Ms. Diane Rheaume
Canadian Radio-Television and Telecommunications Commission
Dear Ms. Rheaume:
Re: Part VII Application by PIAC for enforcement of CRTC ruling regarding Basic Toll Rate disclosure by ILECs
1. We are in receipt of Answers from Bell Canada, TELUS, Aliant, MTS and SaskTel to our above-mentioned Part VII Application. The following is PIAC’s reply.
2. Failure to address any particular 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 interests of PIAC.
3. This reply is organized primarily by issue rather than by Respondent. A few points specific to each Respondent are, however, addressed near the end of these comments.
4. In its August 28th application, PIAC used the term “Basic Toll Service”, with the abbreviation “BTS” (see para.1). In their Answers, the Respondents have used the same abbreviation, “BTS”, to mean “Basic Toll Schedules”. It is important that the Commission appreciate the different uses of this abbreviation in different documents, so as not to misunderstand any party’s argument.
5. In an attempt to minimize the confusion that has already been created by the different uses of this abbreviation, PIAC will adopt the Respondent usage of “BTS” (“Basic Toll Schedules”) in these Reply comments.
Misunderstanding of PIAC’s Argument
6. The Respondents’ Answers portray serious misunderstandings of the PIAC Application in a number of respects, as well as confusion among different arguments made by PIAC. As a preliminary matter, therefore, PIAC reiterates its argument in summary form.
7. First, PIAC is alleging two separate “wrongs” on the part of the companies:
- “Making Basic Toll Schedules Available”:
- The Respondents have failed to make their Basic Toll Schedules (BTS) “publicly available” by refusing to provide the BTS to consumers upon request, or to refer such consumers to a method by which they can obtain the BTS, and by failing to take reasonable steps to make the BTS available to consumers in a meaningful way (e.g., via websites and other general publications); and
“Disclosing BTS as a toll plan option”:
The Respondents have, to varying degrees, misrepresented their long distance service options to consumers by failing to disclose the option of Basic Toll service at appropriate times and in appropriate locations.8. While these two issues are related, it is important not to confuse them as some companies have done. Each point stands on its own, regardless of how the Commission determines the other.
9. Second, PIAC points out the consequence of these wrongs: that some customers on toll plans have paid more for toll service than they would have paid under BTS rates. PIAC argues that at least some of these customers would have chosen BTS rates had the option been properly disclosed to them. Hence, a causal relationship can reasonably be assumed between the Companies’ failures to disclose and at least some of the “excess” monies paid for toll service. The companies have been unjustly enriched as a result.
10. Finally, PIAC proposes that:
- the companies should be required to change their practices so as to accord not only with the words, but also with the spirit of the CRTC order; and
- the companies should be required to rebate adversely affected customers by the difference between their actual toll bills and what their toll bills would have been under BTS rates, over the period since Decision 97-19.
11. Whether deliberate or not, the confusing and embellishing of these arguments by some Respondents in their Answers should not be allowed to obscure the straightforward points made by PIAC.
Confusion between Basic Toll Schedules (BTS) and Basic Toll information
12. Some companies refer in their arguments alternatively to “the BTS”, “BTS information”, “BTS rates”, and “BTS rate information”. By doing so, they attempt to draw attention away from from the fact that they have not been making their Basic Toll Schedules publicly available, as required by the Commission.
13. PIAC does not dispute that the companies provide point-to-point BTS rate information upon request; that is not the issue. The issue is whether the companies have been making their Basic Toll Schedules available upon request, and it is clear from the record that they have not been doing so.
Confusion between availability of the schedules and disclosure of the basic toll option
14. Some companies have confused the two separate arguments made by PIAC in its application:
- that the BTS is not being made publicly available (i.e., available upon request and easily accessible); and
- that “full and pertinent information” regarding the basic toll service option is not being disclosed to customers by telcos at appropriate times.
15. Bell, for example, confuses these two points when it states, incorrectly:
“PIAC alleges that all ILECs have failed to meet the requirements of Decision 97-16 to make the BTS publicly available because the BTS was not prominently and frequently mentioned in every medium of communication between the ILECs and their customers.” (para.16)
16. Bell repeats this error in paragraph 29 of its Answer.
17. Contrary to Bell’s assertion, PIAC’s allegation that the Company has failed to make the BTS publicly available is not premised on an interpretation of Decision 97-19 requiring disclosure of the BTS rate option alongside other toll options.
18. Bell is confusing the issue of public availability of the schedules with the issue of misrepresentation. The simple requirement for public availability of the BTS can be satisfied without mentioning the BTS option to customers at appropriate times. Nevertheless, failure to disclose the BTS option to consumers is misleading where the BTS option may be a relevant option for the consumer. The requirement to mention the BTS option to consumers at appropriate times, regardless of the medium of communication, stems from the obligation not to mislead, not from the obligation to make the BTS publicly available.
19. It is important not to confuse these two issues, since a finding on one issue is not determinative of the other issue.
Confusion between past and present wrongs
20. All five companies point out that they have changed, or about to change, their practices in response to PIAC’s Application. In doing so, they suggest that because past non-compliance has been corrected, no more regulatory action need be taken.
21. As set out below, the companies are still far from full compliance with the CRTC order and the requirement to disclose all pertinent information so as not to mislead consumers. Regardless of whether they have become compliant, however, the issue of past wrongs remains.
22. It has been almost five years since the order in question was rendered. It is important that the Commission consider both past wrongs and present wrongs. That companies have improved their practices after PIAC’s Part VII application (or upon being notified of the problem by PIAC in June 2002) should not absolve them of responsibility for wrongs committed prior to this time. The Commission should not allow such wrongs to go unaddressed.
Misinterpretation of PIAC’s point that BTS rates should be presented as an option alongside other toll plans, in all modes of communication
23. Some companies have misinterpreted PIAC’s point, in para.31 of its Application, that “the BTS rate option should be disclosed alongside other toll options in all modes of advertising or customer communications: on websites, in print advertising, in email communications, and during telephone and in-person communications with customers.”
