CRTC Proceeding on Telecom Consumer Bill of Rights – Initial proposed Bill of Rights

TELECOMMUNICATIONS CONSUMER BILL OF RIGHTS

Application

This Bill of Rights applies to all regulated telecommunication services offered by [insert name of ILEC] on a retail basis. Regulated services include basic local wireline service, optional local services, payphone service, and non-discounted long distance rates. Regulated services do not include discounted long distance rates, wireless service or Internet service. Call [insert name of ILEC] if you are uncertain whether a service is covered by this Bill of Rights.
The term “consumers” includes residential and business service subscribers. It also includes non-subscribers seeking to obtain service or using telecommunications services subscribed to by others.

ACCESS TO SERVICE

1. Consumers have the right to reasonable access to basic telephone service.
Telephone companies must provide basic telephone service to consumers unless the applicant for service:
a) owes the company money,
b) is a credit risk and does not provide a reasonable deposit (no more than three months estimated charges), or
c) does not pay their share of construction costs ($1,000 + any costs exceeding $25,000) where facilities do not already exist.
Basic telephone service includes:

individual line, touch tone service with the capability to connect to the Internet at local rates (except where facilities do not yet exist)
free access to emergency services (911)
access to operator and directory assistance services
a free local print directory (white pages + Yellow Pages)
free local calling within a defined area that includes the subscriber’s local community
access to long distance service, or local-only service (as requested)
access to local (or toll-free) Internet service
access to enhanced local calling features (e.g., voicemail, Call Display, Call Waiting)
blocking of pay-per-use features and/or 900 services (upon request)
free access to Message Relay Service (for deaf users)

For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.
2. Consumers have the right to choice among services and service providers.
All services other than basic service as defined above are optional. Consumers have the right to subscribe to some, all, or no optional services.
Consumers also have the right to subscribe to different service providers for local, long distance, wireless and/or Internet service, where alternative providers of such service(s) offer service. A consumer could, for example, use a different provider for each of these services.
Consumers who switch local service providers within a local area have the right to keep their existing telephone number, except in locations where number portability has not yet been implemented.
3. Consumers have the right not to be disconnected except as specifically permitted by regulation.
Consumers cannot be disconnected if:
a) they agree to a reasonable deferred payment plan, and honour that agreement; or if
b) there is a dispute regarding the grounds for disconnection, the consumer pays all undisputed amounts, and there is no reason to believe that the purpose of the dispute is to avoid payment.
Consumers cannot be disconnected for failure to pay charges for a different class of service at different premises, or for service in the name of another consumer.
Consumers cannot be disconnected from local service for non-payment of long distance, 900 service, or other non-local charges. [pending – see Telecom Public Notice CRTC 2002-2]
Prior to disconnection, the telephone company must provide the consumer with reasonable advance notice. Such notice must include the scheduled disconnection date, the reason for disconnection, and all applicable charges.
The telephone company must restore service, without undue delay, once the grounds for disconnection no longer exist or once a payment agreement has been negotiated.
For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.

PRIVACY

4. Consumers have the right to privacy of their personal information.
Consumers have the right not to have their name, address or telephone number published in the telephone directory (print or online). Charges for unlisted service must not exceed $2/month.
Consumers have the right to block, at no charge, the display of their name or number on a called party’s telephone. Consumers requiring special protection, such as shelters for victims of abuse, have the right to automatic blocking of such information display, at no charge. Call display blocking must be applied automatically to all unlisted service consumers. [Privacy Commissioner, Finding #172, April 28, 2003]
Consumer information other than name, address and listed telephone number is confidential and shall not, without the consumer’s express consent, either in writing, orally or electronically, be disclosed by the company to anyone other than:

the consumer;
a person who, in the reasonable judgement of the company, is seeking the information as an agent of the consumer;
another telephone company, provided the information is required for the efficient and cost-effective provision of telephone service and disclosure is made on a confidential basis with the information to be used only for that purpose;
a company involved in supplying the consumer with telephone or telephone directory related services, provided the information is required for that purpose and disclosure is made on a confidential basis with the information to be used only for that purpose; or
an agent retained by the company in the collection of the consumer’s account, provided the information is required for and is to be used only for that purpose.

Telephone companies are also subject to the federal Personal Information Protection and Electronic Documents Act (“Act”), which gives consumers rights to control the use and dissemination of their personal information. “Personal information” means any information about an identifiable individual. In particular, this Act requires the knowledge and consent of individuals to the collection, use or disclosure of their personal information, except in specified circumstances. One exception is “publicly available” information, which includes information listed in telephone directories. The Act also gives consumers the right to access information about them held by the company, and to have inaccurate information corrected.
For further information, see http://www.privcom.gc.ca/legislation/02_06_01_e.asp or http://www.privcom.gc.ca/information/02_05_d_08_e.asp.
For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.
5. Consumers have the right to block unsolicited telemarketing calls.
Telemarketers must identify themselves, and must display a telephone number at which they can be reached.
Telemarketers must cease unsolicited marketing calls (by telephone or fax) upon request. If the calls do not stop or the telemarketing company cannot be contacted, the telephone company or the CRTC can assist.
Consumers can have their telephone numbers removed from marketing lists or have their names removed from any directories made available by the telephone company to publishers of independent or electronic directories.
Automatic dialing and announcing devices are prohibited except where there is no attempt to solicit (e.g., emergency announcements, scheduling appointments, market research).
Unsolicited faxes are permitted only between the hours of 9:00am and 9:30 pm on weekdays, and 10:00am to 6:00pm weekends and holidays.
For more information on telemarketing rules, see http://www.crtc.gc.ca/eng/INFO_SHT/T22.htm.
6. Consumers have the right to privacy of their telephone communications.
It is a criminal offence to intercept telephone communications between two other parties, without authorization or consent.
7. Consumers have the right to control access to their premises.
Before entering a consumer’s premises, the telephone company must obtain permission. The telephone company cannot enter a consumer’s home outside normal working hours unless it is an emergency or there is a court order. The company representative must show proper ID upon request by the consumer.
For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.

PAYMENT

8. Consumers have the right to pay telephone bills by any reasonable means.
This includes payment by cheque, major credit card, or cash.
9. Consumers have the right to pay up-front charges of $45 or more by instalment.
Interest rates may apply.
10. Security deposits earn interest, and must be refunded with interest to the consumer when service is terminated or when the conditions justifying the deposit no longer exist.
Such refunds may be applied against amounts owing by the consumer.
For more information on security deposit rules, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.
11. Consumers have the right to a reasonable payment period before late payment charges apply.
Charges cannot be considered past due until at least 30 days after the date that the bill was mailed or otherwise sent to the consumer.
For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.

CONSUMER RELATIONS AND REMEDIES

12. Consumers have the right to an effective complaints and dispute resolution process.
Consumers are entitled to have their complaints heard and dealt with in a timely and effective manner.
Consumers have the right to:

speak with management or supervisors upon request;
full and accurate information regarding rules relevant to an inquiry or complaint;
be referred to the CRTC once it is clear that the matter cannot be resolved internally to the consumer’s satisfaction.

Full information regarding the complaint procedure (including toll-free number, physical address, fax number and other contact information for the CRTC) should be easily accessible and understandable, in both the telephone directory and on the company website.
For information on [ILEC name’s] complaints process, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.
13. Consumers have a limited right to redress when they have been wronged by the telephone company.
Consumers have the right to reimbursement of overbilled charges, where they dispute the charge within one year of the date of an itemized statement showing the correct charge.
In the case of directory errors or omissions, or service problems, the telephone company’s liability is limited, in general, to a refund of applicable charges. The telephone company’s liability is not, however, limited in cases of deliberate fault or gross negligence.
For more information on consumer rights to redress, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.

CONSUMER INFORMATION

14. Consumers have the right to full and accurate information.
Consumers have the right to full information about all rates, terms and conditions of telephone services available to them. Such information must be generally accessible to consumers, and provided to individuals upon request. All relevant information must be provided to individual consumers prior to entering into a contract for service.
Company policies regarding such matters as consumer privacy and complaints handling must be easily accessible, in both the print directory and on the company’s website. Company representatives must be able to provide consumers with such information over the phone.
All information designed for consumers should be in plain language.
All bill statements, invoices and notices must include a telephone number at which a knowledgeable company representative can be reached.
For further information, see www.crtc.gc.ca/eng/INFO_SHT/t1007.htm and www.crtc.gc.ca/eng/INFO_SHT/t1008.htm
15. Consumers have the right to detailed, itemized information regarding equipment and service charges.
Consumers have the right to know, on an ongoing basis, what services they have subscribed to, which services are optional, and how much they are paying for each service. This information must be provided on each monthly bill, as well as initially and upon request.
16. Consumers have the right to reasonable advance notice of rate increases and other important service changes.
Consumers are entitled to at least 30 days advance notice of rate increases or other significant changes to their service.
17. Consumers have the right to paper bills at no extra cost.
Where online or other forms of billing are offered, they are optional. Consumers always have the right to monthly billing by mail, at no extra cost
18. Consumers have the right to be informed about current telecommunications fraud and scams, and about how to avoid them.
Telephone companies should inform users about risks arising from known scams and frauds affecting their networks and/or billing, and about how such risks can be minimized.

OTHER

19. Consumers are entitled to have disputed 900 service charges waived the first time that they dispute such charges.
When consumers dispute 900 service charges, the telephone company must offer blocking of such services to the consumer. Such blocking is free of charge, other than a maximum $10 one-time charge.
For further information, see www.crtc.gc.ca/eng/INFO_SHT/t1001.htm
20. Consumers have the right to quality of service.
Telephone companies are held to specific quality of service standards by the CRTC. These standards cover such matters as delay in answering calls to the business office, time taken to connect service and to repair broken service, and directory accuracy. Where companies fail to meet these service standards on a generalized basis, they may be required to rebate consumers.
21. Consumers have the right to participate in the regulatory process.
Consumers have the right to be involved in the regulatory process. Information is contained on the Commission’s website in that regard, including information on upcoming proceedings and how to participate.
For further information, see www.crtc.gc.ca/eng/publicpar_1.htm
22. Telephone companies must accommodate consumers with visual or hearing disabilities.
Consumers with hearing or visual disabilities have all of the rights listed above, and must be accommodated in accordance with human rights law (i.e., to the point of undue burden).

CRTC Proceeding on Telecom Consumer Bill of Rights – Consumer Groups Initial Submission

Ms. Diane Rheaume
Secretary-General
Canadian Radio-Television and
Telecommunications Commission
Ottawa, ON
K1A 0N2
BY EMAIL AND COURIER
Dear Ms. Rheaume:
Re: Public Notice CRTC 2003-6: Consumer Bill of Rights
1. The following submission is made in response to Telecom Public Notice CRTC 2003-6, on behalf of the following groups, collectively referred to herein as the “Consumer Groups”:

The Consumers’ Association of Canada, National Anti-Poverty Organization, and L’Union des Consommateurs;
The BC Old Age Pensioners’ Organization, Council of Senior Citizens’ Organizations of BC, federated anti-poverty groups of BC, Senior Citizens’ Association of BC, West End Seniors’ Network, End Legislated Poverty, BC Coalition for Information Access, and Tenants Rights Action Coalition; and
The Consumers Association of Canada (MB. Branch) and the Manitoba Society of Seniors.

2. In PN 2003-6, the Commission invited parties to provide their views on a Consumer Bill of Rights (“CBOR”), to be comprised of a list of clear and concise statements of existing consumer rights written in plain language.
3. Specific issues on which the Commission requested comment include:

Proposing rights for inclusion in the CBOR, providing the exact wording of the statement of the right and the accompanying text. Parties are also to identify the documentary sources related to the right;
Recommendations on methods to communicate the CBOR to consumers; and
Address whether there is a need for an amendment process and if so, to propose the process.

