A couple weeks ago, we warned about Bell‘s application to increase Centrex rates by 10%.
The CRTC gave interim approval to Bell’s tariff filing, but Allstream and the federal government, under the Department of Justice, have filed interventions.
At the heart of both complaints are two fundamental issues: the inflation cannot reasonably be blamed for the price increase; and, customers are not able to escape their contracted terms, despite Bell unilaterally taking this price action, raising the costs of services under the contracts.
Allstream is particularly concerned about the anti-competitive effects, since it acts as a Centrex aggregator.
The Federal Government’s complaint is interesting reading. As a customer, the Government consumes a lot of Centrex: 177,000 directory numbers in 1,500 locations serving 100 departments. The government signed its contract less than a year ago, in November 2005 for a fixed 3-year period, with an additional 3-year option. The tariff increase will cost taxpayers $4M per year or potentially $20M over the full remaining life of the contract.
The government contract was already bitterly fought – with Bell winning on price. The deal was the subject of a trade tribunal review, and judicial review and CRTC complaint. Bell won on price. But now that the contracts are signed, Bell raises the prices.
Nasty business.
How should customers respond? We have a number of strategies to address these issues.
One might start by sending notice of intent not not renew at option time. Send it now. A flood of such letters may help trigger a fresh look at those inflation calculations.