24. Specifically, Bell interprets this as “an onerous requirement that [the BTS] be disclosed in each and every communication relating to long distance calling”, and argues that “there is not currently, nor should there be, a requirement to include the BTS in every customer communication relating to long distance calling”.
25. SaskTel similarly misinterprets PIAC’s point, arguing that “the requirement to present the BTS rates in ‘all modes of advertising and customer communications’ would produce clutter and confusing messages, is not necessary, and has no obvious benefit….”.
26. The Companies are attacking illusory arguments. PIAC never suggested that the Companies should be required to disclose the BTS option “in each and every communication relating to long distance calling”. Rather, PIAC’s point was that the disclosure of BTS rates as an option along with other toll service options should not depend on the mode of advertising or communications. It should not be limited to the website, for example. Nor should it be limited to print communications. The principle of disclosure at appropriate times and in appropriate locations should apply to all modes of communication chosen by the Company.
27. Nor did PIAC suggest that the BT rate schedules, or a listing of BTS rates, should be disclosed in all modes of advertising or communication; the point was simply that the existence of BTS rates as an option should be disclosed at appropriate times and in appropriate locations. The details of such rates should then be provided to customers upon request, and made available for customers to review at their leisure.
Misinterpretation of the duty to advise customers of the basic toll option
28. The companies also misinterpret PIAC’s point that they should “be required, when directing consumers to the best toll plan based on the consumer’s calling patterns, to advise those customers who may be best off under BTS rates that this is the case”.
29. They respond by arguing that “the Company cannot pre-determine the economic and personal factors that would establish when a customer is ‘best off’ on the BTS”, that “the toll option that results in the customer being better off is dependent on each customer’s individual situation”, that “in order to ensure that customers are receiving the ‘best buy’ it would be necessary to continuously monitor customers’ calling patterns to determine the optional [sic] toll calling arrangement”, and that “it is therefore impractical, unreasonable and unnecessary to order the Company to advise customer that they may be financially best off under BTS rates, based on customers’ current calling patterns”. 30. These responses portray a misunderstanding of PIAC’s point.
31. First, PIAC is not suggesting that the companies be required to advise customers of the BTS option at all times and in all situations. Rather, the point is that where assisting consumers in identifying the appropriate toll plan given their calling patterns, companies must not ignore the BTS option. Not to disclose the BTS option in this context constitutes misrepresentation insofar as the consumer is led to believe that their best option is a toll plan which may in fact cost them more in the end than BTS rates.
32. Second, PIAC is not suggesting that companies should be required to make a determination for the customer as to which toll option best suits their needs. Indeed, PIAC agrees wholeheartedly with Bell that “it is inappropriate for the Company to replace its judgment for that of its customers”. Rather, when advising customers of toll options that might meet their needs, the companies should not ignore any obvious options, such as BTS rates. To provide full and pertinent information to consumers in response to inquiries and at the time of service selection does not in any way constitute replacing the Company’s judgment for that of its customers.
33. Third, the companies frequently assist customers in identifying the least expensive toll option for them on the basis of the profile presented to them by the customer. It is thus disingenuous for the companies to argue here that a requirement for such assistance to include the BTS option where relevant is “impractical” and “unreasonable” because customer calling patterns change, As they do now, companies can continue to provide this advice based on the calling profile presented to them. It is then up to the customer to decide which option to choose.
34. It is similarly disingenuous for the companies to argue that advising customers, where appropriate, that the BTS option might be their “best option” would be “impractical” or “unreasonable” because financial considerations are not the only ones important to customers. It is well understood by both company representatives and customers that a reference to “best deal” is based on price considerations. Indeed, the companies themselves use the term “best option” to mean financially best option; to argue here that it means something else either to them or to consumers is insincere. If there is any doubt, companies can be specific about what they mean when they refer a customer to the best deal for that customer. It is then up to the customer to decide which option to choose.
35. In fact, Aliant admits (like other companies) that its “representatives undertake a general analysis of customer calling patterns as a matter of course to help the customer select the most appropriate long distance service”. In the same breath, however, the company argues that “in order to ensure that customers are receiving the ‘best buy’ it would be necessary to continuously monitor customers’ calling patterns to determine the optional [sic] toll calling arrangement”. It is particularly ironic that Aliant, whose website includes an option “Unsure of which plan is right for you?”, should argue here that a requirement for such advice to include all pertinent options is “impractical” and “unreasonable”.
36. If the companies can advise customers of the most appropriate long distance service for that customer, they can surely do so in a way that does not mislead customers, by disclosing all relevant options.
37. In brief, the proposed requirement to advise customers that BTS rates might be their best option would apply only where not to do so could be misleading.
38. Some companies distract attention from the issues in this proceeding by making irrelevant arguments. For example, the fact that a company’s Basic Toll Schedule has not been revised since 1997 has no relevance to the issues in this proceeding. The fact that customers are charged BTS rates unless they choose a toll plan, can switch among long distance plans at will, and can choose to go with BTS rates at any time, are also irrelevant. The fact that discount plan long distance rates have fallen significantly since 1997 is similarly irrelevant to the issues in this case.
39. What is relevant to this Application is the extent to which customers are fully aware of the BTS option and BTS rates, both in general and at the time they are making decisions about their toll service.
Making Basic Toll Schedules “Publicly Available”
40. All five companies argue that they have met the Commission’s requirement to make their Basic Toll Schedules “publicly available”.
41. In order to determine the proper meaning of the term “publicly available”, it is important to review the CRTC order in question, which states:
To protect the interests of users, including users in high-cost remote areas, and in light of the Canadian telecommunications policy objectives, the Commission considers it appropriate to adopt the following additional conditions applicable to the offering or provision of toll services:
(i) The Stentor companies shall provide to the Commission, and make publicly available, rate schedules setting out the rates for basic toll service. These schedules are to include the 50% discount currently applicable to calls which originate from, and are billed to, the residence service of a registered certified hearing or speech-impaired Telecommunications Devices for the Deaf (TDD) user. The Stentor companies shall update their respective schedules within 14 days of any change to the rates for basic toll service.
