Bell Canada, Bell Aliant ask for regulatory permission to raise payphone fees

Bell Canada (NYSE: BCE) and its fellow telco subsidiary Bell Aliant (Toronto: BA-UN.TO) have asked Canadian regulators to charge more to recoup their  investments on their payphone businesses.

The two telcos asked the Canadian Radio-television and Telecommunications Commission (CRTC) for permission to increase payphone usage rates up to 100 percent, meaning consumers who still use payphones would have to now pay CAD 1 (USD 1.02) instead of the current CAD 50 cents (USD 51 cents) rate.

And if the CRTC does not give them flexibility to increase payphone rates, the service providers said in a Globe and Mail article that they will begin taking "unprofitable payphones from service."

They added that the "proactive removal" of these payphones could amount to about 25 percent of their overall payphone base in Ontario and Quebec—two of their key operating cities. This comes at a time when wireless communications continues to grow. As of the end of last year, there were 27.4 million wireless subscribers.

In a regulatory filing with the CRTC, Bell Canada and Bell Aliant said "if they do not get approval for the opportunity to experiment with alternative rate levels that could be as high as the maximum levels requested in their application, then they plan to change their practice and will proactively start removing their most unprofitable pay telephones."

However, the Public Interest Advocacy Centre argues that any upping the prices of payphone calls will cause harm to low-income Canadian residents, a number of whom can't afford to purchase a cell phone or have POTS at their homes.

Battles between regulators and incumbent telcos that want to get out of the payphone business as more customers adopt cell phones exclusively for their voice service is not relegated to Canada alone.

The drive to get rid of payphones is just as strong in the United States, where a number of major service providers—including AT&T (NYSE: T), CenturyLink (NYSE: CTL), FairPoint (Nasdaq: FRP) and Verizon (NYSE: VZ)—have already sold off a majority of their payphone holdings.

Like Verizon, FairPoint has also sold off its New England payphone business in May to Pacific Telemanagement Services (PTS). At the time, the service provider said the sale would enable it to "divert its capital spending for other projects like expanding residential broadband and deploying new business services like Ethernet."

While there's been a lot of emphasis on the larger service providers selling off their payphone business, rural telcos are facing a similar dilemma of what to do with their pay phone operations, which produce little, if any, revenue.

Nebraska-based K&M Telephone Co. has asked the state's Public Service Commission to take down the two payphones it operates in Chambers, Neb. and Inman, Neb., which collected a total of $19.58 in 2011.

For more:
- Total Telecom via Globe and Mail has this article

Related articles:
FairPoint to sell off its Northern New England payphone operations
Verizon takes another step out of the pay phone business

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