> >

> > Dear Commissioners,

> >

> > I would like to state my opposition to Aliant's application to have a

> > two tiered rate structure for local phone service in Atlantic Canada.

> >

> > It is my submission that a rate increase cannot be justified based

> > solely on the cost of providing a service to a certain sector, in this

> > case rural areas. The motivation of the application must be examined

> > in light of the market. A company is always seeking to get the best

> > return for their shareholder's. They accomplish this by: reducing their

> > cost structure, expanding service/products, or increase the price of

> > their service/products. I believe that in this case, the latter is

> > problematic since they no longer have a complete monopoly with respect

> > to local network service. The competitive environment has changed in

> > recent years with the introduction of alternatives to Aliant's twisted

> > pair network. The alternatives now offered are cable and wireless

> > solutions and Aliant now has to compete with this new and growing

> > sector. It is significant that this new sector operates in a

> > predominately urban environment, leaving behind rural areas with only

> > one choice for local service. Cable companies are expanding their

> > networks but only in urban areas, since the cost of providing this new

> > infrastructure to 100 % of the homes in Atlantic Provinces is

> > prohibitive. In summary, in my view, Aliant has a greater ability to

> > increase pricing in rural areas than in the increasingly competitive

> > urban market.

> >

> > Since Aliant is looking raise the price on their poor investment in

> > rural network lines, the CRTC should consider a mechanism that would

> > allow them to divest themselves of such an unprofitable segment of their

> > business. I am sure the market would return them significant price on

> > this network and they could use the equity towards more profitable

> > ventures given Aliant's Return on Investment for 2000 was reported as

> > 37%. 1

> >

> > Addressing the cost side of the equation, Aliant says that it is more

> > expensive to service the rural areas. Is this a valid argument? What

> > has changed? It would be very interesting to examine how much was

> > being spent on maintaining local rural service 10 years ago and what it

> > is today. From a rural customer's perspective I have seen a dramatic

> > decrease in the number of line workers. They seemed to have already

> > dealt with the cost side of the equation.

> >

> > In closing, it is completely understandable, on a business level, for

> > Aliant to increase their prices. In an open market this would be

> > acceptable, but since it is not in that the rural sector is poorly

> > served in a competitive sense, I appeal to the CRTC to protect consumers

> > and turn down the rate increase application.

> >

> > Respectfully submitted

> >

> >

> > Philip J. Mosher

> > 552 Canaan Cross

> > Kentville, NS B4N 4K1

> >