- Telecom Decision
CRTC 98-8
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- Ottawa, 30 June 1998
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- LOCAL PAY TELEPHONE COMPETITION
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- I BACKGROUND
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- In York University - Provision of
Competitive Local Pay Telephone Service, Telecom Decision CRTC 95-20, 18 September 1995 the Commission expressed the
preliminary view that the resolution of certification issues for competitive local
exchange carriers (CLECs), in the context of the proceeding announced in Implementation
of Regulatory Framework - Local Interconnection and Network Component Unbundling,
Telecom Public Notice CRTC 95-36, 11 July
1995, would be sufficient to address concerns identified with respect to competition in
the local pay telephone market. The Commission also indicated its intention to initiate a
proceeding, following the establishment of the CLEC certification requirements, to
consider whether or not additional consumer safeguards were required as a condition of
competitive entry into this market.
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- On 1 May 1997, the Commission issued Local
Competition, Telecom Decision CRTC 97-8 (Decision
97-8), which established the framework for local exchange competition. The Commission
found that resellers of local exchange services would meet certain of the service
requirements that the Commission imposed on local exchange carriers (LECs) such as 9-1-1
and Message Relay Service (MRS), by virtue of the underlying LEC obligations.
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- On 8 July 1997, the
Commission issued Telecom Public Notice CRTC
97-26, Local Pay Telephone Competition, requesting comments on issues in
relation to pay telephone competition, including the following:
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- (i) Is it appropriate at
this time to permit competition in the local pay telephone market?
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- (ii) If so, what consumer
safeguards should be met by service providers?
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- (iii) What is the
appropriate mechanism to ensure the enforceability of the consumer safeguards identified
in (ii) above?
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- Comments and reply comments
were received from AT&T Canada Long Distance Services Company (AT&T Canada LDS),
The British Columbia Public Interest Advocacy Centre on behalf of the British Columbia Old
Age Pensioners Organization, Council of Senior Citizens Organizations of B.C.,
Federated Anti-Poverty Groups of B.C., Senior Citizens Association of B.C., West End
Seniors Network, End Legislated Poverty, B.C. Coalition for Information Access and
the Tenants Rights Action Coalition (collectively, "BCOAPO et al."),
Consumers Association of Canada (CAC), Consumers Association of Canada,
Alberta Branch (CACAlta), Call-Net Enterprises Inc. on behalf of itself and Sprint Canada
Inc. (Call-Net), Canadian Business Telecommunications Alliance (CBTA), Canadian Cable
Television Association (CCTA), Canada Payphone Corporation (CPC), the Director of
Investigation and Research (the Director), The Public Interest Advocacy Centre (PIAC),
Queens University (Queens), RNL Financial & Investment Advisory Services
(RNL), Stentor Resource Centre Inc. (Stentor) on behalf of BC TEL, Bell Canada (Bell),
Island Telecom Inc. (formerly known as The Island Telephone Company Limited), Maritime Tel
& Tel Limited, MTS Communications Inc. (formerly known as MTS Netcom Inc.), The New
Brunswick Telephone Company, Limited, NewTel Communications Inc., TELUS Communications
Inc. and TELUS Communications (Edmonton) Inc., The City of Calgary, and Vidéotron
Télécom Itée.
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- II GENERAL CONCLUSIONS
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- A. General
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- As noted above, the
Commission in Decision 97-8 established a framework for
local competition that balances the interests and needs of consumers, local competitive
entrants, toll competitors and incumbent telephone companies. Building on that framework,
the Commission finds that it is appropriate to allow competition in the local pay
telephone market.
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- Highlights of the
Commissions determinations in this proceeding are listed below. Detailed discussion
of the various issues and rationale are set out in Parts III, IV, and V of this Decision.
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- B. Competition
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- The local pay telephone
market is opened to competition effective the date of this Decision. Before a new entrant
may provide service, the following must be completed: (i) all new entrants must
register; (ii) where an unregulated provider uses an incumbent local exchange
carriers (ILEC) services for access, Commission approved pay telephone access
tariffs and a standard service agreement must be in place; and (iii) where an unregulated
service provider uses CLECs services for access, the CLEC must ensure that its
service contract includes the consumer safeguard requirements of this Decision.
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- The Commission intends to
hold a review within a three-year time frame to investigate the impact competition has had
on the local pay telephone market. This review will include, among other things, problem
areas that have been identified through complaints, including complaints with respect to
consumer safeguards and barriers to entry.
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- C. Consumer Safeguards
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- The Commission mandates
additional consumer safeguards to augment those established in Decision 97-8. These safeguards will serve to protect the Canadian
consumer and address the concerns which have historically militated against the opening of
the pay telephone service market to competition.
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- D. Enforcement Mechanism
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- The registration process
established for CLECs in Decision 97-8 is modified for
specific application to entry into the local pay telephone market. A new entrant must: (1)
attest in writing that it understands and will conform to the obligations and consumer
safeguards set out in this Decision; (2) provide the name of the carrier supplying the
access lines; (3) provide to the Commission serving area maps for information purposes and
make such serving area maps available upon request at its business offices; and, (4)
provide details as to how it proposes to deal with consumer complaints.
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- CLECs are directed to
include the consumer safeguards established in this Decision in all contracts negotiated
with competitive pay telephone service providers (CPTSPs) for the provision of pay
telephone service.
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- Stentor-member companies are
directed to file proposed pay telephone access tariffs within 45 days of this Decision.
The tariffs are to incorporate the mandated consumer safeguards established in this
Decision.
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- Non-compliance by the CPTSP
with the ILEC tariff or the CLEC contract as applicable will constitute reason for the
termination of the access service.
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- E. Regulatory Framework
For New Entrants
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- Pursuant to section 34 of
the Telecommunications Act (the Act), the Commission refrains from exercising its
powers and performing its duties pursuant to sections 25, 29 and 31 and subsections 27(1),
(5) and (6) of the Act, in relation to local pay telephone services provided by CLECs.
Sections 24, 25, 27, 29 and 31 do not apply to CLECs to the extent that they are
inconsistent with the determinations in this Decision.
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- F. Other
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- ILECs are directed to file
reports within 45 days of this Decision indicating where pay telephones were located as of
1 July 1998 in their respective serving territories. Thereafter, ILECs are directed to
file annual reports indicating locations where pay telephones were removed and the reasons
why.
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- ILECs are directed to file
information within 45 days of this Decision with respect to any long-term or exclusive
contracts entered into after 1 July 1997 which have a life expectancy of five years or
longer.
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- The Commission considers it
appropriate to establish a per-call compensation regime and that ILECs may file tariffs
for its implementation. The Commission also considers it appropriate that new entrants
negotiate rates with interexchange carriers.
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- III ISSUES
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- A. Should Competition be permitted in the
Local Pay Telephone Market?
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- All parties that commented
on this issue, with the exception of CAC, CACAlta, PIAC and Stentor, expressed the view
that competition should be introduced in the local pay telephone market.
