ILECs tell CRTC to reject Primus Canada’s application on winback rules

Incumbent telephone companies have resoundingly told the CRTC that it should reject Primus Telecommunications Canada Inc.’s application for a re-establishment of the 12-month no-winback rule (NL, June 22/06). Aliant Inc., Bell Canada and SaskTel state in their July 6 response that Primus’ application runs counter to commission policy with respect to promoting competition. In reference to a speech CRTC chair Charles Dalfen gave at the 2006 Canadian Telecom Summit, the company notes obstacles "are intended to foster competition, not for the benefit of the competitors but for Canadian telecommunications consumers and businesses, particularly, small businesses." The incumbent telephone companies continue that the commission took the same approach in rendering the landmark ruling on local forbearance (Telecom Decision 2006-15) when it stated the CRTC isn’t in the game of reviewing the variable costs of competitors. "For this reason, the customer connection and acquisition cost information provided by Primus…is irrelevant. Regulating to promote the financial viability of competitors is inconsistent with stated commission policy," reads Bell’s response. The three ILECs also take issue with Primus’ assertion that winback rules should be decided on a market-by-market basis. The telephone companies cite two cases in which the commission didn’t assess the competitiveness of local markets before rendering decisions: review of winback rules and promotions in 2003 (Telecom Public Notice 2003-1) and local promotions last year (Telecom Decision 2005-25). Telus Corp. agrees with Bell et al. in this regard noting that "the commission has never made reference to competitive conditions in particular geographic areas in creating or modifying the local winback rule." The company adds that in 1998 when the original no-contact period was established and in 2004 when it was extended to 12 months, Primus didn’t contest the fact that it was done on a national basis. The ILEC also rebukes Primus’ claim that granting a stay for winback-related issues in the local forbearance ruling is in the public interest. "It is a particularly perverse interpretation of the public interest that would lead to the granting of a stay that would result in reduced choice for consumers," writes Telus. "Primus’ claim rests on the theory that there is no other possible consequence of the shortening of the winback no-contact period than the ‘diminution of competition,’ but provides no evidence that would exclude the possibility of competition actually being enhanced by this measure." Shaw Communications Inc. lent its support to Primus’ call for a return to a 12-month no-winback period. Highlighting the local forbearance ruling and two decisions on winback applications (Telecom Decision 2006-16 and Telecom Decision 2006-17), Shaw states, "Further, from these decisions, one can surmise that the only circumstance pursuant to which removal or relaxation of the winback rules is appropriate is when competition reduces incumbency advantage to a point where targeted winback attempts will no longer grant the ILEC an undue or unfair advantage. Absent such evidence, it should follow that the 12-month no-winback period established in Decision 2004-4 remains appropriate." The Alberta-based cable company agrees with Primus’ assertion that winback rules have to take into account the competitiveness of local markets. "A nation-wide reduction of the no-winback period fails to take into account the state of competition in the relevant local market. This is not only, as Primus points out, inconsistent with the purpose of the winback rules, but is also inconsistent with competition law principles and the forbearance framework itself," Shaw writes in its comments.

ILECs tell CRTC to reject Primus Canada’s application on winback rules

News | July 24, 2006

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