CRTC Rules Bell and Telus Must Pay Customers

by Jordan Richardson on September 1, 2010

Bell and Telus customers from urban areas will be receiving as much as $90 each after the CRTC ordered the two telecom giants to repay overcharges.

The ruling came down on Tuesday and also included a ruling that Bell and Telus must spend millions to upgrade and expand broadband service to rural communities.

All in all, probably not the greatest of days for Bell and Telus when it comes to dealing with the regulatory body. This comes on the heels of another CRTC decision from Monday that mandated that major internet providers, Bell and Telus included, must make their highest broadband speeds available when reselling to smaller ISPs.

In Tuesday’s decision, the CRTC ordered Bell Canada, Bell Aliant, Telus and MTS Allstream to rebate a total of $310.8 million to urban home telephone customers. The rebates will range in amounts from $25 to $90 per customer. In the province of British Columbia alone, Telus will be issuing rebates in some 96 urban locales.

The CRTC ruling comes down after four years of disputes between consumer groups and the telephone giants. The disputes were largely over what was to be done with the overcharges, as there was little dispute over the fact that the overcharges actually took place between 2002 and 2006.

The overpayments came after an order was sent down from the CRTC forcing major landline operators to keep rates in “high service areas” artificially high. This was done to, of course, encourage competition.

The difference between the actual lower rates and the ballooned rates was kept in a deferral account and, after quite a while, the account racked up around $700 million. The companies tangled over the $700 million, with some suggesting that the artificial windfall should be used to upgrade existing services and others saying that the cash should go back to the customers who were overcharged by the market experiment.

“We are pleased that the CRTC has shut the door on the blank-cheque approach of Bell Canada and Telus to expanding their broadband networks,” said Michael Janigan, executive director of the Public Interest Advocacy Centre. Janigan also called the overcharging a “regulatory adventure.”

In 2008, the case went to the Supreme Court and it was decided that the CRTC should be the group to allocate the funds. That brings us up to Tuesday’s decision, as the regulatory body has elected to dedicate some to the customers. The other $421.9 million? That money will go towards helping put broadband in rural areas.

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Written by: Jordan Richardson. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

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