Telecommunications Consumer Bill of Rights
4. While drafting the CBOR, it became abundantly clear that it would be difficult to reference every right that a consumer may be interested in. In addition, the Incumbent Local Exchange Carriers (“ILECs”) have different policies on important matters. Therefore, we broadly defined the rights so as to develop a CBOR written in terms that are uniform across Canada. Where applicable, we referred the consumer to the decision, term of service or policy that would give them further and specific information. In addition, we recommend that each ILEC provide page references to any other consumer information published in their white pages in the same manner we have proposed for references to the General Terms of Service.
5. Our proposed CBOR is entitled “Telecommunications Consumer Bill of Rights” to specifically identify that this document pertains solely to telecommunications service. The documentary sources related to the rights are referenced as endnotes.
6. We used the category heading “Consumer Relations and Remedies” to more accurately reflect the rights we proposed under this section. We also identified some important rights that do not fall within the five categories set out in the Public Notice. We have listed these rights at the end of the CBOR under the section entitled “Other”.
7. While drafting the CBOR, various issues came up that needed further clarification by the Commission. These issues are listed below:

We ask the Commission to clarify whether the CBOR includes both residential and business service. Our proposed CBOR has assumed that both classes of service are included.
The federal Privacy Commissioner’s Finding #172, regarding unlisted service and Call Display, should be followed by all ILECs and incorporated into the Bill of Rights. (refer to Paragraph 4 of the proposed CBOR)
Consistent with federal privacy legislation, consumer information other than “listed name, address and telephone number” should be treated as confidential (refer to Paragraph 4 of the proposed CBOR). The current General Terms of Service treat “name,address and listed telephone number” as confidential.
Consumers should have the right to pay telephone bills by any reasonable means. In practice, however, some ILECs have stopped accepting cash as a means of payment. This issue needs to be addressed and the rules clarified. (refer to Paragraph 8 of the proposed CBOR)
The issue of the manner in which charges and services are to be identified in billing statements needs to be resolved. (refer to August 6, 2003 letter from BCOAPO et. al, and CRTC Decision 2002-34, paragraph 806.)
We await the Commission’s rulings on a number of relevant matters, including:
- whether ILECs can disconnect subscribers from local service for non-payment of toll charges (BMT Committee dispute);
- the scope of consumer protections related to 900 services (CRTC PN 2002-2);
- the scope of consumer protections related to telemarketing (CRTC PN 2001-34);
- whether ILECs must automatically refund overcharged amounts to all affected subscribers (PIAC Part VII Application re: Bell Canada party-line rental set overcharging); and
- the scope of remedies available to consumers who have been wronged by an ILECs’ non-compliance with CRTC regulations (PIAC Part VII Application re: ILECs Disclosure of BTS rates).

8. The Consumer Groups’ proposed Telecommunications Consumer Bill of Rights is set out in Attachment A.

COMMUNICATION OF CBOR

9. The CBOR must contain the rights that consumers feel are the most pertinent to them. The CBOR must be written in plain language and presented in a consumer friendly format. Finally, the CBOR must be communicated effectively. Towards these objectives, the Consumer Groups submit the following.

Plain Language Review

10. Once the Commission has determined which rights will be included in the CBOR, the wording of those rights must be carefully executed. The Commission has requested that Parties provide concise, accurate and clear statement of the rights and accompanying text. The Consumer Groups have relied on our clients and our own expertise to ensure that we have complied with this request. The Commission may wish to use the services of a plain language specialist to ensure that this goal is achieved. The value of having the rights presented clearly and effectively to consumers cannot be overstated. The CBOR must be useable by consumers.
11. However, any revision of wording runs the risk of changing the meaning of a given right. It is therefore essential that any further editing of an agreed CBOR be subject to further review and comment by interested parties.

Communication to Consumers

12. The CBOR has the ability to become the primary document that consumers refer to. As such, it should be disseminated as broadly as possible. The CBOR should be communicated in three separate ways:
a. The CBOR should be published on the CRTC website and on the websites of all ILECs. There should be a clear and conspicuous link to the CBOR on the CRTC’s home page, on the ILECs’ main web page for consumer/residential services, and on all web pages with consumer-related information.
b. The CBOR should be published conspicuously, in font size of at least 11pt, in the white pages of all ILECs. The Consumer Groups submit that the CBOR must be given prominence or it will become lost in the many different types of information found in the front of the white pages. For example, Metro Vancouver white pages begins by publishing an emergency list of numbers, followed by 8 pages of information entitled “How to use Telus Personal Call Management Services”, followed by 8 pages entitled “Home Pages: Choices for Wiser Living”. It is not until 17 pages into the telephone book that a consumer will find the Table of Contents that will direct him or her to information on the basic rights of consumers pertaining to telephone service.
Accordingly, the Consumer Groups submit that the CBOR be placed immediately after the list of emergency numbers. Where applicable, we submit that the CBOR should reference where further information on point can be found within the white pages and where applicable, online. For example, the Consumer Groups’ first proposed right would have a reference at the end as follows:
For more detail, refer to sections [insert section numbers] of the General Terms of Service located at page [insert page number] of these white pages.
c. The CBOR should be distributed to all subscribers as a bill insert once it is finalized and thereafter once a year. The CBOR should be a separate document from the bill, and should be readily distinguishable from marketing material that is commonly also sent via bill insert. In particular, the size, colour(s), layout and formatting of the CBOR insert should be different from that used in marketing inserts. The recent insert used to publicize this proceeding (e.g., plain black and white, reasonable size font) could be used as a model for future CBOR inserts.

AMENDMENT PROCESS

13. There is clearly a need for an amendment process specific to the CBOR, as the Commission promulgates new rules and revises old rules. Indeed, there are pending issues before the Commission right now that will affect the CBOR (for example, disconnection of local service for non-payment of long distance, 900 service, or other non-local charges).
14. The Consumer Groups submit that there be an ongoing process to compile proposed amendments to the CBOR throughout the year, for inclusion in the annual revision. Whenever a CRTC proceeding relates to consumer rights, the Commission should provide an opportunity for Parties to made submissions on amendments to the CBOR. In addition, there will likely be further consumer rights issues raised in the Bill Management Tools and Access to Telephone Service Committee. As part of that process, Parties can make submissions on amendments to the CBOR. Once a year, the Commission would initiate a proceeding regarding amendments to the CBOR and parties would have an opportunity at that time to make further submissions. The actual amendments to the CBOR would also be made once a year to coincide with the publication of new directories and for the annual bill insert.
All of which is respectfully submitted,
original signed
Philippa Lawson
Co-Counsel for the Consumer Groups
cc: Interested Parties, PN 2003-6

PIAC submission on security deposits

PIAC’s submission on security deposits, on behalf of a coalition of low-income energy consumers, to the Ontario Energy Board.

The Ontario Energy Board (OEB) is currently considering changes to the rules governing the customer security deposit policies of electricity distributors. For more information on this topic, visit the the OEB website
RP-2002-0146
ONTARIO ENERGY BOARD
NOTICE OF PROCEEDING TO AMEND THE DISTRIBUTION SYSTEM CODE AND RETAIL SETTLEMENT CODE CONSUMER SECURITY DEPOSIT POLICIES

Submissions of the Vulnerable Energy Consumers’ Coalition (“VECC”) With Respect to the Notice of Proceeding Concerning Consumer Security Deposit Policies

Introduction

These submissions, made on behalf of the Vulnerable Energy Consumers’ Coalition (“VECC”) are in response to the Ontario Energy Board’s own motion of June 10, 2003 to initiate a proceeding concerning proposed changes to the Distribution System Code (the “Code”) to provide for rules with respect to the consumer security deposit policies of electricity distributors. The Board has also noted that consequential changes to the Retail Settlement Code are also being proposed, as a result of the changes to the Distribution System Code.
VECC has a particular interest in this proceeding because it touches on issues that are of concern to the groups that constitute this coalition. VECC represents the Ontario Coalition of Senior Citizens (“OCSCO”), the Ontario Coalition Against Poverty (“OCAP”) and the Federation of Metro Tenants Association (“FMTA”). OCSCO is a coalition of over 120 senior groups, as well as individual members across Ontario and represents 500,000 senior citizens. OCSCO’s objective is to improve the quality of life for Ontario Seniors. OCAP is an umbrella organization of regional and locally based anti-poverty groups throughout the province. The FMTA is a non-profit corporation composed of over ninety-two affiliated tenants associations, individual tenants, housing organizations, and members of non-profit housing co-ops.
These organizations have longstanding concerns associated with the provision of public services and utilities and their client groups, who are low income and fixed income consumers, are particularly affected by security deposit policies of utilities. VECC’s submission, therefore, focuses on the proposed changes that will affect the residential customer rate class.

Argument

Overall, VECC supports the Board’s proposal, following upon the recommendations of the working group, to standardize consumer security arrangements among electric Local Distribution Companies (“LDCs”). The current provision in the Retail Settlement Code places too much discretion in the hands of LDCs to impose security deposits on consumers without any specific guidelines as to terms or amounts. This has resulted in inconsistent approaches, which has resulted in uncertainty and unfairness for residential consumers across the province. VECC therefore supports the requirement for LDCs to adhere to a set of minimum requirements in preparing their consumer security deposit policies.
VECC’s concern, however is that even the adoption of uniform guidelines will have a disproportionate impact on low and fixed income consumers, given the maximum amount of security deposit that may be charged under the proposed amendments. VECC’s position is that low-income residential customers should receive an exemption from LDC security deposit obligations, based on the definition of “low-income consumer”, proposed by the Advocacy Centre for Tenants Ontario. It is VECC’s submission that the Board has the authority under its enabling legislation, the Ontario Energy Board Act¹, to grant such an exemption.
The Board has the legislative authority to grant mandatory exemptions
The Board has a clear objective under Section 1 of the Ontario Energy Board Act to provide consumers with non-discriminatory access to electricity distribution systems in Ontario and to protect the interests of consumers with respect to prices.
The recent amendment to Section 88. (1) (z.4) of the Ontario Energy Board Act states that the Lieutenant Governor in Council may make regulations governing the amount of deposits charged by distributors as a condition of distributing electricity to consumers. We argue that this provision gives the authority to the Board, through the regulatory instrument of the Distribution System Code, to mandate exemptions to the requirement of a security deposit.
Residential customers do not present the greatest non-payment risk to LDCs
The Board has recognised that the residential customer rate class does not post the greatest degree of non-payment risk, as acknowledged in its June 10, 2003 Notice of Proceeding: “…large customers (> 50 kW), representing the greatest degree of non-payment risk, would have their deposit refunded after 7 years of GPH”.
We also note that research on payment patterns of utility customers indicates that residential consumers tend to pay their utility bills before paying nearly any other obligation, other than rent or mortgage.² This supports the argument that distributors may exempt a certain portion of residential customers, without undue financial risk or risk of being held imprudent by the Board. The Board, in its August 14, 2002 letter reiterated that LDCs “are not intended to be held generally accountable or at risk for uncollected commodity costs from consumers.”
The proposed formula for determining a consumer security deposit is prohibitive for low- income residential consumers
The proposed Code amendments set out a formula for calculating the maximum amounts of a security deposit which a distributor may require of a residential consumer, based on a an average billing multiplied by a billing cycle factor. VECC’s concern is that the formula allows maximum amounts that may be prohibitive for some consumers. For residential customers with an average monthly electricity bill of $100, the maximum security deposit that could be charged would range from $250 to $450, depending upon the customer’s billing cycle. These amounts could be prohibitive for many low and fixed income customers, as even a cursory analysis of income levels of those in the lower income brackets and the financial challenges they encounter reveals.
The overall impact of paying higher utility costs is much greater upon lower income residential consumers than any other class of consumers. The demand for utilities by residential consumers is virtually inelastic. A consumer’s dependence upon these utilities is such that the consumer will continue to demand almost the same amount of service even if the price increases. Residential consumers who are also poor have an even more inelastic demand, being less able to choose between alternate suppliers of electricity than any other class of consumers.
Statistics confirm this assertion. A recent Statistics Canada analysis of the widening gap between rich and poor Canadians strongly suggests the difficulties low-income families, who would not qualify for social assistance utility supports would face in having to pay a security deposit. The typical low-income family in 1999 had only $300 in savings to protect it against unexpected financial hardships.³
In 1999, the lowest household income quintile (those earning less than $20,520 per year) in Canada, spent, on average, more than twice the amount of their income on utilities (water, fuel and electricity) than the highest income quintile (those earning $79,964 and over).⁴
There has been some judicial consideration of the constitutionality of charging security deposits to low-income residential consumers, which is leaves open the possibility that the imposition of a security deposit on low-income customers may be found to be unconstitutional. Although the court in Clark v. Peterborough Utilities Commission⁵ found that the requirement of a security deposit upon the applicants, who were persons of limited income, was constitutional, we argue that the court was inconclusive on the issue of the constitutionality of effect of consumer security deposit policies on certain income groups.
We take issue with the working group’s interpretation of this case, based on their meeting notes of October 9, 2002, page 3, which suggest that this case affirmed the legality of the requirement of a security deposit upon low income consumers by a distributor. It is our view that the decision cannot be so broadly interpreted and that it stands for the narrower proposition that, on the facts before this court, a constitutional argument could not be made. The court stated:
In conclusion, then, I find that the applicants have not proven that the P.U.C. policy violates s. 15(1). It may well be a provable proposition, using the P.U.C.’s records or by a statistical survey of those of whom deposits are required or in other ways, but it has not been shown in close to any satisfactory way in this case. Strangely, the expert in utility practices retained by the applicants and the coalition, Roger Colton, was based in the United States…However, he did not analyze or have any knowledge of the Ontario or Peterborough situation nor did he have any knowledge of social welfare legislation in Ontario. Mr. Anand was unable to traverse the resulting evidentiary gap with law alone, impressive though the attempt was.⁶
The court’s inconclusive approach to the issue of the legality of security deposits imposed by distributors upon low-income consumers in Clark, does not constrain the authority of the Board to exempt low income consumers from security deposit policies of LDCs.
The proposed amendments fail to address the relationship between non-payment of a security deposit and termination of service
The proposed amendments fail to address an important issue concerning consumer security deposits, whether non-payment of a security deposit is grounds for termination of service pursuant to section 31 of the Electricity Act, 1998. We note the comments by the Board in their August 14, 2002 letter regarding the co-ordination of a working group on consumer security deposits, that the Board had not “made a determination on whether non-payment of a consumer security deposit is grounds for termination of service pursuant to section 31 of the Electricity Act, 1998.” We are very concerned about this omission, particularly in light of the position taken by the working group in their Options Paper (April 10, 2003) that the LDC be given the ability to limit or disconnect service for a consumer’s non-compliance with a security deposit requirement.
If the Board proceeds with the proposed amendments to the Code which would impose a security deposit requirement on all residential consumers, we propose that the Code be amended to state that non-payment of a consumer security deposit by a residential consumer be specifically exempted from distributor’s power to terminate service under section 31 of the Electricity Act, 1998.

