|
Telecom Decision CRTC 2004-31
|
|
Ottawa, 11 May 2004 |
|
Terms of Service – Disconnection for partial payment of charges
|
|
Reference: 8638-C12-46/01 |
|
In this decision, the Commission
determines that, in accordance with the incumbent local exchange
carriers' (ILECs) approved Terms of Service, the ILECs are not permitted
to suspend or terminate (disconnect), or threaten to disconnect, a
customer's tariffed services if that customer has made partial payments
sufficient to cover that customer's outstanding arrears for tariffed
services, whether or not there remain outstanding arrears for non-tariffed
services. |
|
Background
|
1. |
In Commission modifies reporting
requirements for affordability, Order CRTC
2000-393, 10 May 2000,
the Commission created a Bill Management Tools (BMT)1
Committee. The BMT Committee's mandate was to examine avenues and
approaches that could be used to promote BMTs and to facilitate access
to telephone service. The BMT Committee, comprised of consumer groups
and incumbent local exchange carrier (ILEC) representatives, met on
several occasions, the first meeting being held on 2 April 2001. |
|
Disconnection issue brought before the BMT Committee
|
2. |
One of the issues brought before the BMT
Committee by the Public Interest Advocacy Centre (PIAC), on behalf of
itself, Action Réseau Consommateur (ARC) and the National Anti-Poverty
Organization (NAPO), was the practice of some ILECs of suspending or
terminating (disconnecting), or threatening to disconnect, a customer's
local service when the customer made partial payments towards his or her
outstanding charges, leaving outstanding amounts on his or her account.
PIAC/ARC/NAPO requested that the BMT Committee examine this practice at
the BMT Committee's meeting of 9 April 2002. PIAC/ARC/NAPO expressed the
view that the Terms of Service of the ILECs should not allow them to
disconnect, or threaten to disconnect, a customer's local service when
sufficient amounts have been paid to cover the charges related to local
service. |
3. |
This disconnection issue was addressed by
parties in attendance at the BMT Committee meeting held on 9 April 2002.
By letter dated 12 April 2002, PIAC/ARC requested that the ILECs
participating in the BMT Committee respond to a number of questions on
this issue. The following parties provided their responses to these
questions in early May 2002: Aliant Telecom Inc. (Aliant Telecom), Bell
Canada, MTS Communications Inc. (MTS), Northern Telephone Limited
Partnership2 (NorthernTel), Northwestel Inc. (Northwestel),
the Ontario Telephone Association (now known as the Ontario
Telecommunications Association), Saskatchewan Telecommunications (SaskTel),
Société en commandite Télébec (Télébec), and TELUS Communications Inc.
(TCI) (collectively, the respondents). |
4. |
The responses indicated that the current
practice of the respondents is to apply customer payments to the oldest
outstanding charges first until sufficient amounts have been paid to
cover all outstanding charges. These chronological allocations are
applied to the charges for both tariffed and non-tariffed services, with
no distinction made between the types of service. MTS was the only ILEC
to clearly state, in its response to the questions posed by PIAC/ARC,
that it was not permitted to disconnect customers' local service, if
outstanding charges for non-tariffed services are not paid. |
5. |
On 13 May 2002, PIAC/ARC circulated a table
summarizing the above-referenced responses, as well as a statement of
the issue raised by the information provided. In response to a
suggestion made by Bell Canada on 5 June 2002, on behalf of itself,
Aliant Telecom, MTS, SaskTel, NorthernTel, Northwestel and Télébec, PIAC/ARC/NAPO
circulated two proposed resolutions of the issue to interested parties
on 7 June 2002. |
6. |
This issue was addressed again at a BMT
Committee meeting held on 17 June 2002. Noting that the parties at that
meeting had failed to reach a consensus on the issue, PIAC/NAPO filed a
dispute with the BMT Committee on 26 June 2002. The dispute set out the
same issue and alternative proposals as those identified in the 13 May
and 7 June 2002 correspondence referenced above. |
|
Process
|
7. |
Subsequent to 26 June 2002, various parties
filed submissions with the BMT Committee as to whether the issue raised
by PIAC/NAPO in its dispute should be dealt with by the Commission at
that time or at some later date after the then-pending proceeding on a
Consumers Bill of Rights (CBOR)3 had been completed. By
letter dated 18 July 2002, TCI submitted that it would be more
appropriate and efficient to address the disputed issue within the
context of the CBOR proceeding or as part of a possible proceeding on
