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PIAC opposes disconnection of local phone service for non-payment of toll charges

DISPUTE

CRTC BMT/Telephone Access Committee

Subject of Dispute: Terms of Service regarding disconnection of basic local service for non-payment of toll or other non-tariffed charges Dispute Initiator: Philippa Lawson, PIAC/NAPO Date: June 26, 2002

Dispute Description: This dispute can be divided into a number of elements, as follows:

1. Do the terms “service”, “account”, and “payment” in Article 22.1, 22.1(a), 22.1©, 22.1(h), 22.2, 22.2(b) and 22.2© of Bell Canada’s Terms of Service refer to tariffed services only, or to non-tariffed services as well?
2. Is Bell permitted, under Art.22.2(a) of its Terms of Service, to disconnect the local service of a customer who has paid enough to cover local service charges (current and arrears)?
3. Is TELUS permitted, under Art.115.4 of its Terms of Service, to disconnect local service of a customer who has paid enough to cover local service charges (current and arrears)?
4. Should the rules regarding disconnection of basic local service for non-payment of toll and other non-tariffed charges be uniform among ILECs?
5. What rule(s) should apply to ILECs in respect of disconnection of local service where the customer has arrears in respect of non-tariffed services (e.g., toll, 900 service) and is making partial payments?
6. What rule(s), if any, should apply to ILECs in respect of their communications to customers regarding potential disconnection for non-payment? (For example, should ILECs be required to distinguish between local, toll, and possibly optional service, disconnection?)

History of Dispute within Committee:

This issue was raised by PIAC in the first Committee meeting (April, 2001).

Through discussion and interrogatories, it became clear that:

1. the existing terms of service on this point are interpreted differently by different parties (even among companies);
2. there is a significant difference in the rule applicable to TELUS and SaskTel, on one hand, versus the rule applicable to Bell, Aliant and MTS on the other hand;
3. even among companies subject to the identical rule, practices differ and there is disagreement as to how the rule should be interpreted; and
4. ILECs and consumer groups disagree on the rule(s) that should apply in this situation.

In an email dated May 13, 2002, PIAC/NAPO proposed to treat the matter as a dispute. TELUS and Bell, in response, requested that further discussions take place before treating the matter as a dispute. Further discussions were held at the June 17, 2002 meeting, with a view to achieving consensus on any of the above-noted issues. No consensus could be reached.

Issue Background

In Telecom Letter Decision CRTC 88-4, regarding Bell Canada’s collection practices in respect of its 976 service, the Commission noted that under Bell’s Terms of Service, “Bell may deny service for non-payment of tariffed charges but not for the non-payment of non-tariffed charges.” The Commission ordered as follows:

“The Commission reiterates that non-payment of non-tariffed charges cannot result in denial of service. Accordingly, it would be unacceptable for the company or any party acting on behalf of the company to suggest that disconnection of service would result from non-payment of 976 non-tariffed charges. As customers may not differentiate between the payment of tariffed and non-tariffed charges, the Commission directs that, any partial payments are to be applied first to tariffed charges.”

In the proceeding that led to Telecom Decision CRTC 96-10 (Local Service Pricing Options), a competitors and consumer groups argued that ILECs “should not be permitted to continue the practice of disconnecting local service for the non-payment of toll bills”. The Commission rejected this argument, reasoning that:

”…the approved procedures which must be followed by the companies in order to suspend or terminate service area adequate to prevent unjust discrimination against other long distance providers or the conferral of an undue preference in favour of the Stentor member companies”. (p.18)

In Telecom Decision CRTC 98-4 (Joint Marketing and Bundling), the Commission summarized its approach to partial payments in the context of bundled services as follows:

”…In those Decisions [97-11 and 97-12], Bell and TELUS were permitted, without the requirement to file tariffs, to bundle tariffed telecommunications services with non-telecommunications services subject to the condition that the bundled service must not be sold for less than the sum of the tariffed rates of the telecommunications services and that the bundled service must not be designed to circumvent the tariff for any tariffed service included in the bundle. The companies were also required to itemize the tariffed services on the customer’s bill and to ensure that payments for bundled services were allocated first to primary exchange services and other tariffed services….”

By way of letters to ILECs dated April 11, 2000, CRTC staff noted as follows:

“With regard to your policy for partial payment, we note that most companies do not differentiate between tariffed and non-tariffed charges in arrears and would have to incur additional costs to either modify their billing systems or to manually track tariffed and non-tariffed charges on past due account[s].

In our view, those costs would likely outweigh the benefits that customer facing disconnection for making partial payments would receive. In light of the above, we consider that your current policies regarding toll denial and the application of partial payment do not appear to be unreasonable…..”

Proposed Resolution

PIAC/NAPO’s position on this issue is set out in our email of June 7, 2002. In respect of the specific issues set out above, PIAC/NAPO’s position is as follows:

Regarding the existing rules:

1. The current Terms of Service relate only to tariffed services. Hence, references to “service”, “account”, and “payment”, unless otherwise specified, refer to tariffed services, accounts, and payment therefor only.
2. Bell is not permitted to disconnect the local service of a customer who has paid enough to cover their local service charges, or who has complied with a “reasonable deferred payment arrangement” regarding any local service arrears.
3. TELUS and SaskTel may be permitted to disconnect the local service of a customer who has paid enough to cover their local service charges, or who has complied with a “reasonable deferred payment arrangement” regarding any local service arrears. (This is not clear.)

and regarding what rules should apply:

4. The same rule regarding disconnection of local service for non-payment of non-tariffed service charges should apply to all ILECs equally.
5. The appropriate rule on this issue is as follows:

That, unless otherwise directed by the customer, partial payment be applied to basic local service charges first, regardless of the relative age of outstanding bills. Remaining payment should then be applied to other charges by oldest outstanding. Basic local service should only be disconnected where the customer has failed to pay basic local charges, and only after attempts have been made to negotiate a reasonable deferred payment agreement regarding any outstanding local charges. Failure to pay toll charges should result in toll blocking, and failure to pay optional local service charges should result in disconnection of those services, before basic local service is disconnected for non-payment.

ALTERNATIVELY,

That the companies continue to apply partial payments as they wish, but that there be no disconnection of basic local service as long as the partial payment covers local charges, or is in keeping with a reasonable deferred payment agreement regarding outstanding local charges. Failure to pay toll charges should result in toll blocking, and failure to pay optional local service charges should result in disconnection of those services, before basic local service is disconnected for non-payment.
6. ILECs should not threaten to disconnect a customer’s basic local service as long as customer payments cover basic local charges. ILECs should threaten toll disconnection for failure to pay toll charges, and optional service disconnection for failure to pay optional service charges.
END OF DOCUMENT

Explanatory Notes

DISPUTE

CRTC BMT/Telephone Access Committee

Subject of Dispute: Terms of Service regarding disconnection of basic local service for non-payment of toll or other non-tariffed charges Explanatory Notes

“Terms of Service” are the rules that apply to the phone company in respect of the regulated services it offers. They are found in the front of your telephone directory.

“Tariffed services” are telephone services set out in a regulated “tariff” that has been approved by the CRTC. In other words, they are services whose rates are regulated by the CRTC. Basic local service is tariffed, but long distance service is not.

“ILECs” stands for “Incumbent Local Exchange Companies” and means the local phone companies that have been providing service in their territories for ages.

“toll service” is the same as “long distance service”

CRTC proceeding

 

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