A recent public document obtained by the Nation contains proposed rate increases for basic phone service in the James Bay region. The document, dated July 6, 2001, was submitted to the CRTC by Telebec. The phone company has proposed rate increases to take place over the next two years for basic residential phone service in Cree territory.
The current base service for 2001 is $26.93 a month. Telebec is seeking an increase to $31.10 for 2002, followed by an additional increase to $34.43 for 2003. These rates apply to the most basic service and don’t include additional service charges. Another $4.95 would have to be averaged out for popular services such as touch-tone, call-waiting and voice mail.
Though the rate increase proposals have been officially submitted to the CRTC, they have not yet been approved. Some of the issues involved in northern phone service include operating in a high-cost service area, opening the doors to competition, implementing competition, and establishing a price cap.
Since James Bay is a high-cost area, Telebec has sought subsidies in the past to allow it to remain competitive in the marketplace. Subsidies were not approved, but previous rate increases have been. Telebec has also gone on record as not being opposed to competition in the region, though this position is not so clear in areas north of Nemaska. Since Telebec isn’t against competition, and there is nobody else to oppose it, it is felt that the CRTC will allow it to happen.
If competition does open up in the area, as it is expected to, Telebec proposes the rate increases as a commercial necessity in the changing telecommunications market. The implementation of competition will involve the establishment of a set of fees for anyone seeking to move into the territory.
“Telebec is very open to competition,” said company representative Norm Kelly. “Any competitor can go anywhere in the area right now.” According to Kelly, Telebec faces no competition in the north due to the high cost of operating in remote areas. “Competition will go places where there is dense population,”said Kelly. “The cost of doing business in the north is high.”
Telebec feels it has no choice but to raise rates in order to bring all the customers in their territory up to par, in compliance with CRTC regulations.
The issue of a rate price cap has been raised. Apparently Telebec wanted to establish a cap somewhere around $42, while Chisasibi Telecommunications and the Cree Nation of Chisasibi sought to set the cap no higher than $28. An unofficial amount of $34.75 has been suggested as a compromise, but this has not been announced by either party or the CRTC, who have to rule on this, and the question of a price cap is an ongoing issue. Telebec officials had no immediate information at hand about possible price ceilings.
“Price Cap is basically a nice way of saying rate increase,” said Jean Sebastien of Action Reseau Consommateurs, a consumer advocacy group.
“The point is not so much that the prices are capped, but that productivity gains can be put in their pockets and distributed to shareholders.” Sebastien points out that since a price cap forces the phone company to operate under certain restrictions, they are then less accountable to the CRTC for how their profits are managed. Price caps are not etched in stone and can be adjusted to keep pace with factors such as inflation.
“We were opposed to any increase in rates without a corresponding increase in service,” said Hyman Glustein, representing Chisasibi
Telecommunications. Glustein made it clear that negotiating a price cap was not the main priority of the Cree group, who seek to oppose any rise in rates without an improvement in the service offered. Though the decision has not yet been rendered, there would be little surprise if the CRTC agreed to the proposed rate increases. “In cases involving phone companies,” added Glustein, “the consumer almost never wins.” A final CRTC decision on the proposed rate hikes is not expected before January, 2002.