, for social assistance subsidy for phone rates. For those that are considered part of the working poor, they are essentially on their own in that regard. This $6 increase is going to reduce the number of people that are able to access telephone service.
211 COMMISSIONER CRAM: I'm sorry, Mr. Dyck. Is the social assistance subsidy the same as this one that we were just talking about, the Employment and Income Assistance? Is that the same subsidy from the government?
212 MR. DYCK: That's the same. That is the name for social assistance or welfare in Manitoba. Yes, that's the same system.
213 COMMISSIONER CRAM: So it is only people who are on assistance who are eligible for that?
214 MR. DYCK: That's right. Again, it is a fairly onerous procedure they do have to go through in order to access that service.
215 COMMISSIONER CRAM: It is only if there are medical or safety issues that they are entitled to that --
216 MR. DYCK: That's correct.
217 COMMISSIONER CRAM: -- specific money from welfare or social services?
218 MR. DYCK: That's correct. And very urgent medical reasons.
219 COMMISSIONER CRAM: Are you aware of any bill management tools that Manitoba Tel would be using at all? We had what we called an Affordability Proceeding some time ago and we were talking about bill management tools and the companies telling people who had problems with their bills of various ways of managing their bills.
220 Are you aware of that at all with MTS?
221 MR. DYCK: If that type of service is available I am not aware of it because I do not believe it has been widely publicized. My experience has been, both personally and talking with a number of other consumers who are on low income, that the tendency from MTS is to treat them in a fairly callous and cavalier manner, where literally quite often where people have problems making ends meet, of literally putting a gun to their head that you pay the entire amount now or you are cut off, that kind of thing. It is a very different process to try and negotiate the time and the ability to pay off debts that people may have accumulated. And this business of the cash payment policy, to me, is a reflection of that.
222 The time was not so long ago that when you went in to pay your bill at MTS, if you tried to pay by cheque they would refuse it. It had to be cash or certified or money order. Now it seems to be this strange reversal. You can't walk in and tender legal tender, cash, and pay the bill. Now, you can pay cash at certain outlets, drugstores, so on, but there are services charges associated with that. Again, that is passing on an expense to people that can least afford it.
223 Surely MTS, with all these mobility sensors and fancy high-end user systems, can make some of their clerks available to allow the odd person that walks in now and then to lay down a certain amount of cash to pay their telephone bill.
224 COMMISSIONER CRAM: I just wanted to confirm then, your council is unaware of any bill management tools that MTS may be offering and so therefore you wouldn't be able to tell any of your members. Is that fair?
225 MR. DYCK: I'm not aware of that. I am glad to hear about that.
226 Again, I just have to restate, I wish they would publicize these kinds of services so that people who are trying to assist the low income community would be better able to advise them on how to meet these kinds of needs.
227 COMMISSIONER CRAM: Thank you, Mr. Dyck.
228 MR. DYCK: Okay. Thank you.
229 THE CHAIRPERSON: Commissioner Noël.
230 COMMISSIONER NOËL: Just one question, Mr. Dyck.
231 What is the total population of Manitoba?
232 MR. DYCK: It is a little over 1 million people.
233 COMMISSIONER NOËL: Thank you.
234 MR. DYCK: Okay.
235 THE CHAIRPERSON: Thank you, Mr. Dyck.
236 MR. DYCK: Thank you for your time.
237 THE CHAIRPERSON: Mr. Krushen.
238 MR. KRUSHEN: Thank you, Mr. Chairman.
239 I would now like to call Ms Sally Thomas.
PRESENTATION / PRÉSENTATION
240 MS THOMAS: Good morning.
241 I am representative of the Council of Women of Winnipeg. The Council of Women of Winnipeg urges the CRTC to reject the proposed rate increase requested by MTS.
242 The Council of Women of Winnipeg is a federation of organizations of women and individuals united as a co-ordinating body for action in the public interest.
243 For over 100 years, our goal has been to promote the wellbeing of women, children and community. The council federates represent business, professional, cultural, religious, service and social organizations. In other words, we reflect the many faces of our city.
244 The council feels that the rate increase is not in the best interest of the public. Although a rate increase of $6 per month may not seem very much to many people, especially those people here from the CRTC and from MTS, for them it may only represent a pair of pantyhose or a big meal deal, but for many other people the proposed rate increase of almost 30 per cent over a one-year period can and will impose a significant hardship for anyone with a limited or fixed income.
245 All Manitobans will be affected by this increase, but women will be the most adversely affected as more women in our society are in the lower income bracket, and that is at whatever age group you are in.
246 This increase is certainly way above the annual inflation rate and, coupled with other increases in utilities, has the potential to greatly impact the quality of life of our citizens.
247 As Mr. Penner so ably spoke before, that many people in our society have had to give up their phones. This makes them certainly more vulnerable to risks in our society when they can't readily access medical services or emergency services, and it even makes their life in other ways more difficult and it prevents them from having equal access to services in our community.
248 If we could believe that this would be the last time that MTS will ask for a rate increase above the 10 per cent that when they went to privatization they said that they wouldn't be coming to the people asking for more than 10 per cent increase in a year, then the rate might seem less frightening to the future affordability of local telephone services.
249 But given the track record of the utility in this short time period since it has been privatized, and also history of other private companies, we have a great concern that the assurances given prior to privatization to cap the rate increases at more than 10 per cent annually will be broken, just as we are seeing that in their request today.
250 It is ironic that we see these requests for high rate increases for local residential phone service at a time when the shareholder profits continue to skyrocket and services tend to be cut now. Mr. Fraser said that services are being expanded, but mostly those are related to things -- the Internet. There is a tendency for people on lower or fixed incomes not to have that access to those increased services.
251 And we see these requests at a time when not only the services are cut, but they become even more impersonal.
252 With competition between the long distance companies we have seen those costs go down and we see those costs being dumped on the local phone service. It would appear that MTS feels that if they have a monopoly they can pass on the costs that they want.
253 So, in closing, I would just like to say that the Council of Women of Winnipeg strongly urges that the CRTC listens to the voices of Manitobans and rejects this request for an almost 30 per cent rate increase and insist that the annual rate of increase be held to 10 per cent or less.
254 Let's have MTS look for other ways to improve their efficiency and hold down rates.
255 Thank you very much.
256 THE CHAIRPERSON: Thank you for your presentation.
257 We will hear one more presentation and then we will take our morning break.
258 Just a reminder, following the morning break we are going to contact those who wish to speak by teleconference.
259 So, Mr. Krushen.
260 MR. KRUSHEN: Thank you, Mr. Chairman.
261 I would now like to call Ms Sheila Murphy.
PRESENTATION / PRÉSENTATION
262 MS MURPHY: Good morning.
263 My name is Sheila Murphy and I am adamantly opposed to the proposed basic rate hike that MTS is currently considering at this time and personally feel that other means of funding should be considered.
264 I am sure that I speak for hundreds, maybe thousands of folk who consider their phone a necessity, not a luxury. These people, many of whom were the backbone of our society, are threatened with being penalized with an unfair increase in their basic phone rates. Many are fixed, low income seniors trying with dignity to maintain their standard of living without any financial assistance.
265 I think it is reprehensible of MTS to consider any increase in our basic phone charges which will put it on the backs of those who are least able to pay. MTS advertises constantly re their great long distance deals and I personally enjoy my $17.95 a month long distance rate. And, since I have family and friends living throughout Canada, I am a frequent caller, saving myself at least $50 to $100 a month on every bill.
266 Where is the equity?
267 Competition for our business is huge. Well, I say "competition be damned". Let's use our hearts instead of just our heads.
268 Thank you.
269 THE CHAIRPERSON: Thank you, Ms Murphy.
270 MS MURPHY: That is the end of my presentation.
271 THE CHAIRPERSON: Thank you, Ms Murphy.
272 With that, then, we will take our morning break.
273 We will reconvene at 10:30, at which point we will attempt to get the next group of folks on the telephone.
274 Thank you very much.
--- Upon recessing at 1005 / Suspension à 1005
--- Upon resuming at 1030 / Reprise à 1030
275 THE CHAIRPERSON: Order, please, ladies and gentlemen. We will continue with our proceeding.
276 Just to prove how flexible we can be, apparently there is one other party who wishes to appear here before we go to the phones. So to accommodate her, we will do that.
277 Mr. Krushen, please.
278 MR. KRUSHEN: Thank you, Mr. Chairman.
279 I would now like to call Ms Emile Clune.
--- Pause / Pause
280 MR. KRUSHEN: Ms Clune...?
281 She was here before the break.
282 THE CHAIRPERSON: Is Ms Clune here?
--- Pause / Pause
283 MR. KRUSHEN: I can certainly call her later.
284 I could also check to see if Ms Ute Senf has arrived.
285 Ms Senf...?
--- Pause / Pause
286 THE CHAIRPERSON: Well, Mr. Krushen, in that case perhaps we will go to the phone.
287 MR. KRUSHEN: Our first presenter by phone will be Ms Janet Johnson.
PRESENTATION / PRÉSENTATION
288 MS JOHNSON: Good morning.
289 THE CHAIRPERSON: Good morning, Ms Johnson.
290 MS JOHNSON: How are you?
291 THE CHAIRPERSON: We are fine, although we can just barely hear you. Perhaps we will see if our friends at the back of the room could turn up the volume a little bit so that we can hear you a little better.
292 MS JOHNSON: Just a moment. I am going to change phones also.
--- Pause / Pause
293 MS JOHNSON: I don't know if this is any better. I have another one.
294 THE CHAIRPERSON: That is a little better. Perhaps you could give your name again.
295 MS JOHNSON: My name is Janet Johnson.
296 THE CHAIRPERSON: That is good. Go ahead.
297 MS JOHNSON: Thank you for the opportunity.
298 I am a resident of Brandon, and I have a very big concern with another increase in our MTS rates. I guess the part that bothers me the worst is that we have no choice whatsoever in local telephone calls living in Brandon, with the section of Manitoba telephone.
299 I have a telephone with MTS and pay a basic monthly rate of $25.60. That is no options whatsoever.
300 A while back I was reading on the excellent opportunity for Northern Televoice to subscribe to, but when I called I found the service was not available again to the city of Brandon. Again, like I say, I continue to emphasize that if we had a choice I guess I would not have a problem with it. When there are no choices whatsoever, when we only have the one local telephone company, I certainly have a problem with another increase in the rates going up again.
301 We buy phones that have --
302 THE CHAIRPERSON: Ms Johnson, I am sorry to interrupt. You are fading out here. I don't know if it is a problem with our equipment here or a problem with the telephone line.
303 Perhaps you could try speaking a little louder and a little more clearly right into the phone.
--- Pause / Pause
304 THE CHAIRPERSON: Ms Johnson, are you still there?
305 MS JOHNSON: Hello. Is that a little better?
306 THE CHAIRPERSON: That is much better.
307 MS JOHNSON: All right; thank you.
308 As I say, we just finished buying a top of the line phone with a whole bunch of different options on it, but in order to be able to use any of them you have to pay additional money every month for MTS to activate them.
309 As a prime example, all I have is a light indicator for messages and I have to pay 75 cents a month for it.
310 Like I say, it really bothers me to think that MTS is now going to be looking at spending an additional $50 million into a wireless division network to beef up their cellular services when it looks to me that they can't even be responsible to the public for the plain ordinary telephone services.
311 I understand -- I hope that this is not right, but I understand that the reason for the increase is for the opportunity to have their taxes paid. If this is true, I would certainly like to find out where that line starts because I would like to get in it.
312 Anyway, as I said, I am a concerned citizen and I want to register my complaint of another increase in rates through MTS, the biggest reason being because of the fact that we have no other choice except to take them.
313 Thank you very much for your time.
314 THE CHAIRPERSON: Thank you, Ms Johnson. We appreciate your taking the time to provide your comments.
315 MS JOHNSON: My pleasure. Goodbye.
316 THE CHAIRPERSON: Goodbye.
317 Mr. Krushen...?
318 MR. KRUSHEN: Thank you, Mr. Chairman.
319 I understand that we have not been able to contact the next person on our list, so we will go Mr. Robert Love.
PRESENTATION / PRÉSENTATION
320 MR. LOVE: Thank you. Good morning.
321 THE CHAIRPERSON: Good morning, Mr. Love.
322 MR. LOVE: I am a broker. I share brokerage fees with the agency I work through. I approached the agency about a larger percentage of the fees to pay my taxes. They replied that since I was not doing any additional work or services, nor was I improving anything, I could pay my own taxes from the share I was already receiving.
323 I had to agree with that answer, and I feel MTS should be given that same answer. They are not improving any services, nor creating any additional ones. They are putting their greed and shareholders ahead of their customers, without whom they would not survive.
324 Paying customers should have preferential treatment because some day you will not have a monopoly on landline, or they may become redundant. Customers who have been mistreated or overcharged have long memories.
325 One question: If this increase is allowed, will MTS come back to the trough yet again for more money to pay the additional taxes the last increase caused? This could become a vicious cycle.
326 Thank you for this opportunity to voice my opinion.
327 THE CHAIRPERSON: Thank you, Mr. Love.
328 Mr. Krushen...?
329 MR. KRUSHEN: Thank you, Mr. Chairman. I will now call Mr. Terry Carols.
PRESENTATION / PRÉSENTATION
330 MR. CAROLS: Hello.
331 THE CHAIRPERSON: Hello, Mr. Carols.
332 MR. CAROLS: How are you?
333 THE CHAIRPERSON: Fine.
334 MR. CAROLS: My concern is we are in southwestern Manitoba where we had the flood situation and the farmers didn't have any crops. I have a very substantial business. We have eight phones in the store that we have. With what has gone on and what is going on, and the prices on the farm and no high grain prices and the farmers aren't hardly making ends meet, we are having a very tough time doing the same thing in our business.
335 We just had made a substantial addition to our business, increasing it by 10,000 square feet and putting an additional phones into the business.
336 I feel at this particular time and with what is going on with the whole economy, things are going to be very tough to make ends meet in our business, along with the farmers in this area.
337 THE CHAIRPERSON: Is that it, Mr. Carols?
338 MR. CAROLS: That is everything, yes.
339 THE CHAIRPERSON: Thank you very much. We appreciate your taking the time today.
340 MR. CAROLS: Thank you.
341 THE CHAIRPERSON: Mr. Krushen...?
342 MR. KRUSHEN: Thank you, Mr. Chairman.
343 I would now like to call Mr. Dollard Boily.
PRESENTATION / PRÉSENTATION
344 MR. BOILY: Hello.
345 THE CHAIRPERSON: Good morning, Mr. Boily.
346 MR. BOILY: Can I make my comments?
347 THE CHAIRPERSON: Yes. Please go ahead.
348 MR. BOILY: The comment I would like to make is that I find that since MTS has this deal that you can call for 10 cents a minute, all you want to call, with a maximum of $17.95 a month, what I find is that since they do that the rental payments for the phone every month seems to be going up. It keeps going up more and more.
349 I feel that what is happening is that for the people who do a lot of long distance it is a good deal, but the people like myself and a few others that I know that do not do very much long distance, it is not such a good deal. We have to pay more rental to offset the expense of this all you can call for $17.95 a month.
350 This is what I find. It is a good deal for people who use long distance, but for the people who do not use long distance very much it is not such a good deal. We have to pay more rent.
351 This is my comment. This is what I would like to say.
352 THE CHAIRPERSON: Thank you, Mr. Boily.
353 MR. BOILY: Okay.
354 THE CHAIRPERSON: Mr. Krushen...?
355 MR. KRUSHEN: Thank you, Mr. Chairman.
356 I am advised that our next presenter will not be available to speak to us this morning.
357 THE CHAIRPERSON: That is Mr. Brand?
358 MR. KRUSHEN: Yes, that is correct.
359 I know we are trying to reach Ms Sklar, but apparently we have not been able to reach her either.
360 At this point I would suggest that we continue with our presenters who are in the room.
361 I am going to at this time recall Ms Emile Clune.
362 Ms Clune, are you here?
363 Ms Clune is in the room now.
PRESENTATION / PRÉSENTATION
364 THE CHAIRPERSON: Good morning, Ms Clune.
365 MS CLUNE: Good morning.
366 Mr. Chairman and Members of the Committee, my name is Emile Clune. I would like to thank you for the opportunity to appear before you to express my opposition to Manitoba Telecom's request for another increase in the cost of our basic telephone service.
367 In the four and a half years since the sale of Manitoba Telephone System rates for basic telephone service have increased approximately 71 per cent. If this latest increase is granted, rates will have risen approximately 93 per cent.
368 Manitoba Telecom is a highly profitable company and has generated millions of dollars for investors and continues to return high dividends to its shareholders.
369 The argument that the company needs additional revenue to enable it to pay its income tax when its tax exemptions expire is patently ludicrous.
370 What the company really wants is to maintain and increase profits any way it can to the detriment of its service to Manitobans.
371 Telephone service has deteriorated to such a low degree that it sometimes takes 15 minutes or more to reach some departments. Even when calling 411, Directory Assistance for local or provincial numbers, one frequently encounters a recording telling you the operators are busy, to hang up and try your call again later. It is very, very frustrating for the customer.
372 This poor service is not the fault of the employees but a problem generated by Manitoba Telecom, who in the pursuit of ever increasing profits for its shareholders has eliminated hundreds of jobs throughout the province. The result of such low staffing levels is that it is humanly impossible for the remaining personnel to handle the workload, and the result is atrocious customer service.
373 When the original Manitoba Telecom shares were offered on the open market, the majority of shares had to be owned by Manitobans. This requirement no longer exists, and the company is now almost 100 per cent foreign owned.
374 This means that profits generated in Manitoba by Manitobans leave the province, resulting in millions of dollars of lost revenue. Yet Manitoba Telecom expects Manitobans to subsidize these foreign investors by paying higher costs to cover the company's taxes.
375 A telephone is an essential item, not a luxury. But if the rates for service continue to rise, many people will no longer be able to afford telephone service, and this is simply not acceptable.
376 For this reason and the other reasons previously stated, I urge the CRTC to deny Manitoba Telecom's request for this latest increase, Mr. Chairman.