the ILECs' Terms of Service following the CBOR proceeding. Aliant
Telecom, Bell Canada, MTS, NorthernTel, Northwestel, SaskTel and Télébec
made the same submission in a letter dated 28 July 2002. In its letter
dated 1 August 2002, PIAC/NAPO argued that the issue should be
considered without delay, as there was no guarantee that it would be
included in the CBOR or subsequent proceedings. |
8. |
By Commission staff letter dated 27 August
2002, the BMT Committee participants were advised that this dispute
would be dealt with by the Commission prior to the CBOR proceeding, and
that all materials submitted to date on the issue would form part of the
record. The letters from TCI and PIAC/NAPO dated 18 July and 1 August
2002, respectively, also included submissions regarding the matter in
dispute. Parties were requested to provide their comments on the dispute
issue raised by PIAC/NAPO. On 11 September 2002, Aliant Telecom, Bell
Canada, MTS, NorthernTel, Northwestel, SaskTel, Télébec and TCI
(collectively, the Companies) filed their comments in a combined
submission. PIAC/NAPO filed its reply comments on 23 September 2002. |
|
Regulatory framework
|
9. |
In Disconnection of Telephone Service
for Unpaid Debts of Others, Telecom Decision CRTC 77-14, 24 November
1977 (Decision 77-14), the Commission expressed its view on the
seriousness of disconnection of basic telecommunications service. In
Decision 77-14, the Commission stated: |
|
Disconnection of basic telephone services is an extremely serious
action, the adverse effects of which, from an individual subscriber's
standpoint, can in many cases far exceed any possible pecuniary return
to the company. In the Commission's view, where the telephone involved
is the only service furnished to the subscriber, disconnection should
never occur except in clear cases of a breach of the regulations4,
and only upon notice to the subscriber of the tariff provisions relied
upon with an opportunity given to the subscriber to make
representations to the company and, if necessary, to the Commission.
|
10. |
In Telecom Letter Decision CRTC
88-4, 7
July 1988 (Letter Decision 88-4) regarding Bell Canada's collection
practices for the collection of 976 charges, the Commission clarified
when tariffed services may be denied for non-payment of non-tariffed
services and the proper allocation method for partial payments. The
Commission stated: |
|
The Commission reiterates that non-payment of non-tariffed charges
cannot result in denial of service. Accordingly, it would be
unacceptable for the company or any party acting on behalf of the
company to suggest that disconnection of service would result from
non-payment of 976 non-tariffed charges. As customers may not
differentiate between the payment of tariffed and non-tariffed
charges, the Commission directs that, any partial payments are to be
applied first to tariffed charges.
|
11. |
The Terms of Service, which form part of
the ILECs' Commission-approved tariffs, set out the basic obligations of
ILECs and customers. The Terms of Service specify, for example, when
services can or cannot be disconnected. |
12. |
The wording of the ILECs' Terms of Service
is not identical as it relates to the issue of permitted and prohibited
disconnection. However, with regard to this issue, the ILECs' Terms of
Service are in all material respects the same as those of either Bell
Canada or TCI. |
|
SIZE="3">
Bell Canada's Terms of Service
|
13. |
The scope of application of Bell Canada's
Terms of Service is defined as follows: |
|
1.1 Except as otherwise specified these Terms of Service apply with
regard to services for which the Canadian Radio-television and
Telecommunications Commission has approved a Tariff.
|
14. |
Article 22.1 sets out the circumstances in
which Bell Canada is permitted to suspend or terminate service(s) for
overdue accounts. |
|
22.1 Bell Canada may suspend or terminate a customer's service only
where the customer:
|
|
(a) fails to pay an account of the customer that is past due,
provided it exceeds fifty dollars or has been past due for more than
two months; …
|
15. |
Article 22.2 specifies the circumstances in
which Bell Canada is not permitted to suspend or terminate service. |
|
22.2 Bell Canada may not suspend or terminate service in the
following circumstances:
|
|
(a) failure to pay non-tariffed charges; …
|
|
SIZE="3">
TCI's Terms of Service
|
16. |
The corresponding provisions of TCI's Terms
of Service are as follows: |
|
101.3 These General Terms of Service define the basic rights and
responsibilities of TCI and TCI's customers with respect to all
services, facilities and equipment contained in the TCI Tariff.
