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Oakville Beaver Weekend, Sunday, February 7, 1993 â€" 10 NOTICE TO BELL CANADA CUSTOMERS Since Bell Canada‘s last general rate increase in 1983, the business environment in which the company operates has changed dramatically. The company has had to deal with a weak economy and has lost significant revenues to competition from cellular service providers and in the telecommunications resale and terminal equipment marâ€" kets. Bell Canada has responded by aggressively cutting costs and introducing new products and services to generâ€" ate additional revenues. However, because of the proâ€" longed recession and a largerâ€"thanâ€"expected loss of business to competitors, the company‘s financial prospects will significantly worsen in 1993 and 1994. It must be remembered that Bell Canada has a legal obligation to serve its customers and provide access to local telephone service. To meet this obligation, the comâ€" pany must spend vast sums of money to maintain and enhance its network, products and services. In order to do this, Bell Canada must maintain the financial integrity and strength necessary to attract investment capital. Bell must also generate enough revenues from offerings other than basic local telephone service to subsidize this service which costs more to provide than the rates charged. The company‘s projected revenues for 1993 and 1994 will not be sufficient to meet these responsibilities. Therefore, on 5 February 1993, Bell applied to the Canadian Radioâ€"television and Telecommunications Commission (CRTC) for a general increase in local rates. If approved, the increase would be the first general increase in 10 years. An initial interim increase would take place on 1 April 1993. A second increase would come into effect on 1 September 1993, with a further increase on 1 November 1993 for customers in and around Montréal, when the Community Calling Plan (described below) is introduced there. What is the application all about? Phase I On 1 April 1993, local rates would increase by $1.40 per month for all residence customers with individualâ€"line serâ€" vice and $3.25 per month for all individualâ€"line business customers. Customers with twoâ€" or fourâ€"partyâ€"line service would see monthly increases of $1.00 (residence) and $2.30 (business). In addition, two service charges for the installation of resiâ€" dence basic telephone service (Primary Service Connection Charge and Primary Premises Work Charge) would each increase by $3.00. Phase II In the second phase, a new service, the Community Calling Plan, would be introduced to customers living in and around Toronto, Ottawaâ€"Hull and Montréal. This new service would expand the local calling area for those customers. Long distance charges would be eliminated for all calls made from anywhere in the three plan areas to any other location within the same plan area (see maps 1, 2 and 3). With the Community Calling Plan, Bell is taking an innoâ€" vative approach which it believes will respond to cusâ€" tomers‘ oftenâ€"expressed desire for wider local calling. This plan would provide customers with the many social and economic benefits associated with being able to call more locations without paying long distance charges. The Community Calling Plan would come into effect on 1 September 1993 for customers living in the Toronto and Ottawaâ€"Hull areas (see maps 1 and 2), and would be introduced in the Montréal area (see map 3) on 1 November 1993. In total, Community Calling Plan customers with individualâ€"line residence service would pay an average of $7.65 a month more for local service than they pay now (including the 1 April 1993 increase). The increase for residence customers with twoâ€" and fourâ€"partyâ€"line service would average $3.70 per month, ranging from decreases of $0.70 a month to increases of $8.55, depending on where a customer lives. The plan would totally eliminate long distance charges for calls made within the Community Calling Plan areas. Individualâ€"line business customers would see increases averaging $15.35 a month over their present rates. Rates for twoâ€" and fourâ€"party business customers would increase by an average of $31.65 a month, but would range from $14.10 to $35.80 per month, depending on the cusâ€" tomer‘s location. Within each Community Calling Plan area, customers located in the ring surrounding the urban core