377 THE CHAIRPERSON: Thank you, Ms Clune.
378 MS CLUNE: Thank you.
379 THE CHAIRPERSON: Mr. Krushen...?
380 MR. KRUSHEN: Thank you.
381 I understand that we may be able to reach Mr. Brand after all, but we have not been able to yet.
382 The next on our list is Theresa Ducharme.
--- Pause / Pause
383 I don't see Ms Ducharme in the room at present, so I will return to her later.
384 MR. KRUSHEN: Next is Ms Gloria Desorcy.
PRESENTATION / PRÉSENTATION
385 MS DESORCY: Good afternoon. My name is Gloria Desorcy. I am here today on behalf of the Manitoba branch of the Consumers Association of Canada.
386 CAC (Manitoba) is a non-profit volunteer independent organization, informing and educating consumers and representing the consumer interest in Manitoba since 1947.
387 On behalf of CAC (Manitoba) I would like to thank the Commission for coming to Manitoba in the dreaded month of January to meet with Manitobans face to face and hear firsthand their concerns about this proposed $6 rate increase. Welcome.
388 Before I left for the Convention Centre this morning my mom phoned me at home. She always calls before I have to do any kind of public speaking, because she knows I really don't like to do it. The last thing she said to me was: "Whatever you do, don't sound nervous." I said to myself: "Don't sound nervous? I am terrified."
389 So if you hear me gasping for breath, you will know why.
390 I am nervous for a couple of reasons: partly, of course, because it takes a bit of guts to present in front of a panel of very well informed Commissioners who do telecommunications stuff every single day and attempt to tell them something they don't already know about local telephone rates. But mostly I am very aware of the weighty consequence of the decision you are about to make for consumers in this province.
391 Quite frankly, some of the possible outcomes are pretty scary.
392 CAC (Manitoba) is an organization that attempts to represent the interests of the whole spectrum of consumers in the province, consumers from various regions with various occupations, living on various levels of income.
393 As the person who answers the phone most of the time in our office, I get to talk with a lot of those consumers and read their letters and e-mails.
394 Since MTS applied for these rate increases last spring, the $6 has been the subject of a lot of that communication. The one common theme we hear from residents of downtown Winnipeg and residents of Pukatawagan, from consumers on social assistance, and those who are MTS shareholders, is that they do not want to see local phone rates increase by $6 per month.
395 Their reasons fall into two basic categories: what I call affordability and justice.
396 I will start with affordability.
397 You have heard today and may hear some more examples of how much of a hardship this increase could create for consumers with limited and fixed incomes.
398 But I would like to remind the Commission of something they already know much better than I, and that is how impossible it is for a person to function in our high tech telecommunications dependent society without a telephone.
399 For example, consumers who live in remote areas depend on their phones for essential services. Seniors and shut-ins need them for safety. Anyone who ever hopes to get a job needs to be able to put that phone number on their job application, on their résumé.
400 Although the possibility for local phone competition exists in theory in this province, the reality is that MTS still has a monopoly on this segment of their business. Manitobans looking for a better rate cannot simply go to another supplier as they could for many other products or services.
401 For some of the consumers that call our office the reality is that the $6 increase will mean that they will have to consider the option of not maintaining their telephone. That may sound, given what I have said about how important a telephone is, like a radical option. But consider the rate increases Manitobans have already faced in the last few months and days.
402 When you are looking at your rising home heating bill in chilly Manitoba and your rising transportation bill, regardless of whether you drive a car or take a bus, your increased Canada Pension Plan deductions, which you can only reduce by earning even less money, and then your rising phone bill, which one can you do without? And where do you cut costs?
403 A couple of years ago the Stentor Quarterly Monitoring Report indicated that Manitoba had the second lowest percentage of low income household with phones of any province in this country. If we allow the cost of local phone to rise to the point where only those privileged enough can access it, we are excluding an important segment of Manitobans from full participation in this society.
404 We have been hearing a lot in the media lately about rising costs in this province, and there is always this tone of inevitability surrounding it. In some cases that is true. There is not a lot Manitobans are going to be able to do to decrease the price of home heating fuel on the global market.
405 The message I believe Manitobans are sending you today by their presence here, by all the petitions and letters they have signed, is that this is a home-grown increase that they don't believe is inevitable.
406 This is an increase they don't believe is necessary or fair and this is an increase that they do believe they can do something about. That brings me to my second point, which is the justice or fairness of this application.
407 Think back for a minute to 1997 when local phone levels were just coming under price cap regulations. At that time consumers were assured that under price cap regulation, their local telephone rates would rise no more than 10 per cent in any given year, yet if we add the first rate increase that we had in 2000 under price caps to the $6 that we are discussing today, the 52 per cent increase facing Manitobans in some remote areas, and I am talking like band EA, I believe's called, not to mention the 34 per cent increase facing Winnipeggers, it flies in the face of that agreement.
408 This isn't rate shock. It's rate electrocution. At the same time, the beginning of price caps in 1997, a reasonable expectation of earnings for telephone companies was indicated as part of the agreement. Based on this expectation, the additional tax deductions that MTS had accrued while still a crown corporation were forecast to cover the company's income tax until 2001.
409 In a later proceeding, it was ruled that the benefits from these additional tax deductions were to go toward keeping rates low for MTS customers, not to benefit the company's shareholders. However, almost every year since 1997 MTS earnings have been in excess of the reasonable expectation going in its price cap.
410 Their return on equity to their shareholders has been much higher than indicated in the original agreement. The result is that they have used up the additional tax deductions sooner than anticipated. It has been the shareholders of MTS who have benefited from some of those deductions, not residential ratepayers.
411 It was still the captive residential ratepayer that the company turned to when the tax bill came due earlier than expected in 2000 by applying for an interim $3 per month increase to begin August 1. In addition, MTS is now asking them to pay another $3 per month toward this year's income tax bill, 2001.
412 CAC Manitoba is pleased that MTS is doing so well. It's great that the company and its shareholders are able to benefit from those higher than expected earnings, but we believe that those who reap the benefits should also foot the bill for the extra costs associated with those excess earnings.
413 Residential ratepayers should not incur astronomical rate increases because MTS shareholders have a higher than expected return on equity. CAC Manitoba would never suggest that MTS should not be able to recover a fair and reasonable portion of their income tax costs from every segment of their customers, including residential ratepayers.
414 We are convinced, however, that residential ratepayers should not be made to bear an unfair portion of the tax burden simply because they cannot go elsewhere.
415 Other telephone companies in other provinces have been paying income tax for years, yet MTS would have us believe that Manitoba's rates must he close to the highest in the country to enable them to pay their income tax. This raises some serious questions about the company's efficiency.
416 CAC Manitoba strongly recommends that the CRTC prohibit MTS from charging residential ratepayers for any portion of their income tax cost that is a result of earnings in excess of expectations going into price caps.
417 Toward that end, we recommend that the Commission disallow the $3 rate increase to take effect in January 2001 and that the Commission re-evaluate the amount of the interim increase granted as of August 1, 2000.
418 On behalf of CAC Manitoba, I would like to thank you for the opportunity to be here this afternoon.
419 THE CHAIRPERSON: Thank you, Ms Desorcy. The weather here isn't particularly dreaded.
420 MS DESORCY: It's not that bad, eh? We arranged that just for you.
421 THE CHAIRPERSON: No worse than it is in Nova Scotia right now, I assure you.
422 MS DESORCY: That's true.
423 THE CHAIRPERSON: And as far as the nervousness, I have been on the Commission now for ten years and given a lot of speeches and chaired a lot of meetings and I still get nervous every time I speak in public or chair one of these meetings before it starts. I find if I am not a little bit nervous, I don't tend to do a very good job.
424 There is nothing wrong with being a little nervous.
425 MS DESORCY: Thank you.
426 THE CHAIRPERSON: We are actually into, I guess, some of the afternoon folks now. If they are here we will just keep going.
427 Mr. Krushen.
428 MR. KRUSHEN: Thank you, Mr. Chairman.
429 I understand that we have now managed to reach Mr. David Brand.
430 Mr. Brand.
431 MR. BRAND: Yes, I'm on the phone here.
432 THE CHAIRPERSON: Okay, Mr. Brand.
433 MR. BRAND: Good morning.
434 THE CHAIRPERSON: Good morning.
PRESENTATION / PRÉSENTATION
435 MR. BRAND: I am going to take you off speaker so you can hear me better. Can you still hear me okay?
436 THE CHAIRPERSON: Yes.
437 MR. BRAND: Okay. I don't have my letter that I sent to you, so I am going to have to just wing this. I hope you had an opportunity to read it.
438 THE CHAIRPERSON: Yes, we have your letter.
439 MR. BRAND: Okay. Great. Thanks.
440 I much commend that lady that was there before me. She hit every point that I ever imagined having to hit. I wish I was as prepared as she was.
441 My biggest concern was the fact that the MTS is no longer a crown corporation and that they are now looking for an increase to cover income taxes. I don't know why that wasn't covered in the business plan when they went public. I'm quite surprised they are looking to protect their shareholders by relying on the consumers to contribute towards the shareholders' profit.
442 I think they should internalize their look at finding better profitability in ways of cutting down on administrative costs, paper billing and so forth. I get billing as a consumer. Personally, I get four or five sheets of paper on fancy letterhead that I certainly don't need as a consumer. I don't see the value. Simple billing on black and white paper would be sufficient. If they are looking at ways to better the bottom line, that would be one way.
443 As a businessman, the same thing comes across my desk every day from suppliers providing billings in such a way that is very costly. We ourselves cannot afford to do our billing or invoicing in such a manner because it's cost-prohibitive for us. It would definitely affect our bottom line.
444 I think there's a way that MTS can generate the profits they are looking for internally versus looking to the consumer once again to increase their profitability. That's basically along the lines of what I have written in to the CRTC.
445 I don't know where we go from here. Do you ask me questions now?
446 THE CHAIRPERSON: No, we don't necessarily have any questions, Mr. Brand. We just wanted to give you an opportunity to elaborate on your submissions.
447 That's your presentation then?
448 MR. BRAND: That's it, sir. Yes.
449 THE CHAIRPERSON: Okay. Thank you very much.
450 MR. BRAND: Okay. Thanks for your time.
451 MR. KRUSHEN: Our next presenter will be Ms Theresa Ducharme on behalf of People in Equal Participation Inc.
PRESENTATION / PRÉSENTATION
452 MS DUCHARME: Good morning.
453 THE CHAIRPERSON: Good morning, Ms Ducharme.
454 MS DUCHARME: I am Theresa Ducharme on behalf of People in Equal Participation Inc., PEP for short. I wish to present our concerns regarding the dehumanization of Manitoba Telephone System.
455 Trying to get help is very difficult because most of the time the only response we get is a recording which tells us to press buttons. Often we need communication with a person.
456 I brought my telephone with you -- with me, pardon me -- to show you that from the time I press number one, it takes me two more seconds or three more seconds to press number two, or number four or number five by the time it's over at the end. People like myself, the disabled, are trying to use the communication system. It's great for technology.
457 I have got a telephone in my hand, but I can't use it because my hands don't work that well. At the same time they say press one, press three, press four, press five. You got nobody to talk to. They can't do it for you. You don't know where you are going.
458 Why do we have MTS? Why do we need MTS? Why must we always punish the elderly and the disabled on fixed incomes with rate increases regarding essential services such as the telephone? I feel like we are being punished.
459 Every time they need a dollar or they need an increase for their wages, there's always let's go after the consumers that can't move, can't do this, can't do that and can't defend themselves and they won't be out here anyway. I'm shocked to see that there's hardly any people here this morning.
460 They said "Well, I tried to get our members out" and they said "Theresa, do you think CRTC is going to listen to you or anybody else? Do you think that -- they have already made up their mind what they are going to do, so why even bother going out to do your own little thing because they are not going to listen to you or anybody else there? They are going through a public hearing to say that they gave the chance to the public to come and voice our concerns".
461 I said "Well, I will get my own transportation". I have got my personal attendant helping me. I had to get up extra early this morning to meet the needs of MTS' public hearing. I say "You know, my lifeline is my telephone in order to be in the community. I can't do without my telephone".
462 I have a medical alert system. If my machine stops, I can only breathe three minutes on my own. I have to press medical alert hoping -- hoping that the medical alert will contact 911 or bring the medical services to save my life. I have only had to use it a hundred thousand times.
463 My husband just returned from hospital himself. I said "You know, MTS must be going through I don't know what". I said "I plan on resolving this matter myself as an individual because I am here to stay". I love to live and I live to love.
464 Seeing as there's no cure for Mrs. Ducharme, it's called l-o-v-e. See? That's why I'm here supporting MTS in the fashion that I will outlive MTS or I will do something because I will be here to stay.
465 Why is it that when all employees must have a raise in pay, the funds are discovered? You know, employees go on strike. They can do this, they can do that. When will the Manitoba Telephone System consumers go on strike to promote their disgust over the rate increases and the less humanized services being bumped on us in the name of digital technology?
466 You see, it's so painful to us to see that we are forgotten. We have nobody to talk to. The employees are invisible. They are not there any more. You ask for an operator and you -- the less humanized Manitoba Telephone System encourages digital VLT insanity. That's how I see it. You are pressing buttons forever, forever, forever, hoping to get the number that you want, but you can't.
467 So there we are. You have dialled 411 and have asked for an Operator. The Operator arrives after a fair length of time. Then they automatically hook you up to the digital circuits.
468 Previously the MTS tried to satisfy their customers by having human employees respond to our needs, human employees, okay? This digital insanity without human communication is our greatest disgust with MTS. Less service and more pay.
469 Before MTS became privatized, special needs clients received certain services free because of their low and fixed incomes. Now they have to pay for disabled services as well as pay for the drastic increase in the MTS basic rate per month with little or no increase in their own income.
470 We haven't had an increase in our -- a raise in our -- the social services hasn't given a rate increase until the government wakes up six months or two years later and says "Okay, well everything else has gone up, now we will think about giving the disabled and the elderly a rate increase". By that time, MTS has asked for another rate increase.
471 We can't even catch up. It's like going to the Assiniboine Downs, wondering who is going to get to the race first. Who is going to win? Geez, even though MTS is my lifeline, I plan to go on strike as soon as I set out an alternative plan of safety for myself. Then I plan on going on strike. You know that?
472 I would love to see them lock me up and say "Come, we are going to take you because you didn't pay you bill. We will cut you off". I will say "Oh, who is going to be responsible for Mrs. Ducharme's life?" It won't be euthanization or whatever you call it, all this compassionate homicide. It won't be that. It will be the fact that MTS is not there.
473 There's other economical alternatives, but at the same time other business are coming out about. Of course, time changes everybody, but I still depend on MTS. They have always satisfied my needs. I have been disabled with polio for 47 glorious years, found a loving husband, living in the community.
474 I have my own little business. I run an organization from my phone, but most of it is done through communications, through my lifeline, MTS. They have always satisfied Mrs. Ducharme's needs, that I'm still alive, happy, ready go -- can do anything.
475 I think what I plan on doing most is I will go on strike. I plan on going down to the office of MTS and volunteering my services free of charge and showing them that most of us consumers will come out -- will volunteer at least two days of our -- a two day shift, eight hours, and work for nothing. If that doesn't bring down the prices, I don't know what else will because everybody will be rotating and there won't be no jobs available for anybody because we will be doing it voluntarily.
476 That's how important it is that we keep people happy and we keep them healthy and most of all, we keep them in the community and move with technology and not make it insanity, but make it satisfaction for people and consumers who depend on this beautiful system.
477 It's unbelievable that we have to keep going back and forth. I remember when telephone service was only 60 cents or only 40 cents and my mother, raising nine children and everything, she couldn't hardly afford to have a telephone, best and least to have a party line.
478 We used to have to wait way back when nine families were on the same line. We were still happy because we had a telephone. You could still call somebody for help. You go back and forth.
479 Now we have got computers, now we have got this and we have got that. Everybody has time to buy a package of smokes at seven bucks a shot, they got this and they got that, but not everybody has the income of people that are employed.
480 Our population is aging. Sooner or later you will probably be my room-mate because I am going to outlive everybody. I'm telling you, the gentleman over there, I'm telling them that every time I see somebody I always smile at them and say "Oh, you are stuck with me now because I'm here forever". Isn't that right? Here is your smile, sunshine.
481 I'm here to cheer everybody up. At the same time, I am not a political haemorrhoid, sunshine, I'm a political catalyst. Remember, there is no cure for PEP. PEP stands for pester every person until you win. We don't win and we don't lose because we go forever and ever amen until we get the answer.
482 I hope to God you have a question or anything for me because I would like to answer. Don't forget, your office better be accessible for me and everything ready for me because I'm coming up to volunteer services.
483 Have you got a telephone set? That's why I brought my telephone with me. I hope you start to answer the telephone calls instead of this digital insanity that I have been coping with for the last few months.
484 Any questions?
485 THE CHAIRPERSON: Well, I don't have any questions, Ms Ducharme. I would like to just make a couple of comments first of all to your friends who said that we are suggesting we may have prejudged. It may sound trite, but we haven't prejudged any issue. I think I can speak for my colleagues.
486 When we have gone across the country dealing with many issues, we find these hearings extremely informative and helpful in us rendering a decision. It has had a huge influence on the ultimate outcome of our decisions, whether it is the comments from consumers like you.
487 I wouldn't suggest that you are pestering at all. We appreciate the input that we get from you and others or the submission that we get from the company itself. We weigh all of those issues.
488 I think if you look back -- I recall you appeared before us two years ago, I think it was, when we were here. I think you could suggest to your friends that you and others had an influence on the outcome of that proceeding at that time.
489 MS DUCHARME: Why do we have to pay for our services when our telephone breaks down and we have to wait so long to get it fixed? Why do we have to pay for the services when we don't even have an income? Most of us don't have an income. I'm not employed. By the time I get to fix my phone, it's painful.
490 THE CHAIRPERSON: One of the things I would add to that comment and others that others have been made, the Commission has announced in our strategic plan or our work plan for the next year that the Commission is going to be addressing this question of affordability as it relates to low income people with a proceeding we would probably initiate later this year.
491 MS DUCHARME: Do you have an advisory committee from the public, with people from all walks of life, that are helping you come to a decision, because I would like to offer my services?
492 THE CHAIRPERSON: We will be seeking input from the public on that very issue, and we will seek input from you. We know that you will take a key interest in that issue.
493 MS DUCHARME: That's right.
494 THE CHAIRPERSON: I thank you very much, Ms Ducharme. I appreciate you coming here this morning.
495 MS DUCHARME: And you are all buying a mosquito egg before you leave because that is how our PEP organization exists because we raise funds by selling mosquito eggs. How do you like that, eh? You have got to see a mosquito egg. And nobody needs them but they do buy one.