Conclusion

VECC recognizes that the rationale for applying a security deposit by a utility is to protect a utility from those customers who fail to pay their bills and protect other ratepayers who would be required to make up the loss of revenue from non-paying customers. This argument, however, must be weighed against other, equally compelling arguments. These include the actual financial capability of low and fixed income residential consumers to meet the obligation represented by a security deposit, the relatively low level of financial risk that would be posed by exempting consumers who met the required definition of low-income, and the ultimate impact of the inability to access electrical service by residential consumers.
Despite comments by some members of the working group that provided stakeholder input to the Board on this issue, that “Electricity is not defined as a necessity of life (not an essential service)”⁷ the provision of electrical service is well recognized as a necessity of modern urban life. In Clark v. Peterborough Utilities Commission, [1995] O.J. No. 1743 (Gen. Div.) the court, in considering the issues raised by the imposition of security deposits on low income customers, affirmed this:
“I recognize that the issues raised by these applications are of importance to all parties. They remain of importance to others in the position of these applicants in 1991, faced with a threatened denial of what is now a necessity of life in urban Canada.”
The U.S. Supreme Court has also affirmed this view by stating that “utility service is a necessity of modern life; indeed, the discontinuance of water or heating for even short periods of time may threaten health or safety.”⁸

Recommendations

VECC recommends that the Board amend the Distribution System Code as follows:

Section 1.2 is amended to add the following definition: “low-income residential consumer” is a person with a household income level at or below the Low-Income Cut-offs (“LICOs”) defined by Statistics Canada, using pre-tax, post-transfer household income.
The proposed Section 2.4.6.1 is amended by adding after the last bullet “Where a security deposit is not paid by a residential consumer, a method of enforcement may not include termination of service.”
Add Section 2.4.6.1.1 – “A distributor shall waive all security deposit provisions of its Conditions of Service in favour of a low-income residential consumer.”
The proposed Section 2.4.11 is amended to add the following: – (c) verification that the consumer is a low-income residential consumer.ALL OF WHICH IS RESPECTFULLY SUBMITTED this 10th day of July 2003.
Sue Lott, Counsel for VULNERABLE ENERGY CONSUMERS’ COALITION (“VECC”)
1. Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sched. A.
2. National Consumer Law Centre, Access to Utility Service (2nd ed. 2001) at 76
3. Statistics Canada, The Daily (July 18, 2002) at 13.
4. Statistics Canada, Spending Patterns in Canada, 1999 (Ottawa: Industry Canada, August 2001) at 57.
5. 24 O.R. (3d) 7.
6. Ibid. per Howden J.
7. Consumer Security Deposit Working Group, Meeting Notes – #3, (October 9, 2002) at 3.

Memphis Gas Light and Water Division v. Craft, 436 U.S. 1, 18 (1978).

Consumer Groups' submissions to CRTC on Payphone Access – Cover Submission

Philippa Lawson
Senior Counsel
Ms. Diane Rheaume
Secretary-General
Canadian Radio-Television and Telecommunications Commission
Ottawa, ON
K1A 0N2
BY EMAIL AND COURIER
Dear Ms. Rheaume:
Re: Public Notice CRTC 2002-6: Access to Payphones
1.The following submission is made in response to Telecom Public Notice CRTC 2002-6, on behalf of the following groups, collectively referred to herein as “The Consumer Groups”:

The Consumers’ Association of Canada, National Anti-Poverty Organization, and Union des Consommateurs;
The BC Old Age Pensioners’ Organization, Consumers’ Association of Canada (BC Branch), Council of Senior Citizens’ Organizations of BC, federated anti-poverty groups of BC, Senior Citizens’ Association of BC, West End Seniors’ Network, End Legislated Poverty, BC Coalition for Information Access, and Tenants Rights Action Coalition; and
The Consumers Association of Canada (MB. Branch) and the Manitoba Society of Seniors.

2.In PN 2002-6, the Commission invited parties to provide their views, with reasons and supporting information, on access to pay telephone service generally, and on access to payphone service by deaf consumers in particular. Specific issues on which the Commission requested comment include:

The extent to which consumers rely on pay telephone service;
The availability of pay telephone service to meet consumers’ need;
The impact of the removal of pay telephones on consumers;
Whether there is a need to establish a regime for public interest pay telephones, and if so, how it should be designed; and
Whether there is a need to improve access to pay telephone service by deaf consumers, and if so, how that should be accomplished.

3. In considering these issues, the Consumer Groups found that they did not have sufficient information on which to develop a response. Aside from anecdotal information, it was not clear, for example, to what extent consumers rely on payphones.
4. The Consumer Groups therefore undertook two primary research projects: first, a nation-wide telephone survey of Canadians regarding their use and perceptions of payphone service; and second, a purposive survey targeted at low income Canadians, asking about their use and perceptions of payphone service. The results of each survey are provided in Attachment A and Attachment B, respectively.
5. With respect to the policy questions of whether and how a public interest payphone regime should be established, and whether and how access by deaf consumers should be improved, the Consumer Groups also found that they lacked sufficient information to develop reasoned positions. Much of the information needed for this purpose can only be obtained from the telephone companies, through the interrogatory process. However, some useful information is available from other jurisdictions, in terms of their approaches to the same issues. Attachment C provides an overview of the approaches taken by some other jurisdictions to the issue of public payphone service availability in general. Attachment D provides a brief overview of the approaches taken by some other jurisdictions to the challenge of ensuring access to payphone service by those with hearing impairments, including the profoundly deaf.
6. Based on the evidence that they have been able to gather without the benefit of data from the telephone companies, the Consumer Groups submit that certain conclusions can be reached regarding consumer reliance on payphone service.

Payphones are an important public service

7.The evidence is clear that Canadians consider payphone service to be an important public service.[1] Payphone users feel that the calls they make from payphones are important, while a strong majority, including infrequent users and non-users, say that it is important for others to be able to use payphones to call them.
8.The growth in popularity of wireless phones has by no means rendered payphones obsolete. Indeed, cell phone users (half of those surveyed) are almost as likely as others to use payphone service. However, their frequency of payphone use is much less than that of people without cell phones.
h3. Low income Canadians rely heavily on payphones
9.While a significant proportion of all Canadians (49%) use payphones at least occasionally, a much larger proportion of low-income Canadians (88%) do so. Well over half (59%) of respondents to our low-income survey said that they use payphones at least once a week (vs. 5% of respondents to the EKOS survey), and 22% said that they use payphones daily (vs. 1% of respondents to the EKOS survey).
10.Not surprisingly, people without home phone or wireless service rely heavily on payphones: 93% of the 131 “phoneless” respondents to our survey reported using a payphone at least occasionally, and 82% said that when they need to make a phone call, they go to a payphone. Seventeen percent (17%) said that they use payphones to receive calls.
11. The main reason cited by low income payphone users for their use of payphones is “no other option” (71%). Convenience, while important, is much less likely to be a motivating factor for payphone use by this class of users (46%). A high proportion of low income users report using payphones to call important services (55%) or to make important personal calls (69%).

Payphones are used for a variety of purposes

12.Payphones are used for many different purposes, from social to emergency calling. Convenience and important personal calls are the most common types of calls made (65% and 60%, respectively), but 43% of payphone users say that they have used payphones in the past year to make an emergency or urgent call.
13.Low-income Canadians are more likely than others to use payphones for important personal (69%) and emergency (50%) calls, and less likely than others to use payphones for convenience (58%) calls.
Sizable minorities report problems with payphone availability
14. Forty-four percent (44%) of respondents to the EKOS survey reported sometimes having difficulty finding a payphone when they need one, and 24% (41% in smaller communities or rural areas) said that they had been frustrated by the removal of a payphone that used to be there.
15.One-third (33%) said that they had been frustrated by payphones that are broken, and 44% said that they have sometimes tried to use a payphone and found that it was not working.
16. While availability of payphone service is generally rated as good or excellent, 14% of respondents to the EKOS survey, and 12% of respondents to our low-income survey, rated the availability of payphone service in their area as poor.

The coin payment option is important

17.The vast majority of payphone users (84%) use coins to make payphone calls, and 64% use coins more often than other methods of payment. In contrast, only 23% reported using prepaid cards, and this method of payment was used “most often” by only 6% of respondents.
18. Over one-third (36%) of payphone users have been frustrated by payphones that will not accept coins, and a strong majority (71%) agree that it would be a problem for them if payphones no longer accepted coins.
Lack of incoming call capability is a problem for some
19.Twenty-three percent (23%) of respondents to the EKOS survey said that they used payphones to receive calls from other people, and 21% said that they had been frustrated by payphones that don’t allow incoming calls.

Need for Public Interest Payphones?

20.The evidence suggests that there may be a need for some kind of program to ensure the delivery of payphone service in locations where it is not being provided by market forces alone. Clearly, Canadians, and especially low-income Canadians, rely heavily on payphone service for important calling needs. Yet, it is also clear that the availability of payphones does not always meet consumer needs.
21.In any case, it is unlikely that the social need for payphones will always coincide with profitability of payphone service; some locations will remain unprofitable, yet will serve an important public need. Hence, some kind of regulatory intervention is likely to be necessary in order to ensure that payphones are provided in some locations, where needed.

Design of a Public Interest Payphone regime

22. The Consumer Groups take no position at this time as to the appropriate design for a public interest payphone regime, other than to submit that public interest payphones should:

have no less functionality than regular payphones;
cost no more than regular payphones; and
have the same consumer safeguards as regular payphones.

23. See Attachment C for a description of approaches taken by some other regulators to the provision of public interest payphones.
Access to payphone service by deaf consumers
24. The Consumer Groups agree with the Canadian Association of the Deaf that payphones must be accessible to deaf consumers. Clearly, there is a need to improve access to payphone service by deaf consumers in Canada.
25. Current requirements that all payphones be hearing-aid compatible and provide access to Message Relay Service are insufficient. The former does not accommodate the needs of the many Canadians who are profoundly deaf. The latter is useless to deaf consumers wishing to make a call from a payphone, unless there is a TTY unit attached to the payphone.
26.However, more information on options for the provision of such access is needed before the Consumer Groups can take a position on how the needs of deaf Canadians for access to payphone service should be accommodated.
27.Attachment D provides information on how some jurisdictions are approaching this issue.
All of which is respectfully submitted,
original signed
Philippa Lawson
Co-Counsel for the Consumer Groups
cc:Interested Parties, PN 2002-6
[1] 92% of respondents to the EKOS survey agreed with this statement: “Payphones are an important public service”.

