Minister Noel says CRTC decision good news for consumers

Walter Noel, minister responsible for consumer affairs, says yesterday�s CRTC ruling will protect consumers from higher telephone rates.

The commission has issued new rules for local telephone rates. These new rules will take effect on June 1, 2002 and will apply over the next four years to the largest telephone companies in Canada: TELUS, SaskTel, MTS, Bell Canada and Aliant Telecom.

The commission has denied a request by the incumbent telephone companies for the flexibility to raise rates for residential customers. Residential customers, on average, will not see a rate increase for basic services unless inflation exceeds 3.5 per cent.

The commission has also denied a request from Bell and Telus that would have given them

the flexibility to raise payphone rates. These rates will be frozen until the commission holds a policy proceeding to look at issues related to payphone service in Canada.

The commission is also looking at the establishment of a consumer bill of rights. This will be the focus of a follow-up proceeding.

Minister Noel said: �This decision is over 200 pages long. I have asked officials to review it carefully but it looks extremely positive for consumers.

"I was particularly concerned about the submission which was filed by Bell Canada on behalf of Aliant. Because of my concerns, I made a formal presentation to the CRTC in Hull last October. The major focus of my concerns centred around the proposed amendment to regulations which would enable Aliant to charge differential rates to high cost and low cost service areas and the company�s approach to standardizing a rate for basic residential service for the Atlantic Region.

"I saw no reason to approve any increase in basic telephone rates. I was opposed to any rate structure that would set basic telephone rates in Newfoundland and Labrador at the same rates as those in the rest of Atlantic Canada. This would have resulted in unjustified rate increases for all residents of our province. I further opposed any rate structure that would see residents in rural areas pay more for basic telephone services than in urban areas. I saw this as poor public policy that would be contrary to the policy goals set out in the Telecommunications Act.

"It was important to me that concerns raised by consumers be expressed. If the proposed framework by Aliant had been adopted, residents in Newfoundland would have seen a $3.05 per month increase in their basic residential rate and then up to $30 per month over the period 2001-2005 for rural areas, in addition to inflationary increases for low cost areas.

"Basic telephone service is a necessity for all our residents, and should be available to all at the same rate. It is simply not acceptable for residents in this province who live in rural areas to pay more for this basic service than those who live in urban areas. The proposal would have seen rates in rural areas increase to $29.95 from the current level of $21.95. This would have been an increase of $8.05 per month, or 36 per cent.

"In my presentation, I strongly urged the CRTC not to approve any rating structure that would result in different basic telephone service rates for residents living in different areas of this province. If the Aliant proposal before the CRTC had been accepted, it would have negatively affected 43 per cent of the population and 97 per cent of our communities.

"The second aspect of the Aliant proposal which I opposed was that a price ruling be established to make basic residential prices across the Atlantic region consistent with the price in Nova Scotia, which is $25 per month.

"Newfoundland and Labrador is a distinct geographic region from the rest of Atlantic Canada. It would be highly unjustifiable to charge residents a higher rate simply because the rate is higher in another province. Newtel is already a profitable company. There is no reason to charge our consumers more. If that proposed rate structure had been accepted, consumers would have faced a further rate increase of $3.05 per month, or 14 per cent, and I didn�t see any justification for that.

"The CRTC has taken into account the many concerns that have been raised and has rendered an appropriate decision to protect consumers."

Media contact Rick Callahan, Director of Communications, (709) 729-4860.

2002 05 31                             4:40 p.m.