The value of Basic Toll Schedules to consumers
42. The CRTC’s order to make basic toll rate schedules publicly available is premised on the notion that such schedules contain potentially useful information for consumers in a competitive marketplace. Most respondents, however, explicitly challenge the notion that basic toll rate schedules are useful to consumers. By doing so, they effectively challenge the CRTC order itself.
43. For example, Bell argues that “the rates contained in the BTS are of limited value to customers” because they are based on distances between rate centers, and hence that “BTS rate schedules are inherently of little use to customers”. MTS argues that “the BTS schedules have only limited value to most customers because these schedules are the rates for toll calls made only by a small percentage of customers”, and that “the BTS schedules have very limited use to customers without the customer first knowing what the distances are between the calling and the called locations of interest to the customer”. SaskTel argues, similarly, that “since the BTS provides the rate to be charged based on the distance between the originating and terminating rate centers, the BTS proves to be of little value to SaskTel’s customers…”.
44. It would appear that some companies have consciously chosen not to comply with the CRTC order because they disagree with its premise. Such disrespectful behaviour should not be tolerated by the Commission. The companies know full well that the appropriate course of action to take in such a case is to apply to the Commission for a review and variance of the order, under s.62 of the Telecommunications Act.
45. As TELUS states,
”…it [the company] has an obligation to ensure that consumers have access to all pertinent information they may need in order to make economically rational decisions regarding what long distance service to subscribe to.”
46. As TELUS recognizes, a fundamental criterion for the effective functioning of a competitive market is that consumers have full information about their options. Because it is often in a company’s interest to provide less-than-full information to consumers, governments have enacted numerous statutes and regulations requiring specific disclosures. Moreover, the common law (both contract and tort) demands a certain level of disclosure in order both to make contracts valid and to avoid misleading customers.
47. The Commission clearly states, in the preamble to the order, that the purpose of the order is “to protect the interests of users”. There can be no doubt of the Commission’s intention to ensure, through this order, that consumers have reasonable access to the companies’ basic toll rate schedules. Nor can there be any doubt that the Commission considered such access to be a valuable protection for consumers – otherwise, it would not have bothered to make the order.
48. The Commission appreciated, in this order, that basic toll rate schedules contain valuable information for those consumers who wish to understand their toll rate options. It is particularly valuable information for the increasing proportion of consumers for whom BTS rates may be the best option.
49. Indeed, Bell acknowledges that “in recent years, the BTS has become relevant to more customers”, and admits that “the intent of Decision 97-19 was to ensure that BTS information is available to customers in a way that allows them to reasonably assess the BTS as an option for their long distance calling needs”.
50. That these schedules contain rate information by distance does not diminish their value to consumers. Clearly, it is impractical to provide schedules showing toll rates by every possible origin-destination combination. Instead, the schedules are provided in summary form, by distance between rate centres. That the consumer does not know the exact mileage applicable in each case does not mean that these schedules have no value to her. To the contrary, the schedules provide clear per minute rate information for many destinations (e.g., beyond a given distance). Where the customer is not sure of the applicable distance, they provide an indication of the applicable rate. Finally, and most importantly, they provide this information in a format that the consumer can consult at her leisure, without having to contact the telephone company repeatedly with specific point-to-point rate inquiries.
51. At the same as they argue that the schedules are of limited value to customers, the companies also acknowledge that “it is inappropriate for the Company to replace its judgment for that of its customers”. Yet, that is precisely what companies are doing when they choose not to disclose their basic toll rate schedules to consumers on the basis that the information in the schedules is of limited use. They are replacing their judgment about the utility of basic toll rate schedules for that of their customers.
Providing point-to-point BTS rate information is insufficient
52. Bell, TELUS, and Aliant argue that the provision of point-to-point BTS rate information to consumers upon request constitutes fulfillment, to greater and lesser degrees, of the CRTC order to “make publicly available, rate schedules setting out the rates for basic toll service”. (emphasis added)
53. Basic toll rate schedules are not the same thing as a specific rate between two locations. In some cases, consumers will want the former; in others they will want the latter. Point-to-point rate information is sufficient when all the customer needs is the applicable rate between two centres, but it is not sufficient when the customer desires a reference document outlining the all applicable rates under the BTS (in the same way that the rates under specific toll plans are set out in a document).
54. As the companies point out, specific point-to-point rate information has always been available upon request. The Commission was fully aware of this when it made the order for basic toll rate schedules to be made publicly available. The requirement in Decision 97-19 for rate schedules to be made available cannot therefore be reasonably interpreted as anything other than a requirement for additional disclosure, beyond that already being offered by way of point-to-point rate information.
Providing schedules to the CRTC is insufficient
55. The companies also argue that provision of the basic rate schedules to the CRTC constitutes full satisfaction of the requirement that they be made publicly available.
56. Paragraph 81(i) of Decision CRTC 97-19 states as follows:
The Stentor companies shall provide to the Commission, and make publicly available, rate schedules setting out the rates for basic toll service…… (emphasis added)
57. On a plain reading of this order, it is clear that the requirement to make basic toll rate schedules publicly available is in addition to the requirement that they be provided to the Commission.
58. In other words, provision of basic toll rate schedules to the Commission does not satisfy the requirement that these schedules be made “publicly available”.
59. This makes sense, insofar as availability through CRTC public examination rooms alone would provide little value to the users that the Commission meant to benefit by this order. The point of the order was to make it easy for consumers to access the basic toll schedules. CRTC public examination rooms are not meant to be used by the public for general rate information that should be available directly from the companies.