Consumer Groups comments on telco “winback” activities – Reply comments

Link to CRTC proceeding

Philippa Lawson
Senior Counsel
(613) 562-4002 x.24
plawson@piac.ca
Ms. Diane Rheaume
Secretary-General
Canadian Radio-Television and
Telecommunications Commission
Ottawa, ON
K1A 0N2
BY FAX AND EMAIL
Dear Ms. Rheaume:
Re: Public Notice CRTC 2003-1: Review of Winback Promotions
1. The following reply comments are provided by the Consumers’ Association of Canada and l’Union des Consommateurs (“The Consumer Groups”), in response to the above-noted Public Notice. We are in receipt of comments from The Companies, TELUS, Aliant, AT&T, Call-Net, Futureway, Eastlink, Primus and Microcell.
2. Consistent with the Public Notice, these comments refer to promotions of local telephone services.
ILEC local service promotions available only to customers of competitors (“winback promotions”)
3. Having reviewed the comments of all parties, the Consumer Groups confirm their preliminary position that all ILEC “winback” promotions (i.e., those available only to customers of competitor companies) should be prohibited for the time being, regardless of whether they meet the imputation test. As noted in their preliminary comments, promotions that are targeted solely at disloyal customers are unduly discriminatory from the customer perspective, and take undue advantage of the ILECs’ incumbency to the detriment of new entrants.
4. This prohibition should be lifted once competitor market share has achieved a level consistent with a truly competitive market, such that all service providers are able to benefit relatively equally from the ability to engage in such practices.
5. The ILECs argue that ILEC winback promotions “may actually encourage customers to sample CLEC services”,[1] and that disallowing the waiver of re-connection fees, for example, would impose significant switching costs that will disincline customers from switching in the first place.[2]
6. In reply, the Consumer Groups submit that this argument has little merit. Customers who switch to competitors are unlikely to be aware of the existence (if any) of ILEC winback offers at the time that they make the switch. Moreover, such offers are typically time-limited. Hence, a consumer’s decision to switch providers is unlikely to be informed by any knowledge regarding applicable ILEC reconnection fees. The ILECs’ argument would have merit only if ILECs waived re-connection fees to all returning customers as a matter of course, and if all customers were aware of this standard policy.

Promotions available to all customers (existing and new)

7. Competitors have proposed a variety of restrictions on general ILEC promotions, including a complete ban on such promotions for at least three years (Call-Net). The Consumer Groups see no reason to restrict ILEC promotions that cover their cost and that are offered equally to all customers. In fact, this is the type of benefit that competition is supposed to deliver.
8. General promotions that do not pass the imputation test should continue to be permitted as long as they are of limited duration. The Consumer Groups confirm their preliminary position that the maximum time period for “limited duration” promotions should be six months. Thirty days, as proposed by Futureway, is unreasonably short for a service that is billed on a monthly basis, while the current effective twelve-month limit is unreasonably long.

Promotions available to all new ILEC customers

9. A number of competitors argue that general ILEC promotions available to new customers (e.g., connection fee waivers; discounts for new local service subscribers) effectively target customers of ILEC competitors, and should therefore be treated as “winback” offers.
10. The Consumer Groups share the concern that ILECs may be able to circumvent a prohibition on winback offers by making their offers available to all new customers. However, without data on the average number of new service requests originating from customers who are moving (as opposed to the number of potential winback customers), it is difficult to assess this argument.
11. The Commission is currently deliberating on an application by Call-Net to order ILECs to permit their ADSL Internet subscribers to obtain local telephony service from alternative providers. Should this application succeed, one type of promotion allegedly targeting CLEC customers (i.e., discounts on ADSL service subscriptions) would no longer be a concern in terms of its impact on the local service market.
12. As long as promotions such as connection fee waivers are available to all new customers, and as long as they pass the imputation test, the Consumer Groups submit that they should continue to be permitted. Where such promotions do not pass the imputation test, they should, at a minimum, be subject to the same limited duration rule as applicable to other below-cost promotions.
Period of Prohibition
13. Should the CRTC prohibit ILEC winback and/or other promotions, it will have to decide on a period of prohibition. The Consumer Groups see two options:
a) a fixed duration, after which time a review is held to determine whether the prohibition should be lifted, continued, or modified; or
b) pre-established criteria for the lifting or modification of the prohibition (e.g., a threshold of ILEC market share loss by specified market segment).
14. The Consumer Groups consider that either approach is acceptable in theory, as long as the time period, or criteria, are fair and reasonable. In that respect, the Consumer Groups submit that an appropriate time period for any new restrictions on ILEC promotions would be the remainder of the current price cap regime.
15. Should the latter approach be taken, the Consumer Groups reiterate their view as expressed in the recent Price Cap Review proceeding, that the test for competition currently applied in the cableTV market is inappropriate for the telephone service market. A threshold of 5% market share loss in the telephone service market would be laughable, insofar as ILECs would continue to dominate the market. Should the Commission decide to establish such a test, other than the criteria for forbearance in the telecom market already articulated, for the purpose of lifting or reconsidering restrictions on ILEC promotions, a further public process should be initiated on this specific issue.
Long Term Contracts
16. Primus raises the issue of cancellation fees and automatic renewal of ILEC long term contracts for local service, arguing that these also need to be regulated by the Commission if local competitors are to be able to break into the local market.
17. The Consumer Groups note that this issue is currently under consideration by the Commission as a follow-up to Decision CRTC 2002-34, in respect of Bell Canada and TELUS tariffs applicable to business services.
18. While this does not yet appear to be an issue in the market for residential local wireline services, the Consumer Groups note that it could become an issue, and that it is already an issue to some extent in the wireless and Internet services markets.[3]
19. The Consumer Groups submit that any rule prohibiting automatic renewal of long term contracts and requiring positive customer consent to renewal of such contracts, should apply to contracts for all telecommunications services, including residential wireline, wireless and Internet services.
20. The issue of cancellation fees should also be examined, perhaps by way of a separate proceeding, with a view to maximizing the potential for competition and market forces to operate effectively.
All of which is respectfully submitted,
original signed
Philippa Lawso
Counsel for the Consumer Groups
cc: PN 2003-1 Interested Parties
[1] The Companies, para.21.
[2] TELUS, para.11.
[3] Some wireless and Internet service providers apply large cancellation fees for early termination of long term contracts, thus creating a barrier to switching of service providers by customers.

Consumer Groups comments on telco “winback” activities – Initial comments

Appropriateness of ILEC Winback Promotions

2. Based on the record to date, the Consumer Groups support a prohibition of ILEC “winback” promotions in the local residential wireline market, whether or not such promotions meet the imputation test, until competitor market share reaches a level that is reflective of a sustainably competitive market.
3. In the current environment, ILECs continue to hold a virtual monopoly in the local residential wireline market. Competition is only just beginning to emerge. In this context, allowing incumbent providers to offer special deals to “win back” those customers who have decided to switch, even after a 90-day period, could amount to allowing a re-monopolization of this market.
4. Particularly in light of the high cost to CLECs of acquiring new customers, targeted winback promotions by ILECs could serve to ensure that new entrants are never able to turn a profit, such that effective local competition never gets off the ground.
5. If ILECs want to compete with CLECs by offering special deals to customers, such deals should be available to all customers, not just those who have switched to alternative providers. In particular, loyal ILEC customers should not be forced to subsidize disloyal ILEC customers. Even where winback promotions meet the imputation test, they can be fundamentally unfair to loyal customers. Such price discrimination should not be permitted in markets that are not fully competitive.
6. Once the local residential telephony market has attained a level of competition more indicative of a truly competitive market, winback restrictions can be lessened or eliminated.

Definition of “Promotion of limited duration”

7. The Consumer Groups consider that a “promotion of limited duration”, in the context of telecommunications services, ceases to be a “promotion of limited duration” after three to six months. Based on general marketplace practices and expectations, six months would appear to constitute the outside limit of any reasonable definition of this concept; three months may be more appropriate. A promotional offer lasting a full year cannot reasonably be considered a promotion “of limited duration”; it is more in the nature of a standard offer.
All of which is respectfully submitted,
Philippa Lawson
Counsel for the Consumer Groups
cc:PN 2003-1 Interested Parties

Consumer Groups Additional Comments on AT&T Petition

Mr. Alex Himelfarb
Clerk of the Privy Council and Secretary to the Cabinet
Langevin Block
80 Wellington St.
Ottawa Ontario
K1A 0A3
BY FAX AND EMAIL
Dear Sir:
Re: Canada Gazette – Notice No. DGTP-008-02
Petition to the Governor in Council from AT&T Canada under Section 12 of the Telecommunications Act in regard to the following CRTC Decision: Regulatory Framework for Second Price Cap Period, Telecom Decision CRTC 2002-34
1. The following supplementary comments are filed on behalf the of Consumers’ Association of Canada, the National Anti-Poverty Organization, and l’Union des Consommateurs (“The Consumer Groups”), a coalition of consumer groups that participated in the CRTC proceeding leading to Decision 2002-34, under the name “ARC et al”.
2. The Consumer Groups have recently been made aware of some misleading statements made by Call-Net in its submission of November 21, 2002. The Groups are submitting these comments in order to identify and correct those misleading statements, and to address the request put forward by Call-Net for a repeat of the CRTC’s price cap review. Failure to address any other allegation or argument should not be construed as acceptance of, or agreement with, that allegation or argument, where such acceptance or agreement would be contrary to the position of The Consumer Groups.

Call-Net’s request for a review of telecommunications pricing in Canada has already been fulfilled

3. Call-Net requests, among other things in its Comments, that the Governor in Council direct the CRTC:
to investigate and report on policy initiatives to reform the pricing of telecommunications services in Canada. This would include reports on the relative level of telecommunications prices in Canada versus other G-8 countries; whether existing price levels provide a sufficient return to ILECs and competitors to finance their capital projects and research and development activity; and what measures need to be taken to improve investment in telecommunications infrastructure in Canada and the ability of competitors to finance their new entry; while still providing services to Canadians at reasonable rates.
4. This is precisely what the CRTC did during the fourteen month proceeding launched by Public Notice 2001-37, Price Cap Review and related issues, which focused on the very issue of local telecommunications service pricing in Canada. Call-Net ignores the fact that, during this proceeding, ILECs and CLECs submitted voluminous evidence in an attempt to establish exactly what Call-Net is, once again, trying to establish here.
5. That evidence, which included international rate comparisons, ILEC returns, competitor returns, and effects of pricing on investment and R&D in the Canadian telecommunications industry, was the subject of extensive review and cross-examination during the proceeding.
6. Indeed, the very report on which Call-Net relies for its (incorrect) assertion that Canadian residential retail rates are significantly lower than in those in the USA, was relied upon by the ILECs and subjected to a thorough review during the proceeding. Also reviewed during the proceeding was an International Price Benchmarking Study produced for the ILECs by Teligen Ltd., as recently as May 2001. Indeed, the whole issue of international price comparisons was discussed at length and addressed in argument by several parties.
7. Also discussed at length during the proceeding were the issues of ILEC returns, CLEC returns, and investment in telecommunications generally, all in the context of setting local retail rate constraints. Extensive evidence was adduced on these issues, via submissions, interrogatories, exhibits, cross-examination, and argument – too many to catalogue here.
8. That such evidence may not have been explicitly addressed by the Commission in Decision 2002-34 does not mean that it was not considered. To the contrary, the Commission took into account all evidence adduced and all submissions made during the proceeding, in coming to its decision on appropriate rate levels.
9. In brief, Call-Net is effectively requesting that the CRTC be ordered to repeat the fourteen month proceeding it has just completed on the issue of pricing of telecommunications services in Canada. In light of the thoroughness of the CRTC’s review, this request cannot be taken seriously.

Call-Net’s argument is out-dated and patently self-serving

10. In an effort to make its local telephone business more profitable, Call-Net suggests that higher retail rates are necessary. Insofar as increases to retail rates would increase Call-Net’s profits, this is not surprising. Higher retail rates have obvious appeal for all providers in the market.
11. Any “general consensus in the industry that existing price levels are too low” merits no weight, given the industry’s self-interest in higher rates. Regulators and policy-makers must instead examine objective factors such as costs and profit levels in order to determine whether there is a problem with price levels. This is exactly what the CRTC did in the price cap review.
12. Competition in local telephony may have required higher retail rates several years ago, when local residential rates were below cost; it no longer makes sense, now that local service more than covers its costs in all but the defined “High Cost Serving Areas”, where a competitively-neutral subsidy scheme is in place. It is no coincidence that industry players argued for higher price caps and greater pricing flexibility in the price cap review proceeding not on the basis of cost, but rather on the grounds that higher retail rates would attract more investment by better rewarding shareholders, while still comparing well internationally.
13. Yet, Call-Net tries to resurrect this out-dated argument by suggesting that retail rates in Canada still do not cover costs. Except in High Cost Areas, consumer prices for local phone service in Canada are no longer “frozen below cost”. Call-Net should know better than to mislead the government in this manner.
14. In any case, Call-Net’s argument that retail rates need to rise in order to attract competition was clearly rejected by the CRTC on the basis of the evidence provided during the proceeding, including extensive evidence on the cost of providing service and rates of return to service providers in the local market.

