Canada's CRTC denies BCE, Bell Aliant's payphone rate increase

Pay phone use continues to decline as more consumers turn to cell phones for voice service, but the Canadian Radio-television and Telecommunication Commission (CRTC) has denied a proposal by Bell Canada (NYSE: BCE), Bell Aliant and Télébec to raise local payphone rates to between $1 and $2 for calls charged to a credit card or a prepaid calling card.

Each of these service providers said that if they could raise payphone prices, they could improve revenues and delay the rate at which payphones are being removed.

"This trend is likely to continue regardless of the rate charged for payphone services, and highlights the need to reassess the role of payphones," said Jean-Pierre Blais, chairman of the CRTC.

The regulator is asking for input from Canadian residents about how they see the role of payphones and whether they need to prohibit telephone companies like Bell Canada from removing the last payphone in a community until it completes a fact-finding process.

A similar issue exists in the United States, where a number of Tier 1 and 2 telcos, including Verizon (NYSE: VZ), AT&T (NYSE: T), Sprint (NYSE: S) and FairPoint (Nasdaq: FRP) have sold off a majority or all of their payphones to another party.

However, Tier 3 telcos such as Nebraska-based K&M Telephone Co. have faced an uphill battle in trying to stop selling payphone service. The service provider has been asking 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:
- see the release

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Canada's CRTC reveals wholesale rates for competitive ISPs
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