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- CAC, CACAlta, PIAC and
Stentor supported competition in varying degrees provided adequate consumer safeguards
were put in place. CAC expressed considerable reservation that such a state could be
reached and urged the Commission to consider the United States experience carefully.
PIAC submitted evidence prepared by Dr. Mark Cooper indicating that since competition
became a major thrust of public policy in telecommunications in the United States, few
areas have been more troubling than the competitive provision of pay telephone service.
Dr. Cooper also recommended the provision of public interest pay telephones. These are pay
telephones which are deemed to be required in locations to further the public interest
(e.g. promote public health and safety), but which are not likely to be profitable. To
ensure that these telephones are deployed, subsidy mechanisms are necessary, typically
drawn from a universal service fund.
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- Stentor submitted that
Canadian consumers have been provided with and have come to expect high quality pay
telephone service. According to Stentor, pay telephones located in Canada provide
consumers with an array of services and consumer safeguards, including access to local and
toll services provided by the Stentor-member companies and other service providers,
alternate billing arrangements, access to emergency services, access to MRS, clearly
posted instructions, a process for repairs, and leading edge technology.
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- Stentor noted that the
details of the competitive pay telephone scene painted by Dr. Cooper would not be disputed
by knowledgeable industry observers. Given the awareness of the situation, Stentor stated
that the Commission must assess whether it is in the public interest to establish a
competitive environment for the provision of pay telephones. If so, a framework should be
put in place that embodies consumer safeguards, establishes appropriate enforcement
mechanisms, allows consumers to obtain the benefits of competition, promotes a healthy and
viable pay telephone industry, fosters investment and innovation in the pay telephone
industry, and ensures equality in regulatory treatment for all pay telephone service
providers.
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- In Decision 97-8, the Commission found that it was in the public
interest to exercise its powers under section 24 of the Act, in order to impose a variety
of terms and conditions (e.g. consumer safeguards) on CLECs. The Commission also indicated
that resellers providing local exchange services would meet certain of the service
requirements imposed on LECs, such as 9-1-1, MRS, and privacy protection, by virtue of the
underlying LECs obligations. The Commission notes that parties to this proceeding
generally supported the notion of competition in the local pay telephone market, provided
appropriate consumer safeguards were put in place.
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- The Commission notes that
parties to this proceeding generally agreed that safeguards, in addition to those
established in Decision 97-8, were required to deal with
specific issues associated with pay telephone service.
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- The Commission also notes
that CAC, CACAlta, PIAC and Stentor submitted that the introduction of pay telephone
competition in the United States was accompanied by customer confusion and complaints
caused by negative practices. Many of the problems encountered were related to alternate
operator service providers (AOSPs) and included such concerns as a lack of rate
information on the services provided and the inability of callers to select or use a
service provider of their choice. Customer complaints reflected concerns such as being
billed unreasonable rates, being billed for unanswered calls, restricted carrier access
and variances in billed amounts due to "call splashing". Call splashing occurs
when an AOSP transfers a call to a particular carrier at the callers request. In
such cases, for billing purposes, the call is transferred or deemed transferred to an
interexchange carrier in the city where the AOSPs switching centre is located. If
the location of the AOSP switching centre differs from that of the caller, the call may be
billed from the location of the centre, rather than from the location where the call
originated. As a result, the bill may confuse the customer and be higher than expected.
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- The Commission considers
that the uniform consumer safeguards adopted by the Commission in Consumer Safeguards
for Operator Services, Telecom Order CRTC
95-316, 15 March 1995, (Telecom Order 95-316) go a long way towards resolving many of
the price gouging problems involving AOSPs encountered in the United States market.
(A detailed description of these safeguards is outlined in Part III B (vi)
"Provisioning of Operator Services" of this Decision).
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- The Commission considers
that the establishment of a regime that incorporates the safeguards established in
Decision 97-8, those set out in Part III B of this
Decision, and the enforcement mechanism in Part III C of this Decision is
sufficient to protect the Canadian consumer and address the concerns which have
historically militated against the opening of the pay telephone service market to
competition.
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- In the Commissions
view, introducing competition in the local pay telephone market will stimulate service
innovation, foster a viable domestic industry and increase total market revenues. It is
therefore consistent with the Commissions stated objective in Review of
Regulatory Framework, Telecom Decision CRTC 94-19,
16 September 1994 that increased competition in the local telecommunications market is in
the public interest and that restrictions on entry into the market should be removed where
appropriate. Furthermore, the Commission considers that the rules for competition in the
local pay telephone market established in this Decision conform to the Commissions
objectives of placing greater reliance on market forces and ensuring that regulation,
where required, is effective. Accordingly, the Commission directs that the local pay
telephone market be opened to competition effective the date of this Decision. Before a
new entrant may provide service, the following must be completed: (i) all new entrants
must register; (ii) where an unregulated provider uses an ILECs services for access,
Commission approved pay telephone access tariffs and a standard service agreement must be
in place; and (iii) where an unregulated service provider uses CLECs services for
access, the CLEC must ensure that its service contract includes the consumer safeguard
requirements of this Decision.
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- B. Consumer Safeguards
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- Many of the safeguards
established in Decision 97-8, such as access to 9-1-1 and
provision of MRS were unanimously supported and are being mandated here. As noted above,
parties, in general, supported the view that additional safeguards are required to ensure
that consumers are protected from potential abuses and competition is permitted to roll
out properly. The following areas were contentious and are examined in more detail: rate
regulation; notification of long distance charges; location provider commissions; per-call
compensation regime; provisioning of various types of calls (local, long distance,
incoming and outgoing) and means of payment (use of coin and/or card); provisioning of
operator services; provisioning of operating instructions; public interest pay telephones;
information campaign; and long-term and exclusive contracts. Each of these concerns is
addressed below.
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- i) Rate Regulation
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- PIAC, CAC and CACAlta argued
that the Commission should impose full rate regulation on CPTSPs and that a rate ceiling
should be established for local calls at current rates.
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- AT&T Canada LDS, CPC,
the Director and Queens submitted that, similar to the treatment afforded CLECs in
Decision 97-8, retail rates for CPTSPs should not be
regulated. Furthermore, the Director argued that the Commission should forbear from
regulation of the rates charged by the ILECs, pursuant to the provisions of section 34 of
the Act, if it is satisfied that there is, or is likely to be, sufficient competition to
protect the interests of users.
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- The Director noted that
traditional wireline services as well as wireless cellular and personal communications
services (PCS) services were likely to provide an increasing constraint on the pricing of
pay telephone services and that, given factors such as location and volume of calls, it is
highly likely that there is a wide range of costs associated with the provision of pay
telephone services. The Director considered that capping rates at $0.25 or some other
pre-determined level could have the effect of eliminating price competition and inhibiting
the installation of competitive pay telephones in higher cost areas. Moreover, to the
extent that rate regulation has led to subsidies for the provision of pay telephone
service, such subsidies will act as a barrier to entry for competitors.
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- According to Stentor, in a
competitive pay telephone market, the terms and rates for pay telephone services should be
determined by market forces, thus generating conditions which will support service
availability, quality, innovation and competitive prices. Stentor submitted that the
principle of establishing a level playing field should lead the Commission to conclude
that the regulation of pay telephone rates will not be necessary once competition is
established to some degree.
