aparghi@watcgl.waterloo.edu (Amit Parghi) (07/25/89)
First, some background: The Canadian Radio-television and Telecommunications Commission (CRTC) is the federal agency responsible for regulation of radio, TV, and phone service in Canada. Bell Canada (once a division of, but no longer related to, Ma Bell in the States) serves Ontario, Quebec, and part of the Northwest Territories. B.C. Tel serves British Columbia, and NorthWestel serves the Yukon and the rest of the Northwest Territories. Teleglobe Canada provides [I think] international service to the regional telcos, while Telesat Canada provides satellite services both to the telcos and to individual [usually corporate] customers. All figures are in Canadian dollars. Excerpted from the Toronto _Globe_and_Mail_, Tuesday, 18 July 1989: PROVIDE DISCOUNTS WORTH $288 MILLION TO LONG-DISTANCE CALLERS, BELL ORDERED Less than a month after Bell Canada was told to give $261-million in free basic telephone service to its customers, it has been ordered to give long-distance users a $288-million dollar discount. The Canadian Radio-television and Telecommunications Commission yesterday also ordered B.C. Tel, Northwestel and Teleglobe Canada to reduce their long- distance rates by October 2, 1989. Telesat Canada was ordered to give up part of a 5.5 percent increase it would have implemented on January 1. The CRTC ruling follows a decision announced June 22 by the Supreme Court of Canada that requires Bell Canada to repay its customers $261-million in overcharges by providing two months of free basic service. Because of reductions in corporate income tax rates and changes in the way deferred taxes are calculated, the CRTC ruled that the five federally regulated long-distance companies overshot the total amount of deferred taxes they are allowed to carry by $350-million. The companies are required to create a reserve account in the amount they have exceeded their allowable tax deferment and charge against it over five years while giving equivalent long-distance rate reductions. [...] The CRTC did not dictate to the companies which of their long-distance rates they should reduce and by how much. That is at their discretion. [...] The CRTC's move to reduce the carriers' deferred tax total by forcing them to cut long-distance rates is in keeping with its policies of the past four years, said Eamon Hoey, president of [...] a telecommunications research firm in Toronto. "Any savings it has been finding in any cases it has been hearing since it put an embargo on increases to local rates have been in keeping with its policy of reducing long-distance rates," he said. *** End of story. Even more interesting than this recent decision is the CRTC's earlier decision (which I haven't seen discussed on on TELECOM), which ordered Bell Canada to pay back CAN$261-million in local service charges to its customers. Bell appealed the ruling on the basis that the CRTC had no authority to order a retroactive refund. After a good deal of legal wrangling (leading up to the Supreme Court of Canada), the Supreme Court ruled that the CRTC did in fact have this authority. Bell has decided to implement the refund by giving two months of free local service (which is about CAN$8.75 per month, plus touch- tone rates and phone rental[s]) to all customers who had Bell Canada service as of October 14, 1986 - the date of the original CRTC ruling ordering the refund.