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- 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
- ******************************************************************
-
-
- DATE: NOVEMBER 30, 1990
- SUBJECT: B.C. TEL FILES EVIDENCE OPPOSING ENTRY OF UNITEL AND
- BCRL INTO LONG DISTANCE MARKET
- CONTACT: MAUREEN KIRKBRIDE, MEDIA RELATIONS SPECIALIST
- 432⌐2661 (OFFICE) 737⌐0044 (HOME) 290⌐9724 (PAGER)
-
-
- B.C. Tel today filed evidence with the Canadian Radio-television
- and Telecommunications Commission opposing bids by Unitel
- Communications and B.C. Rail/Lightel (BCRL) to enter the long
- distance market.
-
- "B.C. Tel is in favour of competition where it makes sense.
- However, we do not believe applications by either Unitel or BCRL
- are in the best interests of the Canadian public," B.C. Tel
- president and CEO Brian Canfield told reporters at a Vancouver
- news conference this morning.
-
- "Canada already has one of the best telephone systems in the
- world. Entry by either applicant would jeopardize this without
- providing the advantages generally associated with
- competition,"said Canfield.
-
- Canada ranks second only to Sweden for the highest levels of
- universal service in the world. Canadians also enjoy overall
- telephone prices that are among the world's lowest.
-
- In the past four years, productivity increases have allowed
- B.C.Tel to reduce long distance rates by an average of 37 percent.
- Over the next decade providing the existing system remains
- unchanged. Canfield said the company would implement the following
- additional reductions:
-
- 35 percent off calls to provinces east of Alberta
- 20 percent off calls to Alberta
- 35 percent off calls to the U.S.
-
- B.C. Tel also plans to introduce further discounts of up to 50
- percent for high volume long distance calling. "All of these
- reductions would be accomplished the need for local rate increases
- which accompanied long distance competition in the U.S.," said
- Canfield.
-
-
- 2
-
-
-
- With modest increases in local rates, the company would be able to
- slash the price of long distance service even further over the
- same period. If local rates were increased at the rate of
- inflation for one year, and at half the rate of inflation for the
- next seven years, Canfield said B.C. Tel could instead implement
- the following reductions:
-
- 47 percent off calls to provinces east of Alberta
- 33 percent off calls to Alberta
- 47 percent off calls to the U.S.
- 18 percent off overseas calls
-
- B.C. Tel would also introduce further discounts of up to 50
- percent for high volume long distance calling.
-
- B.C. Tel's evidence shows the following risks of entry by either
- applicant:
-
- significantly higher local rates
- higher telecommunication industry costs
- duplication of resources
- increased regulation
-
- Unitel and BCRL have also made a variety of assertions regarding
- the benefits that competition would bring. "Their claims are not
- supported by any solid evidence," said Canfield.
-
- Myth #1 Local rates will not increase as a result of competition.
-
- "If competition is introduced, local rates WILL increase. The
- only question is by how much," Canfield told reporters.
-
- Depending on the terms of entry and the number of entrants, local
- rates would increase by at least 20 to 44 percent over ten years,
- he said.
-
- Canada has adopted a pricing structure which uses revenues from
- overpriced long distance service to subsidize under priced basic
- local telephone service. About 60 percent of long distance
- revenues are currently used to subsidize basic local service.
-
- But both Unitel and BCRL are proposing to pay significantly less
- contribution toward maintaining affordable local rates than
- B.C.Tel. "In effect, the two applicants are asking B.C. Tel's
- customers to subsidize their entry into the marketplace," Canfield
- said.
-
-
- 3
-
-
-
-
- Myth #2 Competition will increase productivity.
-
- Studies have shown that Canadian telephone companies have
- productivity growth rates that are significantly greater than
- those of their American counterparts this despite the introduction
- of competition in that country more than a decade ago.
-
- Myth #3 Competition will stimulate demand for long distance
- services.
-
- If this were true, the U.S. market would have grown more rapidly
- than the Canadian market. This has not been the case. Analysis
- indicates that growth in the demand for long distance services in
- the Canadian market has matched that in the U.S.
-
- Myth #4 The U.S. and Britain have benefited from the introduction
- of long distance competition.
-
- Canada has both higher rates of universal service and lower
- overall prices than either the U.S. or Britain. It also has one
- of the most technologically advanced systems in the world.
- "Canadians have certainly benefited more from their existing
- telecommunications system than the British or Americans have
- through the introduction of competition," concluded Canfield.
-
- The CRTC will consider applications by Unitel and BCRL in hearings
- scheduled to begin April 15, 1991 in Hull, Quebec.
-
-