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- The Commission is of the
view that ILECs will remain dominant in the local pay telephone market for the foreseeable
future and accordingly, until such time as sustainable competition is in place,
forbearance from the regulation of ILEC-provided pay telephone service is inappropriate.
However, the Commission considers that, in a competitive pay telephone market, new
entrants will not have sufficient market power to impose unreasonable rates on callers.
Accordingly, market forces should be sufficient to discipline the pay telephone rates of
these providers. Forbearance is discussed further in Part IV of this Decision.
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- ii) Notification of Long
Distance Charges
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- PIAC and CAC submitted that
a mechanism to inform the customer of the long distance rates for all calls should be
provided on-line (e.g. the rate for the first three minutes or the per-minute rate for
that particular carrier) after the number has been dialled, but prior to the call being
completed, thus giving the caller the opportunity to terminate the call at no charge.
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- CPC indicated that should a
caller choose an alternate interexchange carrier (IXC), it may not be possible for the
CPTSP to identify the charges which would apply, as only the IXC selected by the caller
would have this information.
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- According to Stentor, the
rates for alternately billed calls are determined by the network service provider and are
beyond the control of the pay telephone service provider (PTSP). Additionally, long
distance rates for most service providers are unregulated and, therefore, there is no
readily available process through which PTSPs could learn of rate changes, making it a
challenge to ensure that accurate rate information is provided. Moreover, Stentor noted
that the costs incurred to change the rate information at each pay telephone at the time
of any service providers rate change would be onerous. Stentor submitted that should
the CPTSP or location provider impose an end-user charge in addition to that of the
network service provider, a mechanism should be provided so that consumers are aware of
such charges prior to placing calls.
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- The Commission notes that
currently ILECs are not in a position to provide customers who use alternate interexchange
service providers via swipe cards, 1-800/888 or 10XXX dialling with the long distance
charges incurred on those networks. Furthermore, the long distance rates charged by such
service providers are unregulated. Given these circumstances, CPTSPs would not be in a
position to provide the long distance rates for all alternate interexchange service
providers. In addition, the Commission considers that callers who select alternate
interexchange service providers, other than the default service provider, can be presumed
to be aware of the rates charged by that provider, or if not, are likely to have been
informed by the selected service provider how to obtain this information. In the
Commissions view it would not be feasible or practical to direct CPTSPs to provide
the long distance rates for all service providers, given the number of resellers. However,
in order to ensure that consumers are aware of the default service provider selected for
the pay telephone in question, the Commission directs CPTSPs to display prominently the
name of the default long distance service provider at each pay telephone.
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- iii) Commissions Charged
By Location Providers
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- CACAlta submitted that
splitting of revenues with location providers such as the owner of the establishment,
placement agent, property manager or any other party who might gain benefit from the
establishment of a pay telephone location should not be permitted. CACAlta considered that
these third parties already benefit due to increased traffic to the location, enhanced
property values or other similar reasons. CACAlta also considered that revenue splitting
would cause the CPTSP to increase rates.
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- Stentor noted that location
providers supply essential floor space and appropriate lighting and, in some cases, assume
additional responsibilities such as cleaning the telephone and enclosure, providing
electricity, reporting service problems and assisting customers with change or dialling
problems. According to Stentor, a discontinuation of the practice of revenue splitting
with location providers would lead to a reduction in the availability and quality of pay
telephone service in Canada and, therefore, CACAltas arguments in this regard should
be rejected.
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- In Canada, typically,
location providers are compensated through negotiated settlements with the ILECs based on
earned eligible revenues per public pay telephone. The Commission is of the view that it
would not be possible or appropriate to eliminate revenue splitting between the PTSPs and
third parties and that, in fact, to do so could result in a deterioration of pay telephone
service.
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- The Commission notes that
location surcharges to be paid by pay telephone users have not been part of the history of
the Canadian pay telephone industry and are not a part of the historic norm in a monopoly
environment. The Commission also notes PIACs concern that, in the United States,
CPTSPs are not adhering to a requirement to post warnings with respect to location
surcharges. The Commission considers that the Canadian consumers expectation about
the cost of a call is based on experiences with long distance calls billed from home and
that without warnings about location surcharges, consumers will, at least initially, not
be aware of them.
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- Accordingly, the Commission
directs that any surcharges not included in the cost of a call be prominently displayed at
each pay telephone location.
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- iv) Per-Call Compensation
Regime
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- Stentor submitted that PTSPs
should be compensated for every call that accesses an IXCs network from a local pay
telephone. However, Stentor considered that this charge should ideally be collected from
the IXC rather than directly from the initiator of the call. This would permit toll-free
and casual calling to continue and reflect the fact that the network service provider is
the beneficiary of the provision of this access to their network. Stentor also concurred
with CPCs view that, at the present time, such a charge should be at least
equivalent to the value of a local call. According to Stentor, even if the Commission
determined that competition is not appropriate at this time, the implementation of a
per-call compensation regime for access from pay telephones is required. Stentor indicated
that its members were studying alternative approaches for implementing a per-call
compensation regime for the use of their pay telephones, with the intention of proposing
tariffs in the fourth quarter of 1997.
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- CPC submitted that a
suitable mechanism to compensate PTSPs would be to charge the caller the price of a local
call in order to access an IXC, although a lesser charge (or no charge at all) could be
levied for calls to IXCs who have made compensation arrangements with the PTSP. CPC noted
that a similar approach had been adopted by the Federal Communications Commission (FCC)
and could serve as an appropriate interim or final arrangement in Canada.
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- AT&T Canada LDS
considered that rates charged for services or forms of access from CPTSPs (e.g., card
swipe access or location provider compensation), should be limited to no more than the
rates charged by ILECs where the ILECs rates are subject to Commission approval.
Moreover, AT&T Canada LDS and Call-Net indicated that until Stentor offered details as
to the type of access charge and the business case underlying that fee, they were not in a
position to comment meaningfully on the justification of such a charge.
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- Queens submitted that
CPTSPs should be compensated for calls and should negotiate the appropriate charge. In its
view, if parties are unable to agree on the amount, they should have recourse to some form
of alternative dispute resolution procedure.
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- In Stentors view,
services such as swipe card access, which are provided on a competitive basis or could be
self-provided, do not meet the definition of an essential service. Furthermore, in a
competitive environment, rates for such services, regardless of the specific service
provider, should be subject only to market forces. Stentor noted that the economic
structures associated with different location characteristics vary substantially and,
therefore, inflexible price structures or terms and conditions associated with location
access would unduly constrain service availability, and quality, and stifle innovation.
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- The Commission notes that
the Canadian pay telephone industry has accommodated access to alternate toll service
providers, delivered card swipe access service and provided access to toll-free services
without additional direct charges to the pay telephone user. In Telecom Order CRTC 98-281, dated 18 March 1998, the Commission
found it appropriate to establish an ongoing usage charge of $0.25 as a proxy for an
access charge to provide for a contribution to the costs of the pay telephone operations.