|
|
115.2 TCI may suspend or terminate a customer's service only if the
customer:
|
|
(a) fails to pay a past due account for which the customer is
responsible if it exceeds $50 or has been past due for more than two
months, …
|
|
115.4 TCI may not suspend or terminate a customer's service:
|
|
(a) because the customer fails to pay charges that are not
authorized by the CRTC, …
|
|
Position of PIAC/NAPO
|
17. |
According to PIAC/NAPO, the ILECs should
not be permitted to disconnect or threaten to disconnect the local
service of customers who have paid enough to cover the charges related
to local service. PIAC/NAPO indicated that there was disagreement among
the Companies as to how their Terms of Service should be interpreted and
that they and the consumer groups disagreed on the rules that should be
applied to the situation. PIAC/NAPO were of the view that, with the
possible exception of TCI and SaskTel, the ILECs' Terms of Service do
not permit them to disconnect a customer's local service where the
customer has paid enough to cover local charges. |
18. |
PIAC/NAPO argued that the Terms of Service
of the ILECs only applied to tariffed services, in that "service",
"account", and "payment", as used in the Terms of Service, referred
exclusively to tariffed services, unless specifically noted otherwise.
PIAC/NAPO also noted that the Commission, in Letter Decision
88-4, had
indicated that under its Terms of Service, Bell Canada cannot deny
access to tariffed services on the basis of the non-payment of charges
for non-tariffed services. |
19. |
PIAC/NAPO submitted that it was
inappropriate for ILECs to disconnect, or even threaten to disconnect,
basic local service where the customer was making payments that (a)
cover his or her basic local bill, or (b) were in keeping with a
"reasonable deferred payment agreement". According to PIAC/NAPO, Article
22.2 of Bell Canada's Terms of Service supported this position. |
20. |
PIAC/NAPO acknowledged the differences in
wording between the Bell Canada Terms of Service and the TCI Terms of
Service, stating that it was not clear whether or not TCI and SaskTel,
the Terms of Service of which are equivalent to those of TCI with regard
to this issue, were permitted to disconnect the local service of a
customer who has paid enough to cover charges for local service. |
21. |
PIAC/NAPO proposed that, unless otherwise
directed by the customer, partial payments on accounts should be applied
to outstanding local service charges first, regardless of the relative
age of a customer's outstanding bills, since the chronological
allocation of such partial payments could result in outstanding amounts
for local service, even if sufficient payment had been made to cover the
total amounts for local service. Any remaining amount of payment should
then be applied to any other outstanding charges, beginning with the
oldest outstanding charges first. PIAC/NAPO further submitted that the
disconnection of basic local telephone service should only occur if a
customer had failed to pay outstanding charges for basic local telephone
service, and only after attempts had been made to negotiate a reasonable
deferred payment agreement regarding any outstanding local charges. |
22. |
As an alternative to its proposal, PIAC/NAPO
suggested that the ILECs could continue to apply partial payments as
they wish, but that there be no disconnection of basic local service as
long as the partial payment covers local charges, or is in keeping with
a reasonable deferred payment agreement regarding outstanding charges
for local service. Moreover, the ILECs should not threaten to disconnect
a customer's basic local service as long as customer payments cover
basic local charges. The ILECs should threaten toll disconnection for
failure to pay toll charges, and optional service disconnection for
failure to pay optional service charges. |
23. |
PIAC/NAPO noted that, under both
alternatives, failure to pay outstanding charges for toll services
should result in toll blocking, and failure to pay optional local
service charges should result in disconnection of those services, before
basic local service is disconnected for non-payment. |
|
Position of other parties
|
|
SIZE="3">
TCI
|
24. |
In its submission of 18 July 2002, TCI
noted that Item 115.4 (a) of its Terms of Service prohibits it from
suspending or terminating a customer's service because the customer
fails to pay charges that are "not authorized" by the Commission. TCI
submitted that the term "authorized" related to both tariffed and
forborne services. Accordingly, TCI was of the view that it was allowed
to suspend or terminate services for a customer's failure to pay any
charges for tariffed or forborne services. TCI further submitted that
its Terms of Service do not contain any express or implicit direction on
which types of service or services take priority in the allocation of
partial payments for outstanding charges. |
25. |
TCI argued that the PIAC/NAPO proposal
would require changes to TCI's Terms of Service to make specific