496 THE CHAIRPERSON: We will arrange through Mr. Krushen to get some.
497 MS DUCHARME: Good. He can buy one for every employee because we brought 50 for you to purchase. You know what I mean? There you go. That's how you make money, honey. There you go.
498 THE CHAIRPERSON: Thank you very much.
499 MS DUCHARME: Don't forget.
500 THE CHAIRPERSON: We won't.
501 MS DUCHARME: You are going to cure this because I am here to stay.
502 THE CHAIRPERSON: Mr. Krushen.
503 MR. KRUSHEN: Thank you, Mr. Chairman.
504 I understand that we have now been able to contact Ms Sklar.
505 Please proceed, Ms Sklar.
PRESENTATION / PRÉSENTATION
506 MS SKLAR: Good morning.
507 I am a senior with a very low income, like around $13,000 a year. One thing to me, the phone is very essential. The way it keeps going up and up and up, pretty soon I won't be able to afford it.
508 I have my own home. It's an old one. I have to pay taxes on that. I have an old car. I have to pay insurance on that, plus gasoline and everything, plus my pills. Plus utilities and everything.
509 It's a good thing I have a good brother that I can depend on him. Every so often I'm in a bind and he pulls me out. But I mean, I hate to do this all the time because he has his own family. The thing is that now with the telephone, they want to raise it up again, I'm afraid that I might have to say I can't afford it and that's it. But a phone is an essential thing.
510 You know, the other day when that old gentleman had tried to help the mute lady, if he had a phone maybe it would have been better off and maybe he would have never been in the position that he was in with the bleach and everything if he would have been able to phone the police for help instead of giving the lady money to let her take a bus.
511 Also, I don't see why the telephone has to be raised yet when they spend I'm sure it is millions of dollars on advertising. Sure they are cute with those bison and everything but I mean they are spending millions of dollars in advertising. Why don't they just save some of that advertising and let the people have a cheaper phone bill instead. At least the seniors. There should be something for the seniors because they need a phone. It is essential for them to have a phone, and, I mean, they can't afford it, not with -- and I'm sure I'm not the only one with a low income like that. I'm sure there must be hundreds of them.
512 That is about all I have to say. I thank you for taking the time to hear me.
513 THE CHAIRPERSON: Thank you, Ms Sklar, for taking the time to make your representation.
514 MS SKLAR: All right. Thank you. Bye, bye.
515 THE CHAIRPERSON: Bye, bye.
516 Mr. Krushen.
517 MR. KRUSHEN: Thank you, Mr. Chairman.
518 Next on our list is Ms Gerri Hewitt, but I don't believe that she is here.
519 THE CHAIRPERSON: We are actually into I guess the groups that had indicated they would appear this afternoon, so it may be --
520 MR. KRUSHEN: Yes, that's correct. Although, I am going to proceed through the list. I note there is one individual who is here, but in fairness to the others I will just quickly run through it.
521 Is the representative from the MKO in the room? No?
522 I know Ms Swedick, the next one, is not coming until this afternoon.
523 Is Ms Marlene Vieno in the room? Apparently not.
524 Ms Ellen Kruger?
525 THE CHAIRPERSON: Mr. Krushen, why don't we do it this way.
526 Is there anybody else in the room who wishes to make a presentation?
--- Pause / Pause
527 MR. KRUSHEN: I know that Mr. Cerilli I have spoken to earlier.
528 Perhaps, Mr. Cerilli, if you would like to make your presentation now.
PRESENTATION / PRÉSENTATION
529 MR. CERILLI: Thank you and good morning. I welcome you to Winnipeg, of course.
530 Our organization is made up of the Union Retirees and we are affiliated with the National Congress of Union Retirees of Canada. As an affiliate, we are advocates for seniors and all kinds of different causes in regards to things that affect society as a whole, nationally and internationally.
531 We welcome you to Winnipeg and we wish to register with the CRTC our strongest opposition against the MTS request for a rate increase to the basic phone rate presently being charged.
532 Our reasons are as follows for the CRTC to consider:
533 One, MTS seeks an increase in rates to offset the taxes it now is required to pay. The previous provincial government said at the time of the privatization in 1997 that the new corporation would be required to pay its share of taxes as an argument to get public support. In addition, at the public legislative hearings at that time, the provincial government also reconsidered the matter of the pension plan covering the employees. The deal was struck in the midst of much opposition and the fear that this telephone lifeline would be out of an affordable essential service. Yet MTS comes before you wanting more from its customers. We say to you, and recommend, that you say no.
534 Two, MTS on the one hand comes to you to plead poverty, and on the other hand has gone wild with advertising cheaper rates for customers that are in the gadget electronic service. In a brief review, MTS is not alone in this. Other companies are as well.
535 Electronic services, cell phones, wireless services, high speed/same phone line Internet, MTS first rate ultimate plans, all these incentives/ charges are all geared to those that can and may afford them or want the service. There is no benefit to the regular customer or incentive of relief from the charges of the essential telephone. Promotion is one thing. Excess is another.
536 Three, the line telephone is the lifeline for call centres, may it be 911 or the telephone centres that are established all over the country now. This present means of mass marketing is essential to the call centre and without lifeline telephone these enterprises will not meet their commitment to their customers.
537 We, in the present society of change, are not all connected to the Internet, cell phone, or whatever other electronic service is out there. Many northern seniors, low income families, as well as the families simply are faced with cost-of-living increases that cannot be offset. To price a phone or other commodities out of their reach is a path to an unhealthy society. I say that simply because of what is happening to our society. If you don't get a response to 911 or an ambulance or police it creates a real problem.
538 Emergencies face everyone. For those that only have a line telephone service in their home or place of work, the lifeline telephone is essential in many life or death situations.
539 Again, we say no to rate increases.
540 Four, MTS is not in any new infrastructure of wiring. The only investment is in the MTS wireless division to beef up the MTS digital cellular services to serve that market. From the Winnipeg Free Press Report on Business, January 5, 2001, the line phone is not affected. The $50 million investment cannot be achieved through the back door via the CRTC. Those services will either have the market to pay for themselves or the shareholders wanting to invest will provide those funds.
541 The application before you must not be allowed.
542 Five, MTS, on page 2 of the MTS letter to Ms Shirley Soehn, Executive Director of CRTC, September 1, 2000, in the last two lines states:
"Utility segment income tax expenses would have to be recovered from basic local residential services since most residential local services are priced below cost." (As read)
543 Who says they are priced below cost? That is a serious question. If they are, does that mean that MTS is not making a profit to pay taxes for the loss on the basic local residential services?
544 On page 3 of this letter to the CRTC, MTS states:
"Income tax expense is a cost recoverable through rates for all federally regulated telephone companies. MTS' utility segment is incurring income tax expenses at the statutory rate of 46.12 per cent in 2000 and 45.08 per cent in 2001. Of every dollar of revenue collected to fund the recovery of income tax expense, 62 per cent will ultimately flow through the federal government, and the remaining 38 per cent will flow through the provincial government." (As read)
545 I think that that is a direct quote, and I end it there.
546 May we suggest that MTS wishing relief from these tax percentages apply to the federal and provincial governments like we have to do, or even City Hall. And that is a fact.
547 MTS and competing phone companies, and their war for the customer, as in other services of goods providers, means lower prices for the customer. Not so in this case of telephone companies. As an example, in the application before the CRTC, MTS wants you to grant the telephone company a rate increase so it can be and remain the good guy. I think that is wrong. Either they stand on their own two feet and do the business planning that is required or don't come before you simply to pay their taxes.
548 At the same time, the CRTC is being challenged. And the challenge comes from -- to the CRTC -- being challenged on two fronts: by Telus and your subsidy ruling. Telus appealed to the Federal Court of Appeal, has asked to review this decision, and may have a bearing on the rate increase application to the CRTC by MTS.
549 Bell Canada, on the other hand, is challenging your decision directly to the CRTC for a review and vary.
550 The CRTC is caught in the middle of a possible upset in the manner in which decisions are made on rates.
551 The court may rule one way and the CRTC review may hold fast and say: We, the CRTC, have ruled.
552 The people of Manitoba are also caught in the middle of what could be reviewed as collusion by the telephone companies, and the CRTC may be wise not to grant any rate increase to the MTS whatsoever, and particularly for tax relief.
553 Some observers may even believe that these three different applications and challenges did not happen by accident and happened by chance.
554 We would request the CRTC to set aside, until such time as the Federal Court has ruled, the CRTC has ruled, these hearings to date after the challenges have worn through the system.
555 Seven, our request for the CRTC to set aside these proceedings until such time as the appeals have been worn through on basis of the assumption that a change in federal legislation may be required for: (a) a new mandate for the CRTC; and, (b) a new set of federal and/or provincial regulations on a new act governing radio, television, telecommunication, Internet and any like services.
556 I think that the present debate has not reached far enough in the House of Commons, with the provinces and the public to alleviate the concerns on that, if I can add that, Mr. Chairman. I think that that is a serious concern around. And the implications are great and I think the court has to have a ruling first before you act on the request of the CRTC.
557 One last thing. As a retiree organization, we do not have the means, financial or otherwise, to do a complete investigation or audit of these giants and must rely on the CRTC or the federal and provincial governments to protect the public good, and we would ask you to do an audit of the books, and I am sure you will.
558 Respectfully submitted on behalf of our membership and other Canadians, may they be young or old.
559 Thank you very much.
560 THE CHAIRPERSON: Thank you, Mr. Cerilli. I appreciate your time here this morning.
561 MR. CERILLI: Thank you.
562 MR. KRUSHEN: At this time I would like to ask if there is anyone else in the room who has registered to make a presentation, would like to do so at this time, please identify yourself and come forward.
563 THE CHAIRPERSON: Or is there anyone else in the room who didn't register who wishes to make a representation here this morning? No.
564 Well, in that case, Mr. Krushen, ladies and gentlemen, I think we will take our break.
565 Normally, we only take an hour and a half break for lunch, and I would be inclined to reconvene earlier than we anticipated, but I understand, Mr. Krushen, most of the parties had been informed that we would reconvene around 2:00 so they likely wouldn't be available before then in any event.
566 MR. KRUSHEN: It is possible that some may come earlier, but I would suspect that many of them are planning on the 2:00 time frame.
567 THE CHAIRPERSON: In that case, then, we will adjourn now and reconvene at 2:00 p.m.
568 Thank you very much.
--- Upon recessing at 1125 / Suspension à 1125
--- Upon resuming at 1400 / Reprise à 1400
569 THE CHAIRPERSON: Ladies and gentlemen, welcome back to our proceedings.
570 For those of you who weren't here this morning, I will just remind us that we are here to deal with MTS Communications, the issue about the income tax, and we are addressing how much of the income tax shall be recovered through customers of MTS services for the years 2000 and 2001.
571 Today is a more informal proceeding to hear from the public, customers of MTS in Manitoba, and we are providing an opportunity today to hear from the general public.
572 So we have gone, today, through the list of folks that we had who had registered to appear in the morning. We were also able to do a couple who had indicated they would appear in the afternoon, but we had the time to do a few this morning.
573 So we will pick up the order this afternoon.
574 I will just remind parties, when you come to do your presentation, come forward to the table in front of us here and sit in front of one of the microphones and turn the microphone on.
575 You have 10 minutes to make your presentation. We still have quite a few parties to go, so I would encourage you to respect the time limit so we can hear from everybody before the end of the day.
576 So, with that, Mr. Secretary, I will ask you to call the next party.
577 MR. KRUSHEN: Thank you, Mr. Chairman.
578 The first presentation this afternoon will be by Gerri Hewitt, Executive Director of the Manitoba Society of Seniors.
PRESENTATION / PRÉSENTATION
579 MS HEWITT: Mr. Chairman, Commissioners, ladies and gentlemen, thank you very much for allowing me to speak today. I represent the Manitoba Society of Seniors, a non-profit organization, member-based, who look after the needs and concerns of seniors in Manitoba.
580 Have you ever thought what today would be like if Alexander Graham Bell had not discovered the phone? Oh yes, there were others that were very close behind and in doing some research I discovered that one person was only hours behind Mr. Bell in getting the patent for the telephone.
581 But in 1876 we had the telephone first brought forth. The world would be a very different place if we didn't have the telephone today.
582 So what does that mean as far as the presentations that we are making? To the dollars and cents and to MTS and their shareholders it means a company, it means profits and it means providing a service. To the seniors in Manitoba the telephone means something different. It has a huge impact on their everyday life.
583 I can remember years ago the crank phones. Maybe I shouldn't admit that, but that means I'm pretty close to a senior as well. You turned the crank so many times and the local operator picked up and you chattered a while with her and then she put through your call. Oh, and before she did you got the information of the community, you found out who was doing the good things and who was doing the bad things and what everybody in the community was saying. And you felt a little more secure in your home. Maybe they even gave you a little advice. Life was a little simpler.
584 However, that isn't always the case today.
585 At the beginning of the telephone era it was for the well-to-do. But that changed over time as technology took over. And as there were more telephones out there they became more affordable, either at home or at business.
586 Today it seems we are going backwards. The telephone is becoming for the "haves" again. Only those will be able to pick up the phone in the comfort of their home and business. Yes, it is happening today.
587 My organization speaks for all seniors. And not all seniors are on fixed incomes. Just like every generation, seniors are a mix. But for those who are on fixed incomes, the phone is an important tool in their homes.
588 A $3 interim increase in August and a proposed $3 increase in February, and the total $11 or more increase since MTS became privatized, sounds like a little bit, and for some it is just a small amount, it's loose change in the pockets. But for others that is not the case.
589 Why is the consumer on a fixed income, of a company that is doing extremely well, having to take the brunt of the income tax necessary to be paid. Will this population become the no phone population?
590 I would like to put a bit of a face on those I'm talking about. I would like to call the person Mary. This isn't a story I made up, it is a story that has come over the telephone lines to me.
591 Mary is receiving her old age pension and her supplement. Not a massive income. It went up slightly last year.
592 Mary has health problems, but she is making out okay at home. She has some help. She is a part of a network that call each other at 10:00 a.m. every morning, just to check in, to have another voice and to find out if they are all right. Twice a week she calls for groceries, and they are delivered.
593 Last year, Mary fell and broke her hip. But she was able to go back to her home. When she broke her hip she was able to call 9-1-1 for help.
594 The phone is Mary's lifeline. With this instrument she is able to live in her own home. Without the phone she will probably end up in a personal care home. She doesn't want it. Neither should we.
595 This story may seem exaggerated but, rest assured, it's not. Since the announcement of the telephone increases I personally have answered at least one and frequently a dozen calls a day from people who are concerned that the telephone is going to be a luxury for them. Is the telephone a luxury or is it an essential service? I don't have that answer.
596 Recently, those of us who read the newspaper have seen wonderful announcements by MTS about the expansion of the Internet, the expansion of digital cell phones in rural Manitoba. This is the competitive side of MTS and this only connects us even more to the world and is wonderful for some of us.
597 However, local, essential, basic telephone has no competition. Our provider is MTS. Without this telephone we could become, for many, a no-telephone people. It may mean we go from our apartment to the pay telephone in the front hall if this happens today.
598 The question is money. But the question is really: What is going to happen to many of the people who live in Manitoba without a telephone?
599 Thank you very much.
600 THE CHAIRPERSON: Thank you very much, Ms Hewitt.
601 I'm sorry, Ms Hewitt, my colleague Commissioner Cram reminded me that I didn't read a ruling the Commission wished to make regarding an issue between MTS and the -- regarding the more formal proceeding that we will participate in tomorrow, an issue between MTS and CAC/MSOS.
602 So let me just read this into the record for the benefit of CAC/MSOS in terms of dealing with the issues tomorrow and the rest of the proceeding.
RULING / DÉCISION
603 THE CHAIRPERSON: The Commission is now prepared to make its ruling with respect to MTS' request for further responses to interrogatories posed to CAC/MSOS -- that is the Consumers Association of Canada (Manitoba) and the Manitoba Society of Seniors.
604 On January 3rd, CAC/MSOS responded to MTS interrogatories on CAC/MSOS's evidence. On the 5th of January MTS requested further responses to 16 of its interrogatories. On the 8th of January CAC/MSOS replied.
605 After considering these submissions, the Commission has decided that CAC/MSOS has adequately responded to all of MTS' interrogatories except for CAC/MSOS-MTS, 19 December, No. 6.
606 CAC/MSOS is directed to either provide the reference required or the basis of Mr. Johnson's assertion. This information should be provided by 5:00 p.m. today.
607 The Commission's ruling is in accordance with the principles enunciated in past proceedings.
608 So I believe there is a representative of CAC/MSOS here to take note of that ruling.
609 Mr. Krushen, then, we will go to the next party, please.
610 MR. KRUSHEN: Thank you, Mr. Chairman.
611 I would now like to call Mr. Michael Anderson representing the Manitoba Keewatinowi Okimakanak.
PRESENTATION / PRÉSENTATION
612 MR. ANDERSON: Thank you, Mr. Chairman, members of the Commission.
613 THE CHAIRPERSON: Good afternoon, Mr. Anderson.
614 MR. ANDERSON: It is very nice to be here this afternoon.
615 It's not nice on the matter of the increase that is facing our First Nations membership in the North, but a pleasure that we have the opportunity to speak to you. I appreciate it very much.
616 There are two documents that I have provided to your staff that I won't wish to refer to during my comments, and a third comment that my associate from the Public Interest Law Centre has just left with me. If I might be able to circulate these as well.
617 Thank you.
---- Pause / Pause
618 MR. ANDERSON: Before I proceed, I would like to make sure that the references that I wish to refer to are before you.
619 In the document just being circulated, which is an extract from an early report presented to this Commission by MKO, I would like you to, if possible, flip to the last page one, which is a map. It is fairly straightforward.
620 THE CHAIRPERSON: This was the document that was your submission in the high cost proceeding?
621 MR. ANDERSON: That's correct.
622 THE CHAIRPERSON: Okay.
623 And the map on the last page?
624 MR. ANDERSON: Yes, please.
625 THE CHAIRPERSON: Okay.
626 MR. ANDERSON: And then the first page of the Table "MKO First Nation Access Statistics".
627 THE CHAIRPERSON: Okay.
628 MR. ANDERSON: And then a memo that I had sent to Mr. Williams earlier this year on MKO stationery dated March 20th, 2000.
