Primus eyes $2 million in savings through CRTC ruling

Last week’s price cap ruling from the Canadian Radio-television and Telecommunications Commission (CRTC) produced some blunt reaction from Canadian carriers.

Call-Net Enterprises Inc. (which

operates Sprint Canada) stated it was “”disappointed”” with the ruling, while AT&T Canada Inc. characterized the decision as a “”marginal improvement over the status quo.””

But not all competitors were disappointed with Telecom Decision CRTC 2002-34.

Ted Chislett, president of Toronto-based Primus Telecommunications Canada Inc., said Tuesday he predicts his company will save about $2 million per year because Primus will not have to pay as much to access its competitors facilities.

“”That’s an improvement from the way things were before this decision occurred,”” Chislett said. “”Our (financial) plans did not take into consideration that we were going to benefit from this.””

Primus Canada, which is 100 per cent owned by McLean, Va.-based Primus

Telecommunications Group Inc., resells telecommunications services, such as long-distance and local voice service, to residential and small business customers.

The CRTC decision, issued last Thursday, limits the amount that ILECs can charge CLECs for “”essential”” services to 15 per cent above cost – down from 25 per cent above cost.

“”It’s hard to argue that 15 per cent is unreasonable,”” Chislett said of the CRTC ruling. “”This means we get more cash. We’re more competitive as a result of this, and I think that’s the case with almost anyone in the competitive arena.””

But Sprint Canada is not counting its chickens before they hatch.

Jean Brazeau, Call-Net’s senior vice-president for regulatory and government affairs, said his company won’t know for about six months how much money it will save, because the CRTC did not make a specific decision on the pricing for services such as digital network access.

“”Only once we get a final decision on those issues will we know how good or bad this decision was,”” Brazeau said. “”There’s a fairly significant cost reduction, but not at the front end. It’s difficult for anybody to tell you today what it’s worth.””

He added Call-Net’s problem with the decision was not so much the substance but the overall tone.

“”It sort of sounds like the Commission has given up on competition, and they’re still supporting the view that their definition of facilities-based competition is you have to build the network, and then get the customers,”” Brazeau said. “”We have continuously argued, ‘No, that’s not the way it works. You have to get customers, and then you build networks.’ They have never bought that argument and they still seem to not buy that argument, and I think that was the most discouraging part of the decision.””

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