However, this rate will apply solely to calls using the three slots being offered by the
ILECs to long distance competitors.
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- The Commission also notes
that Stentor, CPC, the Director and Queens supported the requirement for a per-call
compensation regime. In principle, the Commission considers such a regime to be
appropriate but is of the view that there is insufficient evidence at the present time to
assess the appropriate level of this compensation. The Commission notes that Stentor, in
reply comments, stated that its members were in the process of studying alternative
approaches for implementing a per-call compensation regime, with the intention of filing
proposed tariffs in the fourth quarter of 1997. As of this date, no tariffs have been
filed. The Commission considers it appropriate to establish a per-call compensation regime
and ILECs may file tariffs for its implementation. With respect to unregulated PTSPs, the
Commission considers it appropriate that they negotiate rates with IXCs.
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- v) Provisioning of
Various Types of Calls and Means of Payment
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- PIAC noted that several
parties wished to provide a level of pay telephone service which is substantially less
than currently provided. PIAC considered that consumer expectations would likely be
frustrated by partial service and noted that while many participants indicated that
competition would promote better service at lower prices, the first thing they wished to
do was raise prices and cut back on services.
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- With the exception of
Queens, parties considered that CPTSPs should provide for both local and long
distance calls. According to Queens, all pay telephones should be technically
configured to provide both services; however, CPTSPs should not be mandated to provide
both as a condition of service.
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- Stentor submitted that any
CPTSPs telephones that provide for long distance calls should be required to provide
equal access to all networks of alternate providers of long distance services (APLDS).
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- With the exception of CBTA,
Queens and Stentor, parties to the proceeding were of the view that both coin and
card payment options should be mandated.
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- CBTA submitted that coin
access should be mandatory and card access optional, the assumption being that in order to
compete, PTSPs will provide for card access. With respect to CBTAs proposal,
Queens argued that the service provider should have the ability to determine which
means of payment best satisfies its customers needs and its own business operations,
whether that be through the use of coins, credit cards, debit cards, smart cards, or some
combination of these or other alternatives. Queens noted that the operation of coin
pay telephones involves increased operating costs, e.g. collection of coins, and greatly
increased risks of vandalism and theft, as compared to card only pay telephones.
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- Stentor indicated that its
installed base of pay telephones includes both coin-operated sets and pay telephones which
do not accept coins. According to Stentor, mandating the acceptance of cash payment at all
pay telephones could actually stifle innovation in the technology and services available
to consumers in Canada.
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- The Commission is of the
view that opening the local pay telephone market to competition and then mandating CPTSPs
to provide the identical services to those currently in place is at odds with the concept
of the benefits to be derived from competition. The Commission finds that, subject to the
requirements established in this Decision, new entrants should be allowed to determine the
nature and scope of the services they wish to provide. However, if long distance calling
is provided for, the CPTSP must allow access to all APLDS networks accessed by the
CPTSPs underlying LEC.
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- In addition, it will be left
to the CPTSPs discretion as to what types of payment they will accept. However, it
is imperative that they ensure coinage is returned for incomplete calls, such as busy
signals or no answer (if coins are accepted) or similarly, if a card is used, that
alternately billed charges do not apply if the call is not connected to the called party.
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- vi) Provisioning of
Operator Services
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- Parties varied in opinion as
to whether or not provision of directories and operator services, other than 9-1-1 and
MRS, should be mandated. AT&T Canada LDS argued that if operator services are
provided, it should be in compliance with the industry guidelines noted in paragraph 284
of Decision 97-8. BCOAPO et al. argued that operator
services similar to those provided by ILECs should be mandated, including 9-1-1, MRS,
directory assistance, collect calling, line verification, and coin return for incomplete
calls. CAC expressed the view that local and long distance directory assistance should be
provided. CBTA argued that free access to the ILECs operator assistance, or that of
any CLECs as such services are developed, should be provided.
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- According to CPC, operator
services should be limited to 9-1-1, MRS, local and long distance directory assistance.
Queens submitted that all pay telephones should provide free access to directory
assistance, operator assistance, 1-800 services, 9-1-1 and MRS. In RNLs view, 411
and 0+ calling should be provided.
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- Stentor considered that
access to operator services and directory assistance could be mandated as an industry
requirement or left to market forces. In addition, Stentor submitted that the provision of
directories need not be mandated, as market forces could reasonably be expected to ensure
that consumer needs in that regard were met by CPTSPs.
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- In Telecom Order 95-316, the Commission mandated that: (1)
operators identify themselves as representing the company to callers or to any party
accepting charges for a collect or billed-to-third party call, prior to charges being
incurred; (2) operators provide the customer with sufficient time to terminate the call at
no charge prior to the call being connected; (3) operators provide, upon customer request,
(a) rates or charges for a call, (b) alternative call billing methods available to
customers, and (c) complaint procedures available to dissatisfied customers; (4) the
company post information in close proximity to each publicly accessed telephone serviced,
identifying itself and providing rate information; and (5) in cases where the company
provides operator services on behalf of another party, it withhold payment of any
compensation to that party if 10-XXX or 1-800 access is blocked to competitive carriers.
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- In addition, the Commission
directed Unitel Communications Inc. (now AT&T Canada LDS) in that Order to implement
standards to ensure that (a) emergency calls are connected to the appropriate emergency
service in the reported location, if known, and, if not known, in the originating location
of the calls, and (b) where there is no 9-1-1 service available, operators handle
emergency calls in a manner similar to that expected of the incumbent local telephone
company operators; furthermore AT&T Canada LDS was directed to incorporate its
complaints and access procedures into its operator services tariffs.
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- The Commission directed the
ILECS, in Telecom Order 95-316, to file operator services tariffs that (a) incorporate the
consumer safeguards currently set out in various locations in their tariffs and white page
directories, and (b) state that contracts are required pursuant to the ILECs
operator services tariffs. Furthermore, the ILECs were directed to negotiate contracts
with operator services providers for services or facilities used in the provision of
operator services. These contracts were to (a) include provisions similar to Article
11 of the ILECs Terms of Service, (b) specify that, when cases of abuse arise, the
Commission may direct regulated carriers to discontinue the provision of access and
related services to operator services providers, and (c) reference the fact that
negotiated operator services contracts were required pursuant to the ILECs operator
services tariffs.
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- In Decision 97-8, the Commission declined to mandate the provision of,
or terms and conditions for, operator services provided by CLECs, with the exception of
access to emergency services through 9-1-1 or, failing that, through an operator and MRS.
With regard to 9-1-1, all service providers were directed to ensure, to the extent
technically feasible, that the appropriate end-user information is provided to the
Automatic Location Identification database to the same extent as that provided by the
ILECs. Furthermore, the Commission declined to mandate the provision of directory
assistance and directories as it considered that, by virtue of CLEC non-dominance, market
forces would be sufficient to discipline the provision of these services.
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- The Commission notes that
CPC has indicated its intention to initiate service using paper directories. CPC plans,
over time, to develop new electronic directory services that will not be subject to the
same vandalism problems experienced with paper directories.
