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TUCoPS :: Cyber Law :: policy.txt

BC Tel Policy on Competition





The following was received from BCTel Feb. 20 1991. It's original
WordPerfect formatting has been removed. The original layout
formatting may have been altered in this conversion process, but
the text has not been altered either in content or it's original
order.

-JC- Feb 20 1991
******************************************************************
November 29, 1990


            POLICY STATEMENT ON COMPETITION



B.C. Tel is in favour of competition where it makes sense.
However, we do not believe it makes sense in Canada's long
distance market.


Most importantly, the type of competition being advocated in
Canada today is not genuine competition. Toronto based Unitel is
asking for a 15 percent price differential.  Unitel is able to
afford this differential because it doesn't want to pay its fair
share toward subsidizing the cost of local service.  B.C.
Rail/Lightel (BCRL) is even less willing to subsidize local rates
adequately. In addition, BCRL wants to establish its network on
only the most lucrative long distance ro utes, thereby skimming
off revenues B.C. Tel uses to maintain affordable local prices.
Far from establishing a competitive environment, such artificial
advantages would instead create merely the illusion of
competition.


Furthermore, the Sherman Report concluded that only a small
percentage of Canadians would benefit from competition.  According
to this study, nine out of ten customers would have higher monthly
telephone charges if there were alternative long distance
services.


The Sherman Report also examined the impact of long distance
competition in countries where it already exists.  From the
American experience, researchers found that:

        most customers pay higher phone bills;

        lower long distance prices are mostly due to regulatory
        action, not competitive entry;

        while competition provides extra choice to customers, most
        are more confused about service and offerings; and

        there is no evidence that competition improves
        productivity.


Commissioned by the FederalİProvincialİTerritorial Task Force on
Telecommunications; published December 1988.


                                     2



As for claims by proponents of competition that it brings greater
technical innovations, the Sherman Report concluded:  "Canadian
telephone companies appear to have kept pace with international
technological developments, and they have built one of the most
modern and functionally efficient telecommunications networks in
the world."


These conclusions are backed up by U.S. data contained in a
February 1989 report issued by the Federal Communications
Commission.  According to the FCC, the average decrease in
interstate long distance rates over the past five years (1984 -
1989) has been 29 percent; intraİstate rates have gone down by
just 8 percent.  Local charges in the U.S., however, have
increased by 31 percent during the same period.  In B.C. during
this time, local rates have gone up only 9 percent, whereas prices
for long distance service have decreased by almost 30 percent.

It is the responsibility of the Canadian Radio-television and
Telecommunications Commission (CRTC) to determine whether long
distance competition is in the best interests of the public.  The
CRTC will hold public hearings commencing April 15, 1991 to allow
Canadians to air their views on this subject.





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