Amalgamated municipalities no longer need to reach out to call neighbours

The new guidelines established by the CRTC for local calling areas (LCAs) has met with approval in a city that has been demanding a change for years now. One of the big surprises is how well CLECs fared in the deal. On September 12, the commission issued Telecom Decision 2002-56, setting a new framework for the expansion of LCAs. The move became necessary as more and more communities amalgamated forming larger cities. In the ruling, the CRTC has mandated that ILECs and CLECs should be compensated for foregone toll revenues for a three-year period. That victory delighted the only major CLEC that provides local residential service. "We’re always surprised when we win something," Jean Brazeau, senior VP regulatory and strategic partnerships at Call-Net Enterprises Inc., remarks to Network Letter. "But we also asked for the DNA rates for those services to be equal to the intra DNA rates, so that we could extend our services to the EAS given that our customers would also want the same calling area that the Bell Canada customer has. And we didn’t get that one but that’s OK." Ottawa councillor pleased The City of Ottawa has long been complaining about the way LD territories are set up (NL, Apr. 9/01; Dec. 4/00). Even though the 11 surrounding suburbs united in January 2001 to create one big city, residents of the eastern area of Orléans had to pay LD rates to call their friends in Kanata in the west. One city councillor, who has been fighting the battle for years, is happy. "It certainly is a step forward," Alex Munter tells Network Letter. "The process that has been in place until now for changing local calling areas was so complicated and convoluted that it virtually ensured nothing would ever change. So the CRTC has laid out a process that’s clearer and more achievable." Previously, only ILECs were compensated for lost LD revenues. But the CRTC noted that changes have occurred in the marketplace in recent years. "The commission remains of the view that it is reasonable for the ILECs to be compensated for the foregone toll revenues resulting from expanded LCAs," the decision states. "In addition, the commission does not consider that the competitors’ position in the market allows them to modify service offerings and rates in order to recover their foregone toll revenues. The commission also considers that any regime should treat all entities fairly. Accordingly, the commission concludes that compensation is to be paid to both ILECs and competitors for foregone toll revenues resulting from expanded LCAs." The regulator went on to say it is "unreasonable" to expect the recovery period to be limitless. Therefore, it is establishing a preliminary three-year period. Decision 2002-56 also set up a follow-up proceeding to determine compensation amounts. Comments must be filed with the commission by October 15, the same date that Ottawa city council will deal with the matter. Reply comments to the CRTC are due one week later. The commission has decided that all residential subscribers whose individual line rates will jump by more than $1 per month as a result of the expanded LCA may vote on the issue. It proposes a plebiscite, paid for by the municipal government, with a simple majority of those voting determining the outcome. It rejected a suggestion from the City of Ottawa and other municipalities that city councils be permitted to act on behalf of their constituents without the need for a referendum. The CRTC is looking at altering some of the provisions of the decision in the case of Northwestel. Because its operating territory is broad and remote, different criteria may need to be applied on a case-by-case basis.

Amalgamated municipalities no longer need to reach out to call neighbours

News | September 23, 2002

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us