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- The Commission is of the
view that the same rationale used in Decision 97-8 with
respect to CLECs can be adopted in this proceeding. Accordingly, CPTSPs are not mandated
to provide directories, access to directory assistance or operator services, with the
exception of 9-1-1 or operator assisted emergency service access and MRS. However, should
a CPTSP decide to offer its own operator services or use the operator services of a third
party, such services must comply with the consumer safeguards established in Telecom Order
95-316.
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- In Decision 97-8, the Commission directed the CRTC Interconnection
Steering Committee (CISC) to establish guidelines, processes and procedures for the
provision of Operator Services within a multiple service provider environment. In its
Consensus Report to the Commission (DOTF009 - Operator Processes, dated 26 August
1997), the Operator Services/Directory Listings Sub-Working Group of CISC indicated that
further discussions would be deferred until such time as an AOSP existed. At that time the
industry would decide whether to re-open discussions using the work completed to that date
as a starting point.
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- The Commission directs that
any operator services offered by CPTSPs be provided in compliance with procedures that
evolve from CISC.
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- vii) Provisioning of
Operating Instructions
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- Parties submitted that an
approach for the provision of operating information similar to that established in
Decision 97-8 should be adopted. In Decision 97-8, CLECs
were directed to provide two distinct categories of information. The first category
contains consumer information, which must be made available upon request, including rate
information, and services available. The second category contains information that must be
made available before the purchase decision is made, including the company name, address
and a toll-free telephone number where information can be obtained and complaints
addressed.
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- Stentor was of the view that
the provision of instructions on accessing APLDS should not be mandated but should
continue to be the responsibility of each APLDS. With respect to the level of detail for
operating instructions to be posted on or near a pay telephone, Stentor considered that it
would be in the CPTSPs best interest to ensure that their pay telephones are easy
for customers to use.
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- The Commission is concerned
that in a competitive environment where rates for all parties are not regulated, it is
essential that consumers have full, comprehensive and comprehensible information to make
informed choices.
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- In order to achieve this
goal, the Commission directs that the following information be prominently displayed at
each pay telephone location provided by CPTSPs: (a) rates of local calls; (b) charges for
operator services (if provisioned); (c) the name of the default long distance provider, if
applicable; (d) any surcharge, mark-up or location charges not included in the price of
the call; and, (e) the CPTSPs name, address and toll free number where information
can be obtained and complaints addressed. In addition, CPTSPs are directed to place the
Commissions address and toll-free number (1-877-249-CRTC) on all pay telephones, in
order to ensure that, when complaints are not satisfactorily addressed, consumers have
direct recourse to the Commission. CPTSPs are also directed, as part of the registration
process, to disclose the method by which complaints concerning rates, charges or
collection practices will be resolved.
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- With respect to providing information on the
operation of special features such as Email, Internet browsing and on-line services, the
Commission considers that these services could conceivably be delineating factors and an
incentive for the public to opt to use the equipment. Accordingly, given that it would be
in the CPTSPs best interest to ensure that clear operating instructions are
provided, the Commission will not mandate that such instructions be provided.
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- However, should there be limitations on the
functionality of the pay telephone equipment, such as an inability to make long distance
calls, the Commission directs the CPTSPs to post this information either on, or in close
proximity to, the pay telephone.
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- With respect to providing information on how
to access APLDS, the Commission considers that, similar to when the long distance market
was opened to competition, APLDS will ensure that their customers know how to access their
networks from pay telephones. Accordingly, the Commission does not consider it necessary
to mandate this requirement.
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- viii) Public Interest Pay Telephones
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- As already noted, PIAC
submitted evidence prepared by Dr. Mark Cooper recommending the provision of public
interest pay telephones. Public interest pay telephones are defined by the FCC as pay
telephones which (a) fulfil a public policy objective in health, safety, or public
welfare; (b) are not provided for a location provider with an existing contract for the
provision of a pay telephone, and (c) would not otherwise exist as a result of the
operation of the competitive marketplace.
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- BCOAPO et al. argued that a
regulatory body should be created, whose costs would be borne by the CPTSP through a fee
of $0.25 per month per telephone, to handle issues and concerns raised by consumers,
location providers and competitors, in respect of these telephones.
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- AT&T Canada LDS
submitted that subsidized public interest pay telephones have the potential to be as
contentious as existing mechanisms to subsidize residential basic local service. Such a
regime would require a clear definition to establish which pay telephones would be
eligible, quantifying the appropriate subsidy, possibly at a very disaggregated level
depending on the location, and establishing a mechanism to recover and distribute the
subsidy.
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- CPC indicated that in Local
Service Pricing Options, Telecom Decision CRTC 96-10,
15 November 1996 (Decision 96-10), the Commission noted the high penetration rate of
telephone service in Canada and found that affordability was not presently an issue. CPC
noted that PIAC had relied for its submissions solely on information relating to
activities in the United States and that the FCC had acknowledged in CC Docket No. 96-128,
Implementation of Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, that the question of whether there was a need for public
interest pay telephones varied from region to region and it was, therefore, more
appropriate for the individual states to regulate this area based on local conditions.
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- CPC argued that it would be
inappropriate to import a regulatory scheme from California or any other state which would
almost certainly be unrelated to Canadian realities. In this regard, CPC submitted that
Decision 96-10 reflected Canadian realities and a comparable approach should be adopted
with respect to public interest pay telephones.
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- Queens objected to the
imposition of an obligation to serve on CPTSPs and submitted that such an obligation does
not currently exist. Queens considers that it would be ironic if the introduction of
competition in the provision of pay telephone service was accompanied by an obligation to
serve which is more typically associated with the provision of a service on a monopoly
basis.
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- Stentor argued that
requiring a certain number of pay telephones to be maintained and funded in the interest
of serving health, safety and welfare goals had never been imposed in the past, and would,
in effect, be an attempt to mandate certain forms of obligation to serve.
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- Stentor stated that pay
telephones are installed today primarily to meet the needs of the travelling public and
people away from their primary network access. Unlike the situation in the United States,
these pay telephones are not typically installed in areas with low levels of residential
telephone penetration in order to provide an extension to basic local service.
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- According to Stentor,
communication options available to the travelling public have increased over the last
several years and, as a result, the number of non-compensatory pay telephones has
decreased. In Stentors view, the approaches suggested by BCOAPO et al. and PIAC are
entirely inappropriate in todays environment.
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- The Commission has in the
past encouraged ILECs to provide pay telephone service in locations where costs exceed
revenues. However, this is not mandated, as illustrated in Item 250 of Bells General
Tariff which states that the company furnishes public telephone service at its discretion,
primarily to make outgoing service available to the general public and determines the
location of the service.
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- In the Commissions
view, there is no compelling evidence on the record to indicate that the introduction of
competition in the pay telephone market warrants placing an obligation to serve, which
currently does not exist, on CPTSPs or incumbent PTSPs at this time. Furthermore,
establishing such a regime could prove to be contentious and a heavy administrative
burden. The FCC acknowledged this concern when it indicated that any effort by it to
implement a national program for public interest pay telephones would be beyond its
current resource capabilities.