reference to tariffed services (not "authorized") and to limit
references to "service", "account", and "payment" to mean tariffed
services only. TCI also argued that the PIAC/NAPO proposal would require
significant changes to the company's billing systems and other manual
processes in order to track partial payments on past due accounts. TCI
noted that the Commission had found, in an 11 April 2000 letter5,
that the costs of these changes would likely outweigh the benefits to
customers facing disconnection for making partial payments. |
26. |
TCI stated that it considered it to be in
its best interest to make every effort to keep a customer on the network
as long as the customer continued to make payments towards an
outstanding account. TCI indicated that it had received no customer
complaints regarding its application of partial payments to customer
accounts, and was of the view that PIAC/NAPO had provided no evidence to
the BMT Committee that customers were concerned with the company's
practice in this regard. |
|
SIZE="3">
The Companies
|
27. |
In their 11 September 2002 submission, the
Companies agreed with PIAC/NAPO that local service should not be
disconnected if a customer has paid for his or her local service.
However, the Companies disagreed with the position of PIAC/NAPO that as
long as a customer has made partial payments equal to the amount of
charges for local service, such service should not be disconnected. The
Companies argued that there was no compelling policy, regulatory
or business rationale for allocating payments on a service-specific
basis as proposed by PIAC/NAPO. Noting that customers receive a single
bill for all the services they use and make a single payment for all the
services they receive, the Companies were of the view that a customer
has not paid for his or her local service until they have paid their
total bill in full. |
28. |
The Companies noted that the practice of
applying partial payments to outstanding total bill charges, with the
oldest outstanding charges retired first, had been in place for years.
The Companies submitted that this approach to applying partial payments
was a standing practice across a wide range of industries. The Companies
submitted that this approach was fair to both the subscribers and the
Companies. In particular, the Companies submitted that this practice
benefited customers by minimizing the extent to which interest charges
accrue on outstanding amounts. The Companies also noted that their
process for allocating payments had been reviewed by Commission staff
and was found to be reasonable6. |
29. |
The Companies submitted that, in a
competitive environment, it was very important that they be able to
disconnect a customer's local service for non-payment of undisputed
arrears, absent a mutually agreed upon deferred payment plan. The
Companies argued that this was particularly true given their status as
long distance carriers of last resort (COLR). In support of their
position, the Companies noted, as an example, the situation where one of
their customers would have switched to an alternative provider of long
distance service (APLDS), and that customer was subsequently
disconnected by the APLDS for non-payment. The Companies noted that such
a customer would return to the Companies' toll network and be in a
position to accrue further bad debt without the respective company's
knowledge. Allowing customers to allocate partial payments to local
service would, in the Companies' view, effectively "allow recalcitrant
debtors to game the system" at the expense of the ILECs, APLDS and,
ultimately, more fiscally-responsible customers. |
30. |
The Companies noted that their respective
Terms of Service clearly indicated that customers are responsible for
the payment of all charges for calls originated from, and accepted at,
their telephone numbers. The Companies further noted that customers
would not have their local service disconnected if outstanding charges
were legitimately in dispute or a customer had entered into, and was
honouring, a reasonable deferred payment plan. However, the Companies
stated that they may use toll blocking or other methods to limit further
accrual of arrears. |
|
SIZE="3">
PIAC/NAPO reply comments
|
31. |
In contrast to the Companies' position,
PIAC/NAPO was of the view that customers have paid for their local
service when they have paid the local service portion of their
local/toll bill. PIAC/NAPO argued that local and toll services are two
distinct services that are sold separately and can be obtained from
different service providers. Further, toll service can be disconnected
without affecting local service. Accordingly, PIAC/NAPO was of the view
that there was no compelling reason for disconnecting local service when
customers have paid the local service portion of their bill in full. |
32. |
PIAC/NAPO disagreed with the position taken
by the Companies that their policy of disconnecting customers from basic
local service for the non-payment of toll charges was entirely
consistent with the provisions of their respective Terms of Service.
