AGT Limited Floor 31, 10020 - 100 Street Edmonton, Alberta T5J 0N5 Bus. (403) 493-6530 Fax. (403) 493-6542Late last week I received a copy of the Commission's letter of June 20, 1995 advising AGT that the record with respect to Tariff Notice No. 609 ("TN 609"), dealing with the introduction of AGT's proposed Planet Service, is not yet complete and that, accordingly, the Commission will be unable to dispose of this filing within the statutorily prescribed norm of 45 business days. In its letter, the Commission further advised AGT that it expects to render a decision by the end of September.
D.J. (Don) Lowry President & Chief Operating Officer
June 26, 1995 Mr. Allan J. Darling Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2
RE: AGT Tariff Notice No. 609 Introduction of AGT Planet Service
My purpose in writing this letter is to express AGT's extreme dissatisfaction with the regulatory delays AGT is encountering in seeking to introduce this competitive service into the market.
On April 19, 1995 AGT filed TN 609, requesting the Commission's approval by May 1, 1995 and requesting, should the Commission be unable to grant final approval by that date, that interim approval be granted. AGT prepared TN 609 in accordance with the Commission's filing requirements as prescribed in Telecom Decision CRTC 94-19. The Company filed, as part of TN 609, an economic analysis study, incorporating AGT's existing tariff rates and all relevant costs, in compliance with the Commission's Phase II costing methodology.
Two interested parties, CADVision Development Corporation and TELNET Canada Enterprises, both of which, by no coincidence, happen to be existing competitive suppliers of Internet access service, filed comments with the Commission on May 5, 1995 and May 18, 1995, respectively. AGT replied to these comments on May 15, 1995 and May 30, 1995, respectively.
On May 8, 1995, the Commission served AGT with a number of interrogatories, seeking clarification on the proposed conditions of service for AGT Planet Service and requesting that AGT file any available copies of conditions of service employed by other providers of Internet access, along with a comparison to the Company's proposed conditions of service. Following significant efforts to gather as comprehensive a set of conditions of service (employed by other competitors) as possible and to undertake a thorough comparison to assist the Commission, AGT filed its interrogatory responses on June 12, 1995.
Barring any subsequent information that the Commission may request, AGT submits tht the public record on this matter is now complete and fully justifies approval of TN 609. Accordingly, AGT requests that the Commission move as quickly as possible to provide such approval. Any further delays in allowing AGT to enter this highly competitive market will result in significant and irreparable harm to the Company.
AGT's information is that two to three new competitors enter the Candian Internet market each week. AGT is aware that large U.S. based Internet access service providers, specifically Microsoft and America On-Line, have installed systems in Edmonton and Calgary and are expected to commence service by the end of September. AGT has attached, for the Commission's information, newspaper articles from the Financial Post, the Globe and Mail, dated May 30, 1995 with respect to a joint venture among Rogers Communications Inc., Le Groupe Videotron and Shaw Communications Inc. to establish a national computer network to provide services in competition with AGT Planet Service, among others.
It is noteworthy that none of these emerging competitors are regulated (or at least anywhere remotely sa intensely regulated as AGT) with respect to the provision of these services. However, AGT's competitors, in the case of the present filing, are able to intervene in the Commission's regulatory process to purposely delay AGT's entry into this highly competitive market. AGT submits that the Company's proposal to enter the Internet access market should not be unnecessarily frustrated by the willful delaying tactics of competitors.
The harm to regulated telephone companies of "regulatory predation" by competitors is well known and well documented. AGT addressed this issue at length in its submissions to the Commission in the Regulatory Framework proceeding. Nevertheless, competitors continue to employ delaying tactics in the regulatory arena with some measure of success precisely because it takes so much time to conduct a public process and to demonstrate the lack of merit in the positions they advance.
What is all the more frustrating in this instance is that Internet access services, comparable to that which AGT is seeking to offer, are already being provided by a number of telephone companies in different parts of Canada.
AGT notes, for example, that The New Brunswick Telephone Company, Limited ("NBTel") filed Tariff Notice No. 256 on May 31, 1993 proposing a service similar to AGT Planet Service. On July 28, 1993, NBTel's Special Services Tariff Item 3790.1 was approved. NBTel has provided its Internet access service, pursuant to this Tariff, since that date.
AGT Planet Service, although part of AGT's utility segment under the CRTC's split rate base regulatory regime, is a fully competitive service, which will enhance the Company's portfolio of value-added services. AGT Planet Service is a potential source of revenue to the Company, at a time when the pressure on telephone companies to generate revenues from such value-added services is overwhelming. The revenues from AGT Planet Service will contribute to AGT's Phase III local and access categories, thereby reducing pressure for local rate increases and mitigating the magnitude of local rate increases that are otherwise required.
It is essential that AGT be allowed to enter this market without further delay. The company submits that further regulatory delay in bringing AGT Planet Service to the market will severely diminish the likelihood of AGT's success in this market. AGT hsa complied fully with the Commission's filing requirements and has made every effort to respond thoroughly and comprehensively to the Commission's requests for information to assist in its disposition of this filing. AGT submits, moreover, that the public record fully supports immediate approval of this tariff notice. AGT respectfully requests that the Commission grant immediate final approval of Tariff Notice No. 609 - AGT Planet Service, failing which, at the very minimum, the Commission grant immediate interim approval of this proposed service.
Chief Operating Officer
XC: CRTC Vancouver CRTC Public Examination Room Stentor Owners S. Guiton (Unitel) M. Zohar (Sprint Canada Inc.) J.L. Dawson (ED TEL) TELNET Canada Enterprises CADVision Development Corporation