Canadian retail rates are no longer lower than US rates

15. Astonishingly, Call-Net relies upon a discredited study for its argument that Canadian retail rates are significantly lower than rates for comparable service in the USA. Citing a 2001 Yankee Group report, Call-Net argues that typical users in selected US cities paid significantly more for local service than in selected Canadian cities. This very study was relied upon by the ILECs in the price cap review proceeding, and reviewed by other parties. Call-Net totally ignores the fundamental flaws of this study, as set out in ARC et al’s Final Argument, reproduced below:
Canadian rates are at parity with US rates for basic service, and are not out of line with rates in other OECD countries
1. In defence of their application to further raise basic local rates, The Companies argue that “local service rates in Canada are among the lowest in the world”. Specifically, they argue that Canadian rates for a typical basket of residential local telephone service are well below those in the USA and other OECD countries. In so doing, they rely on two studies, both of which were funded by them: one by Teligen comparing rates in G7 countries, and another by The Yankee Group, comparing Canadian and US rates.
2. The Companies’ capital markets witness, Mr. Richard Talbot, also relies on the Yankee Group study for his conclusion that “Canadian consumers pay lower prices for a typical usage basket of telecom services than do consumer in the U.S.”.
3. As demonstrated by Ms. Lawson in cross-examination of The Companies’ Panel #1, the Teligen study is inherently biased due to its selection of countries, and the Yankee Group study is so flawed that it is not worth the paper it is written on.
4. In fact, rates for a representative basket of local services in Canada are well within the bounds of other OECD countries: as Mr. Farmer acknowledged, Canada ranks 10th or 11th out of 29 OECD countries in terms of the price of a given basket of residential local services. The Teligen study, for no good reason, excludes most of those OECD countries with lower rates than Canada’s.
5. A close examination of the Yankee Group study shows that it is nothing more than propaganda for the company who funded it. Its flaws are numerous, centering around an arbitrary methodology. The many flaws include:

three “user profiles” which bear no relation to actual consumer usage;
an assumption of 1,000 minutes of local calling for each user profile, which is exactly twice the number of local minutes assumed by the FCC when constructing similar comparisons (and hence exaggerates the cost of metered service in the USA);
a “modest user” profile which, in respect of long distance usage, is in fact reflective of a heavy LD user based on data from Bell Canada;
a “typical” usage profile which, in respect of long distance calling, is again many times higher than that of the typical (i.e., median) Bell Canada customer;
a “heavy user” profile which is at the extreme end of heavy usage;
no amount for installation fees;
no accounting for discount “Lifeline” and “Link-up” rates in the USA (available to low income households for basic local service and installation); and
failure to adjust rates for purchasing power parity.

1. Clearly, the conclusions of this study are completely unfounded and cannot be relied upon.
2. In fact, a simple comparison of average Canadian and US rates for basic local service shows that they are virtually identical, once the OECD’s purchasing power parity adjustment is applied. As illustrated in ARC et al Exhibit #5, the average rate in Canada as of May 2001 (before increases in July 2001) was app.CDN$22.75, while the comparable US rate in 2000 was US$18.71, equivalent to CDN$22.76 using the June 2001 PPP adjustment factor of 1.25.
3. As confirmed by Dr. Taylor under cross-examination by Ms. Lawson, rates for basic local service in the USA have generally been frozen (i.e., no increases, even for inflation), over the past few years. Hence, the average US rate in 2001 is unlikely to be much different.
4. To the extent that comparative rate levels are relevant, we have therefore already achieved rate parity with the US. No longer is the Canadian economy benefiting from lower basic telephone rates than apply south of the border.
5. Furthermore, at the same time that basic telephone rates in the USA are being reduced, in real and in many cases nominal terms, ILECs in Canada are asking for increases that would bring Canadian rates to levels higher than in the USA. Such is neither necessary nor desirable.”
1. In their Reply to ARC et al’s Argument on this point, the Companies focused on the issue of Purchasing Power Parity, and did not refute other flaws in the Yankee Group study, pointed out by ARC et al. Instead, they acknowledged that if any conclusions can be drawn from these studies, it is that “telecommunications costs in Canada are fair”. Notably, the Companies did not attempt to stretch the truth in the way that Call-Net has.
2. The fact is that there is no longer any “significant” differential between Canadian and American telephone service prices, as alleged by Call-Net. Canadian local rates are no longer “remarkably low”. Indeed, Canadian prices for local phone service are now higher than in the USA in many cases, depending on location. On average, rates for local service in Canada and the USA are now comparable.
3. For Call-Net to attempt to perpetuate an out-dated myth about relative price levels is regrettable and surprising, given that the real issue raised by the AT&T Petition has to do with competitor service rates, not retail rates.

Call-Net confuses issues of long distance pricing with issues of local service pricing

4. Call-Net fails to distinguish between long distance and local service pricing in its argument that CRTC price caps are at least partially responsible for its financial woes. Decision 2002-34, the subject of the AT&T Petition, has to do only with local price levels. Call-Net’s complaints, however, have more to do with its long distance business than its local business.
5. When Call-Net states, in para.66, that it “views the pricing issue of telecommunications services as a key indicator of the unhealthy state of competitive market in Canada”, it not only has the issue backwards, it is confusing low LD pricing (and hence low profits) due to high levels of competition in that market, with price caps on local service. In fact, local service continues to be highly profitable for the ILECs.
6. Evidence adduced during the CRTC proceeding showed that ILEC rates of return on their local service businesses, during 1998-2001, ranged from 9.7% to 27.0%, healthy levels by any calculation. On the other hand, competitive service rates of return were a fraction of these utility returns.
7. If there are “structural problems” with the local telecommunications market in Canada, they clearly do not have to do with local price levels.
8. On the other hand, the long distance market is characterized by a high level of competition, which, as expected, results in low prices and low profit levels. Call-Net’s complaints, in our submission, lie more with the competitiveness of the long distance market in Canada than with the CRTC price caps on local retail rates.

Local price caps are not to blame for the woes of competitors

9. The evidence regarding ILEC rates of return is sufficient to dispose of Call-Net’s argument that the low level of pricing for local exchange services is responsible for the slow development of competition in this sector. Clearly, other factors are at work, including the highly capital-intensive nature of this industry, the economic nature of competition in some areas and/or sectors, competitor service rates, difficulties obtaining access to ILEC facilities, and other anti-competitive behaviour on the part of ILECs.
10. It is facile and short-sighted to suggest that raising local rates will solve the problems faced by competitors in this industry.

Call-Net puts the cart before the horse

11. Call-Net is explicit in its request that “pro-competitive policies must prevail over other policy objectives”. This is the heart of Call-Net’s argument: that competition should be pursued at all costs, regardless of the outcome in terms of price, quality of service, or other ultimate goals.
12. In effect, Call-Net is asking the Governor-in-Council to put investor returns ahead of consumer rates.
13. Yet, Call-Net also appreciates that competition is merely “the preferred means of achieving the socio-economic objectives in s.7 of the Telecommunications Act”. If this is the case, then clearly, the socio-economic objectives Call-Net refers to are ultimately more important that the means of achieving them.
14. Clearly, the latter approach is the one adopted by Parliament and implemented by the CRTC. Competition is a preferred means to an end, not an end in itself. As noted by the Consumer Groups in their earlier submissions:
“Competition is achieved, where it is economic, by ensuring that competitors face fair rates for the services they need from ILECs. Healthy, sustainable competition cannot be forced. It should instead be allowed to develop where economic, and at a pace that reflects the reality of this highly capital-intensive, technology-dependent industry. The public interest will not be served by premature attempts to “kickstart” competition where it cannot be sustained in the long term. Such regulatory subsidization of uneconomic competition is destined to failure at the expense of ratepayers and to the benefit of no one other than a few lucky shareholders.
ompetitors can be subsidized either through discount rates for services they buy from ILECs, or through artificially high retail rates. In the latter case, ILECs also benefit, and may indeed benefit more than CLECs due to their dominant position in the marketplace. As Dr. Taylor acknowledged, it is inappropriate to raise retail rates simply in order to create margins for competitors…”
“Inefficient competitive entry will not be sustainable. If such entry is made possible through retail price increases beyond levels necessary for fair ILEC returns, it will be very short-lived. Once ILECs lower prices to levels more in accordance with efficiently competitive markets, inefficient competitors will lose their margins and go out of business. In order to avoid such inefficiency and disruption to consumers, it is incumbent on the Commission to establish price caps at levels that reflect lowest cost provision of service.”
15. In sum, the Consumer Groups urge the Governor-in-Council to review all the evidence and arguments put before the CRTC in the price cap proceeding on the issue of local rate price levels, before accepting any of Call-Net’s submissions on this point. If this is done, it will become clear that the “investigation and report on pricing” requested by Call-Net are unnecessary.
All of which is respectfully submitted,
original signed
Philippa Lawson
Counsel for the Consumer Groups
cc: The Honourable Allan Rock, Ministry of Industry
Ms. Diane Rheaume, Secretary General, CRTC
Mr. Michael Helm, Dir. Gen., Telecom Policy Branch, Industry Canada
Chris Pierce, AT&T
Ian Scott, Call-Net
END OF DOCUMENT

Consumer Group Comments on AT&T Petition re: CRTC Price Cap Decision

Philippa Lawson
Senior Counsel
Mr. Alex Himelfarb
Clerk of the Privy Council and Secretary to the Cabinet
Langevin Block
80 Wellington St.
Ottawa Ontario
K1A 0A3
Dear Sir:
Re: Canada Gazette – Notice No. DGTP-008-02

Petition to the Governor in Council from AT&T Canada under Section 12 of the Telecommunications Act in regard to the following CRTC Decision: Regulatory Framework for Second Price Cap Period, Telecom Decision CRTC 2002-34

1. The comments below are filed on behalf the of Consumers’ Association of Canada, the National Anti-Poverty Organization, and l’Union des Consommateurs (“The Consumer Groups”), a coalition of consumer groups that participated in the CRTC proceeding leading to Decision 2002-34, under the name “ARC et al”.
2. The Consumer Groups were active participants in the proceeding that led to Decision CRTC 2002-34. They represent one of the three main stakeholder groups affected by this decision. As noted in both the Public Notice and Decision in this proceeding, the Commission attempted to balance the interests of the three main stakeholder groups: customers, competitors, and incumbent telephone companies.
3. The Consumer Groups consider that, with the exception of certain reporting requirements that the CRTC decided to lift, the Commission did a reasonable job of balancing the interests of end-users with those of service providers generally. (See below for more on the issue of reporting requirements.)
4. The AT&T Petition challenges the appropriateness of the balance struck between incumbent service providers (“ILECs”) and new competitors (“CLECs”). It does not challenge the appropriateness of the CRTC’s determinations in respect of the balance between companies and end-users. It is important to appreciate this distinction, because any remedies flowing from the AT&T Petition should be carefully constructed so as not to interfere with the appropriate balance struck between consumers and service providers.

Standard for Cabinet Review

5. In general, the Governor-in-Council should not interfere with decisions of its expert tribunals, such as the CRTC. To do so other than in cases of egregious error would undermine the ability of the tribunal to operate independently and effectively.
6. The Consumer Groups submit that the Governor-in-Council should not interfere with the CRTC’s decision in this case unless it is convinced that the goals of Canadian telecommunication policy, taken together, will otherwise be subverted. It is not clear to the Consumer Groups that this is such a case.

The Goal of “Facilities-Based Competition”

7. AT&T challenges the Commission’s interpretation of the policy goal of fostering competition in telecommunications, arguing that Decision CRTC 2001-37’s focus on “facilities-based competition” constitutes a “startling departure from the clear wording of the Telecommunications Act….”
8. AT&T’s characterization of the Commission’s approach to facilitating competition is misleading in two respects: the focus on “facilities competition” is not new: in Decision CRTC 97-8, the Decision by which the local telecom market was opened to competition, the Commission stated:
The Commission is of the view that efficient and effective competition will be best achieved through facilities-based competitive service providers; otherwise, competition will only develop at the retail level, with the ILECs retaining monopoly control of wholesale level distribution.
The Commission is of the view that resale can promote the development of a competitive market while allowing competitors time to construct their own facilities. While resale competition can help promote the development of a competitive market, it is the Commission’s view that the full benefits of competition can only be realized with facilities-based competition.”
9. Second, “facilities-based competition” as promoted by the Commission is in fact a hybrid model of competition: it explicitly permits resale and requires the provision of certain “essential” ILEC facilities at mandated cost-based rates. It does not require competitors to duplicate incumbent networks. It is based on the notion that parallel networks already exist, in the form for example of wireless and coaxial cable transmission facilities, and that competitors can take advantage of such non-ILEC facilities to create more lasting forms of competition.