629 Thank you very much.
630 As I have been introduced, my name is Michael Anderson. I am the Research Director of MKO's Natural Resources Secretariat. It is a capacity that I have held with MKO since 1988.
631 One of the interests that MKO and Mr. Williams had had in having me appear before you, of course, is my experience in using the telecommunications network in Northern Manitoba to conduct the business of the Natural Resources Secretariat in MKO.
632 Our staff group also has been responsible for installing, for example, MKO's first network system. We have maintained that system. We have maintained and installed much of our telecommunications and Internet capabilities.
633 So in addition to being the techies of the group we also have had direct exposure and familiarity with the use of telecommunications networks.
634 In terms of our First Nations, as the summary on the map indicates, Figure 2, "Remoteness", that 15 of our 26 First Nations are not accessible by all-weather roads and are accessible either by air or winter-road only. One community also has the benefit of a rather archaic rail line that collects ore from mining operations but, in essence, means of communicating beyond standard driving and travel is essential to us and that, of course, is our telecommunications system.
635 The population, as you can see from the second page of my access statistics, we have approximately 47,000 members in our 27 First Nations. And, as you can see, they are presented throughout Northern Manitoba across something -- three-quarters of the surface of the Province of Manitoba.
636 Now, that poses a great deal of challenge to MKO as an organization in that there are at least four languages, not counting dialects spoken within our region, Dene, Ojibway-Cree, Cree, English, and in conducting our operations and organizing our annual assemblies, our special assemblies, special meetings, conferences, just day-to-day business, we have become experts at communicating over this vast territory and, I must say, learning to adapt to limitations in our communications capabilities.
637 By way of a bit of a story, I would like to share an anecdote that prior to 1990-91 the community of Tadoule Lake, Manitoba, which is the Sayise Dene Nation, was supplied with radio, telephone and a single pay phone in the Band office, which meant that for MKO to conduct its business with the Sayise Dene Nation, formerly known as the Fort Churchill Band, we literally had to charter aircraft and fly there and hope that people were not away from the community hunting or on other business or visiting another Dene community.
638 In terms of the advancement, now there is telecommunications capability in terms of telephones that are installed in some of the homes of the community.
639 The report that we submitted to you earlier talks about penetration rates and the availability by community, but in terms of the benefits of telecommunications we have not really moved that much further ahead. In other words, in many respects we are still flying out of the community to do our research.
640 What I mean in particular is that given the isolation of our community telecommunications, and particularly the ability to use the Internet, are a way to link our communities literally with the rest of the world. In most of our Northern communities, the telephone -- telecommunications capabilities are so poor that the use of Internet isn't practical.
641 Now, our office would be very interested in being able to take advantage of the capabilities, partly because of our long years of experience and, I must say, frustration trying to communicate with 27 First Nations and not being able to do so.
642 Our offices, ironically, are often equipped with fairly modern state-of-the-art computer systems that are more than capable of actually conducting telecommunications -- either messaging, images and Internet -- but simply don't have the connective network to do so.
643 So we are left with this rather strange situation where we have relatively modern equipment that we cannot use to its full capability. In our office we have broadcast, fax capability which, of course, automatically redials, and our fax units frequently just give up trying to communicate to our communities.
644 One of the things that had been expressed, I believe, in the high cost of service proceedings, as I understand the comments made by MTS and by others, is that there are relatively few formal complaints, strangely, with this record of experience within our region. So I began to discuss with my staff, with the organization, with Byron, a telecommunications log project so that we could remedy the apparent lack of formal complaints being filed either with the company or before the Commission.
645 Now, while this list of three pages seems lengthy, it is broken down by incidents that occur for telephones, facsimiles and Internet. These are actual occurrences that take place on a literally daily basis that our staff, through a brainstorming session, identified as things that we needed to actually matrix on a form and begin to log. Perhaps the most frequent is "We're sorry, all circuits are busy now. Will you please try your call again later."
646 And when you think about an organization such as MKO, with some 25 personnel, our affiliated Tribal Councils, of which there are three, the Swampy Cree Tribal Council, the Keewatin Tribal Council and the Island Lake Tribal Council are three independent First Nations at Opaskwayak, Norway House; Pimicikamak, Cross Lake; and Misichawayasihk, Nelson House, plus all of our remote communities experiencing these staff-person-by-staff-person on a daily basis throughout the network of First Nations government.
647 This adds up to considerable difficulties, but also considerable additional costs in our operation.
648 We are looking at the fact that it is often extremely difficult literally to reach leadership, technicians and membership in our communities for days because of these kinds of operations.
649 If I were to diarize my activities, of course you have a list of things to do: phone this person, call that person, double check on this, forward that. You begin to go down your list, and if you can't reach somebody you skip over it and hope to get back to them.
650 Sometimes just due to the pressures of our workdays, we may not be able to get back to an individual for a matter of a couple of days either.
651 When you begin to compound our difficulties in reaching our membership and leadership and the difficulties of the communities in reaching us, you begin to see a communications requirement that is wrapped up in service requirement, wrapped up in services that really do not serve our very high requirements for active and widespread telecommunications, and also have the result of our incurring additional costs that are not even appearing on our bills. That is staff time, repeating faxes, having people pull files out of archives and other documents while I fax the document that may have disappeared or have been incomplete in its receiving end, that we have to pull and refax again.
652 It is something that we would like to document and present to this Commission in the future.
653 When we look at the application of the company and the considerable increases there being considered for ranks C, D and E, which are primarily our membership, it is against the backdrop of being unable to use our telecommunications network efficiently, incurring considerable additional costs in doing so, and then facing significant rate increases that we must say enough is enough, and we are not paying for the service.
654 In fact, if you look at the ability to communicate, our service has worsened over the years in relative terms; that is, we are not that much effectively further ahead than the day when we had to fly out to Tadoule Lake to conduct a meeting. We still can't use teleconferencing, so we are flying to have meetings to meet face to face.
655 Our conference telephones do not always work because of poor line quality. If you notice, some of our incidents were calls that were terminated by the caller or the recipient due to poor line quality, and then with all of the same attempts to reconnect again.
656 So if we are trying to reach somebody, we have to phone them five, six eight times. We finally get through, the line quality deteriorates and one of us hangs up and then we go through that all over again. That makes teleconferencing in many cases very difficult. It is often related to weather. It is often related to distance. Those are northern realities.
657 The fact of the matter is that as telecommunications capabilities and opportunities have marched on, the rest of the world is speaking to each other. Our communities are still lost in the same type of telecommunications capabilities that we had in the early 1990s and late 1980s, which is barely there.
658 There is evidence that has been submitted to you by CAC and MSOS which we are examining. We understand the issues with respect to excess profits and the tax considerations that the company has proposed to you. But for our membership we are at, and have exceeded in many cases, our ability to pay the bridge that we are facing now, let alone the rates that we are being asked to pay in the future.
659 One of the things that is important to us is that on a relative basis our communities may well -- and I say this instinctively from my experience with MKLN as an analyst -- spend proportionately greater amounts of funds on telecommunications in our remote communities than for other household expenditures than for people in urban centres.
660 Interestingly enough, that question was not asked in the 1996 or other census, including the Central Survey of Aboriginal People by Statistics Canada. They ask you to break down electrical and mortgage and other expenses like that, but not telephone costs.
661 It is something that needs to be incorporated, because in addition to the higher unemployment rates that we face and limited incomes which are between 50 to 40 per cent of the average income for the province, borne out easily by Statistics Canada Community Profile Review, we are faced with a reliance on telecommunications.
662 So here we are. We have communities with very limited incomes, incomes that are 40 to 50 per cent, if, of the provincial average, with many other persons on fixed incomes, due to social assistance and other situations. We are dealing with a remoteness issue, which means telecommunications is essential to communicate with family and medical facilities, First Nations government organizations and others, and we don't have the facilities to do it. But we are looking at rate increases in excess of 30 per cent.
663 THE CHAIRPERSON: Thank you, Mr. Anderson.
664 I must say this same panel, with two others, was in Whitehorse last June, and the situation in northern Manitoba sounds very similar to what we heard about the Northwest Territories in terms of remoteness of the communities, roads, and so on.
665 MR. ANDERSON: And limited income, yes.
666 THE CHAIRPERSON: Yes. Thank you.
667 MR. KRUSHEN: At this time I would like to call Ms Theresa Swedick, of the Deaf Centre of Manitoba.
PRESENTATION / PRÉSENTATION
668 MS SWEDICK: I just want to qualify that I am not representing the Deaf Centre of Manitoba. I am here representing the Winnipeg Community Centre of the Deaf. I just want to make that clarification.
669 The Winnipeg Community Centre of the Deaf is a pivotal consumer organization that advocates on behalf of the deaf community and is membership based. Through WCCD, I speak on behalf of all deaf Manitobans.
670 We are opposed to Manitoba Telecom Services' application for increases, for some very obvious reasons which I will outline.
671 We are totally fed up with MTS, although MTS provided the Manitoba Relay Service for many years, we are still not happy with it. MTS is not an excellent service. We often can't get through for 30 to 45 minutes. In Sioux Falls, South Dakota, this time frame would be totally unacceptable. If their relay service Sprint is busy for more than three minutes, Sprint has to pay a fine each time that happens. Their relay service is excellent and it is something that should be applied to Manitoba.
672 The more MTS asks for greater increases, the more MTS endangers the lives of deaf Manitobans. There are more and more deaf people who are on social assistance and fixed incomes that can no longer afford to have their own phones. Welfare does not provide telephone allowances to those people who want to look for jobs or who need to call for job interviews.
673 With no phones, we become isolated and fearful. For health and safety reasons, we are unable to call for help without a phone.
674 MTS has provided many features that deaf people cannot access. I have a couple of examples.
675 For example, if we receive obscene phone calls, other people have the opportunity to use the Star 69 feature to find out who has called them. However, deaf people can't do that because it is a voice based system.
676 Another example is when a deaf person tries to phone to another deaf person who has a TTY and does not get through time and time again, they find out later on that there is a voice recording saying that the phone has been disconnected. However, the person was an original TTY user, so why would they then have a voice message connected to that phone?
677 There are more examples of features that we cannot access, but I am sure that these two that I have outlined give you an idea of what we face.
678 The telephone system is not 100 per cent accessible for deaf people, yet we are paying full rates every month. What is more, we cannot have access to any pay phone in the city at any time because there are not TTYs at all the pay phones and we can't bring our own TTYs to hook up to them because there are no electrical outlets.
679 Although there are a few TTY pay phones in this city, we can't have 100 per cent access to them on a daily basis because they are located in shopping malls and those hours are limited. After they close we can't use the phones, while people who are not deaf can access pay phones at any time of the day or night.
680 Too often a person who lives in Charleswood, St. James or another farther area in the city may have to travel to Polo Park where there is one TTY pay phone, and sometimes you get there and the phone is not even working. It is the same thing in other areas. We have to travel quite a distance to get to a TTY pay phone.
681 We have been asking MTS for more TTY pay phones, but for many years MTS has continued to deny us, claiming they can't afford it. Yet they give profits to their shareholders.
682 There is 74 per cent of the deaf community who are unemployed or underemployed, and most of us cannot afford to have a phone; thus we cannot call for job interviews.
683 Even some deaf people who are working have begun to be unable to afford to have two or three phone lines that they would have to have in order to have a TTY, fax and Internet. And some people like to also have teen line, and this just becomes unaffordable.
684 I always remember the words "satisfy your consumers or your customers". It seems to be a new trend for MTS to take more and more money from us rather than to satisfy us.
685 You know the story of Robin Hood. Robin Hood takes the money from the rich and gives to the poor. But with MTS, it is taking the money from the poor and giving it to the rich.
686 It is high time that you, CRTC, listened to us and be on our side and tell MTS to use the profits to pay taxes first before paying their shareholders.
687 Thank you very much for this opportunity to speak.
688 THE CHAIRPERSON: Thank you, Ms Swedick.
689 MR. KRUSHEN: Now I would like to call Ms Marlene Vieno.
PRESENTATION / PRÉSENTATION
690 THE CHAIRPERSON: Good afternoon, Ms Vieno.
691 MS VIENO: Good afternoon. I also would like to apologize for being late, but health problems caused a setback. However, I am here.
692 I also want to apologize. I did not get around to getting a copy available. I believe it is just as well, because on my arrival when we broke for lunch earlier today further information was brought to my attention and concern. It is not just information but concerns in relation to the Disabled Women's Networking Winnipeg Group, which I am here representing this afternoon.
693 We are, all of us, a women's self-support group. We all have a disability, something that I believe CRTC -- I made mention of this before. MTS already is thoroughly aware of this, and that is that cross disability in many cases individuals -- and I speak as one of them -- do require some type of fluid at any given time and not all of us can drink ice water. If MTS can propose to expect we poor women, who are living in poverty already, to pay their debts then I think it is fine time that we were being respected at least with herbal teas, honey and coffee and juices. I don't see how that would be asking too much. It certainly would be a great benefit, and it would also prevent health care crisis and taxes for every taxpayer in this province. I had to throw that in before I forgot.
694 I am the co-ordinator for the DAWNing Disabled Women's Networking Winnipeg Support Group. We are a national network of disabled women's groups who advocate for equal justice for women with disabilities. Although the Winnipeg is just beginning, we are very much concerned about the proposal presented to CRTC from MTS requesting the right to hike phone rates to assist in paying taxes.
695 A phone is not a luxury for we women with disabilities. Many of us would not be living independent or semi-independent lifestyles like we do without a phone. To arrange medical appointments, prescription refills, deliveries of foods, prescriptions, et cetera, and booking handi-transit, checking public transit services, and for some even to order groceries to be delivered, which was mentioned earlier, a phone is a necessity. It is not a luxury.
696 Also, most apartment blocks today require a telephone for the purpose of security. To have visitors enter to visit, without a phone how will they enter? Are we going to have to sit in the lobby in a wheelchair or stand there with our walker waiting?
697 These are all things that have been overlooked and I think need to be priorized better than they have.
698 MTS must remember also that prior to the privatization, MTS was a crown corporation that was built and grown on the trust of the citizens of Manitoba. The previous Tory provincial government okayed the deal to privatize MTS. Many of those Tories are also the very shareholders of this now privately owned corporate business. If maintaining holders' investments is becoming a problem, then I have one message: Please do not hold we innocent impoverished women with disabilities responsible for your own debts. Following decades of investment into MTS as a public utility, suddenly we have no say in the matter.
699 While I say, like my dear parents always told me when I was growing up: Quit whining and face the music. In other words, take responsibility.
700 I also see such an act as an act of conspiracy, and if I was to attempt a similar conspiracy I guarantee I would be arrested instantly. What I am saying here is that this was a plan that was done and worked out by the previous Tory government. It was their decision. We citizens built this corporation and the door was slammed in our face.
701 I see this as a secretive, criminal offence because now whatever money MTS is running short on, that is not our responsibility. They knew what they were getting into. Take responsibility for your mistake, but please don't through the back door offload on to we innocent citizens. We have been ripped off already enough.
702 Like several other people who have come forward, and two women in particular did bring forth disability issues from another area. I am covering the whole cross disability, province-wide.
703 I hope that the CRTC, you people, will listen to what concerned citizens are saying. And if MTS is to be maintained, then I think we have to strike a better balance than what we have been doing and that it is not our responsibility to correct financial mistakes made by people who already have tons of money that they don't know what to do with. We all know that. Nobody can deny that.
704 Please listen to what we have to say. It is also at a political level. What really irks me personally is the way bureaucrats and politicians from all levels of government tour the world and brag about human rights. I see this as a violation of our human rights at every level. Through the Disability Act, through the Council of Canadian Disabilities, together with the Manitoba League of Persons with Disabilities, and other disability advocacy groups across Canada, changes were made within the Human Rights Act.
705 Communication is one. Discrimination against disabilities is one. This is a discriminatory act.
706 We are here. It's violating our human rights. It's violating us of the right of a telephone, the right to communicate, the right of accessibility to communicate through a network with the necessary resources. I believe that needs to be recognized a lot more strongly than it has been.
707 I believe that it is time that both MTS, the CEO, his colleagues and everyone else involved in privatizing MTS must be responsible for their own actions in poor decision-making. Learn from mistakes. Do not blame innocent people. Being responsible is being mature.
708 I also have -- two of our members, myself as one of them. Just recently I received -- made a payment on my telephone. A lot of my volunteer work is used on my own phone.
709 MTS has refused to provide a log to sign any kind of contract with me. It has all been talked over the phone and yet between September of 2000 and January of 2001 there was four times I received -- four months out of those five when I made my -- the highest payment deposit on my account which was $100 or above that when I received two weeks later a notice warning me of a possible disconnection.
710 Here's where again poor communication. I phoned. The arrangement was made. I had to go to a Shopper's Drug Mart. I made that payment. It took two weeks to process. Meanwhile, within ten days, this final notice was sent out to me and the most recent was just earlier this week.
711 Really what makes me laugh is the month that I made the lowest payment was the month of December where there was no reminder or warning. I can't help but laugh because it really makes me wonder. Communication has also been recognized and believed to be our key to success.
712 Where there's a communication breakdown I cannot see us succeed, especially economically. That I think includes everyone in this province.
713 Like now this month I made the payment. I phone in, I leave a message. Ten days later I get a phone call. It's on my voice mail to phone in because no payment had been received. Yet the following day when I did phone in, apparently the very time that the call was sent to me was when my payment was being processed.
714 Again, MTS previously, prior to privatization, promised no loss of jobs. That was not lived up to. That was violated. That was a promise that was broken. There have been more than 400 jobs that have been lost by MTS employees.
715 Here again, we women with disabilities, for us a telephone is a necessity. It's not a luxury. We are paying high out of our income. For some of us we have to pay for special devices. It's not covered by the province.
716 MR. KRUSHEN: Excuse me, Ms Vieno. You are well past your ten minutes allotted time. Could I ask you to quickly summarize the rest of your presentation.
717 Thank you.
718 MS VIENO: Maybe I said too much. I do have this one thing I have to share by all means.
719 Another member, a woman, a single parent with a disability and allergies, the main jack of her home phone was installed on the heating ventilator. This was done before this woman even moved in to her apartment. The furniture was also set up for her.