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- The Commission considers
that the vast majority of people who use pay telephones do so as a matter of convenience
or emergency, not as a substitute for basic telephone service. The Canadian
telecommunications policy, as set out in the Act, requires the Commission to ensure that
reliable and affordable telecommunications services of high quality be accessible to all
Canadians in both urban and rural areas throughout Canada. This generally refers to the
requirement that as many as possible are able to connect to the network via good quality
basic access service. The Act also requires the Commission to foster increased reliance on
market forces for the provision of telecommunications services and to ensure that
regulation, where required, is efficient and effective.
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- The Commission agrees with the majority of
parties in this proceeding that circumstances, at present, do not indicate a need for the
establishment of public interest pay telephones. However, it is the Commissions
intention to hold a review within a three-year time frame to investigate the impact
competition has had on the pay telephone market. This review will include, among other
things, problem areas that have been identified through complaints, including complaints
with respect to consumer safeguards and barriers to entry. In addition, the Commission
will, as part of the review, assess the requirement for public interest pay telephones.
ILECs are directed to file reports within 45 days of this Decision indicating where pay
telephones were located as of 1 July 1998 in their respective serving territories.
Thereafter, ILECs are directed to file annual reports indicating locations from which pay
telephones have been removed and the reasons why. Should the outcome of the review
indicate that significant negative changes have occurred, the Commission would consider
establishing a regime for public interest pay telephones.
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- ix) Information Campaign
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- PIAC argued that there
should be a CRTC-directed information program, paid for by the CPTSPs, that would begin to
educate Canadian telephone customers against potential abuses. This information program
would be proactive and go beyond the mechanisms, i.e., billing inserts, adopted by the
Commission with respect to long distance competition.
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- CPC opposed PIACs
suggested campaign noting the expense and the implicit and unjustified message that
competitive pay telephones are unreliable and likely to cause consumers problems.
According to CPC, this type of hidden message would undermine the evolution of competition
from the outset.
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- In Stentors view,
mandating an information campaign focusing on potential consumer abuses, as proposed by
PIAC, could well have the effect of prejudicing Canadian consumers against all new CPTSPs,
which would retard the establishment of a competitive marketplace and the attendant
benefits that Canadians may derive from it. Stentor noted that Canadians are well educated
concerning the use of pay telephones and, indeed, many have first-hand experience with the
complexities associated with the use of competitive pay telephones in the United States.
In addition, Stentor considered that normal market forces could be relied upon to ensure
that necessary and sufficient information is provided to consumers.
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- The Commission considers
that the concept of competition generally in the telecommunications industry is not new to
Canadians. Further, the Commission is of the view that, imposing the requirement on all
CPTSPs to post rates, etc. at all pay telephone locations should provide sufficient
information to consumers. The Commission is not persuaded that the expected benefits of
conducting an information campaign would materialize and, in fact, believes that it could
stifle the introduction of competition. The Commission, therefore, finds that an
information campaign is not required.
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- x) Long-term and
Exclusive Contracts
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- The Director submitted that
the widespread existence of long-term and exclusive contracts entered into by ILECs prior
to the beginning of competitive entry could pose a competition policy concern if it
prevented entry in high volume locations such as airports, shopping malls, hospitals,
universities and hotels.
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- CPC shared the
Directors concern and submitted that it would be ironic if regulatory concerns about
the anti-competitive aspects of these types of contracts actually served to delay the
introduction of competition.
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- RNL submitted that Stentor
should reveal the percentage of key, high volume locations that are presently under
contract and the percentage of total revenue currently protected under these contracts, as
well as any other contracts expiring beyond the end of 1997 in order to assist in
determining whether barriers to entry exist.
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- Stentor submitted that,
although some exclusive contracts have been entered into by certain ILECs with location
providers, such contracts do not constitute a significant barrier to entry into the pay
telephone business. Furthermore, the percentage of pay telephones covered under such
arrangements is small and would not prevent an entrant from acquiring presence in key,
high volume locations.
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- The Commission notes that
one of the key success factors in operating a pay telephone service is the securing of
appropriate sites. From a commercial perspective, these sites are ideally located in high
pedestrian traffic areas. The use of long-term and/or exclusive contracts is one way to
secure these sites for a pay telephone provider and thereby lower its ongoing costs. In
anticipation of competition, the ILECs have had an extra incentive to secure attractive
pay telephone sites on both privately and publicly owned lands. Such recent arrangements
would be anti-competitive if they had the effect of erecting barriers to prevent new
entrants from entering the market.
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- The Commission is of the
view, however, that long-term contracts between PTSPs and owners/managers of airports or
hotels, for example, are not counter to the public interest in the long term as such
contracts lower the costs to both parties of providing the service or underlying services.
If exclusive contracts give rise to inappropriately high prices, one can be confident that
the users will put pressure on the airport or hotel management to get the price lowered
either directly or through the use of alternatives such as portable wireless handsets.
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- Further, as far as
competition itself is concerned, the Commission expects that the airport or hotel
management will wish to engage in cost-efficient business practices that stimulate
revenues by serving its customers and engendering goodwill. Such managers, therefore, can
be expected to contract with the CPTSP or CPTSPs that can provide the best service at
reasonable prices. Such CPTSPs will have to be at once innovative and efficient.
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- The Commission notes that,
based on the above, exclusive contracts may be benign or disadvantageous. Those most
likely to be disadvantageous to entry are the ones that have been concluded before entry
is permitted. In order to identify whether a problem exists, the Commission directs the
ILECs to file information with respect to any long-term or exclusive contracts entered
into after 1 July 1997 which have a life expectancy of five years or longer, within 45
days of this Decision.
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- xi) Mandated Safeguards
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- The following safeguards are
mandated as a condition of entering the local pay telephone market:
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- (a) Provision of coinless
and cardless access to 9-1-1, or access to emergency call routing by an operator accessed
by dialling 0 at a pay telephone. Where required by civic authorities, provision of a list
of detailed pay telephone locations to the enhanced 9-1-1 administrator;
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- (b) Provision of MRS;
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- (c) Provision of 6-1-1 or
other number for reporting telephone trouble;
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- (d) Provision of
non-discriminatory access to the networks of all APLDS connected to the underlying LEC
network, if long distance calling is permitted;
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- (e) Posting on or near the
pay telephone the company name, address and toll free number where information can be
obtained and complaints addressed;
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- (f) Posting the
Commissions address and toll-free number (1-877-249-CRTC) on all pay telephone
equipment, in order to ensure that consumers have direct recourse to facilitate resolution
of unresolved complaints;
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- (g) Operator services, if
provided, (other than emergency services access and MRS) that are in compliance with
Telecom Order 95-316 as well as with procedures that evolve from the CISC;
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- (h) Prominent display, at
each pay telephone location, of the following information: rates of local calls, the name
of the default long distance provider; and any surcharges not included in the price of the
call;
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- (i) Provision for coin
return for uncompleted calls, such as busy signals or no answer if coin access is
applicable, and similarly if a card is used, alternately billed charges must not apply if
the call is not connected to the called party;
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- (j) Standard arrangement of
letters as well as numbers provided on the dial in order to permit callers to reach their
provider of choice through the use of commonly used vanity access sequences;
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- (k) All pay telephones are
to meet existing and future CSA and the Terminal Attachment Program Advisory Committee
standards to prevent network harm;
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- (l) All pay telephones are
to be accessible to the physically disabled, be hearing aid compatible and meet the
standards established in Telecom Order CRTC 98-626 for provisioning of service to visually
impaired consumers; and
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- (m) Adherence to all
applicable Commission rules concerning protection of customer privacy.
