How would you safeguard consumer telephone service quality in markets that don’t have competitive choice?

In areas that are now forborne, the CRTC has already determined that there is a sufficient level of competition to discipline prices and so it is presumed that service quality can also be disciplined by market forces. If you don’t like the quality, you have the choice of other service providers.

But what do we do with the other places? That is a question that the CRTC is grappling with.

Up until yesterday, phone companies tracked 17 different quality metrics and had to report on action plans when they achieved failing grades on any for 3 consecutive months. In addition, there was a plan that rebated money to customers using a formula if there was a particularly bad year for service performance.

The rebates have never amounted to anything that could satiate a customer that suffered from extremely poor service. Between 2002 and 2005 rebates ranged from $0.19 to $2.73 per subscriber per year and there was no requirement to rebate in 2006 and 2007. Rebates were paid to all subscribers, not just those who suffered poor service quality.

Add to that the consideration that there is an ever shrinking number of places deemed ‘non-forborne’, and so fewer customers are impacted by a relatively onerous (ie. costly) reporting regime. As such, the Commission determined that the current reporting requirements are not “efficient and proportionate to their purpose,” nor “minimally intrusive and as minimally onerous as possible,” which are factors required by the Policy Directive. So, the CRTC has trimmed the 17 indictors to just 3:

Bell Aliant, Bell Canada, MTS Allstream, NorthernTel, Northwestel, SaskTel, TBayTel, Télébec, and TCC to continue reporting on a quarterly basis the results for the following indicators: (a) 1.2 – Installation appointments met; (b) 2.1 – Out-of-service trouble reports cleared within 24 hours; and (c) 2.2 – Repair appointments met.

The CRTC has launched a follow-up mini-proceeding to look at whether there are other key indicators to be tracked or if the Commission should rely on a complaint-based regime.

Public comment is due in January with a final decision by May.

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CRTC, service quality

First it was TELUS Koodo.

Then came Rogers’ rebranded Fido.

Now, Bell’s Solo brand is offering plans with no add-on fees (such as system access fees or 9-1-1 charges).

Available starting tomorrow until December 31, four new Unbeatable plans now offer clients rates starting at $15 per month for both local calling and text messaging. Clients on Unbeatable plans can pay just $5 a month to share minutes and get unlimited local and Canada-wide long distance calling as well as unlimited texting with up to four family and friends on the same account. Higher-end plans also include unlimited incoming calls.

Unlike Koodo, Solo is offering some higher end smart phones such as the Samsung CLEO and the BlackBerry Pearl 8130.

We’re seeing signs of the Christmas specials from the discount labels.

What will the seasonal offers look like from the core brands?

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Bell, Solo

In a joint Broadcast and Telecom Decision, The CRTC rejected an application by Maskatel and Telephone Drummond that asked the CRTC to discipline Cogeco for offering services at too low a price.

They argued that Cogeco’s pricing initiatives, targeting customers in Saint-Hyacinthe and Drummondville, were unjust.

But, the CRTC was not about to issue a decision ordering Cogeco to raise consumer prices.

The Commission found that there may indeed be discrimination, but it is not unjust – rather, it is a normal competitive market response.

The Commission remains of the view that, as noted in several previous decisions, competition among distributors, along with end-user choice for consumers, can contribute to the achievement of a number of the objectives of the Broadcasting Act. Among other things, competition can contribute to the affordability of service by encouraging distributors to reduce subscription rates for end-users in their attempts to obtain subscribers.

Competition is working. Prices are coming down. Hopefully, industry participants can get used to that.

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CRTC, Cogeco, Maskatel, Telephone Drummond

With all of the attention on the CRTC’s broadcast decision last Thursday afternoon, you may have missed a Telecom Order that was also released that day which gives many customers of Bell and Bell Aliant a rate reduction.

The issue is that the companies have been charging too much, which resulted in a $16.3M recurring surplus for residential customers that are in non-high cost serving areas.

Bell had proposed to refund $1.3M to those in non-forborne areas and keep the amount attributable to the forborne areas.

Bells argument was that

if they were directed to implement the required rate reductions in non-HCSAs … they could, under the current regulatory environment, simply offset them by implementing corresponding rate increases to these services.

The CRTC wasn’t happy with this $15M annual windfall to Bell and so it has ordered Bell to reduce the price ceilings for those in competitive markets.

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CRTC, deferral account

Rogers has come out with new branding for its discount brand, retaining the dog imagery, but putting the focus on Fido’s home. Together with the new graphics, the new Fido branding will carry taglines: ‘giving low prices a good home’ and ‘les bons prix font les bons amis’ in French.

Together with the new brand, the new Fido launched a suite of new price plans and an ‘owner’s guarantee’: providing customers with services to control their monthly wireless bills and no surprises. These include low prices, usage alerts (at 75% and 100% of their monthly allotments), easy switching between price plans, and the option to have no term contract.

Customers can choose from a suite of Fido’s new ‘all-in’ price plans, starting from $15 per month, including plans with unlimited text messages that start at $25 per month. And yes, ‘all-in’ really means that it includes system access fees, 911 fees and all that jazz.

The old Fido was urban-centric with a younger demographic. That market is seen as heavily penetrated. The new Fido is looking to increase Canada’s wireless penetration – what Rogers is referring to as the future demographic – with entry level price points that are attractive to people who have never had a cell phone before.

Fido’s new approach seems to also sets its sights on Rogers’ pre-paid competitors, including Virgin and PC brands that use the Bell network. Not a bad strategy since Rogers has the lowest percentage of prepaid customers of the 3 big wireless carriers in Canada.

We suspect that phones with entry level plans, such as those offered by the new Fido, are going to make their way onto a lot of holiday shopping lists.