Telecom Decision CRTC 2003-23, GT Group Telecom Services Corp. v. Aliant Telecom Inc. – Tariff violations and contraventions of the Telecommunications Act, and Telecom Public Notice CRTC 2003-4,Measures with respect to incumbent telephone company regulatory compliance both issued on April 10, 2003, demonstrate the increasing level of frustration that the CRTC has felt with regulatory mischief on the part of Canadian incumbent telephone companies.
Background
In April of 2002, GT Group Telecom asked the CRTC to investigate the Atlantic incumbent carrier, Aliant, in respect of off-tariff pricing for Centrex services for Memorial University of Newfoundland (MUN). Group Telecom asked the CRTC to investigate and take steps to ensure that Aliant conforms with its tariffs and statutory obligations. In the past six months, the CRTC has found violations of various Decisions, Orders and directives by other major Canadian incumbent carriers, in response to complaints by Call-Net and Group Telecom.
Finding Fault
In today’s Decision, the CRTC agreed with Group Telecom and found that Aliant knowingly contravened its own tariffs in all three areas that were the subject of Group Telecom’s complaint in order to maintain the MUN account. The CRTC took the unusual step of asking Aliant to show cause as to why the Decision should not be registered with the Federal Court. Registering a Decision in this manner makes continued violations the subject of contempt proceedings.
Inspectors
Until now, the CRTC has relied on competitors to launch a complaints process before the Commission took the steps to investigate a problem. Given the nature of the relationship between the telephone companies and their customers, competitors often do not have the ability to provide the Commission with concrete evidence of misbehaviour. In today’s Public Notice, the CRTC has announced that it will designate inspectors, for the purpose of verifying compliance with the Telecom Act and stated that inspections could begin any time after mid-June, 2003.
Summary
Throughout the past 11 years of significant telecom competition, a number of CRTC Decisions have been released too late to be of assistance to the original complaining party. With the history of new entrants launching complaints and then withering away into bankruptcy, the CRTC had to be feeling pressure to be more proactive. The signals for this aggressiveness have been coming since the summer of 2002. Competitors have much reason to celebrate. While Bell and Telus have likely been reviewing their major contracts due to earlier bundling decisions, there will be a renewed focus given the clear lack of tolerance for continued abuses.
Incumbent carriers that are seeking increased flexibility in pricing will have their work cut out for them to explain new ways that customers are buying integrated services and new pricing models that such accounts are demanding. As we noted last December, in the end, large businesses may be the losers, with less competition, reduced incumbent flexibility and higher prices from the major ILECs.