AT&T’s Requests

10. At the core of AT&T’s Petition is a request for lower rates for certain competitor services. The Consumer Groups do not have the expertise necessary to take a position on the appropriate rate levels for competitor services. They do, however, take a position on the fundamental principles that should underlie the establishment of such “wholesale” rates. Such principles include:

that competitors should have access to those ILEC facilities that cannot be economically reproduced, at rates that cover ILEC cost, but that are not higher than what the ILEC effectively pays for the same service; and
that competition should not be subsidized.

11. Under no circumstances should end-users be forced to pay higher rates in order to facilitate competitor access to ILEC facilities.
12. Competition is a preferred means of achieving the policy goals set out in the Telecommunications Act. It is not an end in itself. As a recent Decima survey indicated, Canadians are not willing to pay more for local residential telephone services in order to have greater choice. Nor should they: competition is meant to bring them lower prices, not higher prices.
13. The ultimate goals of Canadian telecommunications policy involve availability, affordability, quality, and responsiveness to user needs.
14. The following excerpt from ARC et al’s Final Argument in the Price Cap proceeding sets out their position on the issue of how best to facilitate reliance on market forces in this context:

“Competition is a preferred means to an end; it is not an end in itself

15. Both ILECs and CLECs treat competition as the primary goal in this proceeding. While competition is clearly an objective of the Commission in all of its regulatory efforts, it is not so much an end in itself as the preferred means of achieving the Canadian telecommunications policy goals of affordability, quality, fairness, efficiency, and innovation, among others. From the consumer perspective, choice is desirable, but not at all costs. As the results of BCOAPO et al’s membership survey show, consumers value price over choice: greater choice is not worth higher prices to them.
16. As pointed out by Mr. Todd under cross-examination by Mr. Koch, consumers are not given a choice between competition and higher prices on one hand, and monopoly and lower prices on the other hand. Instead, higher prices are being forced on basic ratepayers in a determined effort to achieve competition, the primary benefit of which is meant to be lower prices!
MR. KOCH: Now, you would agree with me that lower prices is not the only potential benefit of competition to consumers. Correct?
MR. TODD: It’s the primary benefit, but it’s not the only benefit.
MR. KOCH: Okay. Choice and innovation are often cited as other benefits of competition?
MR. TODD: Yes. One of the interesting things is that with the move—and I have been involved in the move to competitive markets in many different industries at this point—with the move to competition, if your choice is between a bunch of different service providers at, say, a 10 per cent higher price than if you didn’t have that choice, customers no longer are able to say “Well, I would rather not have the choice and have the lower price”. So you don’t actually see how much they value that choice.
They are now choosing perhaps at the higher rates amongst competitors, and, yes, they, in a sense, benefit from that choice that they have, but we are not able to get evidence that they actually find those higher prices a fair trade-off for the greater choice.
17. Indeed, for many – possibly most – residential consumers, there may not even be a trade-off: they will continue to face higher prices for an essential service, without seeing any countervailing benefits in terms of choice. As Dr. Taylor stated:
It’s an experiment. We don’t know what the true scope for competition is going to be.
18. Consumers of an essential service should not be forced to underwrite a costly experiment that has no guarantee of success.

Regulation should recognize the reality of competition in local telecommunications

19. The record of this proceeding could not be clearer that effective competition in residential local telephony is a long way off, and will likely never come to pass in some parts of the market. The spate of CLEC failures over the past several months, the inability of any CLEC yet to make a profitable business case, and the fact that only one party in this proceeding is offering local service to residential customers, despite the predictions of ILECs just four years ago, speaks loudly and clearly to this issue.
20. The Commission must not be seduced by unrealistic predictions of competition over the next price cap period. Instead, it should establish a regulatory regime that is based solidly in reality – the reality so eloquently described by TELUS in a recent submission to the CRTC regarding local “winback” rules. In that submission, TELUS emphasizes:

”…..the stubborn economic facts of competition in a network industry (significant capital expenditures, ongoing need for funding, long investment recovery periods, the inevitable failure of some market participants)….”

and states:
“Facilities-based competition in telecommunications is, by its very nature, slow, expensive and risky.”
“The practical and financial challenges posed by infrastructure development appear, in magnified form, in the Canadian context. The difficult task of constructing transportation and communications infrastructure in vast and sparsely populated country is a recurrent theme in Canadian historiography….”
21. Within this context, competition in local telephony should be allowed to develop at its own pace, at rate levels that are constrained as necessary to meet public policy objectives.
22. Experience to date suggests that predictions of future competition have been grossly overstated. The pace and extent of competitive entry in telecommunications over the next 4-5 years is simply not known, regardless of the extent to which accommodative entry policies are put in place.
23. In view of this uncertainty, the Commission should avoid premising its regulatory plan on any particular view of how competition will develop. Instead, it should simply focus on its primary task: protecting ratepayers from monopolistic pricing in a manner that permits ILECs to earn a fair return and that does not impede the natural development of competition.

Competition should not be subsidized

24. Competition is achieved, where it is economic, by ensuring that competitors face fair rates for the services they need from ILECs. Healthy, sustainable competition cannot be forced. It should instead be allowed to develop where economic, and at a pace that reflects the reality of this highly capital-intensive, technology-dependent industry. The public interest will not be served by premature attempts to “kickstart” competition where it cannot be sustained in the long term. Such regulatory subsidization of uneconomic competition is destined to failure at the expense of ratepayers and to the benefit of no one other than a few lucky shareholders.
25. Competitors can be subsidized either through discount rates for services they buy from ILECs, or through artificially high retail rates. In the latter case, ILECs also benefit, and may indeed benefit more than CLECs due to their dominant position in the marketplace. As Dr. Taylor acknowledged, it is inappropriate to raise retail rates simply in order to create margins for competitors:
MS LAWSON: Right. Now, if it turns out, though—and I ask you to make this assumption—if a competitor’s costs are significantly higher than the incumbent’s costs, should retail rates be increased to a level that provides the competitor with an attractive margin, regardless of the incumbent’s costs and margins?
DR. TAYLOR: Not in my view.
MS LAWSON: No. Because that would amount to subsidization of inefficient competitive entry. Correct?
DR. TAYLOR: Yes, which would, in the end, be bad for consumers.
26. Inefficient competitive entry will not be sustainable. If such entry is made possible through retail price increases beyond levels necessary for fair ILEC returns, it will be very short-lived. Once ILECs lower prices to levels more in accordance with efficiently competitive markets, inefficient competitors will lose their margins and go out of business. In order to avoid such inefficiency and disruption to consumers, it is incumbent on the Commission to establish price caps at levels that reflect lowest cost provision of service.”
END OF QUOTE

How to ensure that the balance between end-users and service providers is not jeopardized

27. As noted above, the Consumer Groups believe that Decision CRTC 2002-34 reflects a reasonable balance between service providers and ratepayers, and should not be interfered with in that respect. The Consumer Groups, however, do no take a position on whether the balance between ILECs and CLECs needs to be adjusted (via competitor service rates), all else equal.
28. Should the Governor-in-Council decide that some adjustment or reconsideration of competitor service rates is appropriate, it is essential that any such adjustment or reconsideration be made without affecting retail rate caps and ratepayer entitlements under the Decision.
29. In particular, any negative financial impacts on ILECs as a result of reduced rates for competitor services should be borne by ILEC shareholders; ILECs should not be “made whole” through increases to the price cap or by monies that would otherwise go to reduce retail rates (e.g., via the deferral account).

ILEC Reporting Requirements

30. In its Petition, AT&T addresses the need to ensure fair and appropriate costing methods, given the reliance on ILEC-reported costs. The Consumer Groups agree, and submit that he CRTC should use all the tools at its disposal to monitor and assess, on an ongoing basis, the reasonableness of the balance that Decision 2001-37 strikes between the three main stakeholder groups. One of the key measures of whether the balance is fair, is ILEC earnings on their regulated Utility businesses.
31. If ILEC Utility earnings are extremely low across the board, it can be expected that the ILECs will request adjustments to the regime at the time of the scheduled review (if not earlier), noting their inability across-the-board to earn a fair return on their Utility segments under the regime. If, on the other hand, ILEC Utility earnings are well above market averages, no one will know. This is because the Commission determined, in para.994 of the Decision, that “there is no longer a need for Phase III/SRB inputs on a going-forward basis”. ILEC Utility earnings are reported as part of the “Phase III/SRB inputs”.
32. The Commission does state, in para.995, that “ILEC financial results will need to be available for the purpose of the review of the next regime. Sufficient information must be reported to allow the Commission the gauge the financial state of the ILECs in order to ensure that the objective of the price cap regime are being met.”
33. It is not clear from the Decision whether the Commission will review ILEC Utility earnings as part of the “ILEC financial results” referred to in this paragraph. If so, it is unclear why the Commission would eliminate the ongoing reporting of these particular financial results. If not, the Consumer Groups submit that an important monitoring and assessment tool has been unnecessarily and inappropriately discarded.
34. Dispensing with ILEC Utility segment financial reports is, furthermore, inconsistent with Order-in-Council P.C. 2000-1053, in which the CRTC was ordered to monitor and report on the state of competition in Canadian telecommunications markets. Such reports, over a period of time, provide an important indication of how well the price cap regime has balanced the competing interests of various stakeholders.

Conclusion

35. In conclusion, the Consumer Groups submit that:

the Governor-in-Council should not interfere with the CRTC’s Decision at least in respect of the balance it strikes between service provide and end-user interests;
“facilities-based competition” as promoted by the CRTC is neither new nor exclusive of other forms of competition;
competition is a preferred means to an end, not an end in and of itself;
competition should not be subsidized;
any adjustment of competitor service rates should be done in a manner that does not interfere with end-user entitlements under the current regime; and
the CRTC should not be dispensing with reporting requirements that assist it in its role of monitoring and assessing the state of competition in this industry.

All of which is respectfully submitted,
Philippa Lawson
Counsel for the Consumer Groups
cc: The Honourable Allan Rock, Ministry of Industry
Ms. Diane Rheaume, Secretary General, CRTC
Mr. Michael Helm, Dir. Gen., Telecom Policy Branch, Industry Canada
Chris Pierce, AT&T
Bernard Courtois, Bell Canada

Consumer Groups demand monthly bill detail by Bell and Aliant – Supplementary comments

Ms. Diane Rheaume
Secretary-General
Canadian Radio-Television and Telecommunications Commission
Ottawa, ON
K1A 0N2
BY FAX AND EMAIL
Dear Ms. Rheaume:
Re: Follow-up to Decision CRTC 2002-34:
Monthly Detailed Billing Statements
Comments of The Consumer Groups on Bell and Aliant Interrogatory Responses
1. We are in receipt of responses from Bell and Aliant to Commission interrogatories on the issue of monthly itemized billing statements. Pursuant to the Commission’s procedural order of October 25, 2002, the following are The Consumer Groups’ comments on those interrogatory responses.
2. The Consumer Groups filed initial comments on the issue of monthly itemized billing by Bell and Aliant on July 12, 2002, and a supplementary submission on September 9, 2002. We do not intend to repeat here the comments made in those submissions.
3. In its interrogatories, the Commission asked the Companies, among other things:

to estimate and compare their costs of implementing various approaches to monthly itemized billing (no option, opt-in, opt-out);
for estimates of additional space/pages required as a result of mandatory monthly itemized billing, and to what extent such requirements could be mitigated;
to list all services subject to itemization on the customer bill as of May 1985 and Oct 2002; and
(Bell only) for an estimate of its proposed “draw down” of the deferral account in the event of mandatory monthly bill detail.