Availability for inspection at Company business offices is insufficient
60. TELUS argues that the requirement for public availability of the BTS is identical to the requirement for public availability of company tariffs, and that the latter requires only that the document be “available for public inspection” in company business offices as well as at the CRTC.
61. TELUS is mistaken in a number of respects. First, TELUS ignores the significantly different context of these two regulations. The 1997 CRTC rule regarding Basic Toll Schedules was made in the context of competition, a context in which end-customers need full information in order to be able to compare their options and make rational choices. The CRTC Tariff regulations, on the other hand, were designed for the purpose of ensuring that tariffs were available for inspection by interested parties.
62. Second, TELUS ignores the way in which the practical implementation of making information “publicly available” has evolved over the past decade. Most notably, it is now expected that documents subject to a requirement of public availability will be posted on company websites, if not provided electronically (by fax or email) to persons upon request. Companies are no longer limited to sharing hard copies of documents such as the BTS. Now that they can make this important rate information available to the public much more conveniently than in the past, it is expected that they will do so.
63. Finally, and most importantly, TELUS ignores the requirement in the Tariff Regulations to produce and provide copies upon request. Subsection 11(5) states:
At each business office where tariffs are kept on file as required by this section, the person in charge at that office shall, on request,
(a) produce any tariff on file for inspection;
(b) arrange to provide single copies of up to 10 tariff pages at no charge; and
(c) arrange to provide copies of any other tariff pages at a reasonable charge.
64. This is precisely what the companies failed to do, and continue to fail to do, in the case of the BTS. As the record shows, PIAC’s requests to company business offices for copies of the BTS were repeatedly turned down.
Provision in response to an Interrogatory is insufficient
65. Aliant even goes so far as to argue that provision of the BTS in response to an interrogatory in a CRTC proceeding is evidence that it makes its BTS “publicly available”.
66. Provision of the BTS to parties in a regulatory proceeding, via a response to a Commission interrogatory, can hardly qualify as making this document “publicly available” in a meaningful sense. Clearly, it does nothing for the users whose interests the CRTC meant to protect through the disclosure requirement in Decision 97-19.
Posting schedules on a website is insufficient
67. The companies also argue that posting the schedules on their websites, which most have now done in response to demands from consumer groups, together with provision of this information to the CRTC and availability for inspection at business offices (where such offices exist), constitutes full satisfaction of their requirement to make the BTS publicly available.
68. Bell argues that “public accessibility [of the BTS] is greater today than it was prior to forbearance being granted”. Presumably, Bell is referring to the online availability of the BTS. While online accessibility of Bell’s BTS is an improvement, it does not mean that the general level of accessibility is either adequate or in keeping with the CRTC order.
69. While a necessary component of making the BTS publicly available, website posting is not sufficient, even in combination with public availability of the BTS at certain Commission and Company office locations. As the companies well know, many consumers do not have Internet access. For those that do, company websites are perhaps the most convenient method of accessing the BTS. But all consumers, not just those with Internet access, need to be able to obtain copies of this rate information.
70. As well, website postings are helpful only to the extent that they are easily accessible and easily found by those consumers seeking the information online. As the Affidavits of Michael Nesbitt indicate, the online availability of this information was in some cases of limited value, given its obscure location on the company website. The companies have improved this in response to PIAC’s Application.
Directory information is insufficient
71. In response to an illusory argument, some companies argue that presenting BTS rates in “all modes of advertising and customer communications” would be impractical. Presumably, they include print directories as part of “customer communications”, and would object to a requirement that their BTS be included, together with the time-of-day discount information currently provided, in the company white pages directory.
72. While time-of-day discount information is a critical aspect of Basic Toll Rate information to which customers should have easy access, it is of little use without knowledge of the rates themselves. In the past, companies provided sample BTS rates along with the time-of-day discounts, in their directories. It is unclear why this practice was ended, or why some BTS rate information, at least, cannot be provided in the company white pages.
Making publicly available includes referencing upon request
73. While methods of making information publicly available have evolved over time, the fundamental concept has not changed. It includes not only ensuring that the document is available for inspection by the public, but also that those requesting the information are referred to methods by which they can access it.
74. The record is clear that, with few exceptions, the companies repeatedly refused PIAC’s requests to access their Basic Toll Schedules.
Making publicly available includes providing upon request
75. It is not enough, however, that companies merely refer consumers to their websites, to the CRTC public examination room, or to their (few) business offices where the BTS can be inspected. It cannot be reasonably argued that forcing consumers to attend company or CRTC offices in person constitutes reasonable availability of this information in this day and age. Moreover, as noted above, many consumers do not have website access.
76. Any reasonable interpretation of “making publicly available” the BTS in the context of competition (and in view of the corollary importance of full information to consumers), surely includes provision of the BTS to consumers upon request. Indeed, the respondents for the most part explain their failure to respond to PIAC’s requests for the BTS as “human error”, as a slip between policy and practice, or as a result of the rarity of such requests, rather than arguing that they should not have to provide this information upon request.
The Companies acknowledge the problem
77. Despite arguing that their obligation to make the BTS publicly available does not extend beyond providing it to the Commission and keeping it at Company offices for inspection, all five companies acknowledge, in one way or another, that their practices regarding public availability of the BTS have been inadequate and need improvement.
78. Most companies state, as a result of the PIAC Application, that they are directing their front-line personnel to provide the BTS to customers upon request. All companies have now posted their BTS on their websites, or promise to do so imminently. Bell and SaskTel have improved the visibility of the BTS on their websites.
79. If the companies were correct that their past practices in respect of making the BTS publicly available were sufficient, then they would not be making the significant changes that they are. Despite their protestations otherwise, the companies’ actions belie their words.
Full compliance has not yet been achieved
80. As the record shows, none of the nine company units in question made their BTS available to PIAC upon request to their business offices in June 2002. In response to a similar request in late August 2002, only two of the nine companies offered to provide the requested information. Without conducting more test inquiries, it is not clear whether other companies are now providing the BTS to consumers upon request. The only way to determine whether companies are complying is to test them by way of consumer calls to their business offices.
