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Regulator won't hike pay phone rates, may block yanking of money-losing phones

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GATINEAU, Que. - Canada's telecom regulator is hanging up on Bell Canada's bid to increase the cost of using a pay phone.

The Canadian Radio-television and Telecommunications Commission has rejected a request by Bell (TSX:BCE) to charge people more to use coin-operated land lines, a familiar fixture of the pre-cellphone age.

"This is, in our view, a victory for today," said Janet Lo, legal counsel for the Public Interest Advocacy Centre.

"We're very pleased that the commission stood up to Bell's request for the pay phone rate increase, which was in our view not warranted."

The CRTC is also considering whether to take steps to prevent the company from pulling less profitable pay phones out of underserviced communities.

Bell and its subsidiary Bell Aliant Inc. had asked for permission to boost the price of a local call to as much as $1, compared with the current price of 50 cents, and to double the cost of using a credit or debit card at a pay phone to $2.

In their submissions, the companies said that without a rate increase, they would be forced to get rid of their least profitable pay phones.

Pay phone usage has been steadily dropping as more people turn to cellphones, Bell argued. But the CRTC countered by saying unprofitable coin-operated phones would likely end up being removed anyway, regardless of cost.

"A significant number (of pay phones) will likely continue to be removed from service in response to declines in revenues and demand, regardless of rates charged for pay phone services," the commission said in its decision.

At the same time, the regulator acknowledged that it doesn't have enough up-to-date information to know just how many pay phones remain in Canada, and how much they're being used.

So it has launched consultations on the role pay phones play in Canada. The regulator will also ask Canadians whether phone companies should be prohibited from removing the last remaining pay phone in a community.

That consultation process acknowledges that there might still be an important access role for pay phones to play in smaller communities, said Lo.

"If the last pay phone was to be removed, then the community could disproportionately suffer from the lack of ability to access a pay phone in either times of emergency or times of need or just for those people in that community that rely on that pay phone."

The regulator's decision recognizes that Canada's pay phone business faces "serious challenges," said a spokesman for Bell.

"It's important that the CRTC's fact-finding exercise address the realities of a business that has fundamentally changed with the move to wireless," Jason Laszlo said in an email.

The maximum cash cost of making a call at a Bell pay phone last increased in 2007, from 25 cents to 50 cents. At that time, the charge for a pay phone call using a credit or debit card was also capped at $1.

Prior to that, the cost of making a call at a pay phone hadn't increased since the early 1980s, when it increased to 25 cents from a dime.

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