SaskTel gains control of rates

CRTC approves Crown's application, more competition expected in market

Cassandra Kyle, The StarPhoenix

Published: Saturday, August 04, 2007

SaskTel will no longer have to apply to a federal body for approval before changing phone service rates in Saskatoon, meaning more competition in the local market.

On Friday, the Canadian Radio-television and Telecommunications Commission (CRTC) handed down a decision approving an April SaskTel forbearance application. The company can now change prices on basic local phone service -- as well as on features such as call display and on installation fees and other service charges -- without waiting for approval. They are also now able to make changes to service bundles independently. SaskTel's phone services had been regulated by the CRTC since 2000. SaskTel's Internet, TV and cellular services remain unregulated.

John Meldrum, SaskTel's vice-president of corporate counsel and regulatory affairs, said the decision will let market forces govern prices, rather than regulatory rules. The change will allow them to better compete with the city's other major phone service providers Shaw Communications and Rogers Communications Inc., whose phone service is not regulated by the CRTC. When SaskTel would apply to make changes before Friday's decision, the other companies often found out what they wanted to change.

"Really, what it meant was you didn't change your rates at all, and if you did it was minimal," he said.

A cap on prices came with the CRTC's decision, meaning SaskTel prices can't go higher than they are now. Customers don't have to be concerned their phone companies are going to hike their rates, he said.

While the CRTC decision affects the Saskatoon exchange, which includes the city and nearby communities, Regina and rural areas will not see any changes. Meldrum said SaskTel plans on applying for forbearance in Regina before the end of the year.

"It's not an easy issue for a place like Saskatchewan. It might be easier to charge a different rate in Toronto or Montreal, but it's not going to be easy to change the rates in Saskatoon and not Regina," he said.

SaskTel can't apply for Regina forbearance any earlier due to an 18-month grace period given to Regina's Access Communications, a small rural cable company under CRTC classification, which came into effect when Access began offering phone service earlier this year. SaskTel is also appealing a CRTC decision to raise basic phone service prices in rural Saskatchewan.

Meldrum said Saskatoon rate changes and new service bundles are on their way, but won't be immediate. Overall, he said, the competition between local phone companies will give customers more options.

ckyle@sp.canwest.com