Comparative Analysis of Options re: Monthly Bill Detail

1. It is clear from Bell’s comparison of the three approaches to monthly bill detail that the “no option” approach to monthly bill detail is the least costly: “no option”: 1.6¢/NAS/mo., “opt-in”: 2.7¢/NAS/mo., “opt-out”: 3.7¢/NAS/mo.). All three approaches are presumably compared to the base case of Bell’s current policy, which is to provide a detailed monthly bill annually, whenever there is a change to the customer’s service, and verbally upon request.
2. The Consumer Groups note that Bell’s proposed “opt-in” approach to monthly bill detail would, in fact, cost the company significantly more than the “no option” approach, even assuming that Bell’s figures are accurate. For cost reasons alone, mandatory monthly bill detail is thus a sensible approach.
3. However, Bell fails to account for the recurring cost savings that would be achieved under the “no option” approach, due to fewer billing-related inquiries. As noted in Bell’s 2 July submission, currently, “customers can request and receive detailed billing information verbally at any time, simply by contacting Bell Canada’s business office”. One of the obvious advantages of providing bill detail on a monthly basis is that customers need not call the company in order to obtain this information.
4. The Consumer Groups therefore submit that the costs of Bell’s “no option” scenario are even lower than estimated by Bell.
5. It is not so clear from Aliant’s responses what the relevant estimated costs are for each scenario, on a per NAS basis. Aliant states that, under the “no option” approach, it would incur ongoing costs of app.$1.24/res NAS, but does not specify the time period to which this cost applies, and does not include the estimated one-time cost of $334K in this figure. Nor does Aliant provide comparable per NAS cost figures for ongoing costs of the other two scenarios.
6. Aliant’s estimates are deeply flawed in a number of respects. First, they fail to account for any recurring call center-related costs. As Bell’s figures show, these costs constitute the bulk of the opt-in and opt-out scenario costs. Moreover, as noted above, the “no option” approach to monthly bill detail would result in fewer billing inquiries, hence reducing this ongoing expense. By completely ignoring these costs, Aliant is able to make the astonishing suggestion that it would actually save money by implementing an opt-in approach to detailed billing.
7. Second, Aliant’s estimate of the costs of an opt-out approach strangely include “the increased cost of print impressions to provide monthly billing detail to the Company’s entire residential customer base” (emphasis added), less only the assumed 10% who opt-out. Yet, Aliant already provides monthly detailed bills to its Nova Scotia and PEI customers, hence would not be incurring new costs in order to maintain this practice. This was recognized in Aliant’s cost estimate of the “no option” scenario, which only included printing costs for NB and NL customers. Aliant’s own evidence is thus internally contradictory.
8. Third, Aliant’s assumed extra printing costs of $1.24 per NAS are prima facie excessive in comparison with Bell’s $0.14 per NAS estimate for the same expense, even taking into account Bell’s higher economies of scale.
9. Aliant bases its estimate of printing costs on the assumption “it will be necessary to print additional pages for approximately 95% of Aliant Telecom’s residential subscribers”. Yet, nowhere does Aliant explain how this can be the case. Indeed, a review of the sample bills provided by Aliant in Aliant(CRTC)-107 suggests that:

in most cases, the additional bill detail can easily be accommodated on the first page of the bill together with the total bill summary, hence requiring no extra page at all; and
the additional bill detail consumes only a fraction of a page in any case, and therefore cannot, by any reasonable estimation, require the printing of an additional page in 95% of subscriber cases.

10. Clearly, Aliant has grossly underestimated the costs of its favoured approach (opt-in), and highly exaggerated the costs of the “no option” approach to monthly bill detail. The Consumer groups respectfully submit that Aliant’s cost estimates are fundamentally flawed for the reasons stated above, and should not therefore be relied upon.

Material Changes since 1985

11. Both Bell and Aliant offer many more optional services with recurring monthly charges in 2002 than they did in 1985 when the Commission last considered the issue of monthly itemized billing. As a result, the value of monthly bill itemization to consumers is greater in 2002 than it was in 1985.
12. While there may have been reason in 1985 to allow less detail on monthly customer bills, the increasing array of optional services and the increasing consumer uptake of these services over the past 17 years warrants a re-examination of this policy. Clearly, the need for monthly bill detail is much greater now than it was in 1985.

Cost Recovery

13. Bell argues that it should be permitted to recover the incremental costs of monthly itemized billing from its deferral account, and in Bell(CRTC)-104, proposes an annual draw-down of the deferral account in the amount of $1.4m for this purpose.
14. The Consumer Groups oppose any such cost recovery allowance, for the reasons stated in paras.32-36 of their 12 July 2002 submission.

Mitigation of Costs

15. Both companies maintain that they can do nothing in terms of bill design to offset the need for additional space, and hence paper costs.
16. The Consumer Groups challenge this position of the companies, and suggest that there are indeed ways in which detailed bills could be both shortened and made more easily understandable. For example, Bell Canada need not include a line item for “Touch-Tone service”, which was standardized almost a decade ago. In addition, it is questionable whether the mandatory 911 surcharge needs to be broken down into its constituent parts. Both of these line items provide little, if any, useful information to consumers, and simply serve to clutter the bill. Itemization is only desirable where it provides meaningful information to the consumer.
17. Moreover, the Consumer Groups note that the companies frequently use space on their monthly bills to advertise optional services – space which would be better used to inform consumers of what they are paying for in the way of optional services.
All of which is respectfully submitted,
original signed
Philippa Lawson
Counsel for the Consumer Groups
cc: Aliant
Bell Canada
END OF DOCUMENT

Bell overcharging for party-line rental phone sets – PIAC Reply to Bell’s Comments

Ms. Diane Rheaume
Secretary-General
Canadian Radio-Television and
Telecommunications Commission
Ottawa, ON
K1A 0N2
BY FAX AND EMAIL
Dear Ms. Rheaume:
Re: Bell Canada – unauthorized rate increases to party line rental sets;
PIAC Reply Comments
We are in receipt of Bell Canada’s Answer to our Part VII Application on the above-noted issue, which Answer is dated September 9, 2002. The following is PIAC’s Reply.

Tone of Application and Answer

1. As a preliminary matter, PIAC wishes to express its surprise not only at the content of Bell’s Answer, but of its tone. Instead of simply addressing the facts and law in issue, Bell resorts to what amount to ad hominem arguments. These arguments (e.g., that “PIAC’s innuendos of negligence and stalling tactics” are “particularly unacceptable”, that “the tone of PIAC’s allegations” is troublesome, and that “such veiled accusations are totally inappropriate”) do not correspond with the straightforward presentation of facts and law provided by PIAC in its application. PIAC’s application clearly alleges negligence by Bell Canada. It does so in a factual, forthright manner, not by way of “innuendo”.
2. To the extent that there is inappropriate innuendo in this proceeding, it is provided in Bell Canada’s Answer, not in PIAC’s Application. PIAC requests that the Commission focus on the facts and law in this case, judge the tone of PIAC’s application for itself, and not be swayed by Bell’s unnecessarily adversarial arguments.

Failure to Comply with CRTC Tariff

3. There is no dispute that Bell Canada violated a CRTC tariff and overcharged almost 30,000 of its customers, beginning in August 1999. Bell explains in para.6 that in 1999, “a number of party-line customers were inadvertently overlooked and remained on the unregulated rate”. At a minimum, then, Bell implicitly admits its negligence in making this self-described “error”.
4. PIAC has no evidence to suggest that the initial error was intentional, nor does it mean to suggest that Bell consciously violated this tariff. Rather, PIAC points out that Bell was, by definition, negligent in allowing this error to occur in the first place.

Failure to Detect Error in a Timely Way

5. Bell further admits to continuing to overcharge these customers over a three year period, beginning August 1999. During this three year period, Bell imposed four separate illegal rate increases on these customers, ranging from 30 cents to 90 cents per month. Bell attempts to justify its negligence in failing to detect the error for 2½ years by arguing that “the problem created by this oversight was not immediately apparent”, that subsequent increases drew “little attention from customers who were being incorrectly charged”, and that there is “limited interaction between party-line customers and Company representatives”. Even if all of these statements are true, they do not constitute justification for overcharging. Bell, not its customers, is responsible for complying with CRTC tariffs. Moreover, Bell does not assert that it received no customer complaints or inquiries about the wrongful increases, prior to January 2002. Rather, Bell states that the increases drew “little attention” from affected customers. This suggests that some affected customers did inquire about the increases during the 2½ year period after August 1999. In any case, it can be reasonably assumed that at least one of the 29,730 affected customers would have inquired about at least one of the three rate increases prior to January 2002. Even one customer inquiry, in PIAC’s submission, should have alerted Bell to the error and initiated a process of correction.
6. By definition, again, Bell’s failure to detect the error for 2½ years (if Bell’s version of events is accepted) constitutes negligence on the part of Bell.
7. However, Bell argues that “the initial error and the fact that it went undiscovered for over two years were not the result of a lack of reasonable diligence on the part of the Company” (para.34). In support of this argument, Bell states that “errors will inevitably occur”, possibly affecting large numbers of customers.
8. PIAC submits that the contention that “errors will inevitably occur”, even if true, does not remove these errors from the realm of negligence, especially where such errors involve ongoing overcharging of customers, and especially when they continue for three years despite customer inquiries and complaints.

Failure to Correct the Error in a Timely Way

9. To PIAC’s great surprise, Bell states that it detected the error in late January 2002. (At no time during PIAC’s investigation of the matter with Bell was this fact ever disclosed.) Bell states that it intends to inform and refund affected customers in September 2002, 7½ months after detection of the error.
10. Bell argues that this 7½ month delay in acknowledgement and correction of the error is reasonable, responsible and diligent (paras.13,14, and 35).
11. PIAC disagrees. A 7½ month delay between detection and correction of a billing error is neither reasonable, responsible, nor diligent. Bell’s explanation in paras.9-14 of why it took this long to correct the error, while revealing, is unconvincing.
12. Having detected the overcharging error in late January 2002, it was incumbent upon Bell to correct the error immediately, so as to minimize the number of wrongly charged customers who subsequently disconnect and hence cannot easily be reimbursed. As Bell notes in para.17, there are about 3,450 such customers now in this situation. Had Bell acted more quickly and diligently to correct the error and provide refunds, many fewer customers would be in this situation.
13. Indeed, it can be argued that, given Bell’s awareness of the error as early as late January 2002, continued overcharging after that point constitutes “wilful negligence”. One or possibly two months of knowingly overcharging customers might be acceptable depending on the circumstances; 7½ months is surely not.

Failure to Acknowledge the Error upon request, once known

14. Having detected the error, Bell fails to explain why it continued to defend the validity of the wrongful charges when contacted by customers. It can be assumed from para.12 of Bell’s Answer that the company consciously chose not to inform its CSRs of the error until 7+ months after it had been detected. However, it is not clear why Bell took this course of action, given that it meant knowingly giving customers false information as to the correct rate over a significant period of time. Nor is it clear why Bell regulatory personnel failed to inform PIAC of the error and intended correction when asked by PIAC to explain the discrepancy between the tariffed and billed rates.
15. As PIAC states in para.4 of its Application, this whole process was initiated by a customer complaint to PIAC in March 2002, about the most recent increase to her rental set charge. As noted in PIAC’s Application, PIAC called Bell Canada on behalf of an affected customer two months after Bell had apparently detected the error, and was assured (wrongly) that the $5.30 charge was valid.
16. Having noticed the discrepancy between the 1996 tariffed rate and the billed rate in June 2002, PIAC’s first step was to contact Bell’s regulatory department in order to determine the cause of this discrepancy. The regulatory affairs official confirmed the current validity of the 1996 tariff, but was unable to explain the discrepancy between the tariffed rate and the billed rate. Contrary to Bell’s allegation in para.25, he did not offer to look into the matter, but rather advised PIAC’s researcher to pursue the issue regarding the specific account with Bell customer service. At no time did he or any other regulatory affairs personnel give any indication to PIAC that there was an error affecting more than one account, let alone that the error was being looked into, and that measures would be taken to correct it.
17. Acting on the advice of Bell Regulatory Affairs, PIAC made subsequent calls to Bell customer service inquiring about the validity of this charge, both in respect of the individual account and generally. Contrary to the information provided by Bell Regulatory Affairs, Bell customer service representatives informed us once again that the correct rate was $5.30. Every time that PIAC contacted Bell’s customer service about this issue, the customer service representative wrongly confirmed the validity of the $5.30 rate in the first instance (at which point customers would have had to accept Bell’s answer). Only by noting the discrepancy with the 1996 tariff was PIAC able finally to obtain confirmation from Bell that the $5.30 rate was in fact unauthorized.
18. Even then, Bell representatives often refused to answer questions about the applicable rate except in relation to a specific customer account, of which PIAC had only one. It was therefore difficult for PIAC to determine the extent to which this was a widespread case of overcharging (in which case, only those customers who complain would be entitled to a refund, under the Bell Terms of Service). Not once did any Bell representative disclose to PIAC that there had been a widespread billing error and that corrective action was being taken.
19. Furthermore, PIAC counsel raised the issue with senior Bell executives during a meeting on August 1, 2002. Once again, no indication was given that the error had been detected and was being corrected.
20. PIAC thus contacted numerous Bell Canada representatives, beginning with the regulatory department, in order to determine whether any overcharging had occurred, both for a specific customer and for party-line customers generally, and to find out what measures the company was taking to correct any such overcharging. At no time was PIAC informed by any of these company representatives that there was an error affecting more than one account, that the error was being looked into, and that measures would be taken to correct it.
21. In para.13 of its Answer, Bell asserts that “At no time did the Company fail to recognize its obligation to provide a refund”. In fact, at no time during PIAC’s investigation of this matter did Bell ever explicitly recognize the widespread error, let alone its obligation to provide refunds. It is cold comfort to affected customers that Bell internally recognizes its obligation to provide a refund to overcharged customers. The facts of this case show that Bell failed, in communications with affected customers and consumer advocates, to recognize its obligation to provide a refund. It is only now, after PIAC has filed a Part VII Application on the issue, that Bell assures us that it was intending all along to issue refunds to the affected customers.