would pay higher rates than those customers located within the core. This is because customers outside the core would have relâ€" atively more exchanges added to their current local calling areas than those in the core. Customers outside the Toronto and Ottawaâ€"Hull Community Calling Plan areas On 1 September 1993, customers in the Montréal Community Calling Plan area, and all other customers outside the Toronto and Ottawaâ€"Hull Community Calling Plan areas, would also experience a monthly rate increase. Including the 1 April 1993 increase, residence customers with individualâ€"line service would pay between $1.40 and $4.90 more per month, depending on where they live (see chart 1). Rates for residence customers with twoâ€" or fourâ€"partyâ€"line service would range from a decrease of $1.05 per month to an increase of $1.80 a month. § Business customers outside the Toronto and Ottawaâ€"Hull Community Calling Plan areas who have individualâ€"line service would pay $3.25 to $13.25 a month more than their current rate, depending on their location (see chart 1). Twoâ€" and fourâ€"party business customers would see increases of $6.40 to $17.20 a month. On 1 November 1993, the Community Calling Plan will be introduced in the Montréal area, with customers‘ rates moving to those outlined in chart 2. An Alternative Plan Should the CRTC decide not to approve the Community Calling Plan, the company would propose an alternative twoâ€"phase increase that would be based on a more conâ€" ventional rating structure. Under this alternative, the Chart 1: Current and proposed monthly rates All exchanges shown on maps 1, 2 and 3 will be rated under the Community Calling Plan (CCP) schedule. Chart 2 provides rates and CCP effective dates for these exchanges. 1 April 1993 increases would go ahead as indicated in the original proposal and a second increase would come into effect on 1 September 1993 at rates similar to those on chart 1, for all customers. Individualâ€"line residence cusâ€" tomers would pay an average of $3.85 more per month than they do now. Twoâ€" and fourâ€"partyâ€"line residence customers would pay an average increase of $1.50 per month. For business customers, the total increase would average $6.50 a month for individualâ€"line service and $10.75 for twoâ€" and fourâ€"party service. If the rate increases in either of these alternatives are approved, the rate changes would generate additional revâ€" enues of about $210 million in 1993 and $450 million in 1994. This would represent a 2.7 per cent increase in revâ€" enues for 1993 and a 5.3 per cent increase for 1994. How would my rates be affected by the application? Examples of how rates would be affected by the proposed changes are shown in charts 1 and 2. A detailed schedule of the proposed changes, which indicates specifically how rates would be affected in your community, is provided in the application itself. Why is Bell asking for a rate increase now? The full details of the company‘s justification for the increase are set out in its application. In summary, howâ€" ever, the prolonged recession has considerably reduced the company‘s revenues from traditional business and resâ€" idential services. Increased competition from cellular serâ€" vice providers and in the telecommunications resale and terminal equipment markets has reduced the company‘s revenues much faster than expected, undermining the company‘s ability to sustain the level of subsidization, called for by public policy, required to help pay for the high cost of local service. To respond to the changing economic and competitive environments, Bell has taken many steps to decrease its costs, including significant staff reductions and large investments in productivityâ€"enhancing computer systems. These efforts have paid off. A recent independent study* indicates that the company‘s costs of providing local serâ€" vice to customers are lower than the vast majority of teleâ€" phone companies in North America. In addition, the company has introduced new services and features to genâ€" erate additional revenues. But costâ€"cutting and new sources of revenue will not be enough to make up the large revenue shortfalls expected for 1993 and 1994. Local rates will have to increase if the company is to respond to continuing customer demand for highâ€"quality service while maintaining the financial integrity necessary to attract investment. All of