81. With respect to website disclosure, the record shows that while the situation has vastly improved since PIAC’s first raising the issue with the companies in June 2002, online disclosure is still inadequate.
82. In June 2002, PIAC was able to find the BTS on only one company’s website (Bell’s), and there, the link to “Base Rate Schedules” was neither clear nor conspicuous. SaskTel’s online posting was so obscure that PIAC’s researcher could not find it without a specific URL from SaskTel. As of late August 2002, TELUS had posted its BTS online in a clear and conspicuous manner, and Bell had marginally improved its website posting. As of October 24, 2002 (see attached print-outs), Aliant had posted its BTS in appropriate locations on all four company sites, SaskTel had posted a link to its BTS on the webpage for long distance services, and Bell had further improved its website posting. However, all postings remain inadequate in one way or another:
- Bell continues to omit the BTS option from the bolded list of options at the top of its webpage on residential toll options; hence, viewers may miss the BTS option;
- TELUS refers to its “Non-Plan Rates” as “non-discounted long distance rates” and fails fails to reference the fact that time-of-day discounts apply, on the webpage that appears when viewers click “Non-Plan Rates” with its BTS; hence, consumers may be led to believe that BTS rates are higher than they actually are;
- SaskTel fails to referenceneither includes the time-of-day discounts in each BTS, ornor specifies them on the page listing all schedules; instead, consumers must open a separate PDF document in order to access the time-of-day discount information;
- NBTel and MTT present “Time of Day Discounts” and “Basic Toll Rates” as if they are separate toll options, and fail to reference Time of Day discounts in their BTS, thus confusing consumers and leading them to believe that BTS rates are higher than they actually are;
- Island Tel and NewTel do not mention Time of Day discounts in their BTS; hence, consumers may be led to believe that BTS rates are higher than they actually are.
1. MTS has still not yet posted its BTS online.
Disclosing BTS rates as a toll plan option
2. The second wrong alleged by PIAC in its Part VII Application is that the companies are misleading customers by not disclosing the option of basic toll service when such option could be of benefit to the customer.
3. The respondents either deny that they have any obligation to disclose the BTS option in communications with customers regarding toll options, or challenge PIAC’s evidence that they failed to disclose this information in circumstances in which it was relevant.
Failure to disclose in certain situations constitutes misrepresentation
4. As noted above, PIAC is not suggesting that the companies should be promoting the Basic Toll option to every customer in every instance. Rather, PIAC is merely stating what the law already requires: that the companies not mislead customers by failing to disclose the Basic Toll option when advising certain customers (i.e., those who might pay less overall under basic toll rates) of their toll service options.
5. All respondents engage in communications with consumers seeking information on their toll options and seeking advice as to the best deal based on their calling patterns. All respondents provide such advice to consumers. In the context of providing such advice, whether orally, via an automated web tool, or otherwise, the companies have an obligation to provide full and accurate information. Failure to advise a customer of the lowest cost option for that customer, when purporting to do just that, constitutes misrepresentation.
The Companies contradict themselves
6. The Respondents contradict themselves in respect of their practices of advising customers on toll service options. On one hand, they admit to assisting customers in the selection of an appropriate toll plan given calling patterns. On the other hand, they argue that such advice cannot be given. They cannot have it both ways.
7. The facts, however, are clear: the companies do provide advice to customers as to the most appropriate toll plan. Arguments that such advice cannot be given due to the many factors affecting each customer’s choice, should therefore be dismissed.
PIAC has provided indisputable evidence of misrepresentation due to failure to disclose
8. The Affidavits of Michael Nesbitt provide ample evidence of misrepresentation by the companies to customers regarding their toll service options, and in particular, regarding the toll service option(s) under which they would be best off.
9. Of the nine company units called in June 2002, only one (Bell) mentioned the basic toll option, when all should have done so. Even then, the Bell representatives wrongly advised Mr. Nesbitt as to the amount of monthly toll calling below which basic toll rates are the least expensive option.
10. Of the nine company units called again in August 2002, only MTS and TELUS proposed the basic toll option, when all should have done so.
11. MTS disputes its failure to mention basic toll rates as an option during Mr. Nesbitt’s inquiry in June 2002, by arguing that “the CSR statement…that ‘the plan that is best depends on where one lives in Manitoba’ is addressing basic toll rates and the basic toll schedules.” PIAC submits that MTS is grasping at straws; this argument is patently untenable. Telling a consumer that “the plan that is best depends on where one lives” says nothing to the consumer about which plan(s) they should be considering. At best, MTS’s argument is for recognition of telepathic communication. More realistically, however, the company is simply refusing to admit the obvious. If its CSR meant to suggest basic toll rates to Mr. Nesbitt, why did he recommend “First Rate 24 Hours” without mentioning the possibility of BTS rates?
12. Bell implicitly acknowledges that its website long distance selection tool was misleading, noting that in response to PIAC’s concerns, it “considered and withdrew the tool”.
13. However, Aliant continues to offer a website link directing customers to its toll plans. At the bottom of its webpage listing residential long distance options is the question “Unsure of which plan is right for you?”. If a consumer clicks on the question, they are taken to a webpage entitled “Long Distance – Choose the plan that’s right for you!”, on which are listed the company’s toll savings plans, without any reference to the Basic Toll option. (see attached print-out)
14. Aliant company websites continue to provide misleading information insofar as they show BTS rates but either do not provide any indication or information as to the applicable time-of-day discounts, or provide this information separately from the BTS rates in such a way that the link is not clear.
Reference to the basic toll option in notices of changes to non-BTS toll plans does not disprove PIAC’s evidence of misrepresentation
15. Bell, TELUS and MTS point to notices that they provided to their long distance customers some months ago, regarding the imposition of a monthly fee, as proof that they are informing consumers of the Basic Toll rate option. These notices noted that the new charge applied only to long distance savings plans, and that customers not subscribing to such plans would not incur the charge.
