Bell Canada seeks creation of standard criteria for phase-out of low demand services

Bell Canada says that the CRTC’s current process of approval for telecommunications service withdrawal applications is inefficient and needs to updated and streamlined with a standard set of criteria in light of changing technology and an increasingly competitive environment. Canada’s largest incumbent telephone company filed an application on January 5 seeking a new approach to phasing out and withdrawing low-demand services. This latest application continues the company’s assault on the country’s telecommunications regulatory system and comes two months after it filed a similar petition seeking automatic approval on certain tariff applications (NL, Nov. 11/04). Currently the commission requires telcos to file tariff applications to seek services withdrawal, a process the company says in its application is unsuited to the current competitive environment. "The tariff approval process is, in Bell Canada’s view, ill suited for consideration of such applications, as that process has been designed to focus on different issues, including whether proposed rates for a service are just and reasonable. "The tariff review process also does not normally contemplate the notification to existing customer of the application. Moreover, as with tariff notices in general, the timelines taken by the commission in rendering rulings suggests that the current process could be improved substantially," reads the company’s application. Mirko Bibic, chief regulatory officer for Bell Canada, argues that the lack of a standardized process has a direct impact on the telecommunications industry. "In our view, (the current system) makes service introduction and associated service withdrawal more complicated than we feel they need to be and really in the long term it’s not conducive to predictable long-term planning and certainty. So it’s another proposal by Bell to offer creative or constructive proposals to enhance the efficiency of the administration of regulation," he tells Network Letter. The company maintains that if a new service withdrawals approvals process isn’t put in place, it will be prevented from introducing new and enhanced services in a timely manner to respond to the increasingly competitive threat from alternative telecommunications service providers. Bibic says that it’s an important issue in today’s telecom world, but will be of even greater importance in the long run considering the technological changes and business transformations taking place in the industry. "It’s an important issue and when the time comes to make applications to destandardize or withdraw services because IP-enabled replacements are in place, we hope that there are clear criteria that are going to be in place that will allow us to determine when we’re ready to withdraw (a service), and that there’s a process and a timeline in place that will make this go efficiently and quickly," he explains. Bell proposes to classify services into two categories, each with a different set of rules regarding the process of withdrawal. Class A services would include core connectivity services, emergency and public safety related services, social protection related service, or competitor services. Class B would be considered any other service that doesn’t fit into the Class A category, such as single number reach, remote call forwarding, integrated voice messaging service, and others. For Class A services, unless more than 5% of the services’ customers opposed the withdrawal application, Bell is proposing automatic approval within 55 days. If that 5% threshold is met, the commission would then allow reply comments from the ILEC before issuing the first decision, which would set out additional procedures for service withdrawal. Once these additional procedures were met, then the CRTC would issue a second decision detailing the implementation date for service withdrawal. Bell can expect support from TELUS Corp., which says some of the old-school regulatory mechanisms need to be reviewed because of the impact of rapidly changing technology and greater competition. Willie Grieve, VP of regulatory affairs, at TELUS, says the "assumptions about how things are done" have to be looked at. "What Bell is trying to do here is give the commission some obvious tests on clearly defined rules…but I think there should always be room for exceptions with those things because it could very well be that you might want to do a massive technological change out in a particular area which would mean that some of the services that you’re offering today would simply not be available. But there would be substitutes (for those services), as Bell says, and they would be substitutes offered with the new technology," he tells NL. "In general, these concepts are good, that you have bright line tests for doing something. When you hit this, you can automatically do something. That’s good, but there should always be room for exceptions, especially when things are changing so fast, it’s hard to set a number for anything right now," adds Grieve. Service withdrawal hasn’t been a big issue to date, says Grieve, but it will in the future. "We see it coming because services, even though the commission says it regulates on a technologically neutral basis, and they do, but the fact is that some services are pretty well defined by the technology," he adds. TELUS Corp. is currently examining the application in more detail, determining the percentage of customers in relation to the proposals that Bell put forth. Grieve says the company will also begin a dialogue with business units. It’s unclear at this point how competitive telcos will respond to this latest Bell application seeking a more streamlined approach to regulating the telecommunications industry. Calls to a number of competitors were unreturned as of press time. But competitive providers will likely try to link this application with one filed last November on streamlining the tariff approval process, saying that Bell is trying to seek greater forbearance in the market in the face of a perceived significant increase in competition. Another aspect of Bell’s application that will likely garner criticism is "automatic approval". Most competitors won’t likely have an issue with the incumbent telephone companies wanting to remove services that are in low-demand, but they will be concerned about some of the services described in Bell’s applications. Such services as core network services and competitor services are likely to be two services competitive providers will want removed from the Class A list. Bell recognizes competitive telcos will take issue with some aspects of its application, but Bibic says this filing has as its goal to help the commission operate more efficiently. "We’re very confident that when one looks at the application from an objective point of view, one will see that we’ve built in many safeguards here to protect competitor interest and especially customer interest; things like reasonable substitutes and adequate notice. "And in our view when conditions are met, when you have a reasonable substitute in place either offered by that same ILEC or by another service provider and if you provide a customer adequate notice in order to plan with that service provider the phase out of an old service, there ought to be no policy justification for refusing the withdrawal request," Bibic tells NL.

Bell Canada seeks creation of standard criteria for phase-out of low demand services

News | January 18, 2005

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