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- C. Mechanism to Ensure
Enforceability of Safeguards
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- With respect to the
appropriate mechanism to ensure enforceability of safeguards, CAC, CCTA, PIAC,
Queens and Stentor supported the system established for CLECs in Decision 97-8. CPC submitted that the appropriate mechanism to ensure
enforceability of the safeguards would be to embody them in the relevant LEC tariffs. In a
similar vein, safeguards could be imposed on CPTSPs by incorporating them in the pay
telephone access tariff offered by LECs to CPTSPs. Should a complaint be lodged, the
Commission would investigate the matter and if the CPTSP had failed to comply with one or
more of the safeguards, it could be directed to demonstrate that it had brought itself
into compliance. Failing this, the Commission could direct the LEC supplying the access
line to terminate the service. According to CPC, this tariff mechanism is familiar, fair
and effective and has been used by the Commission to enforce regulatory restrictions
against end-users, resellers and other unregulated service providers.
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- CPC indicated that when it
conducted its technical trial in the Vancouver area, it utilized a regular business line
with answer supervision and BC TELs directory assistance - all of which were
provided on a General Tariff basis. According to CPC, given the minimal technical
requirements necessary to begin offering competitive pay telephone service, the Commission
could direct the companies to adopt a tariff along the lines of the model tariff it
provided which included provision for interconnection, resale, and terms and conditions of
service.
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- In CPCs view the
tariff could, in time, evolve to address any technical requirements or related matters
that might arise. CPC urged the Commission to approve an initial pay telephone access
tariff as part of its decision to allow the immediate commencement of competition and to
direct the Stentor-member companies to file tariffs implementing the Commissions
decision within 30 days of the date of the decision.
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- The Director supported the
registration/tariff approach envisaged by CPC, but agreed with Stentor that a requirement
for the LECs to essentially police their competitors would place an inappropriate
regulatory burden on the LECs. According to the Director, any certification process should
be subject to review within a fixed period of time, at which time, the process could be
modified or terminated.
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- Queens submitted that
ILECs should be required to submit pay telephone tariffs incorporating appropriate
safeguards. With respect to CLECs, Queens noted that safeguards could be imposed,
pursuant to section 24 of the Act, in all CLEC contracts with CPTSPs for the provision of
services. In both scenarios, non-compliance by the CPTSP could constitute cause for
termination of the service.
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- Stentor was of the view that
the Commission should enforce safeguards directly. Complaints regarding non-compliance
should be addressed to the Commission for review with the possibility of certification
being withdrawn. Furthermore, the Commission would have the power to effect this
termination through a disconnection order served on the provider of the underlying access
lines.
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- Stentor noted that
enforcement of these safeguards could be compromised in the instances where a CPTSP
obtains access facilities from a reseller and, accordingly, the Commission might consider
prohibiting the resale of underlying facilities for purposes of providing pay telephone
service. In addition, the CPTSP should inform the Commission as to which carrier is
providing the underlying facilities.
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- Stentor concurred with
parties that recommended the use of both a certification and complaints process. Stentor
noted that in order for a complaint process to be effective, it must be simple for
consumers to invoke and it must produce timely results. Stentor also noted that, based on
the volume of complaints to the FCC and state Public Utilities Commissions, a more robust
complaint process (e.g., added resources, use of a 1-800 number, etc.) than is currently
in place at the Commission might be required.
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- With respect to CPCs
suggestion to embody safeguards in the relevant LEC access line tariffs, Stentor argued
that it would be inappropriate for the companies to be tasked with policing their
competitors and that the Commission, in Resale to Provide Primary Exchange Voice
Services, Telecom Decision CRTC 87-1, 12 February
1987 (Decision 87-1), had recognized the potential drawbacks to this approach. According
to Stentor, the imposition of such a role on the companies would inevitably lead to
disputes between the parties along with accusations of anticompetitive behaviour in cases
where the companies are obliged to take action to correct non-compliance.
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- In addition, such disputes
would act to slow the process of resolving the non-compliance - to the detriment of the
public - and would burden the companies with substantial additional costs as a result of
this role, which their competitors would not experience. Therefore, Stentor submitted that
the imposition of such a role on the companies would be an ineffective public policy,
which would ultimately negatively effect the pay telephone industry.
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- With respect to CPCs
proposal that existing tariffs for individual business lines were sufficient to meet the
needs of a new pay telephone industry, Stentor noted that the companies would expect to
file tariffs for the provision of pay telephone access lines which reflect the unique
requirements of these customers (such as, among other things, inclusion of the pay
telephone number in the Billed Number Screening (BNS) Database), until competition in
access lines allows deregulation. Additionally, the costs associated with provisioning pay
telephones in public locations (e.g., on street corners or along highways) would need to
be reflected in the development of such tariffs.
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- Stentor noted that CPC plans
to initially install pay telephones that have certain operating characteristics which
enable them to operate with a standard business access line. However, other competitors
may choose to install pay telephones that utilize a different technology and require
different access line characteristics. For example, the answer supervision provided on
business lines would not provide appropriate service to the majority of the pay telephones
currently installed in North America. Issues of this nature would have to be addressed to
adequately reflect the access line needs of all CPTSPs. Furthermore, the unique calling
patterns generated from pay telephone lines may result in an additional or reduced load on
operators when compared to other access services.
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- Stentor agreed with CBTA
that with full competition the market would tend generally towards self-regulation,
eliminating the need for any elaborate enforcement mechanism. However, Stentor submitted
that it would be naïve to believe that the elimination of all regulated safeguards would
be possible with the initial establishment of local pay telephone competition bearing in
mind the United States experience.
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- Finally, Stentor noted
CCTAs proposal that only CLECs be permitted to provide local pay telephone service,
so that safeguards would be enforced through direct regulation. Stentor further noted that
this would be a workable enforcement mechanism and was, in fact, very similar to the
approach taken by the Commission in its findings regarding the provision of toll only pay
telephone service.
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- The Commission has, over a
period of several years, declined to permit competition in the pay telephone market due to
concerns with respect to unregulated service providers. With its decision to allow
competition, the Commission must now establish a competitive pay telephone framework that
encompasses the ILECs and two new potential types of competitive service providers.