720 She also has a three and a half year old daughter. She was not aware of this mistake until the cord fell loose and melted from the heat which disconnected her phone completely. Miraculously, a fire didn't start but this is when things did begin to appear quite ugly and stressful for this young single mother who has a disability, allergies and a child.
721 Firstly, she was told the soonest a repair person would be available was January 9, 2000, but there was no set time. Next, she would have to pay $200 and any additional costs would be added to her MTS account.
722 It took at least six or more people who had to intervene on behalf of this woman and her child to have MTS send a repair person sooner. This same single mother also suffers from anxiety, asthma and several allergies. Any one of these health problems can be lethal if serious enough and proper medical care is not received on time.
723 Prior to MTS being privatized, this young mother claims she had no problem acquiring MTS repair services. This was the first time she became aware of several mistakes made by MTS.
724 One, the location of the main jack was placed on the heater. This was done prior to her living there. MTS themselves installed this jack and MTS is responsible for the damages, not the customer.
725 This young mother was not aware of the $1 a month MTS wire protection plan. This plan is similar to an insurance plan for MTS customers apparently. By enroling in the plan, the customer will be protected from the high cost of repairs should repairs be necessary. This was news to myself.
726 It took six or more persons to have to intervene on behalf of this dear young mother and her child before an agreement was made that MTS would send a repairman and it was MTS' first intention. I find this intolerable.
727 MR. KRUSHEN: Ms Vieno --
728 MS VIENO: This young mother with a disability and multiple health problems together with a very young child who were both being susceptible to viral diseases year round were not only put through unnecessary emotional anguish and stress, but who also had to risk living without a home phone for more than 24 hours.
729 Note, access to emergency medical care services were impossible for this family for more than those 24 hours. This could have been life-threatening and must not be repeated or ignored by MTS or CRTC. Money cannot return lost lives. We members of the disabled women's network in Winnipeg group, we value each other's life too much and the lives of those people around us. That includes CRTC and MTS.
730 THE CHAIRPERSON: Ms Vieno, I apologize for interrupting.
731 MS VIENO: This illustrates how MTS does not correct its own mistakes, but instead attempted to hold an innocent customer responsible.
732 THE CHAIRPERSON: Ms Vieno --
733 MS VIENO: I want to say --
734 THE CHAIRPERSON: No, no.
735 MS VIENO: We fully oppose any increase in the MTS rates to benefit shareholders. MTS has to note the magnitude of such conversion. Please provide us customers the services we deserve, but keep your problems in your own court.
736 Thank you.
737 THE CHAIRPERSON: If you weren't able to read all your notes, we would be happy to make a copy for the record. The Secretary could arrange to do that. Thank you.
738 Mr. Krushen.
739 MR. KRUSHEN: Thank you, Mr. Chairman.
740 I now ask Ms Ellen Kruger to come forward.
PRESENTATION / PRÉSENTATION
741 MS KRUGER: Good afternoon. Thank you for hearing our presentation.
742 I am here this afternoon to speak on behalf of the Canadian Mental Health Association of Manitoba. I personally work in the advocacy program with the Winnipeg region, but have been asked to speak for the organization for the whole of Manitoba.
743 The Canadian Mental Health Association is a national non-profit advocacy association that works with people who have severe and chronic mental illnesses and we work with people with a full range of mental health issues.
744 We do advocacy work, we do individual service delivery work, we do information and referral, we do demonstration projects and research on a national basis. Most of the regional offices -- there are nine regional offices in Manitoba. Our Winnipeg office where I work is the largest of those offices.
745 We would serve probably about 300 people in a year. Many of those people are ongoing full-time participants, others who are casual users of the information services or the resources.
746 In Manitoba the mission of our organization is that we see what people with mental health problems want, and our role is to help them participate as citizens within a responsive society. That's our mission.
747 We believe that in order to participate as citizens in the year 2001, people with mental health problems need a telephone. We believe that a healthy community is one that is responsive to all members and provides conditions and resources for improved quality of life.
748 The CRTC must consider the role of the telephone services in the Manitoba and the Canadian community. Is a telephone an essential, necessary service to the health, well-being and participation of citizens or is telephone a luxury, but not essential to people's lives in our community.
749 I think that's the basis of the decision that the CRTC must look at each time they look at a request for rate increases.
750 In order to participate as citizens, people with mental health problems require telephones for safety, to call for emergency services, to communicate with doctors and community services that assist their recovery, to conduct their day to day affairs and to keep in touch with family and friends for emotional support.
751 These, of course, are the same reasons that all citizens require telephones. Many citizens can already not afford a telephone in Manitoba. Increased rates may mean many more people will have to go without a telephone or cut back further on food since most low income people do not have discretionary income.
752 People with disabilities, including psychiatric disabilities, have lower incomes than other citizens. Many disabled people are on social assistance. Those on social assistance haven't had any increase in their meagre subsistence income since 1994, yet MTS is requesting a 32 to 39 per cent increase at a time when the company is reaping profits and continued growth is being projected.
753 I had a participant of our agency approach me within an hour before I left the office, saying "I want to talk to you about this MTS rate increase". He said "I'm on Canada Pension disability, but it's not enough money, so I'm on social assistance to top that up to the subsistence amount that people get".
754 He said "I calculated my increase in the last year. It was 1.109 per cent". He said "This year I have finally gotten out of the group living situation and I have a little house that I am renting, but my gas prices have gone through the roof".
755 He said "I'm on a special diet for my health problems that I can't afford". He said "Now I have to look at do I have to give up my telephone?" He said "That's my lifeline. Do I have to give it up?"
756 He said "I haven't had an increase". I said "Your 1.109 increase, did you get that?" He said "Well, no, because social assistance, if we get any increases at CPP, social assistance clawed back that". Of course he has had no increase.
757 That was the one person who had approached me individually just prior to the meeting.
758 When MTS was a public utility in Manitoba, the long distance rates subsidized the individual rates. We assume that the reason was that the individual rates are essential services, but long distance rates are not.
759 We now have a long distance rate that's cheaper than the individual rate. Who benefits from this arrangement? Business and those middle-class citizens who can't afford to make long distance calls.
760 Do we now have a situation where the public individual essential telephone rate is subsidizing cheap long distance rates for other citizens and businesses as well as generating profits for shareholders?
761 It appears that MTS has become a company that has lost its heart and there's no concern for the low income minority of its consumers which they say to be about 10 per cent of their consumers. I think it's higher.
762 They have recently announced that in addition to their requested huge rate increases they would not accept cash payments after February 2001. Many low income people do not have bank accounts. They cannot pay in any other manner. MTS is saying to those customers "We don't want your business". How disrespectful.
763 This is not the behaviour of a good corporate citizen. The Canadian Mental Health Association is requesting that the CRTC carefully consider the essential service of telephone communication and refuse to allow the requested increase by MTS.
764 Thank you.
765 THE CHAIRPERSON: Thank you, Ms Kruger.
766 MR. KRUSHEN: The next presentation will be by Ms Elizabeth Carlyle and Robert Marriot. It appears they are not present. I will call their names later.
767 I would now like to call Ms Giselle Saranchuk. No.
768 I will move down the list then to Ms Erica Wiebe.
769 I will move down again to Mr. Don Smith. Mr. Don Smith.
770 I will now move down to Ms Judy Wasylycia-Leis.
PRESENTATION / PRÉESENTATION
771 MS WASYLYCIA-LEIS: Mr. Chairperson, Members of the Board, thank you to the CRTC for holding these hearings here in Winnipeg. I appreciate the opportunity to speak on behalf of constituents of mine. I am here as the Member of Parliament for Winnipeg North Centre expressing many of the same concerns you have heard to date today.
772 Just listening for the past hour, I think you were getting a fairly good cross-section of views representing consumers, residents and families in Winnipeg.
773 I probably don't need to take up too much of your time with respect to making an argument. Suffice it to say, if there is anything I can do today to help convince you to reject, turn down, not approve the rate increase being proposed by MTS, I would like to do that.
774 As a Member of Parliament, I hear from constituents on a regular basis, many of whom who are actually without phones now because of economic circumstances. Keep in mind, I come from a constituency that has probably some of the most difficult economic circumstances imaginable. We are talking about an older neighbourhood, an intercity community, where in fact many of the residents already live below the low income cut off, live in poverty.
775 In fact, the most recent statistics suggest that about 40 per cent of families in a good part of my constituency now live below the poverty line and struggle on a day-to-day basis to make ends meet.
776 I was here a couple of years ago and made the same case. At that time, we were using statistics to show that, in terms of low income families, about one in 12 of those families did now not have a phone. I think that is a pretty conservative estimate based on discussions with constituents and schools and organizations in my community. I would think that in some of the neighbourhoods that I represent, we are looking at more likely about a third of families being without phones now.
777 It is on that basis, those glaring statistics, the clear economic facts of a community like mine, which is certainly not unique across the country but is pertinent to the discussions at hand, that I make my case. I think that in fact an additional $3 a month charge on the phone bill for a vast majority of people in Winnipeg's towns or cities, north end communities and older neighbourhoods will make very difficult circumstances for those families. Make a bad situation even worse.
778 As others have said, and Ellen Kruger just said it so well, a phone is really a basic necessity. Others have said it today, it is a lifeline for senior citizens. It is a way for people now not working to pursue employment possibilities. It is a way for students to enhance their opportunities and take advantage of new opportunities. It is clearly critical for families living in very difficult circumstances, medical or otherwise to have access on a moment's notice to telephone services.
779 So I think enough has been said today about the fact that telephones are a basic necessity in life and I think it needs to be said over and over again that it is very hard for anyone to pursue employment possibilities, to pursue improvements in one's life, to concentrate on that objective if in fact one is worried about physical security, and, physical security by all organizations involved in family policy and social policy includes, as well as food and clothing and water and sanitation, access to utilities and certainly the phone.
780 If I could just for one moment -- I think maybe the best way for me to make the case is to in the couple of minutes that I have left in the time allowed to invite one constituent up to the table. His name is Raymond Blue.
781 Would I have your permission just to invite Raymond to the chair for a moment?
782 Raymond is an individual who currently has -- I will let him explain his story -- currently has a phone. We have talked many times over the last while about times when he didn't have a phone and what that meant for his life, why he needs a phone today, and why this proposed rate increase will bring him so much more hardship.
783 So if I could let him just take the floor for a moment and then perhaps ask him also to comment on the difficulties with the proposal by MTS to phase out the ability to make cash payments.
784 I think, although your hearings today are not really dealing specifically with that issue, you must consider that possibility for all of the reasons I have already stated: for low income residents who are struggling to make ends meet who don't have bank accounts.
785 In the case of my community, Winnipeg's north end, we have lost just about every bank branch that has existed in our community. We have lost six bank branches in the last three years making direct access to banks in one's neighbourhood on a personalize basis almost impossible. That is another factor that has to be considered.
786 So on the basis of that situation I would ask you to reject the $3 a month proposed rate increase and also rule on the phasing out of a cash payment system.
787 Now I will turn it over to Raymond for a moment.
788 MR. BLUE: For about six months I didn't have a phone because I couldn't pay the phone bill. At that time I was staying with a relative of mine.
789 When you have a medical problem -- I'm a diabetic. I went to my doctor one day to have my blood test only to -- I made arrangements where they could get a hold of me if they could. My nephew had just got the phone back in, who is one of his friends. All of a sudden I got a call from the doctor that I had to see her ahead of time because I had leukaemia. Now, if you don't have a phone and the doctor has to phone you for a medical problem, they can't get in touch with you. They could have got in touch with my sister but she lives way out in St. James. If you are not home and they come over, if you are not there, they gotta wait. In the wintertime it is very cold.
790 I am in a senior complex. If you get there between 8:30 to 4:30 Monday to Friday you can get in through the intercom, you can page me. But after hours or on weekends, anybody who comes they cannot get into that apartment. How can they get in touch with you. If you have 30 below, like we just had, nobody is going to wait out in the cold.
791 So a phone also for a lot of people, especially in the wintertime, who have a medical problem and cannot get out in the wintertime, the only means of communication is the telephone. If you come over, if somebody pays them a visit, sometimes they don't know about it, but somebody has to phone somebody, discovers there is a problem. So a lot of times they don't get no visitor and the phone is your only means of communication.
792 Plus the fact if you are on social allowance, if you are going to the social allowance you have to phone ahead of time to make an appointment. How can you? You have no phone.
793 A lot of the times, you know, you have to make an appointment here, you have to make an appointment here. Everything has to be arranged ahead of time. If you had no phone, the next thing is the phone booth and you have to have money for a phone booth.
794 So a phone is an important means of communication between people. It is very necessary. It is as important as a smoke detector or a fridge in a home. It is just as important. Without that phone, life -- before we had a phone in the country, a lot of the time you never saw nobody for months on end, especially if there was a snow storm or stuff like that, you never see them months on end. At least with a phone there is always help available.
795 Without a phone, if you can't get out in the wintertime in the middle of the night to go to a phone. And I have been home at three o'clock in the morning and have had a phone, get a call because there is an accident on the highway, or stuff like that. Without that, meaning a phone, no way. If we get that $3 raise, people on social allowance, they are going to have to take it out of their food allowance or something else, or hope somebody out there can help them out. Otherwise, it is very, very difficult.
796 THE CHAIRPERSON: Thank you both very much.
797 MR. KRUSHEN: I now understand that Ms Erica Wiebe is in the room, so I will now call her.
798 Ms Wiebe, please.
PRESENTATION / PRÉSENTATION
799 THE CHAIRPERSON: Good afternoon, Ms Wiebe.
800 MS WIEBE: Hi.
801 My name is Erica Wiebe. I am here on behalf of a group called CAP, which stands for Community Action on Poverty, and I will just read my presentation.
802 CAP is a coalition of people concerned about poverty in Manitoba. Membership in CAP is about half people who describe themselves as low income and half people who work with people who are living in poverty. Phones have always been a concern of CAP.
803 Over the last few years, as welfare rates have been cut and phone rates have climbed, the numbers of people who can afford phones have fallen drastically. We are already in a situation where people living in poverty probably do not own a phone.
804 A recent quick straw poll at an intercity drop-in showed that one in 12 people there had a phone. So 11 of those people did not have a phone. And the staff there are saying that this is pretty much the norm on a daily basis. A phone is just not feasible when basic survival is at stake. There is little choice when it's food, clothing and shelter versus owning a phone.
805 The cost of this situation that so many people don't own a phone is high for everybody. A few people would deny that we live in a society where access to a phone is an integral part of the way we operate on a daily basis. This is no less true for low income people.
806 Finding a job, finding a place to live, dealing with child care and schooling, dealing with medical concerns, all of these basic life tasks become a huge burden without a phone. It is quite ironic that on the one hand people on welfare are expected to be active members in the community and improve their situations yet the tools required to do that are not available to them.
807 Beyond participating in the practical tasks of life, perhaps even more critical is the ability to participate as part of a community where people are connected, sharing supports, friendships, ideas, resources, skills, connecting with each other, is necessary for survival, but the ability to do this is seriously hampered without a phone.
808 Many people living in poverty are very isolated and it is the ones with extraordinary inner resources who even make it to participate in community groups like CAP. By far, the majority are out there on their own, not really connected to any group or any significant support system.
809 Not having a phone exacerbates this situation. It makes it harder for poor people to reach out and it also makes it harder for people who provides support services to find and stay in touch with people. You just need to talk to people who work for Child and Family Services or the welfare system and ask them what it is like to try and find people who don't have a phone. Many of them live in apartment blocks that are locked, where the outside doors are locked. Some of them you can get in, but only if you are able to buzz up and in order to have that intercom system you need a phone. So it is really hard to reach people and stay in touch with them.
810 The hardship caused when people can't afford a phone goes beyond the individual or the intercity neighbourhood. I think the community at large pays the price when a significant number of people have these obstacles in the way of participating fully in the life of the community.
811 One of the most difficult things for people living in poverty is the shortage of options available to them. The poorer you are, the fewer resources available to you and the harder it is to climb out of poverty. People in our own city live in desperate circumstances and sometimes desperate behaviour is the result. Then we all pay the price in feeling unsafe, in exorbitant costs of keeping people in prison, in welfare payments which go on and on, in medical and social service costs related to unhealthy lifestyles.
812 Of course access to a phone is only one piece in the reality of poverty, but it is very significant. The fact which should be obvious to any non-poor person who takes a minute to consider the extensive role that phone play in his or her life. The proposed phone rate increases will just make an already bad situation worse. The numbers of people without phones will continue to grow.
813 All appearances are that the motive behind the rate increases has everything to do with profit at the expense of the customer base, but there is an opportunity now to reject this most recent proposal in favour of doing what is fair and what makes sense to the wellbeing of the community as a whole rather than the profit of a few.
814 Therefore, CAP urges the CRTC to make the decision to reject this application for rate increases. This would not only prevent added hardship for some people, it would also send a message that this one's profit will not win over the wellbeing of the community.
815 THE CHAIRPERSON: Thank you, Ms Wiebe.
816 MS WIEBE: Okay.
817 THE CHAIRPERSON: We appreciate you coming.
818 Mr. Krushen, I think we will hear from one more and then we will take our afternoon break.
819 MR. KRUSHEN: At this time, I would like to call Ms Carla Keirstead -- Paula Keirstead. I apologize.
820 As I am advised that she will be here later, I would now like to move on to Ms Deborah Graham.
821 THE CHAIRPERSON: Good afternoon, Ms Graham.
PRESENTATION / PRÉSENTATION
822 MS GRAHAM: My name is Deborah Graham.
823 Although I am active in the community, I decided to come as a private citizen because my views might not be quite the same as the views of all the people in the community within which I participate.
824 I am going to Bill 67, the Manitoba Telephone System and Consequential Amendments Act, that allowed for the sale of Manitoba's publicly owned system, a system that ripped off the taxpayers of Manitoba. The Tory government sold MTS at less than it was worth. It took what we as consumers have paid for all these years, and they gave it to their friends.
825 Prior to the sale, the publicly-owned MTS was operating at a profit. MTS was relatively technologically advanced, having put fibre optics in every home.
826 The Filmon government abandoned the needs of northern rural and low income Manitobans to the whims of a profit-driven interest. The Manitoba Tory government sold MTS cheaply to the Manitoba Telecom Services and gave Manitoba Telecom Services, I believe, a three-year tax exemption.