PIAC/NAPO also noted that in at least two previous decisions, Letter
Decision 88-4 and Joint Marketing and Bundling, Telecom Decision
CRTC 98-4, 24 March 1998, the Commission had ordered the Stentor
companies to apply partial payments first to tariffed charges. Further,
PIAC/NAPO noted that the 11 April 2000 Commission staff letter was not a
Commission decision, and thus did not reflect Commission decisions
ordering the ILECs to apply payments first to tariffed charges in other
contexts7. |
33. |
Further, PIAC/NAPO noted that it does not
dispute that customers are responsible for paying for all calls
originated from their telephones. PIAC/NAPO also did not dispute the
Companies' position that they should be able to use the ultimate threat
of disconnection where customers fail to pay their bills in a timely
manner. However, PIAC/NAPO reiterated that disconnection of service
should be directly related to the type of service for which there are
outstanding charges. In the view of PIAC/NAPO, local disconnection
should not even be contemplated where a customer has paid enough to
cover his or her local bill. PIAC/NAPO submitted that only toll service
should be disconnected for non-payment of toll arrears. |
34. |
PIAC/NAPO noted the Companies' concern
about customers who had been disconnected by APLDS for non-payment
accruing additional bad debt upon being reconnected to the ILEC. PIAC/NAPO
was of the view that, to the extent this is a problem in need of a
solution, it is separate from the issue being addressed in this process. |
35. |
PIAC/NAPO questioned the benefit to
customers of applying partial payments in chronological order to
minimize interest expenses, suggesting that such a benefit was of
relatively little value to customers compared to the value of remaining
on the network if such a practice could result in the disconnection of
basic local service. |
36. |
PIAC/NAPO suggested that the lack of
recorded customer complaints concerning the practices of some ILECs was
not surprising. PIAC/NAPO submitted that customers may not realize that
their local service can remain operational even if their toll and/or
optional local services are disconnected. PIAC/NAPO indicated that it
had raised this issue as a preventative measure to prevent
vertically-integrated companies from abusing their market dominance to
the detriment of consumers in the provision of an essential service8. |
|
Commission analysis and determination
|
|
SIZE="3">
Process
|
37. |
The Commission notes the Companies'
argument that PIAC's/NAPO's dispute would be more properly considered in
the CBOR proceeding or a possible proceeding on the ILECs' Terms of
Service following the CBOR decision. The Companies proposed that if the
dispute was not resolved in those proceedings, then the dispute could
proceed. The Commission notes that PIAC/NAPO opposed such a delay in the
Commission's consideration of the dispute. |
38. |
The Commission notes that, in Decision
2002-34, it found that it would be useful to develop a CBOR. The
Commission considered that a CBOR should be a comprehensive and concise
statement of consumer rights, and announced its intention to initiate a
proceeding in which the Commission would consider detailed submissions
on CBOR content and related issues. In Decision
2002-34, the Commission
also considered that it was appropriate to await the completion of the
then-pending CBOR proceeding before deciding on the need for a review of
the ILECs' Terms of Service. |
39. |
The Commission notes that the CBOR
proceeding, as initiated by Consumer bill of rights, Telecom
Public Notice CRTC 2003-6, 13 June 20039, is restricted to
creating a document that will be a plain language statement of existing
consumer rights as well as considering both methods to communicate the
CBOR and what, if any, amendment process would be appropriate. The
Commission also notes that no proceeding on the ILECs' Terms of Service
has been initiated. The Commission is of the view that whether or not a
Terms of Service proceeding is held is irrelevant to the issue of
whether the ILECs are correctly interpreting and applying their existing
Terms of Service. The Commission considers that it would not be
appropriate to delay a ruling in this regard while awaiting the
possibility of future proceedings. Therefore, the Commission determines
that it is appropriate to deal with this dispute at this time. |
|
SIZE="3">
Issues defined
|
40. |
PIAC/NAPO referred to the dispute issue in
terms of the disconnection of a customer's local service for failure to
pay outstanding charges for other tariffed and non-tariffed services.