PIAC’s Investigation and Application were Fully Justified and Appropriate

22. Bell argues that PIAC’s investigation and Part VII application were unnecessary, because the company had already identified the error and was working on correcting it. In reply, PIAC states that its investigation was reasonable and appropriate in the circumstances. This application was made necessary because of Bell’s failure to respond adequately to numerous inquiries by PIAC, beginning in March 2002 with a specific customer inquiry.
23. As noted above, this is the first time that PIAC has had any indication from Bell, despite inquiries to Bell regulatory affairs, customer service, and executive office, that the problem had been identified in January 2002 and was being worked on. It is inexplicable to PIAC why not one of these Bell representatives informed PIAC of the company’s awareness and actions regarding the overcharging, at the time that PIAC inquired about it.
24. Contrary to Bell’s implication in para.32, PIAC did specifically ask Bell regulatory personnel to explain the discrepancy between the tariffed rate and the billed rate. The response was unhelpful – PIAC was merely directed to follow up with Bell Customer Service in respect of a specific customer account. (This, and any other relevant facts presented in this Reply, can be confirmed by a supplementary Affidavit, should the Commission so desire.)
25. Ironically, in paragraph 23, Bell attempts to fault PIAC for inquiring only “about an individual account”. Were this true, PIAC have merely been doing as Bell instructed. However, it is not true. While Bell tried to limit PIAC’s inquiries to the specific account, PIAC continued to inquire about the general billed rate for party-line rental sets, as well as the specific account of which we were aware. At no time did Bell regulatory representatives inform PIAC that a widespread billing error had been detected and was being corrected.
26. In para.21, Bell asserts that “in all but one case, PIAC appears to have been given the correct answer to its inquiry”. In fact, PIAC’s inquiries to Bell customer service in March/April, July and August 2002 were all answered in the first instance with patently incorrect information (with the one exception described in Footnote 1 above). In addition, PIAC’s inquiries to Bell regulatory department and Executive Office about the discrepancy between the tariffed and billed rates were met with “I don’t know” responses. Finally, it was only upon persistent demands by PIAC that the matter be investigated that Bell agreed to do so and report back to PIAC.
27. In para.22, Bell states that “Based on PIAC’s supporting affidavit, PIAC personnel had three contacts with CSRs on the party-line terminal issue”. In fact, as a review of PIAC’s Application demonstrates, PIAC had at least eight such contacts, beginning in March or April 2002. (Note as well that the Application and Affidavit only set out those contacts which were fully documented.) In addition to Bell customer service, PIAC contacted Bell’s regulatory department, without success. Finally, while not documented in the Application, PIAC also raised the issue with senior Bell executives on August 1st, 2002. In sum, it cannot be said that PIAC did not pursue this issue diligently or appropriately in the circumstances.
28. In para.25, Bell accuses PIAC of failing to respond to an alleged offer by Bell regulatory personnel to investigate the possible overcharging of a specific account. In fact, as noted above, Bell regulatory personnel directed PIAC to follow up with Bell customer service in respect of the specific account, which PIAC did. At no time did Bell regulatory personnel offer to investigate the general matter of party line rental set rates (tariffed vs. billed).
29. Contrary to Bell’s statement in para.26, PIAC was not given “accurate and timely responses to its inquiries in almost all circumstances”. In most cases, PIAC was given either patently incorrect responses or was left without an answer as to the cause of the discrepancy. Bell investigated the matter only upon the insistence of PIAC; it did not volunteer to do so until PIAC made it clear that it would not drop the matter until it was resolved. The refund that was volunteered was for an individual customer only; Bell provided no indication that it would refund all affected customers.
30. In para.27, Bell accuses PIAC of not raising its concerns about the error nor asking about refunds for similarly affected customers. This ignores the fact that it was only on August 7th, after Bell finally admitted the error (by way of a voice mail message from a self-identified Bell Public Relations official) in respect of a specific account. Up until that point, PIAC had received conflicting messages from Bell representatives, and was therefore not sure whether the discrepancy between the tariff and the billed rate was due to an outdated tariff or to overcharging.
31. Moreover, Bell chose to respond only with respect to the specific account, despite PIAC’s more broad-based inquiry. PIAC was thus left without an answer as to the extent of the overcharging. As noted, PIAC did attempt to determine by way of follow-up calls whether other affected customers would be refunded, but Bell refused to provide any information except in relation to a specific account. (This is confirmed in para.22 of Bell’s Answer: “PIAC apparently refused to provide a number.”) As noted in the Affidavit of Michael Nesbitt (para.11), Bell representatives became aggressive as well as obstinate at this point, and it was clear that we were at a dead end.
32. Finally, PIAC was aware that Bell’s Terms of Service do not require it to refund overcharged amounts except upon request by individual customers. The only way for PIAC to ensure that Bell actually does refund all affected customers is therefore via a regulatory order. Moreover, PIAC was unaware of Bell’s alleged intention to refund all affected customers until now. Hence, the Part VII application was necessary, not only because of Bell’s failure to disclose its knowledge of the overcharging and its actions to correct such overcharging, but also because the current Terms of Service do not require that Bell refund all affected customers.
33. In para.28, Bell states that “it is unfortunate that PIAC was not more direct in its inquiries”. PIAC submits that the record shows clearly that it was direct in all of its inquiries to Bell, and that any indirectness was on the part of Bell itself, not PIAC.
34. In para.29, Bell states that when the error was found, “the Company sought to deal with it in an honest and fair manner by arranging to provide a full refund, with interest and an apology”. First, as noted above, despite the fact PIAC was inquiring about party-line customers generally, and despite the fact that Bell knew of the widespread billing error, Bell chose to respond only with respect to the individual account in question. Second, Bell arranged for this individual customer refund and apology only after sustained efforts by PIAC, and only after having dismissed this same customer complaint in March or April of 2002.
35. In para.32, Bell incorrectly states that “When PIAC brought forward an individual billing issue, it was promptly corrected and a refund given.” As noted above, the individual billing issue in question was raised with Bell in March or April 2002, at which time the customer was assured that the $5.30 rate was valid. During the summer of 2002, the same issue was raised again with Bell representatives, who again wrongly assured PIAC that the rate charged was valid. Only upon persistent inquiry by PIAC referring to the tariffed rate, was the error admitted and action taken by Bell to correct and refund.
36. Finally, PIAC notes with concern that Bell did not admit the widespread error, or offer to refund all affected customers, until after PIAC had uncovered the error and applied to the CRTC for enforcement and relief. If it is true that Bell would have offered refunds to all affected customers, it is strange that actions to correct and refund were not taken in a more timely way, and that Bell never informed PIAC of its intentions in this respect, despite numerous opportunities to do so, until after PIAC filed the Part VII Application.

Knowingly Overcharging and Misleading Customers

37. Bell argues that it did not engage in “wilful negligence” or “deliberate fraud”. While PIAC did not allege more than mere negligence in its Application, Bell’s admission in its Answer that it was aware of the billing error as early as late January 2002 itself raises the question of whether Bell’s failure to act more expeditiously to correct the error constitutes “wilful negligence”. Certainly, Bell was knowingly overcharging many of its customers for a protracted period of time.
38. In para.14 of its Answer, Bell states that “at no time did the Company attempt to cover up the error or deliberately mislead anyone as to its existence.” Given the preceding explanation in that same paragraph, this statement is hard to understand. The Company knew of the error many months ago. It deliberately chose a course of action that entailed denying the error for a protracted period of time. Regardless of how explicable this course of action was, it was clearly not “inadvertent”. If this does not constitute “deliberately misleading” customers, then PIAC wonders what does constitute deliberate misrepresentation.
39. One must wonder whether Bell would have taken this long to correct an overcharging error where affected customers complained in large numbers, or where customers were able to ascertain that the Company was in error. This was a case in which customers had to rely upon the company’s assurance that the rate increases were legitimate. Moreover, as Bell itself points out, this case involved customers who have ‘limited interaction” with the Company, and who, for the most part, did not complain about the increases. Hence, the Company was able to continue overcharging (and defending the wrongful charge) for a protracted period of time, until after it became clear that PIAC was pursuing the issue.

Ongoing Compliance Issues

40. In response to PIAC’s argument that a more effective incentive is needed to ensure that Bell complies with CRTC tariffs (specifically, one that offsets the financial advantage of non-compliance), Bell notes that the error in question was inadvertent. Indeed, Bell takes umbrage at what it perceives as a suggestion by PIAC “that the Company was either wilfully negligent or deliberately trying to defraud customers” (para.29).
41. Contrary to Bell’s interpretation of its Application, PIAC did not suggest in its Application that the error in question was attributable to anything more than negligence. Indeed, PIAC’s Application was premised on the assumption that the cause of the error was negligence, rather than intentional overcharging. It is only now, having learned of the Company’s awareness of the error as early as January 2002, and its deliberate decision to delay acknowledgement of the error, that PIAC questions whether this case is indeed merely about negligence. It is now also about deliberate company approaches to dealing with overcharging errors.
42. Even assuming, however, that this case is about mere negligence, PIAC reiterates that more effective measures are needed to prevent such overcharging in the first place, and to ensure prompt detection, correction and reimbursement of such overcharging when it occurs.
43. In addition, PIAC requests that the Commission revise ILEC Terms of Service so as to provide all overcharged customers, not just those who complain, with a right to a full refund. If the only penalty for overcharging is to reimburse those customers who complain (and if Applications such as this are considered “unnecessary and inappropriate”), then there is little incentive for companies to take effective measures to prevent such overcharging in the first place, to detect any overcharging at the earliest opportunity, and to correct the error forthwith.
44. In its application, PIAC submitted that more effective measures are needed (a) to ensure ongoing compliance with CRTC tariffs, and (b) to ensure that Bell’s customer service representatives can quickly and accurately answer straightforward questions about current tariffed services. Such measures are needed even assuming that the problem in this case was due to mere negligence (as opposed to wilful negligence or intentional overcharging).
45. Specifically, Bell needs at a minimum to improve its internal systems so as to

provide customers with accurate information upon request,
identify and act upon billing errors in a more timely way; and
prevent such errors from happening in the first place.

46. Moreover, as Bell itself notes, protracted overcharging inevitably involves customers who subsequently disconnect and cannot be located in order to reimburse. Hence, whenever a billing error involves overcharging of customers, it is incumbent on the company to act quickly and diligently to identify and refund affected customers. Such was not the case here: of the 29,730 overcharged customers, 3,450 have since disconnected. Refunds are an ineffective remedy if the customer cannot be located in order to provide the refund. Clearly, Bell needs a greater incentive than refunds to deal more expeditiously and appropriately with billing errors.

Conclusion

47. Bell states, in para.35, that “what is important is that it take reasonable steps to detect errors and responds appropriately when they are found”. The record of this proceeding clearly shows that Bell failed to take reasonable steps to detect the error in a timely way, to correct it once detected, and to deal with complaints and inquiries about the wrongful charge in the interim.
48. The Company repeatedly provided inaccurate information to those inquiring about the correct rate, even after it knew of the error. It failed to act diligently in following up on PIAC’s requests for an explanation of the discrepancy between the tariffed and billed rate, and offered investigate the matter only in relation to a specific customer account. Throughout PIAC’s contacts with Bell personnel between March/April 2002 and August 2002, Bell never once mentioned that it was aware of the error and was working to correct it.
49. For all these reasons, PIAC reiterates its request that the Commission:

confirm that Bell Canada increased the monthly charge for party-line rental sets above the tariffed rate without CRTC approval, and did so on more than one occasion;
order Bell Canada to rebate affected customers all amounts improperly charged, with interest;
order Bell Canada to pay PIAC’s costs of investigating and pursuing this matter; and
grant any further relief as the Commission considers reasonable.

50. As part of the further relief mentioned above, the Commission should revise the Terms of Service (Article 19 of Bell’s Terms of Service) so as to give all overcharged customers, not just those who dispute the improper charge. Such a revision would reduce the need for Part VII Applications (such as this) in order to ensure that all overcharged customers are offered refunds.
51. Consideration should also be given to ways in which the 3.450 non-active customers can be refunded (e.g., advertisements in national newspapers). Alternatively (or additionally), any refunds and other compensation ordered that cannot be provided due to the company’s inability to locate the customer should be paid to PIAC, given PIAC’s role in representing the interests of these customers.
All of which is respectfully submitted,
original signed
Philippa Lawson
Senior Counsel
cc: Bell Canada