827 The private telephone corporations can do whatever they want, unrestrained by provincial legislation. Manitoba Telecom bought MTS low and as well sold shares to those wealthy enough to buy them low. The Tory cronies can now sell their share high to increase and maximize their profits.
828 Low income Manitobans pay for the service at the expense of other basic needs. Welfare recipients, low earners and other persons on fixed incomes cannot afford to pay for the taxes of a privatized MTS.
829 Employment assistance will only pay the costs of those who meet the criteria of a disability. Even with an MB certificate, recipients can be denied basic phone services. Moms, single moms, single dads, and those deemed employable are denied the right to basic telephone service. Those of the recipients considered to meet employability standards are denied basic phone service. They must instead go to their Income and Employment Office to do their employment search. This they must do without the benefit of a bus pass or buss tickets. How are they expected to be reliable to get to income-related interviews on time.
830 Many moms, single dads, employables do procure phones at the expense of a deplorable food budget. To even register at a food bank, one must make a phone call every two weeks to register.
831 After that, to make an appointment with a case worker, one must phone to make an appointment beforehand.
832 After that one, one must have a phone for a case worker to get an appointment set up. After the first time I was denied a phone, my case worker asks me to fax her additional information -- fax!
833 Last fall a young epileptic died in the Broadway West community. He had been denied a telephone. The evidence was such that he was able to get to his apartment door. He may have been able to make an emergency call had he had a phone. True, he had a heart attack and it wasn't as a result of an epileptic convulsion, which might have been worse, but the evidence was that he had been alive three days before somebody checked in on him.
834 Single moms are not allowed basic phone services by employment and income assistance. Indeed, if they do have a telephone you can bet it came from an inadequate food allowance. If there is an emergency for a single mom/dad, senior, how exactly are they expected to get assistance?
835 Basic communication is a necessity of life. The next time you meet a panhandler it might just mean a person trying to get the cost of transportation or to make a telephone call. Six dollars a month means three meals, transportation, making an appointment destination on time. It may mean having to run for a pay phone, and God forbid if you have to leave your children alone at night to make an emergency call.
836 He/she may have to contact a case worker, but how can the case worker contact her or him?
837 Manitoba Telephone offers many profitable services. $1.50 will be the price you pay to get a new phone number from information. The cost of a redial service on an important call on a line that is always busy is $0.50. There are many services and products that come for a price through Manitoba Telephone such that it is possible to say that MTS, the sole reason for existence is to maximize their shareholders' profits and to allow for management's huge salaries.
838 Another reason for privatization was to allow for better services to corporations that can already afford the rates.
839 Consumers are paying taxes on their phone services, GST, PST. Let MTS open their books and show their profits. Just as we consumers have to pay the taxes on MTS service products, let MTS pay their own taxes out of their profits.
840 In ending, we must realize this is not the last battle. During the PanAm Games I met an elderly woman who came from a huge American urban centre who could only afford a party line and then, of course, even local phone calls were by the call and not by basic rate.
841 Because of the Free Trade Agreement it is almost impossible to turn back the clock to a Manitoba public phone system, so now myself and countless others here are here to appeal to CRTC to roll back last August 1st three month rates for local rates and roll back January 2001 increases.
842 If private enterprise is supposed to mean lower rates based on competitive services, let's see MTS show us our lower rates.
843 If we as Manitobans are expected to pay GST and PST on the services for Manitoba Telephone system, let the Manitoba Telephone system pay their taxes. They have had, I don't know, is it three or four years of a tax subsidy.
844 They bought cheap, they sold low to their cronies. I understand there is -- I suppose there are conflict of interest laws, I understand that the Filmon government sold a lot of cheap shares to their friends and the only protection in terms of sovereignty and telecommunications we can be -- we can be continental, we can be affordable, but can we turn back the clock and can the CRTC protect the rights of Canadian Manitoba citizens to decent, affordable local telecommunications services.
845 Thank you.
846 THE CHAIRPERSON: Thank you, Ms Graham.
847 We will take our afternoon break now. It's almost 25 after 3:00 by my watch, we will reconvene at 20 to 4:00.
848 Thank you.
--- Upon recessing at 1523 / Suspension à 1523
--- Upon resuming at 1540 / Reprise à 1540
849 THE CHAIRPERSON: Good afternoon again, ladies and gentlemen. We will return to our proceeding now.
850 Before we call the next party to make a presentation, I would just like to make another ruling related to our more formal proceeding tomorrow.
RULING / DÉCISION
851 THE CHAIRPERSON: This is a ruling on CAC/MSOS' January 8th request that Dr. William Taylor be removed from the MTS witness panel that the company identified would be made available for cross-examination.
852 As I say, that is for tomorrow.
853 After considering CAC/MSOS' and MTS' submissions, the Commission denies CAC/MSOS' request and Dr. Taylor may, therefore, be part of MTS' witness panel.
854 Parties are reminded that the scope of cross-examination should be limited to the evidence and the interrogatories that were prefiled during the proceeding.
855 So I note that for CAC/MSOS and the MTS representatives.
856 So, with that, Mr. Krushen will call the next party.
857 MR. KRUSHEN: Thank you, Mr. Chairman.
858 I understand that Ms Elizabeth Carlyle has now arrived at the Convention Centre, but I don't see her in the room.
859 Then, moving down, I do see Mr. Hales.
860 I would like to at this time call Mr. Bill Hales.
PRESENTATION / PRÉSENTATION
861 MR. HALES: Thank you, Mr. Chair, Mr. Secretary.
862 Good afternoon. My name is Bill Hales. I registered to speak as a private citizen, however I am the Business Manager for the Telecommunication Employees Association of Manitoba, a union representing 1,100 front line and middle management employees at Manitoba Telephone Services. I am, therefore, speaking with the support of the union executive and in my capacity as the business manager, if that is acceptable.
863 Many people in this room, or those who have passed through the room, remember I spoke in 1996 against the privatization of MTS by the then Conservative Government of Manitoba. Still I believe that MTS could have been as viable as a Crown corporation as it has remained as a private company. However, it is no longer a Crown corporation.
864 When it was transformed from a Crown jewel, even though somewhat tarnished, to a publicly traded company several things changed forever. The company has new owners, shareholders; the company has a new regulator, the CRTC.
865 As a private company it has to pay income tax, an expense that it escaped as a Crown corporation. The people of Manitoba, many of whom have spoken to you in the last few days, were not advised, as most of us weren't, that that is one of the costs of privatization. But it is not the fault of the new private company and it, however, is a reality for that company.
866 Had the company not been granted the right to rate down its income tax for the first few years of private operation against the funds it transferred into the new employee pension plan, the corporation would have been obliged to pay these taxes on all income from the day it was privatized.
867 Two years ago MTS approached the CRTC to grant an interim rate increase to enable it to develop a reserve to cover the pending income tax payable this year. Due to the various lobby groups, and other reasons, the Commission denied the gradual increase MTS sought. Now the tax man cometh.
868 And MTS, like every other private company in this country that incurs expenses, including tax, must in some way recoup such expense, usually by building them into the price of their product or services.
869 As I understand, as Mr. Fraser referenced this morning, both the CRTC and Industry Canada recognized income tax as a recoverable expense from business operations. In fact, as Mr. Fraser indicated, the Director General of Telecommunication Policy at Industry Canada identified that MTS rates had to be adjusted to reflect the company's income tax expense.
870 In my research of this matter I was somewhat surprised that MTS had manoeuvred itself such as it is only having to increase residential rates $3 on these occasions, not $13.60 per month, as is required to pay the tax, which became a new expense for the company last July.
871 Some of this manoeuvring included staff reductions in the past two years from 3,800 to 3,300 employees. Some of these employees, many of my members, were not -- it was not easy for them to swallow this pill. Jobs were lost. Service deliverables suffered.
872 Our concern internally was that we were shrinking into oblivion. We were disappearing. We were trying to survive, but it was going to be tough.
873 The shrinking has now stopped. In fact, we expect some real growth in employment to provide required new services to the benefit of all Manitobans, including many of those who spoke to you already.
874 If this rate increase is denied, all Manitobans will likely lose. Employment gains will be halted, maybe eliminated. New or maintained current services or maintenance of current services may be reduced or cut. Financial support to culture, the arts, sporting events such as the games that we sponsored last year, charities to which both the MTS employees and MTS fund in support throughout the province, will likely be reduced.
875 There are only so many sources of funds and if revenues are not adequate then other expenses, expense items would have to be cut to pay the taxes. These taxes are real. They will be paid.
876 As I have indicated, we would all lose in some way if this alternative is forced on MTS if this rate increase is denied.
877 Without the rate increase MTS will be significantly disadvantaged in regards to its competitiveness. All of its competitors have been allowed to build their tax expense into their rates.
878 Manitobans have continuously enjoyed lower rates, the lowest rates -- nearly the lowest rates for many years, while enjoying a high level of service. With this increase, MTS rates shall still be mid-range for all Canadian telephones.
879 When MTS became a private company it did not abandon rural Manitoba. It maintained a good level of service in spite of the expense of doing so being quite disproportionate to the revenue derived from the 40 per cent of the Manitoba MTS customers, pardon me, which are sparsely spread throughout Manitoba. Rates in rural areas have historically been lower than those in urban centres, which is why the rural rates appear to be rising faster due to the across the board increase, but the cost to MTS per customer is the same. The tax has to be paid.
880 The rates are still far below the cost of providing rural service and MTS is committed, I believe, to keeping those rates for rural customers and all customers as low as possible.
881 Further, to reduce the impact of these income taxes, MTS has committed to paying 40 per cent of the tax expense from existing revenues in 2001.
882 MTS has also amalgamated recently its wireless and wirelines companies to reduce expense. They are expanding their business, new markets and new services to increase their revenue base. MTS has one contract in Alberta worth $300 million. MTS is here to stay, but they must be allowed to compete on a level playing field. They must be allowed to recoup as much as possible the expenses by building in, as their competitors have done, their expenses into their cost of services and products that they offer to their customers.
883 This rate increase is essential not only to the Manitoba telecon services, but also to all Manitobans that it serves.
884 I would like to add -- I didn't have this in my written part, but looking to the many stories from the poor and those of the poor health, I couldn't help but feel that just realizing, as I have been around MTS for many years, MTS has hired many disabled people over the years before it was even the thing to do, if you will. And I don't mean to be disparaging, but you have to identify now that you are disabled if you want to be given special compensation. MTS used to hire people when it was just in business and they were able to employ people.
885 Also, just referring back to the fact that they do provide service to remote parts of Manitoba where the revenues aren't nearly near what the cost of providing that service is while operating in a competitive marketplace. A competitive marketplace, I might add, where quite clearly the competitors are not inclined to extend themselves anywhere near what some of these people are asking MTS to do, because they are here to glean profits. That's why they are here.
886 The CRTC policy has, in fact, forced the MTS to charge rates comparable to the cost of providing these services. They can no longer supplement residential rates with long distance revenues. So this is not really an issue of MTS' making, it is the rules under which MTS, as a private company, must operate.
887 I thank you.
888 THE CHAIRPERSON: Thank you, Mr. Hales
889 Mr. Krushen.
890 MR. KRUSHEN: Thank you, Mr. Chairman.
891 At this point I would like to call Ms Elizabeth Carlyle.
PRESENTATION / PRÉSENTATION
892 MS CARLYLE: Good afternoon. My name is Elizabeth Carlyle and I work with the Canadian Federation of Students.
893 I would like to thank, first of all, the NDP Government of Manitoba for calling upon the CRTC to hold these hearings and also to thank the CRTC for offering this opportunity to present on the MTS application to increase the basic residential and business telephone rates.
894 Just for your information, the Canadian Federation of students, representing 400,000 members at 60 colleges and universities across the country, is Canada's national and provincial student organization. In Manitoba the Canadian Federation of Students represents students at the University of Winnipeg, Brandon University and le Collège universitaire de St-Boniface.
895 In this submission, the Canadian Federation of Students argues that the already implemented $3 rate increase for residential and business lines and the further $3 increase proposed by the Manitoba telecommunications system are both unreasonable and irresponsible.
896 It is clear, then, that students, and particularly the Canadian Federation of Students, oppose the rate increases.
897 When MTS was transformed from a Crown corporation to a private for-profit company, the new shareholders of the telephone utility claimed that the service would improve, that rate subsidization for remote areas would be maintained, that prices would go down, that the utility would be run more effectively and the company would be more responsive and dynamic. The Progressive Conservative government of the day claimed that consumers would be in better hands if MTS were privatized and that privatization was necessary in order to remain competitive as long distance telephone competition intensified.
898 When the transformation was complete, the new MTS seemed to break all of its promises. The only promise kept was that a relatively small number of shareholders, many from outside Manitoba, would reap the profits of privatization.
899 The reorganized for-profit utility, benefitting from billions of dollars of public infrastructure investments over the years during which MTS was in public hands, has indeed provided ample dividends to a few shareholders at the expense of access to basic telephone services.
900 At the time, the rhetoric that was drummed into the heads of Manitobans was that MTS must be privatized in order to compete. Yet MTS thrived as an innovative and affordable service of the Crown for many years and they faced many challenges during those years.
901 Even when those interested in its privatization engineered to drive MTS into debt and to sell off shares, i.e., to privatize the company, Manitobans turned out in large numbers to oppose the privatization of MTS. In fact, several surveys indicated that in the range of 70 per cent of Manitobans opposed the privatization.
902 In Saskatchewan, SaskTel still manages to survive as a publicly-owned utility.
903 Now, among the litany of complaints from consumers since the privatization of MTS four years ago, that basic rates have increased dramatically, that connection and reconnection fees have increased, that, arguably, with staff layoffs, less training in some areas, replacement of more experienced with newer workers, increased workloads, the quality and efficiency of the service received has declined.
904 Some examples. There are longer waiting periods for connection and repairs. And operators, especially those employed during the labour dispute, the strike, seemed to offer more limited service due to lack of experience and training. It is more difficult to get the information you need from MTS in many circumstances.
905 Now that most MTS outlets no longer accept cash for payment, consumers are sort of left wondering what to do. Besides discriminating against those that have difficulty obtaining credit, or obtaining a bank account for that matter, and access to electronic banking services, this practice would appear to violate the Currency Act, which states that all legal tender can be used for payment of goods and services.
906 In 1999 MTS proposed to charge those in remote areas higher rates to reflect the higher cost of service in those areas. This was probably in conjunction with the CRTC decision -- a decision, I believe, that was wrong-headed -- to not allow the cross-subsidization within telecommunications companies.
907 This proposal, which was later retracted, came despite promises to the contrary during the early days of the privatization process.
908 Another complaint is that incidental user fees have increased sharply -- for example, directory assistance. I remember a time when it was free. Then it was increased to 25 cents per call. It went up several times, and now the charge is $1.25.
909 Another change to that rate is that it used to be free if you did not receive the information you requested. Now if you simply connect with the operator, according to my MTS bill I am charged for that, even if I don't receive the information that I requested.
910 Those are some of the concerns. There are actually many other concerns that consumers have expressed. Unfortunately, the list of people who have been particularly affected by these problems is no less long than the list of problems itself.
911 Some of those affected are students on loans; seniors on modest pensions; small businesses with low profit margins; aboriginal people in remote areas, or just northerners or people in remote areas in general, where only as little as 40 per cent of residents have phones; the unemployed; welfare recipients.
912 I am sure you can imagine that the list goes on. In fact, you have heard from some of those people here today.
913 Wayne Helgesson(ph), of Winnipeg Social Planning Council, states very succinctly in an article in The Winnipeg Free Press, more in response to MTS' refusal to accept cash but I think it is also a comment that bears on the discussion here today.
914 He says:
"This is reprehensible. I think they are being insensitive to their customer base." (As read)
915 A simple statement, but I think it gets to the heart of the issue.
916 Yet more reprehensible is the fact that during the several years just after the privatization occurred, MTS benefited from taxes raised, to use the transition and not the technical term for it. I think the previous speaker probably articulated it better than I could.
917 Essentially the tax costs that would normally have been paid by a private company were not paid by MTS.
918 So why is it that MTS, a company earning good profits for its shareholders, has failed to plan responsibly for the taxes that they knew were coming? Why should the cost of doing business, a cost assumed by any other company, be so unreasonably downloaded to consumers?
919 I would like to say here that some people have suggested that the solution for the problem with MTS being unresponsive and unreasonably downloading costs on to the consumer would be to offer local competition in residential phone lines and business phone lines. I think that would only recreate the same kinds of problems we are seeing, that competition in other jurisdictions has not improved service, has not lowered prices. I think for residential and business phones we need to have a better system.
920 I think that the previous system of a crown corporation was the best way to go. It is the only way that there is some kind of accountability that is not based on profit margins but based on a concept of people's right to basic services like telephone.
921 Overall, MTS' strategy is quite clear. They want to increase rates based on services on which MTS has a monopoly, no matter what the cost to the consumer, it seems. They want to trim costs by laying off staff, working around labour unions and cutting corners on training, and passing on costs to the consumer associated with poor corporate management; i.e., pass on their bad planning around tax issues to the consumer.
922 The costs of other basic necessities, such as fuel prices, continue to sky rocket while the revenues in the lowest income brackets have declined substantially over the past decade.
923 I am going to talk here about students, because that is the constituency that I work with and represent.
924 According to the National Council on Welfare, the poverty rate of those under the age of 25 years has increased 13 per cent to 61 per cent; that is 61 per cent of young people under the age 25 living under the poverty range. That is only in the past not quite ten years, from 1989 to 1998. Those are the latest numbers available.
925 The rate for full parent mothers in the same category is that there is an increase in the poverty rates of 85.4 per cent. That is quite substantial.
926 According to Statistics Canada, the average income of those aged 18 to 30 years shrunk 30 per cent between 1989 and 1998 -- again a pretty significant fall in income for young people across the country.
927 In this context, MTS' proposed rate hike, which is clearly the result of the company's own poor planning and the short-sighted desire of shareholders to maximize profits for themselves, seems all the more gouging, unreasonable and unfair. It is no wonder that so many Manitobans are opposed to the latest round of rate hikes proposed by MTS.
928 I think that Manitobans are reasonable people and would not mind paying more for something that they felt was absolutely necessary to pay more for, or they felt they were getting some value added. But with all the problems we have seen with MTS since the privatization and the continued rate hikes, I think it is really no surprise that people are quite concerned.