However, the Commission is of the view that the issue is not limited to
the disconnection of basic local exchange service where there
outstanding charges remain for other tariffed or non-tariffed services. |
41. |
The Commission considers there to be two
issues involved: first, whether or not the ILECs are in violation of
their approved Terms of Service when they disconnect the tariffed
services of customers for failure to pay charges for non-tariffed
services; secondly, whether or not the ILECs are permitted to disconnect
the tariffed services of customers who have made partial payment
sufficient to cover outstanding charges for tariffed services and whose
payments have been allocated by the ILECs in a way that results in
outstanding charges for tariffed services. |
|
SIZE="3">
Interpretation of Terms of Service
|
42. |
The Commission notes the following points
raised by PIAC/NAPO in this dispute: |
|
- the existing Terms of Service that relate to the disputed issues
are being interpreted differently by the ILECs;
|
|
- there is a difference in the wording of the Terms of Service of
TCI and SaskTel on the one hand, and those of Bell Canada and other
ILECs on the other hand; and
|
|
- the same rule regarding disconnection of local service for
non-payment of non-tariffed service charges should apply to all ILECs
equally.
|
43. |
The Commission notes that Article 22.1 of
Bell Canada's Terms of Service uses permissive language, allowing Bell
Canada to suspend or terminate service without requiring it to do so. In
contrast, the wording of Article 22.2 contains an absolute prohibition
on disconnecting service. For example, under Article 22.2 (a), Bell
Canada may not disconnect service if a customer has not paid non-tariffed
(e.g., toll) charges. |
44. |
The practice of most of the respondents of
disconnecting local service even when customers have paid enough of
their arrears to cover the tariffed portions of their bills can only be
justified if Article 22.1 and its equivalents in other ILECs' Terms of
Service takes precedence over Article 22.2 and its equivalents. The
Commission is of the view that the permissive language in Article 22.1
and the mandatory language of Article 22.2 prevent any conflict in the
interpretation of Article 22. It is Article 22.2 and its equivalents,
with the prohibition of disconnection under certain circumstances, which
takes precedence over Article 22.1 and its equivalents. |
45. |
In Decision 77-14 the Commission set out
its views on the seriousness of disconnection of customers' local
telephone service, noting that local service disconnection should only
occur if there was a clear breach of the predecessor provisions to the
Terms of Service. The Commission notes that with the subsequent
development and use of emergency 9-1-1 access, telephone networks have
become an even more important component of public safety. The Commission
considers that the views it set out in Decision 77-14 remain relevant to
this day. |
46. |
In light of the above, the Commission
considers that Bell Canada and other ILECs using Terms of Service that,
with regard to this issue, are in all material respects the same as
those of Bell Canada, are not permitted to disconnect tariffed services
for failure to pay charges for non-tariffed services. |
47. |
The Commission notes the argument made by
TCI that it is permitted, under its Terms of Service, to disconnect
local exchange service for non-payment of charges "authorized" by the
Commission. TCI argued that "authorized" charges include those for
forborne as well as tariffed services. TCI further argued that there is
nothing in its Terms of Service that indicated that one type of service
takes priority over other types of service with respect to the
application of partial payments. |
48. |
Item 115.4 of TCI's Terms of Service
prohibits disconnection for failure to pay charges that are not
authorized by the CRTC. The Commission notes that when it has forborne
from regulating services provided by ILECs such as TCI, it has, pursuant
to section 34 of the Telecommunications Act, removed the
requirement that rates for the forborne services be approved by the
Commission and be included in the ILECs' tariffs. This means that the
Commission does not authorize the rates for services that are forborne. |
49. |
The Commission therefore finds that the
term "charges that are not authorized by the CRTC" as used in the TCI
Terms of Service means "non-tariffed charges", and that TCI and other
ILECs using Terms of Service that, with regard to this issue, are in all
material respects the same as those of TCI, are not permitted to
disconnect tariffed services for failure to pay charges for non-tariffed
services. |
50. |
In summary, the Commission considers that
ILECs are only permitted to disconnect tariffed services for non-payment
when a customer fails to pay outstanding arrears for tariffed services.