16. The fact that customers reading these notices will be made aware of the BTS option in no way undermines PIAC’s point that the companies are not disclosing the BTS option to customers in other circumstances when they should be doing so. Even assuming that every customer reads the notice, and that the notice is sufficiently clear about the BTS option (neither assumptions of which PIAC accepts), the fact of this notice does not contradict the clear evidence provided by PIAC that consumers are being given misleading, if not downright inaccurate, advice by the companies about their toll service options.
Recent increases in BTS customers in Bell territory do not disprove PIAC’s evidence of misrepresentation
17. Bell argues throughout its Answer that a substantial increase in its BTS customers (from 13% to 26%) since October 2001 “demonstrates that customers are generally aware of the BTS, have sufficient information to make the decision to switch to the BTS, and are not reluctant to do so”. Bell attributes this increase in subscribership to its “activities that have made the BTS effectively available to the public and increased public awareness”.
18. In fact, the recent increase in Bell’s BTS subscribership says nothing about general customer awareness of the BTS option and has little to do with Bell’s activities (or lack thereof) in making its BTS publicly available. Rather, it has everything to do with the imposition of new charges on Bell’s First Rate customers, first in late 2001 (the $1.25 “Network Charge”), and then in early 2002 (the $4.95 minimum monthly charge).
19. Having switched (or been switched) to this plan when it was free of charge, Bell’s low volume First Rate customers found themselves faced with toll bills substantially higher than expected, due to the new charges. It was in response to complaints and inquiries from these customers, not to any “activities” of Bell designed to raise public awareness of the BTS, that Bell switched them back to BTS rates.
20. The recent increase in Bell’s BTS customers is therefore due to Bell’s recent changes to its First Rate plan, not to any general awareness on the part of Bell’s customers about their toll service options.
21. In any case, the fact that 26% of Bell’s customers now use BTS rates does not in any way disprove the evidence provided by PIAC of misrepresentation on the part of Bell when advising customers of the toll service options available to them.
References to toll “savings” on customer bills does not disprove PIAC’s evidence of misrepresentation
22. Aliant suggests that, because it “lists the realized savings of the customer’s chosen toll plan vs. BTS rate schedules” on customer toll bills, it can be presumed that all Aliant customers are fully aware of the BTS option, and have the information necessary to make informed decisions as to their best toll service option.
23. In order to give any weight to this argument, the Commission must first determine the extent to which the information on Aliant toll bills communicates effectively and accurately to customers (a) the existence of the BTS option, and (b) what they would have paid under the BTS, given time-of-day discounts. Aliant does not provide enough evidence for PIAC or the Commission to make a determination on this issue.
24. It is PIAC’s understanding that the toll bills referred to by Aliant (a) do not specify on what basis the “savings” are calculated, (b) do not include time-of-day discounts in the “charge” to which the “savings” are applied, and© do not specify that BTS rates are an option for customers.
25. Even assuming that the monthly toll bill from Aliant clearly indicated that BTS rates are an option, and told customers on savings plans what they would have paid under the BTS, including time of day discounts, this disclosure does not disprove the evidence of misrepresentation provided by PIAC. Those who simply call Aliant for advice are still receiving misleading information about their toll plan options. Moreover, consumers who are not Aliant toll customers will not receive this information, since they don’t receive a toll bill from Aliant.
Directory Information is inadequate
26. MTS argues that “it is appropriately disclosing information to its customers about toll options that include both the BTS and the toll savings plans” through its white pages directory.
27. MTS’s directory contains the same information as that of other telephone companies in respect of long distance service options. That is, it sets out time-of-day discounts for long distance calls under the BTS, notes that additional savings are available under a savings plan, and directs customers to call the company for more information on savings plans.
28. Nowhere in this section is there any explicit reference to the existence of the BTS or to how a customer may access the BTS in order to determine the rates to which the time-of-day discount applies. Moreover, the statement that “additional savings are available with an MTS LD savings plan” suggests that toll customers will always be better off under savings plans, as opposed to the BTS. Yet, even MTS admits that this is not the case.
29. Interestingly, as Bell Canada points out, telephone directories used to include sample BTS rates between major urban centres, prior to 1997. It is not clear why this practice was discontinued in the mid-1990s.
30. What is clear is that information the telephone directories on toll service options and prices is neither clear nor sufficient, and is itself misleading in some respects.
Company practice, not policy, is what matters
31. MTS refers repeatedly to its policy of providing full information in response to customer inquiries, in an apparent effort to downplay the clear evidence of its actual practice on point.
32. The evidence provided by PIAC, and confirmed by PILC, shows that MTS is in fact not responding to consumer requests in the way its policy would suggest. What matters is not company policy, but rather company practice.
Full disclosure of the BTS option does not constitute “re-regulation of forborne services”
33. Aliant argues that “any order stipulating that BTS rates be presented as an option along with other toll plans, as requested by PIAC, would dictate how the Company markets its competitive toll service offerings and would constitute a form of re-regulation of forborne services”.
34. Yet, PIAC merely seeks an order consistent with TELUS’s recognition that:
“it has an obligation to provide customers with accurate information regarding the benefits associated with the particular long distance savings plans, including BTS as an alternative. Accordingly, full and pertinent information is provided that would enable a customer to choose an appropriate calling plan based on his/her calling pattern….”
35. It is surprising that Aliant would oppose such fundamental tenets of fair market practices. PIAC is merely requesting that the CRTC confirm, through a specific order, what general consumer protection law already requires (of otherwise unregulated market sectors) in terms of full and fair disclosure. Such an order would clearly not “dictate” how the Company markets its toll service offerings any more than the general law against misleading advertising does.