929 Further, even from the company's own point of view, the decision to hike rates seems mistaken. For example, those young people that can no longer afford expensive telephone lines may switch to cheaper pay-as-you-go mobility plans, a subsector in which MTS faces stiff competition.
930 No matter what perspective you approach this from, it seems that all the indications are that MTS just didn't plan properly for the kinds of expenses they should have expected.
931 It is now clear that none of the promises of the newly privatized MTS have materialized. As the NDP predicted while in opposition, privatizing the public utility has resulted in rate hikes and, arguably, a decline in service. Students, like others surviving on low or fixed incomes, suffer inordinately from increases in basic rates.
932 Basic rate hikes have the same discriminatory effect as regressive taxes, such as the GST. Those on modest incomes end up spending an unfairly high proportion of their limited funds to cover such basic expenses as their phone bill, or they do without the service.
933 MTS might point to the fact that long distance telephone rates have gone down thanks to competition, but this is of little benefit to those many Manitobans that cannot even afford a phone line and the increasing user fees for services such as directory assistance, let alone long distance charges.
934 The Canadian Federation of Students urges the CRTC to reject MTS' request for retroactive approval of the $3 rate increase and the additional increase. Rather, consumers should receive in fact a credit to their accounts equivalent to the additional charges incurred by the $3 increase that they are requesting retroactive approval for.
935 In addition, the CRTC should continue to deny MTS request to hike rates in order to cover their tax costs. Shareholders who were all too happy to risk their money to buy MTS shares four years ago should be paying for predictable expenses, such as the company's taxes. And the company overall should have planned for this kind of expense.
936 I feel also, and the Canadian Federation of Students feels, that MTS should be the subject of a full investigation by the CRTC into, and some action taken on the issue, MTS' practices that discriminate against modest income earners.
937 If the CRTC is not the appropriate body for that kind of investigation, I think the CRTC should make recommendations to the federal or provincial governments, whichever is appropriate, to that effect.
938 Finally, in a related recommendation. And although I understand that the CRTC has no direct influence over provincial governments in a lot of these matters that are policy issues, I believe that the provincial government should investigate and report to Manitobans on the possibility of once again making MTS into a crown corporation. I think that is the only way we stand a chance of having some protection from profit-hungry shareholders and market forces that cause rates to rise unreasonably.
939 Arguably, I think it would be more useful in terms of influencing and discoursing with the CRTC. I feel that the CRTC has also made some mistakes in how it approaches the issue of basic telecommunications services for not just Manitobans but Canadians across the country.
940 I would like to thank you for your time and consideration and would welcome any questions.
941 Thank you.
942 THE CHAIRPERSON: Thank you very much, Ms Carlyle.
943 Mr. Krushen...?
944 MR. KRUSHEN: Thank you, Mr. Chairman.
945 I understand that Mr. Kayes and Ms Zoerb do not arrive until 4:30, so I will now go on to Ms Margot Lavoie.
--- Pause / Pause
PRESENTATION / PRÉSENTATION
946 MS LAVOIE: Good afternoon. My name is Margot Lavoie. I am here representing the Manitoba Obliate Justice & Peace Committee.
947 This committee is composed of a group of priests, brothers and lay people committed to working for social justice through public education and other projects.
948 Today -- and I am using the royal we -- we wish to address two issues: the $6 rate increase for residential telephones and MTS' proposition to no longer accept cash payments for telephone bills.
949 Both of these propositions are discriminatory and oppressive to the poor, the elderly and those on fixed incomes, and to low income earners.
950 We live in a world of shameful disparity and exclusivity. These two propositions will most significantly affect those who are already marginalized in our society. Those on fixed income, minimum wages, social welfare, students and unemployed are already burdened by the rising costs for basic needs. Many cannot make ends meet and are just surviving from pay day to day.
951 Today a telephone is one of the basic needs for all households. Isolation is a factor that affects many of the elderly, single parent families and poor families that have to move from one place to another because of poor housing.
952 Searching for a job and having no phone number where you can be reached makes the chances of employment nearly nil.
953 Even if you are on welfare, not having a phone is a real handicap. One tries to make an appointment, and all you get is voicemail. How do you make an appointment with the worker if you have no number where you can be reached?
954 If an emergency comes up, for example, a child becomes ill and only one adult is in the home or someone is living alone and there is no one around, how does one get help?
955 If MTS is granted its wishes, the quality of life of many will be severely undermined. The telephone is their means of keeping in touch with family, friends and the rest of society.
956 When you are poor, you do not use plastic money and never have enough money to even open a bank account. How then are you expected to pay your bill? If neighbourhood outlets are no longer available to accept payment, how do you get to the central outlet?
957 It will be of great inconvenience, if not an impossibility, for the sick and elderly who are not easily mobile and for families who have no cars and have to take two or three buses to get to the central outlet.
958 Statistics show, I think, that 10 per cent of the consumers pay using cash. If there are 250,000 households that have residential homes, 10 per cent represents a substantial number of consumers deprived of their preferred way of paying.
959 The context for these proposals is much bigger than MTS itself. The context is that of the global economy that is market driven and whose golden calf is called profit at any cost.
960 In 1997 during the debate of the bill that would transfer MTS from the public to the private sector, those opposed to the privatization of MTS warns that the consumer would be facing an increase in rates before very long. The Conservatives called this fear-mongering and vehemently denied that this would happen.
961 The old saying is that the proof is in the pudding, and now we the poor are there holding the pudding and paying for it.
962 We would encourage the CRTC to consider a few principles as it makes its decision on MTS' request. I take these principles from my own faith tradition, Christian and Catholic.
963 First, the goods of creation are destined for the entire human race. The right to private property does not abolish the universal destination of goods.
964 Two, the right to private property acquired by work or received from others by inheritance or gift does not do away with the original gift from the creator to the whole of mankind. The universal destination of goods remains primordial, even if the promotion of the common good requires respect for the right of private property in its exercise.
965 The development of economic activity and growth in production are meant to provide for the needs of human beings. Economic life is not meant solely to multiply goods produced and increase profit or power for a few.
966 The practice of justice and charity in the administration of earthly goods are imperative if we aim at building a peaceful society.
967 I will quote two wise persons from our own faith tradition.
968 I quote the first one:
"Not to enable the poor to share in our goods is to steal from them and deprive them of life. The goods we possess are not ours but theirs. The demands of justice must be satisfied first of all. That which is already theirs in justice is not to be offered as a gift of charity." (As read)
969 This closes this first quote of John Krisistohn(ph).
970 The second quote:
"When we attend to the needs of those in want, we give them what is theirs, not ours. We are paying a debt of justice." (As read)
971 That comes from Gregory the Great.
972 A system that subordinates the basic rights of individuals and of groups to the collective organization of production is contrary to human dignity. Every practice that reduces persons to nothing more than profit enslaves human beings and leads to the idolizing of money.
973 The development of economy activity in growth and production are meant to provide for the needs of all human beings, not only for a few, a select few who are to profit from the goods of the earth.
974 We thank you.
975 THE CHAIRPERSON: Thank you, Ms Lavoie.
976 MR. KRUSHEN: I would now like to call Mr. Darrell Rankin.
977 Is Mr. Rankin here?
--- Pause / Pause
978 MR. KRUSHEN: Then I will move on to Mr. Mark McDonald and Ms Emmy Pernsteiner.
PRESENTATION / PRÉSENTATION
979 MR. McDONALD: Good afternoon, Mr. Chairman, Members of the Commission. Thank you for this opportunity.
980 I am here with the Director of Revenue Development for the Canadian Cancer Society, Emmy Pernsteiner.
981 It is my intent, Mr. Chairman, to submit a written document to the CRTC. At the end of my presentation, I will be giving copies to the Secretary.
982 The Canadian Cancer Society, Manitoba Division, has been asked by Manitoba Telecom Services to appear before the CRTC and express our perspective on MTS as a corporate citizen.
983 MTS has been a loyal supporter of the Canadian Cancer Society, Manitoba Division, and we feel it is important for us to acknowledge that corporate commitment.
984 No one likes to see an increase in the rate of services that we feel are essential to our private and business lives.
985 There are times, however, when there is a need to do exactly that. We feel that the decision is one that the CRTC will make in the best interests of all parties.
986 MTS has encouraged its more than 3,200 employees and retirees to be part of an employee payroll deduction program for charitable donations for well over ten years. Other corporations have employee programs such as this. The difference with MTS is that it matches all gifts to the charities dollar for dollar.
987 For the Canadian Cancer Society, Manitoba Division, this has amounted to well over half a million dollars in donations dedicated to information, research and programs that benefit Manitobans.
988 The Telecom Pioneers, a volunteer organization made up of working and retired MTS employees, plays an important part in our community as well. The Pioneers and their families dedicate over a million volunteer hours to charities and the community. These dedicated volunteers are encouraged and supported by MTS to increase the success of fundraising programs such as the Canadian Cancer Society Daffodil Days.
989 The many hours spent by the Pioneers delivering daffodils to cancer patients and corporations cannot be measured in dollars alone. Their donation of time, vehicles and their personal touch make the world of difference to staff, other dedicated volunteers and the recipients.
990 MTS has also shown their commitment to us by supporting our other fundraising event, the Gala Ball.
991 As a charity and a user of telecommunications services, the Canadian Cancer Society appreciates the fact that MTS provided the equipment to us at their lowest possible price. This equipment allowed us to provide greater service to Manitobans and their families going through a cancer experience, a very difficult time acknowledged by all, family members, health care workers, professionals, cancer patients.
992 The Canadian Cancer Society is able to provide a service to all Manitobans which links newly diagnosed cancer patients with peer support. Cancer survivors who have been trained by the Canadian Cancer Society are linked with people with a new diagnosis and they often say publicly that in that experience when the two are linked, there is a transfer of hope and information that's critical to the decision-making and to the choices faced by cancer patients.
993 These services are provided -- excuse me. Cancer information is also made available to all Manitobans. These services are provided through toll-free telephone links and, therefore, are made available at no cost to the client. This would not be possible without the kind of financial and practical support which is given through corporate sponsors like MTS.
994 It is our view that MTS exemplifies a corporation dedicated to the charitable community. To not have the support of a corporation such as MTS would leave a terrible void in the Canadian Cancer Society's ability to meet Manitobans' needs for reliable cancer information and responsive community programs.
995 This is our submission, Mr. Chairman. Thank you for this opportunity.
996 THE CHAIRPERSON: Thank you very much, Mr. McDonald.
997 MR. KRUSHEN: At this time I would like to call Mr. Mark Olfert.
998 Mr. Olfert.
PRESENTATION / PRÉSENTATION
999 MR. OLFERT: Thank you, Members of the CRTC, for allowing me to speak today. I have a small business on the side. I am into sales. I feel that the business rates are becoming out of range. They are getting very, very expensive.
1000 For one thing, MTS had to privatize, which I don't think they should have done at all. It was just something they had to do, they felt. I think it should just be cut at a freeze for a couple of years.
1001 In that way we won't have to worry about the rates going up every time they want to raise the rates.
1002 Thank you.
1003 THE CHAIRPERSON: Thank you.
1004 MR. KRUSHEN: I would now like to call Mr. Jake Bannon.
PRESENTATION / PRÉSENTATION
1005 MR. BANNON: Good day. Telephone rates are going up all the time. It's harder for us to get by. Just pay, pay, pay, pay. It just never seems to end.
1006 That's all I got to say. Thank you.
1007 THE CHAIRPERSON: Thank you very much.
1008 MR. KRUSHEN: Thank you.
1009 I understand that Ms Paula Keirstead has now arrived.
1010 Ms Keirstead.
PRESENTATION / PRÉSENTATION
1011 MS KEIRSTEAD: Thank you, sir. I have asked my colleague, Marlene Vieno, to join me as well.
1012 I am representing the Manitoba League of Persons with Disabilities. This is an organization that has existed for 26 years in this province. We have five branches throughout the province. It's an advocacy organization that really looks at how issues impact all persons with all types of disabilities of all age groups. Primarily, we do deal with adults to be clear about that.
1013 One of the areas that we have often done policy research in is the economic area. I was involved in a project two summers ago that went out to talk to persons who are on income assistance in our province to find out -- and who had disabilities -- to find out how they viewed the program, how they thought the program could be improved to actually meet their needs in looking for employment.
1014 Time and again as we encountered individuals, two things came forward on a regular basis. The first thing was that persons with disabilities are generally considered employable and that that put them behind the eight ball already when it came to getting opportunities for training, when it came to getting extra clothing allowance, that kind of thing, to look for work .
1015 The second thing was that without a telephone that they could afford, they really had very little chance of interacting with employers or even with any kind of training situation.
1016 Persons with disability can get a phone covered by income assistance if there is a medical reason to have one. In other words, there's a safety or health specific issue. I think generally people in the program would say that if someone presents a doctor's note, it's automatically covered.
1017 Recipients have said to us that in fact that is not the case and that it's not like it's extra money that is offered to cover the basic rental fee -- not long distance, of course -- but that they are encouraged to use the extra $80 that they get to cover disability costs to deal with that.
1018 That $80 might be needed for medication or for half the cost of a hearing aid because only half the cost is covered by the system which would have to be used for a basic phone rental, so many persons don't have that access.
1019 For the individuals who do have access to the phone, and when I say individuals we are talking about 12,000 persons who are with some form of disability recognized under the income assistance program. That's not even looking at, you know, persons who might be working and the working poor who might also be struggling with the cost of adding this cost to their economic situation.
1020 Those 12,000 persons, if they are wanting to make a difference in their life and get out there, a phone is a basic necessity. The program is saying it's too expensive to provide that as a basic necessity in this day and age, this year 2001, to a Manitoban who happens to be on income assistance.
1021 We know the effects of isolation on people. We know the effects of not feeling like you belong to a community, that you have something to offer. The phone is one of the most basic links for us to feel like we are connected to this world.
1022 If we look at an increase, there is no chance virtually in our minds that the government as we lobby them here would consider adding the basic necessity of a phone to any recipient's benefits as this figure continues to rise.
1023 It's a real catch-22. Many persons with disabilities want to be out there working. Maybe it's modified work, maybe it's part time work. A phone is a basic necessity to find employment.
1024 Yes, we have a system set up in this province now where there's different locations in the province for someone to go access a phone and a phone messaging system with their little mailbox there that they can punch in the number and get messages, but they need the bus fare to get to that phone messaging system.
1025 Not all the places are accessible for someone who might be a wheelchair user, so it's a trial right now. Then they need a bus fare to get home. Unless they have a bus pass, which is usually only funded if you are actually employed or trying to get employment, you are sort of caught here. That phone system isn't necessarily working for the person with disability.
1026 As much as we realize -- I personally happen to use MTS services and I have felt satisfied with the services. I as well, who happens to earn an income, does feel that the increases are continually eating away at my satisfaction level, if you will, of the services I'm getting.
1027 I think though for persons with disabilities we are not talking about a luxury item and yet it is pursued as that still in our society for persons at the low end of the economic scale.
1028 In the area of disability, the vast majority of persons are unemployed, well over 50 per cent. We are not talking about a few numbers here.
1029 I just wanted to lay that issue out to you and the fact that, you know, if people do not have phones and cannot afford to have them, I'm not doubting that at some point there will be a human rights complaint launched about the, you know, validity of not having a basic necessity and having some kind of incident occur in your life without it. That's not the sort of direction we would want to see this situation go.
1030 The increase in cost makes it harder for anyone in this government to consider taking it on as a basic necessity.
1031 Marlene, did you have any comments as Chair of the Income Security Committee?
1032 MS VIENO: Just earlier this week -- like we do advocate -- like Paula said, we do advocacy. We do not deal with individual cases, but when we hear of a case that we believe or recognize could have in the future a critical impact on the disability community, then we will take that issue on.
1033 A very recent incident. I understand just recently again this mother had a child with a disability. This child's disability is life-threatening. Because this mother is working part time and her very low income is very limited, because when you are on assistance what you earn is clawed back, the same with the child tax benefit. That has not yet been clarified.
1034 Again, within the disability community, here's where this relates to a child who has a disability that is life-threatening. MTS threatened to disconnect this mother's phone because she could not afford to keep the monthly payment up to date.
1035 That personally to myself was heart-wrenching. At the same time not only was it painful emotionally, it also angered me very much because I see that as putting profits before people and that's not what I have known Manitobans to be.
1036 We have always been recognized to be the most generous citizens, the most generous province, here in Manitoba. At events that Winnipeg has sponsored, MTS has been a massive contributor and I commend them for it.
1037 Over the years we have always been recognized by that. We receive excellent feedback, but what about people that are in need? Those in need are the very providers, the people that are really providing MTS employees with job security and it's building our economy. I think that needs to be recognized.
1038 MS KEIRSTEAD: Just two other points before we complete our presentation.
1039 The other aspect that was brought to our attention from some members of our organization is a number of the MTS options, the cost for those, like call-waiting or the call display, the costs are going up for those, the rates for those, without necessarily being notified. This is how a number of members have portrayed it to us.
1040 We would certainly want that to be looked at because that certainly isn't the deal someone signs on for without any notice that there will be increases in costs for those services.
1041 The other point is, of course, not being able to use cash to pay your bills. For persons with disability but also income assistance, it's not uncommon at all to not have any kind of formal banking relationship or a credit history or anything like that that will allow you to use many other options besides cash.
1042 Even though physically going can seem difficult for someone who might be a wheelchair user and can't get handy transit when they want it, the fact of the matter is the other banking options might be more difficult to establish.
1043 Our members asked us to raise that as well, the need to keep a cash payment option only.
1044 THE CHAIRPERSON: Thank you, Ms Keirstead.
1045 MS KEIRSTEAD: Thank you.
1046 THE CHAIRPERSON: Further details on the assistance program are helpful because they were mentioned several times today.
1047 MS KEIRSTEAD: Oh, good.
1048 THE CHAIRPERSON: Thanks.
1049 Mr. Krushen.
1050 MR. KRUSHEN: Thank you, Mr. Chairman.
1051 At this time I would like to ask if Robert Kayes or Carole Zoerb are in the room yet.
1052 MR. KAYES: We originally asked for some time. We were told that we could have it after 4:30 when she gets off work. She works right across the street and will be here in five or six minutes.
1053 I don't want to keep everybody here sitting around or standing around doing nothing for that time. I could present without her if you wish me to.