In addition, disconnection for non-payment can only occur when none of
the prohibitions to disconnection under Article 22.2 of the Bell Canada
Terms of Service or Item 115.4 of the TCI Terms of Service or their
equivalent apply. ILECs must also comply with the other requirements in
their Terms of Service regarding disconnection including those in
Articles 22.3, 22.4 and 22.5 of the Bell Canada Terms of Service, Items
115.5, 115.6 and 115.7 of the TCI Terms of Service, or their equivalent. |
51. |
Since ILECs are not permitted to disconnect
a customer's tariffed services for non-payment when the customer has
paid enough to cover the charges for tariffed services, or when any of
the other prohibitions against disconnection apply, they are also
prohibited from threatening to disconnect tariffed services in such
circumstances. |
|
SIZE="3">
Accrual of bad debt and COLR
|
52. |
The Commission notes the issue raised by
the Companies that customers with outstanding arrears with other toll
service providers could accrue further bad debts with the ILECs without
the Companies' awareness of these customers' past payment history. |
53. |
The Commission also notes the Companies'
argument that it is more important than ever that they be able to
disconnect customers' local service for non-payment of undisputed
arrears, given their status as a COLR for toll services. |
54. |
The Commission considers that the
Companies' arguments with regard to the ability of customers to accrue
bad debts and the Companies' status as COLR for toll services are not
relevant to the proper interpretation and application of the Terms of
Service. |
|
SIZE="3">
Chronological allocation of partial payments
|
55. |
The Commission notes the Companies'
submission that they have long used a chronological allocation of
partial payments for the retirement of customers' outstanding arrears,
with the oldest outstanding charges being retired first, and with no
regard to the type of service to which the payments are assigned.
Further, the Commission notes that the Companies found support for this
practice in the Commission staff letters dated 11 April 2000. |
56. |
The Commission is of the view that such a
practice could result in tariffed services being disconnected when
customers have made sufficient payment to cover outstanding charges for
such services. The Commission considers that administrative decisions
made by the ILECs concerning the allocation of customers' payments
cannot be used to circumvent the wording of the Terms of Service. |
57. |
The Commission notes that the alternative
proposed by PIAC/NAPO would permit the ILECs to continue to decide how
partial payments are allocated while ensuring that a customer's local
service is not disconnected when partial payments are sufficient to
cover outstanding arrears for local service. The Commission considers
that this proposal has merit. However the Terms of Service apply to all
tariffed services rather than to local service only. The Commission is
therefore of the view that a customer's tariffed services are not to be
disconnected for non-payment when partial payments are sufficient to
cover outstanding arrears for tariffed services. |
58. |
In light of the above SIZE="3">,
the Commission considers that there is no need to order a change in the
ILECs' practices with regard to the application of partial payments so
long as they are acting in accordance with all applicable regulatory
rules. |
|
Conclusion
|
59. |
The Commission determines that the ILECs
are in violation of their approved Terms of Service when they disconnect
the tariffed services of customers for failure to pay charges for non-tariffed
services. The Commission further determines that the ILECs, under their
Terms of Service, are not permitted to disconnect or threaten to
disconnect, for non-payment, any of a customer's tariffed services when
that customer has made partial payments sufficient to cover outstanding
arrears for tariffed services. This is the case whether or not there are
outstanding arrears for non-tariffed services. Further, the ILECs are
not permitted to disconnect tariffed services or threaten to do so where
any of the other prohibitions in the Terms of Service apply (e.g., the
customer is willing to enter into and honour a reasonable deferred
payment agreement). Finally, before the ILECs are permitted to
disconnect a customer's tariffed services or to threaten such action,
they must adhere to the requirements set out in their Terms of Service
for the disconnection of service. |
|
Secretary General |
|
This document is available in
alternative format upon request and may also be examined at
the following Internet site:
http://www.crtc.gc.ca |