The Companies acknowledge the problem
36. At least some of the respondents implicitly acknowledge the errors of their ways and have already taken steps to improve the situation. Bell has withdrawn its website toll plan selection tool, which purported to direct consumers to the most appropriate plan for them, but which did not even include BTS as an option. Aliant , SaskTel and TELUS have referenced the BTS rate option alongside other toll plans on their websites, while Bell has improved its website reference to the BTS option.
37. All of these measures constitute implicit acknowledgement of the problem cited by PIAC in its Application.
Compliance has not yet been achieved
38. However, compliance has not yet been achieved. As noted above under para.80, company website references to the BTS option remain inadequate. In most cases, they fail to include reference to the significant time-of-day discounts applicable to BTS rates. In the case of Bell, the BTS option remains unmentioned in the initial list of LD service options.
39. As of late August, most companies were still not mentioning the BTS option to customers for whom it might make sense. The only way to determine if companies have stopped misleading customers in respect of toll service options is to make more calls to their business offices requesting advice on toll service for a very low volume customer.
Reply to Specific Companies
40. The following comments do not provide a full reply to each company; rather, they focus on points that have not already been addressed above.
41. Bell’s misrepresentations of PIAC’s argument, and as well as an internal contradiction in Bell’s argument, have already been outlined above and will not therefore be repeated here.
42. Bell’s implicit acknowledgement of the problems pointed out by PIAC, through the changes it has made to its website and internal practices, has also been set out above.
43. In para.26, Bell challenges the evidence provided by PIAC that a Bell CSR did not provide the BTS to PIAC’s researcher upon request. Bell notes that it is not clear from the evidence whether the question was unclear or whether Mr. Nesbitt was referred to another source for the BTS. PIAC confirms that the question was absolutely clear (Mr. Nesbitt asked for a copy of the BTS), and that Mr. Nesbitt was neither provided with a copy nor referred to any source where the BTS could be accessed.
44. This is consistent with Bell’s apparent policy of not providing customers with hard copies of the BTS. However, it is not clear why the Bell CSR failed to refer Mr. Nesbitt to the Bell website where the BTS was posted.
45. Bell states in para.11 that it “began to post the BTS on the Bell Canada web site” in July 2001. This is a surprise to PIAC, since an experienced Internet researcher was unable to find the BTS on the Bell Canada web site in March, 2002. As the Affidavit of Jean Sebastien states, he was first able to find the BTS on the Bell website only in May 2002.
46. TELUS asserts in para.12 that “the substance of PIAC’s allegations that TELUS has been in breach of the Commission’s directive is based on the observation that the Company’s BTS rate schedules were not posted on TELUS’s website prior to July 24, 2002, and indeed did not get posted until after promptings from PIAC.”
47. TELUS clearly misunderstands the substance of PIAC’s allegations, which will not be repeated here. Suffice it to say that they are not limited to the failure of Companies to post their BTS online.
48. TELUS agrees with the principle that customers should be provided with “full and pertinent information” on toll options, but simply denies having breached this principle. TELUS’s argument regarding misrepresentation by TELUS and its representatives when advising customers of their toll options is almost entirely tautological. The only supporting arguments TELUS makes have to do with the notice it provided to its toll plan subscribers of changes to their plan (an irrelevant argument, as explained above), and the self-evident point that it is up to the customer to determine which option is best for them (a point that PIAC does not dispute).
49. TELUS’s denials and assertions do not disprove the evidence provided by PIAC of misrepresentation, as well as failure to make the BTS publicly available, by TELUS.
50. In para.12, Aliant makes the completely unfounded assertion that “Customers knowingly subscribe to toll plans offered by the Company or competitors with the knowledge that they can choose not to subscribe to such plans and still avail of the BTS.” Aliant provides no evidence of customer awareness of the BTS option. Without clear supporting evidence, it cannot be assumed that all customers are aware of the BTS option.
51. In para.14, Aliant notes that it lists time-of-day and other discounts applicable to BTS rates in the introductory pages of its telephone directories. However, this information is not linked to the BTS rates themselves. Moreover, Aliant’s recent posting of the Basic Toll Schedules on its company websites does not include reference to the applicable time-of-day or other discounts.
52. PIAC’s point is that the discounts applicable to BTS rates need to be referred to together with the BTS. Providing one without the other is likely to mislead customers. Hence, the BTS schedules themselves should include reference to all applicable discounts, as well as any surcharges. As well, directory references to time-of-day discounts should include a reference to the BTS itself (e.g., web address, and tel # where BTS rates and schedules can be obtained).
53. MTS’s argument seems to be based largely on the notion that the failures to disclose on its part were aberrations, the result of “human error”, and contrary to company policy.
54. In reply, PIAC notes once again that company policy is meaningless if not followed. The evidence is clear that the failures by MTS to disclose are not exceptions to the rule, but rather are the norm. While MTS’s track record with PIAC may be marginally better than that of other companies, instances of disclosure by CSRs were the exception rather than the norm (and occurred only after PIAC’s notification to the companies of the problem). In this respect, PIAC notes that it had still not received the MTS Basic Toll Schedule in response to its August 21st request, as of September 30, 2002 – over a month after requesting it.
55. In paras.12 and 16, MTS notes that, having imposed a minimum fee on its LD savings plan, it now advises customers who do not make toll calls, not to select a toll savings plan. This approach is commendable, in PIAC’s view, and should be followed by other companies who impose minimum fees on their toll savings plans.
56. However, it does not go far enough. Many more of MTS’s customers are low toll users who may still do better under BTS rates than under a toll plan. It is important that these customers are properly advised of their options, including BTS, so that they can make a fully informed decision as to their toll service plan.
57. In para.16, MTS also refers to the fact that it “periodically produces a long distance rate schedule” comparing rates under different toll plans, and makes this pamphlet available to customers. MTS argues that this is evidence that it “neither misleads customers nor misrepresents its toll options.”
