Bell boosts network charge
Long-distance customers with Bell Canada are about to be hit with a 136 per cent increase on their monthly network charges.
Starting Dec. 14, Bell will be charging $2.95 for First Rate long-distance subscribers.
Bell introduced the $1.25 network charge in December 2001 months after Sprint Canada introduced a similar charge.
"It comes down to that fact that long-distance rates aren't regulated, so they can do whatever they want," says Ian Angus, a telecom industry analyst.
The charges allow phone companies to pass costs along to customers without affecting their advertised rate plans.
"It's a hidden charge that doesn't show up in advertising and increasingly, that's how they're raising their rates," says Philippa Lawson of the Pubic Interest Advocacy Centre (PIAC).
The group says Bell has been steering customers to its long-distance plans instead of its cheaper basic rates.
PIAC argues about 30 to 40 per cent of the phone company's customers are entitled to a refund because they've been duped.
According to Bell, the newest price hike will help it cover the $600 million it spends annually to maintain and upgrade its networks.
"In (the Toronto area) alone we made an investment of $180 million in maintaining and improving the network," says Catherine Hudon of Bell. Hudon says a portion of the extra money will cover Bell's contribution to a national subsidy fund that ensures affordable local phone service in rural areas of Canada.
Angus says the charge has nothing to do with the fund. Recent changes to regulations have eased Bell's contributions to the subsidy. Angus says the network charge is something Bell can use to collect more money.
"It sounds like something official, but it has no connection to contribution fees or regulatory decisions."
Lawson says it's not worth it to have a discount plan. Consumers who don't make a lot of long-distance calls (less than 40 minutes a month) are better off on a per-call basis.