Consumer groups across Canada cheered the CRTC’s decision today to cap local phone service rates at current levels. Rates for basic residential service, before surcharges and taxes, currently range from $20 to $30 per month. The CRTC decision applies a complicated formula which will prevent further overall increases, assuming that inflation remains below 3.5%.
“This was the right decision to make”, stated Philippa Lawson, Counsel for the Public Interest Advocacy Centre, who represented a coalition of consumer groups in the CRTC proceeding. “The telephone companies have been making heaps of profit on local service: rates of return on common equity of these companies ranged from 16.6% to 27.7% in 2000, well above the 11% benchmark set by the CRTC in 1997, and well above the 9.5% to 10% considered fair for regulated gas and electric monopolies.”
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