58. Again, PIAC commends MTS for this useful initiative. However, MTS is mistaken in believing that production of such pamphlets in any way satisfies its obligation to provide full and pertinent information to consumers in communications with them regarding toll service options. Nor does it in any way disprove the clear evidence provided by PIAC of failure to disclose pertinent information by MTS representatives.
59. In para.11, MTS points out that “all [of its] customers always would have been better off selecting MTS’s Real Plus Extra toll saving plan, prior to February of 2002”, when MTS introduced a $1.25 monthly charge on its toll savings plans. This point is relevant to the question of damages only. If MTS’s assertion is true, it may be the case that any damages suffered by MTS customers as a result of MTS’s failure to disclose, prior to February 2002, are negligible.
60. SaskTel misunderstands PIAC’s arguments in a number of respects. This misunderstanding leads SaskTel to make extensive arguments that are off point.
61. In para.23, SaskTel argues “That a particular rate of the BTS on a day of the week , or time of the day is lower than what may be available via one of SaskTel’s toll plans is no demonstration that the BTS offer greater benefit overall to the customer.” PIAC agrees. This is not the point. The point made by PIAC is that where the BTS may offer greater benefit to the customer overall, the BTS option should be disclosed to them.
62. In para.24, SaskTel refers to “PIAC’s opinion that toll plans must provide a rate better than the BTS for each and every call….” This is not PIAC’s opinion. At no time has PIAC suggested that toll plans must provide a rate better than the BTS for each and every call. PIAC’s point is simply that the BTS rate option should be disclosed to customers when and where potentially relevant.
63. In paras.16 and 17, SaskTel completely misinterprets PIAC’s point about when SaskTel customers will be better off under the BTS than under a SaskTel toll plan. As stated by Mr. Nesbitt in his Affidavit #2,
“A SaskTel customer making only short-haul toll calls (cross-border if spending more than $5/mo.) before 8am any day of the week would be better off under BTS rates.”
64. Because it does not apply any monthly charge to its toll plans, and because of the nature of SaskTel’s toll plans, it is only in these unusual circumstances that a SaskTel customer is likely to be better off under BTS rates than under a toll plan. SaskTel is correct that this circumstance does not involve calls “made to the furthest destination in the province or country”. PIAC recognizes that in the case of SaskTel, very few customers are likely to be better off under the BTS, at least under SaskTel’s current toll plans.
65. Contrary to SaskTel’s understanding as set out in para.17, PIAC’s analysis is based on a customer’s overall toll bill, and in no way suggests that customers should “be charged for each and every call with the most favourable rate”.
66. PIAC acknowledges that any damages to customers as a result of SaskTel’s failure to disclose is likely to be very limited. This does not, however, absolve the company of responsibility to provide full and fair disclosure of its toll service options to consumers.
67. PIAC requested that the Commission order the Companies to take specific measures in order to comply with the order in Decision 97-19, and in order not to mislead customers with respect to their toll service options. The companies responded to these suggestions in various ways.
Providing the BTS upon request
68. Some companies acknowledge this obligation, and argue that they are complying. Others dispute PIAC’s contention that they are, or should be, required to provide the Basic Toll Schedule (as opposed to specific rates under the BTS) upon request. Clearly, the companies differ amongst themselves as to the reasonableness of this obligation, and are not all in compliance with it.
69. PIAC reiterates its request that the companies be ordered not only to refer customers, upon request, to a method by which they can access the company’s BTS, but also to provide (by postal mail where the individual does not have Internet access or email) the BTS to customers upon request. Without a corollary requirement to provide upon request, “public availability” of this information is of limited practical use to ordinary consumers.
Posting the BTS online
70. All five companies acknowledge the reasonableness of this suggestion, and have either done it or promise to do it shortly. See above, under para.82 for further reply on this point
Presenting the Basic Toll option alongside other toll options
71. Again, all five companies acknowledge the reasonableness of this suggestion, at least in respect of their website disclosures. However, they dispute the need to disclose the Basic Toll option alongside other toll options in other media of communication.
72. For the same reason that it is misleading to omit the basic toll service option in website disclosures of toll service options, it is misleading to omit this information in other disclosures of toll service options. Wherever and whenever it can reasonably be assumed that a company is listing all relevant toll service options, failure to do so is misleading. This principle does not vary according to the media used.
73. Nor does this principle require companies to list all toll options in every promotion of toll service, as some companies have incorrectly concluded. As long as the promotion does not purport or appear to list all relevant options, it need not do so.
Clearly noting applicable discounts when and where appropriate
74. The companies submit that they are noting discounts applicable to BTS rates, primarily via the introductory pages of their telephone directories. However, as noted above under paras.82 and 108-112, their directory disclosures of time-of-day discounts do not adequately reference the BT rates themselves, and their disclosure of BT Schedules often does not include reference to the applicable time-of-day discounts.
75. In order for customers to receive full and pertinent information on the BT service option, these two key elements of the BT option should be disclosed together. Otherwise, customers referring to the BTS may not be aware of the applicable discounts, and may thus assume that BTS rates are higher than they actually are. Customers referring to time-of-day discounts need to be able to match those discounts with applicable rates; hence, references to time-of-day discounts on their own should be accompanied by information on how to access the BTS, as well as point-to-point BTS rates.
Advise customers of the Basic Toll option when appropriate
76. All companies object to any such requirement being imposed on them by the CRTC. Some suggest that they should have no such obligation, ignoring the fact that it already exists in common law and in consumer protection statutes. Others argue that they are satisfying this obligation by way of their current practices.
77. PIAC submits that the evidence clearly proves that the Companies are not advising customers of the Basic Toll option when they should be doing so, and that there is no evidence, other than some companies’ promises, to suggest that this will change significantly.
78. In any case, the fact that some companies challenge the appropriateness of such an obligation is reason enough for the Commission to confirm it via regulation.
Rebates to adversely affected customers
79. All companies object to