Telecom Decision CRTC 2002-76, Regulatory Safeguards With Respect To Incumbent Affiliates, Bundling By Bell Canada And Related Matters<\/i>, issued on December 12, 2002 brings significant changes to the rules governing the way Canadian incumbent telecom carriers can offer services through their previously “unregulated” affiliates. While the Decision was issued in respect of Bell Canada and its Bell Nexxia affiliate, the other major incumbent carriers (ILECs) will have to follow suit. We expect the new rules to significantly hamper the flexibility under which Bell Nexxia has been able to operate until this point in time.<\/p>\n
Background<\/em><\/strong><\/p>\n Earlier this year, GT Group Telecom filed a complaint that asked the CRTC to investigate the activities of Bell Nexxia with the intent of implementing competitive safeguards for competitors of Bell and other incumbent carriers. Concerns existed that Bell had moved its Carrier Services Group (CSG) into Nexxia, adding a layer of process into the provision of services. In addition, there were concerns that Bell used Nexxia in providing single sourced services while avoiding CRTC tariff requirements.<\/p>\n Restricting Bell Nexxia<\/em><\/strong><\/p>\n The Decision severely limits the ongoing operation of Nexxia, with significant implications for competitors, incumbents and large business customers. Until now, ILECs had been able to use their forborne subsidiaries to respond to customer requirements that cannot be served under conventional tariff terms. In most cases, these will now require tariff filings and approval from the CRTC. In addition, the terms under which services are provided by the ILEC to its affiliate will be subject to CRTC scrutiny and approval (including a price floor test), creating a layer of previously unseen inefficiency.<\/p>\n Major Accounts<\/em><\/strong><\/p>\n Major accounts will likely see less flexibility in the way ILECs or their affiliates respond to their special needs. In addition, rates, terms and conditions of existing agreements will need to be tariffed (and therefore subject to public viewing). In the near term, customers should avoid signing agreements until these tariffs become public, in order to compare rates to those being offered under the previously private Nexxia deals.<\/p>\n