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- The first such entity is a
CLEC, which by definition, is a Canadian carrier pursuant to the Act and is subject to
direct enforcement of its consumer safeguards by the Commission. In Decision 97-8, the Commission found that, with respect to end-users,
CLECs would be bound by the obligations set out in the Decision, but no tariffs would be
required. However, the Commission retained its power under section 24 of the Act so
that the offering and provision of any telecommunications service by Canadian carriers
would still be subject to any conditions imposed by the Commission or included in a tariff
approved by the Commission.
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- The second type of provider
would be an unregulated service provider, a reseller, such as CPC or Queens.
Resellers are beyond the scope of the Act, are not subject to direct regulation, and are
not required to file tariffs for the approval of rates or of other terms and conditions of
service. Therefore, for these entities, the enforcement of consumer safeguards would
involve indirect regulation through the LEC whose access services are being used to
connect the pay telephone equipment.
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- In Decision 87-1, the Commission found that it would not be appropriate
to place conditions in ILEC tariffs for enforcement of obligations on CPTSPs, as it would
place the ILEC in a position whereby it would have to monitor and enforce compliance on
its potential competitors.
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- However, the Commission
notes that it has used the tariff mechanism to enforce regulatory restrictions on
telecommunication resellers on several occasions, in a variety of areas. For example, in Attachment
of Subscriber-Provided Terminal Equipment, Telecom Decision CRTC 82-14,
23 November 1982, terminals (i.e., telephones, PBX systems) which could be attached
to the networks of carriers were restricted via tariff provisions. Likewise, pursuant to
Telecom Order CRTC 94-629, 8 June 1994, Access
to Billing and Collection Services and Related Databases by Resellers with Trunk-Side
Access, the telephone companies were required to provide resellers with trunk-side
access to the telephone companies BNS databases, conditional on the recipient
signing a non-disclosure agreement. This agreement required the reseller to undertake to
protect the confidentiality of any billing or other information received, using it only
for the purpose of billing and not reselling it or otherwise disclosing it to any third
party. The Commission also notes that consumer safeguards governing the provision of
operator services have been included in tariffs, with a condition stipulating that
unregulated service providers that obtain facilities or services of the company which are
used in the provision of operator services must have a signed contract with the company
which spells out the terms and conditions and consumer safeguards with which they must
comply. Furthermore, contractual arrangements such as agreements specifying the procedures
of the Interexchange Carrier Group and Non-Disclosure Agreements are currently used by the
telephone companies and competitors in place of specific tariff provisions in the
provisioning of interconnection services.
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- In the Commissions
view, the registration/tariff/contract approach is the most suitable to ensure adherence
to its findings in this Decision. The registration process established for CLECs in
Decision 97-8 is modified for specific application to
entry into the pay telephone market.
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- The Stentor-member companies
are directed to file proposed pay telephone access tariffs which include the unique
requirements, i.e., inclusion of the pay telephone number in the BNS database, associated
with provisioning of pay telephone service, together with a standard service agreement,
within 45 days of this Decision. The tariffs are to make reference to service agreements
which include as part of the terms and conditions of service, the mandated consumer
safeguards established in this Decision.
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- The CLECs are directed to
include the consumer safeguards established in this Decision in all contracts negotiated
with CPTSPs for the provision of pay telephone service.
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- The Commission notes that
non-compliance by a CPTSP with either the ILEC tariff or the CLEC contract will constitute
reason for the termination of the access service. When cases of abuse arise and are
substantiated, the Commission will direct LECs to discontinue the provision of access
service.
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- IV REGULATORY FRAMEWORK FOR
NEW ENTRANTS
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- In Decision 97-8, the Commission considered the issue of forbearance for
certain services offered by CLECs, and concluded that sections 25, 29 and 31 and
subsections 27(1), (5) and (6) of the Act would not apply in respect of retail
telecommunications services offered by CLECs to end-users. The Commission notes that,
while local pay telephone service offered by CLECs would be considered a retail service,
issues with respect to the extent of regulation of this service were not considered in
Decision 97-8.
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- In light of the findings set
out in this Decision, the Commission considers that it is appropriate to refrain, pursuant
to section 34 of the Act, from exercising certain of its powers and performing certain of
its duties in respect of local pay telephone service offered by CLECs. The Commission is
of the view that to do so would be consistent with the Canadian telecommunications policy
objectives outlined in the Act. Subject to the following, the Commission also considers
that the offering of local pay telephone service will be subject to sufficient competition
to protect the interests of users.
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- As noted earlier in this
Decision, the Commission considers that competition will be sufficient to discipline the
rates for pay telephone services offered by CLECs. Accordingly, the Commission will
forbear from exercising its powers and duties under section 25 and subsection 27(1) of the
Act with respect to the rates charged for local pay telephone service provided by CLECs.
CLECs will not be required to file tariffs for these services. The Commission is also of
the view that it is appropriate to refrain from exercising its powers under section 29 of
the Act with respect to the approval of agreements.
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- The Commission has also
concluded in this Decision that it is appropriate to require CLECs to include the
safeguards set out in this Decision in all contracts negotiated with CPTSPs. Accordingly,
the Commission considers that it is in the public interest that it continue to exercise
its powers under section 24 of the Act to impose on CLECs the conditions contained in
this Decision, as well as any that may prove necessary in the future.
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- In order to ensure that
CPTSPs do not unjustly discriminate against any other service providers or subscribers, or
confer an undue or unreasonable preference toward any person, the Commission will retain
its powers and duties under subsections 27(2), (3) and (4) of the Act.
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- The Commission has also
concluded that it would be appropriate to forbear from exercising its powers and duties
pursuant to section 31 of the Act which deals with limitation of a Canadian carriers
liability. In Decision 97-8, the Commission concluded
that it would not be in the public interest to provide CLECs with the regulatory
protection that ILECs receive in respect of limitation of liability, as many CLEC services
would not be subject to rate regulation while those of the ILECs would. The Commission is
of the view that the same reasoning applies in respect of local pay telephone services.
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- In light of the above, the
Commission will refrain from exercising its powers and performing its duties pursuant to
sections 25, 29 and 31 and subsections 27(1), (5) and (6) of the Act, in relation to local
pay telephone services provided by CLECs. Sections 24, 25, 27, 29 and 31 do not apply to
CLECs to the extent that they are inconsistent with the determinations in this Decision.
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- Pursuant to subsection 34(3)
of the Act, the Commission finds, as a matter of fact, that to refrain from exercising its
powers as set out herein, would not likely impair unduly the establishment or continuance
of a competitive market for local pay telephone service.
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- V ENTRY PROCEDURES
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- New entrants must conform to
the following registration procedures:
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- (1) The CPTSP must attest in
writing that it understands and will conform to the obligations and consumer safeguards
set out in this Decision;
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- (2) The CPTSP must provide
the name of the carrier supplying the access lines;
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- (3) The CPTSP must provide
to the Commission serving area maps for information purposes and make such serving area
maps available upon request at their business offices; and
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- (4) The CPTSP must provide
details as to how it proposes to deal with consumer complaints.
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- Laura M. Talbot-Allan
Secretary General
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- This document is
available in alternative format upon request.
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