1054 THE CHAIRPERSON: Was there anybody else on the list that was --
1055 MR. KRUSHEN: I can check to see.
1056 Is there anyone else who would like to make a presentation in the meantime who has not yet done so or I have not yet called their name, either someone who is registered or someone who would just like to do a presentation?
1057 THE CHAIRPERSON: There was nobody else on the list, Mr. Krushen. There were several names that were on the list that we called and who didn't appear.
PRESENTATION / PRÉSENTATION
1058 MS BERGER: Sorry, I'm late. I wanted to be here earlier to listen to the other presenters.
1059 I had written a letter to the CRTC back in September. I would like to know if it is on the file. This is regarding the MTS rate increase.
1060 I guess I should introduce myself. My name is Evette Berger. I have been an MTS customer since I moved out on my own. I am very upset that the rates have gone up. I happen to be an impoverished piano player and, of course, the telephone is a major bodily part to someone who is always looking for work.
1061 When the weather is inclement or when I have bronchitis, a telephone is the lifeline to me. It's not a luxury. It's a necessity. To me basic telephone service is important.
1062 My parents are elderly. They have a lot of health problems too. I feel that basic telephone service is a right. Anything else like what I call toys, like extra services, those I feel if people want them, they pay for them. I pay for some of them because to me they are necessary as well.
1063 I also feel that the higher the basic rates go, the more defaulters there are going to be, people who are not able to pay their telephone bill. I feel that is a counterproductive measure because then MTS has to contact the collection agencies to chase after, to pursue people who haven't paid their bills. It causes more aggravation.
1064 Then the rest of us who are responsible MTS consumers have to pick up the slack. I feel that the corporate decisions that were made, they were made concerning people without consulting them.
1065 I know that MTS was privatized recently thanks to Gary Filmon and the former Tory government. I know that when people are working, they get their income and from that there are already deductions made.
1066 I feel that the revenue that MTS is getting, from the revenue that you are pulling in from responsible MTS customers who do pay their bills every month, or do their best to -- don't you have enough money to pay your shareholders as well as paying taxes like the GST.
1067 I feel that the profits should be returned to people on low and fixed incomes, much like the GST rebates.
1068 I am quoting from my letter here:
"I feel that all MTS customers deserve to have telephone service, basic telephone service, at a reasonable rate, not just the shareholders who can obviously afford it and then some." (As read)
1069 I don't know if I have said anything new that hasn't been said already from people representing different organizations like the consumers associations, associations representing the elderly or disabled.
1070 I was very angry and I thought, well, I have to channel this anger somewhere, so I got out my typewriter and I got busy providing what I call an intellectual laxative to the powers that be.
1071 I hope you listen to me because I was talking to other friends of mine who are also in the same impoverished boat, and we can only make nickels squeak, you know, stretching them so far. To us, the telephone is a lifeline because some of us are not able to get out, especially when the weather is inclement. We don't have vehicles of our own, of course. My piano doesn't have a block heater. It stays right where it is. For me, it is very important to be able to keep in touch.
1072 Not everybody is computer literate and able to communicate on e-mail. Some of us need to hear the sound of a human voice. It can be very reassuring and comforting, and perhaps even a lifesaver. You know how many different telephone lines there are, you know, from a clinic, from like The Salvation Army, and the people who use those lines, a lot of them don't have phones of their own and they know that if they can call, let's say, at Crossways in Common, they have, you know, common telephones there for people to collect messages, like, people who are collecting social assistance, looking for jobs. Also, they have a way of keeping in touch with people that I think is a great help to mental health, that prevents people from feeling cut off and isolated.
1073 So I feel the telephone service is a lifesaver too.
1074 I guess I have pontificated long enough. I want to thank you all for listening. I hope you will take my comments to heart. Like the black widow spider, I am waiting in my web to hear good news. I would like to have service improved and made clearer. Please, don't raise the rates. Like, try to improve service. You will notice you will get a lot less complaints and then the guys at 611 won't have to go out on as many repair calls, and you will have much more satisfied customers rather than delinquent customers who are destructive, like, people that go and damage public telephone booths and that.
1075 I don't like seeing that, any kind of, you know, violence and vandalism. I feel that it violates all of us, because if there is an emergency we need to have a telephone that is -- I guess it is straight from my ear to my heart to my mouth. They are all connected.
1076 Anyways, I want to thank you again for listening. This was all done like an improviser. But normally I am sitting on a piano bench and improvising. This is unusual for me.
1077 Thank you very much again for listening.
1078 THE CHAIRPERSON: I am sorry we couldn't provide a piano bench here today. We certainly don't consider your comments pontificating.
1079 Thank you very much.
1080 MS BERGER: I do. Did I come across clearly? Were you able to hear me all right?
1081 THE CHAIRPERSON: Very clear. Yes. Thank you very much.
1082 MS BERGER: Okay. I thank you from the bottom of my answering machine.
--- Laughter / Rires
1083 THE CHAIRPERSON: Okay. I think, then, except for Mr. Kayes and his partner, we have heard from everybody who wanted to make a representation today.
1084 Mr. Fraser, I am wondering how much time, if any, you would like before you respond to the comments you have heard today.
--- Off microphone / Sans microphone
1085 THE CHAIRPERSON: I think perhaps what we will do, then, in order to give Mr. Kayes a few minutes, we will take about a 10-minute break and then we will hear from Mr. Kayes and then, following him, you can respond.
1086 With that, it is 20 to 5:00, so we will take a 10-minute break and then reconvene.
--- Upon recessing at 1640 / Suspension à 1640
--- Upon resuming at 1650 / Reprise à 1650
1087 THE CHAIRPERSON: We will return to our proceeding now.
1088 Mr. Krushen, the next party.
1089 MR. KRUSHEN: Thank you, Mr. Chairman.
1090 I would now like to invite Mr. Robert Kayes and Ms Carole Zoerb to make their presentation.
PRESENTATION / PRÉSENTATION
1091 MR. KAYES: Thank you. And thank you for waiting for a few minutes while Carole was able to get here from work.
1092 In introducing our presentation, I want to beg your indulgence because you will have heard some of the things we are saying probably 18 times today. I have been sitting here through a lot of it.
1093 We come representing ourselves as citizens and also the justice, equality and integrity of the Earth Committee of the United Church of Canada, and also the Christian Development Council of Winnipeg Presbytery, the United Church of Canada.
1094 The United Church has 50 congregations and four outreach ministries in Winnipeg. The presbytery is the body that oversees that. So we are speaking on behalf of the presbytery. The spiritual or ethological basis on which we speak is the believe that the creator puts us in community not to take advantage of one another but to share with one another and to care for one another.
1095 The Reverend Stan McKay, a former moderator and person who is Cree, reminds us that the creator calls us to two things, basically: to care and to share.
1096 MS ZOERB: Our position is twofold. Number one, by this application, MTS is failing to fulfil the pledge given Manitobans when it was formed, guaranteeing that Manitobans would receive as good or better telephone service at equal or comparable rates the consumer could afford once it had privatized.
1097 The second point is that MTS has not proven, and this is in quotes, that "MTS will not be on an even playing field with other companies, nor will its rates be just and reasonable" to MTS if it does not recover its income taxes from its residential and business customers.
1098 MR. KAYES: We begin with a reminder, which you have already heard several times today. The reminder is that the former Manitoba telephone system was developed as a public service that would provide Manitobans with telephone service. Telephone service was viewed at that time as a necessary good for the citizens of Manitoba in both rural and urban settings, due to the long distances between communities and the landmass of the province. It was developed not as a for-profit business but rather as a public service whose aim and purpose was to serve the public to whom it would be responsible.
1099 When the government of the day was contemplating converting this community service into a for-profit business, the government and its allies made many pledges that after MTS was privatized Manitobans would continue to receive equal or better telephone service with no significant increase of cost to the user.
1100 All the Manitobans that we two have spoken to in our work, in our recreation life, in the church, tell us that this assurance of good service included access to telephone service at a cost that would be comfortably within the reach of most if not all Manitobans. We now find that this is not the case.
1101 The pastors of our churches and the workers in our outreach ministries all tell us that more and more lower income people are considering that to have a phone in their home is now a luxury. If MTS is successful in adding an additional $6 a month in addition to our telephone bills, then even those of us who are moderately well off will need to consider if we can continue to have a telephone at home. This is a radical departure from the original mission of the original Manitoba Telephone Service.
1102 Furthermore, we bring you the view of everyone we have spoken to about this particular application by MTS. Without exception, everyone that we have spoken to considers it unfair, predatory and reprehensible to expect that the customers of MTS would pay the tax bill which properly belongs to the shareholders of the company who have gained very much from their ownership of these shares.
1103 Rather than existing to serve the public, the Manitoba Telecom Service gives every sign of existing primarily to serve its shareholders. This application to have the users of the service pay the company's taxes for the shareholders is a blatant example of this shift of focus from Manitoba Telephone to Manitoba Telecom.
1104 More and more, the public of Manitoba is at the mercy of a telephone management that puts high profit before public service. Normally, competition would be our shelter in this capitalist environment. Certainly, we would all agree that competition for the local telephone business of Manitobans is highly unlikely. In fact, the telephone service was first set up as a public service for the very reason that a monopoly in a non-competitive environment, with no regulation, would not be able to provide the service to Manitobans at the cost they could afford.
1105 So it is clear that we have all lost MTS accountability to Manitobans, that is, those Manitobans who are not shareholders. The recent acquisition of MTS stocks by a non-Manitoban company, Bell Canada, will doubtless erode the historic link between MTS and Manitobans even further. In fact, one may wonder if MTS is not trying to shed itself of home telephone subscribers.
1106 This leaves Manitobans at large with only yourselves, the CRTC, to protect us from the avaricious moves of MTS management, such as we have before us today.
1107 MS ZOERB: Our second argument against this MTS proposal has to do with economics and taxation.
1108 We argue on the basis of common sense and experience that in Canada's income tax is paid for by whomever receives the income. In this case, the income recipients are the shareholders of MTS who have received dividends from the company's profits. These shareholders have profited very well from their holdings, and it is they who now must bear the company's income taxes through a reduction in their dividends to pay these taxes.
1109 High-risk investment for high returns and short-term earnings normally results in lowered returns and lost investment over the long term. This was the option investors chose when trying to make a quick profit at the expense of a public utility service being converted to a for-profit venture for those citizens who were able to borrow and finance the purchase of shares in the company at the time of conversion.
1110 This enrichment of shareholders at the expense of the Manitoba public is the direct cause of income taxes being owed by MTS. If the conversion had not occurred, all member users of MTS would not now be faced with increased service costs to cover income taxes for a private sector enterprise.
1111 Secondly, it is our contention that MTS' poor-underfinanced-me presentation of its financial position is not supported by their earnings reports. This is a very wealthy company, which will not be hurt in the least by paying its taxes from its profits.
1112 Thirdly, we object to the unfairness of MTS seeking to pay the income taxes for all its departments through business and residential rates. For example, the minimum wage earners in Manitoba, many of whom are required to have a telephone service to receive daily on-call work orders, will be required to work more than one additional hour per month just to cover the increase of $6 per month for a work necessity or risk losing their employment.
1113 We also wonder at the taxation logic of increasing residential and business rates to pay income taxes. Will this not incur more profits, which in turn will incur more taxes, requiring once again another rise in rates? We think that this is like trying to save a ship by raising the level of water in which it is sinking.
1114 In conclusion, we respectfully ask the CRTC to fulfil its regulatory role of protector of the public by both refusing any further residential rate increases for the purpose of paying MTS income taxes and by withdrawing the interim rate increase already given for this purpose.
1115 Thank you.
1116 MR. KAYES: Thank you. That is our presentation.
1117 THE CHAIRPERSON: Thank you, Mr. Kayes and Ms Zoerb. We appreciate your coming. I am glad we were able to accommodate your work schedule.
1118 MS ZOERB: So I believe, Mr. Krushen, those are all the presentations that we --
1119 MR. KRUSHEN: I believe so, but I would just like to ask one final time if there is anyone in the room who would like to do a presentation and who has not yet done so. Apparently not.
1120 THE CHAIRPERSON: Okay. With that, then, we will turn to Mr. Fraser on behalf of the company.
REPLY / RÉPLIQUE
1121 MR. FRASER: Thank you, Mr. Chairman and Commissioners.
1122 I said earlier this morning that the Commission had an extremely difficult challenge in terms of balancing many social, economic and competitive objectives that you have to manage. I think today only confirmed that.
1123 We have heard a series of compelling heartfelt concerns and it is impossible not to empathize with them.
1124 I also said this morning that it is imperative that the issues be weighed in the total context of the change that has taken place in the telecommunications industry and I would reiterate that.
1125 Individuals and organizations have shared with us some of their experiences and concerns. I would like to share with you a couple of my experiences during the period of dramatic change in our industry.
1126 I have spoken with customers, interest groups, politicians and employees during that period, and I would summarize their issues into three main areas: affordability, quality of service, and jobs. I think you have heard those themes recurring today in the comments that the various presenters have made.
1127 Some have suggested to me and I believe have suggested in the comments to you today that the best solution is to go back to the way that it used to be. In terms of the Crown Corporation, ownership structure, in terms of the subsidization of local rates, in terms of job security and monopoly in terms of local competition in local markets.
1128 However, that is not an option for MTS. We can't go back and we can't stand still. MTS must move forward and compete in the environment and the framework that we operate in, not just for customers but for capital as well. Relative performance within our peer group is critical.
1129 When Stentor broke up Telus ran fibre through Manitoba and Bell did as well. That left us in a precarious situation. It fragmented traffic flows and it reduced revenue because MTS no longer received transiting fees. We were offered to be the local exchange carrier for both Telus and Bell. We negotiated the best deal possible and ultimately aligned ourselves with Bell for a number of purposes, to reduce our costs, to gain a growth vehicle and to obtain the intellectual property and connectivity that we needed. In exchange, we sold Bell 20 per cent of MTS.
1130 I mentioned this morning that we have done everything possible to have as graceful a transition to full taxation as possible. We have reduced staff by 40 per cent, and we are the lowest cost provider in Canada as a result of that. We aligned with Bell and we gained significant efficiencies in cost reductions as a result of that, but there was also costs to making that deal in terms of independence and control. We pursued new growth opportunities and entered the market in Alberta and B.C., and we bought back shares in MTS. We did that to achieve relative performance with other peer groups in the telco industry to sustain MTS' value.
1131 We have had difficult negotiations with suppliers to reduce costs, with partners to generate new revenue and reduce costs, with our employees to reduce costs, and now with our customers in terms of the balance with rates. And we have been trying to balance all those factors in terms of new revenue opportunities, in terms of cost reduction opportunities and in terms of getting local rates closer to the cost of providing that service. It has been a combination of those things, as well as a combination of buying back our own shares, so that our relative performance to other telcos and the capital markets would be within the performance of that peer group.
1132 In general, the majority of consumers have benefited from the changes which have taken place in the industry. Ultimately, that is the objective of the changes that have taken place. There is more choice, there is more investment, there is better quality, there is better total value for the majority of consumers.
1133 Have all consumers benefitted equally? No, they have not. I think some of them are a representative sample of the group or groups that have not benefitted equally here today, but they are one part of the overall group and one part of the overall policy implications that needs to be considered. The less fortunate in society would benefit by going back to the way that it was.
1134 MTS does not control the competitive economic model nor the regulatory framework that exists today. The reality is, however, that they are the frameworks in which MTS must operate and must compete.
1135 We have strived for balance and fairness in our request and we only ask for balance and fairness in your decision so that we can compete effectively.
1136 The components of the competitive economic framework and the regulatory framework are inextricably linked and need to be viewed from a total context. Simply stated, that means income taxes must be paid and local rates must move closer to covering the cost of providing that service, and we must move forward in the environment, both competitively and economically, that we exist in. We do not have the option of going back to the way that it was.
1137 In our request for local rate increases, as I have indicated earlier, we have pursued every possible option in terms of minimizing that and in terms of balancing it. We recognize that there are significant rate increases involved here. We recognize that nobody is going to be pleased with those rate increases.
1138 We also recognized that if we asked for more than we actually needed as a negotiating ploy that that would only hurt us with our customers. So what we worked very hard to do is to find all the alternatives in terms of minimizing it and asking for exactly what we needed, not a strawman in terms of negotiating a position, but rather we tried to do that internally to the best of our ability.
1139 Thank you.
1140 THE CHAIRPERSON: Thank you, Mr. Fraser. We appreciate your comments.
1141 I appreciate this is actually, I suppose, outside, strictly speaking, the parameters of your application, but one of the issues that was raised today by Ms Swedick was the message relay service and performance of the service.
1142 I appreciate that you probably don't have the answer to this question today, so I'm not expecting an answer today. Again, as I say, I appreciate it is really outside the bounds of the application that you have brought forward today.
1143 I guess I was curious about what the status of the service is in terms of its performance outage, and so on, and wondered whether --
1144 MR. FRASER: I did, in fact, Mr. Chairman, ask people to go back and check and get me some information on that.
1145 We looked at the last two weeks. Average answer time has been between 17 and 31 seconds. If we ever see times going over five minutes we take other operators from other queues and put them in the MRS system.
1146 So we do monitor that and we do have statistics on that. As I say, we went back over the last two weeks and the average answer time was between 17 and 31 seconds.
1147 THE CHAIRPERSON: Are you aware of actual outages of the service, where the service has just been out?
1148 MR. FRASER: No, I am not, but I can certainly check on that.
1149 THE CHAIRPERSON: I wonder if you could perhaps go back over a couple of months and just check to see how the service has been.
1150 Again, I appreciate it is outside the parameters of this application, but --
1151 Again, I thank you for your presentation.
1152 I want to take this opportunity to thank everyone who has taken time out of their busy schedules to appear before us today and provide their comments on the application. We understand it is an important issue for the company and for all the citizens of Manitoba indeed.
1153 So I want to thank everybody for coming forward today.
1154 That ends this informal phase of this proceeding and tomorrow we will reconvene at nine o'clock with a more formal phase where CAC/MSOS and the Commission will have questions for the company's witness and we perhaps will have a few questions for the CAC/MSOS witnesses as well.
1155 So again I thank you very much.
1156 We are adjourned for the day and we will reconvene at nine o'clock tomorrow morning.
1157 Thank you.
--- Whereupon the hearing adjourned at 1715, to resume
on Thursday, January 11, 2001 at 0900 / L'audience
est ajournée à 1715, pour reprendre le jeudi
11 janvier 2001 à 0900