Through the summer, we wrote about Bell’s application to raise Centrex rates and the subsequent opposition filed by the Federal government.
On Friday, the CRTC gave final approval to the Bell price increase, rejecting arguments to allow customers out of their contracts in the case that the telephone company initiates the tariff increase.
The Commission said
if the Commission were to direct the Companies, as has been essentially suggested by MTS Allstream, to modify the terms of their Centrex tariffs, and by extension other tariffs, so as to provide customers with the ability to reduce or eliminate their use of a service during the term of a contract period without incurring any penalties, the Commission considers that incentives for the ILECs to continue to make available discounted pricing plans for their customers would be greatly reduced.
This seems disingenuous. According to the CRTC, customers can’t be let out of their contracts when the phone companies raise their prices, because of a fear that ILECs may no longer offer discounts for long term contracts if customers aren’t bound to stick it out. What about the idea that a contract is binding on both parties? What good are discounts if the ILECs get to raise the prices of their own will in the middle of the term?
The ILECs created their own disincentive for customers to sign up to long term contracts, since there is apparently no assurance that the pricing will be maintained. What Allstream sought was for the Commission to permit customers to hold ILECs accountable to offer the committed prices for the duration of the contract period. You would think this wasn’t a novel concept.
Who won in the end? We’ll see if the rate increase was worth the loss of goodwill when these contracts are up for renewal.