the assertions above, and the application itself, will be subject to questioning and examination at a CRTC public hearing in which any Bell Canada customer may participate. If you would like more information regarding Bell‘s appliâ€" cation, please call 1â€"800â€"668â€"2355. * 1991 Topâ€"Line Local Service Productivity Benchmark Mercer Management Consulting Inc. Chart 2: Monthly rates for exchanges that are part of the Community Calling Plan (CCP) for the Toronto, Montréal and Ottawaâ€"Hull CCP areas (see maps) Toronto Community Calling Plan area: Proposed _ Proposed monthly _ monthly Present rates rates monthly _ effective _ effective Examples of te Gr rates 1 April 1993 1 Sep. 1993 communities 3 â€" Res Individual $5.60 $7.00 $10.30 Pelee Island, Bus Individual 1235 15.60 25.60 Armstrong, Ont. Trunk line 2245 2245 32.75 Biencourt, Que. 3A Res Individual $5.00 $6.40 $9.80 Attawapiskat, Bus Individual 10.80 14.05 23.60 Peawanuck, Ont. Trunk line 20.00 20.00 29.90 Posteâ€"deâ€"laâ€"Baleine, Kuyjjuaq, Que. 4 _ Res Individual $6.10 $7.50 _ $10.80 Nipigon, Elgin, Ont. Bus Individual 14.35 17.60 27.60 Fortierville, Que. Trunk line 25.65 25.65 35.60 5 Res Individual $6.40 $7.80 $11.30 _ Barry‘s Bay, Cardiff, Ont. Bus Individual 16.45 19.70 29.60 _ Tadoussac, Weedon, Que. Trunk line 29.05 29.05 38.45 6 Res Individual $7.10 $8.50 _ $11.80 Calabogie, Bus Individual 19.00 2225 31.60 Pakenham, Ont. Trunk line 33.05 33.05 41.30 _ Lachute, Steâ€"Agathe, Que. 7 _ Res Individual $7.40 $8.80 $12.30 Minden, Stratford, Ont. Bus Individual 22.00 2525 33.60 Stâ€"Polycarpe, Trunk line 38.25 38.25 44.15 Riviereâ€"duâ€"Loup, Que. 8 _ Res Individual $8.00 $9.40 $12.80 _ Cardinal, North Bay, Ont. Bus Individual 25.55 28.80 35.60 Drummondville, Trunk line 44.15 44.15 47.00 Jonqui¢re, Que. 9 Res Individual $8.75 $10.15 $13.30 Windsor, Whitby, Ont. Bus Individual 29.10 3235 37.60 Troisâ€"Rivicres, Trunk line 49.85 49.85 49.85 Sherbrooke, Que. 10 â€" Res Individual $9.15 $10.55 $13.80 _ London, Burlington, Ont. Bus Individual 32.10 35.35 39.60 Québec, Trunk line 54.45 54.45 5445 Temiscaming, Que. 11â€" Res Individual $9.60 _ $11.00 _ $14.30 Ottawa, Carp, Ont. Bus Individual 34.95 38.20 41.60 _ Luskville, Wakefield, Que. Trunk line 59.05 59.05 59.05 12â€" Res Individual $10.65 $12.05 $14.80 Rockland, Bus Individual 38.25 41.50 43.60 Clarence Creek, Ont. Trunk line 64.30 64.30 64.30 Chomedey, Stâ€"Constant, Que. 13â€" Res Individual $11.60 _ $13.00 $15.30 Chateauguay, Bus Individual 4140 44.65 46.40 Pointeâ€"Claire, Que. Trunk line 69.50 69.50 69.50 14 Res Individual $12.60 $14.00 $15.80 _ Toronto, Port Credit, Ont. Bus Individual 44.10 47.95 49.20 Montréal, Mascouche, Que. Trunk line 75.00 75.00 75.00 15â€" Res Individual $13.70 _ $15.10 __ $16.30 _ Kleinburg, Pickering, Ont. Bus Individual 48.00 51.25 52.00 _ Vaudreuil, Verchéres, Que. Trunk line 80.50 80.50 80.50 16â€" Res Individual $14.75 $16.15 $16.80 Oakville, Clarkson, Ont. Bus Individual 51.30 54.55 54.80 Trunk line 85.95 85.95 85.95 17â€" Res Individual $15.85 $17.25 $17.30 Stouffville, Aurora, Ont. Bus Individual 54.50 57.75 57.75 Trunk line 9140 9140 9140 18â€" Res Individual $16.90 $18.30 $18.30 Hudson, Oka, Que. Bus Individual 57.85 61.10 61.10 Trunk line 96.80 96.80 96.80 19 Res Individual $17.95 $19.35 $19.35 Mirabelâ€"Aéroport, Que. Bus Individual 61.20 64.65 Trunk line 102.20 102.20 102.20 20 â€" Res Individual $19.00 $20.40 $20.40 Claremont, Bus Individual 64.55 67.80 67.80 Schomberg, Ont. Trunk line 107.60 107.60 107.60 Proposed rates Proposed rates* for the Toronto for the other CCP exchange effective exchanges on map 1 Service 1 Sep. 1993 effective 1 Sep. 1993 Residence individual $19.45 $21.95 Business individual $58.50 $64.50 Trunk line $80.50 $80.50 Montréal Community Calling Plan area: Proposed rates for the Montréal exchange effective Proposed rates* for the other CCP exchanges on map 3 Service 1 Nov. 1993 effective 1 Nov. 1993 Residence individual $18.65 $21.15 Business individual $56.10 $62.10 Trunk line $75.00 $75.00 Ottawaâ€"Hull Community Calling Plan area: Proposed rates Proposed rates* for the Ottawaâ€"Hull for the other CCP exchange effective exchanges on map 2 Service 1 Sep. 1993 ffective 1 Sep. 1993 Residence individual $15.85 $18.35 Business individual $47.70 $§53.70 Trunk line $59.05 $59.05 * An additional charge of $0.50 to $1.00 will apply in exchanges with local calling outside the CCP area.