APR 19 1993 screL COUNCIL April 1, 1993 Be Tet 3777 Kingsway Burnaby. B.C. Canaga VSH 327 Telepnone: (604) 432-2151 Facsimile: (604) 334-6616 Mayor Trabculay City of Pert Coquitlam 2580 Shaughnessy Street Port Coquitlam, B.C. V3C 2A8 Dear Mayor: Today, BC TEL announced our intcntion to file an application with the CRTC early this summer for a general rate increase. We also applied today for interim local rate increases. The proposed interim rate increases range from $4.05 to $4.15 for residential customers and $3.05 to $4.15 for business customers. I'am writing to personally inform you of these increases as I anticipate they may resul’ in enquiries to you and your staff from citizens in your community. While this is not the kind of news we like to bring to customers, it is a necessary step. We believe British Columbians have a right to understand the issues surrounding this decision and the impact it may have upon them. Competition has fundamentally changed Canada’s telecommunications industry forever. And in a competitive marketplace, prices must meve closer to costs. Historically, telecommunications in Canada has been regulated by social -- rather than economic -- policy considerations. Local rates have been subsidized by long distance revenues in order to provide universal access to the telephone. In fact, BC TEL cross-subsidizes local service with 60 cents of every dollar of long distance revenue. To achieve this subsidy, the price of long distance service has been kept artificially high. Now, with the introduction of long distance competition, this historic balance has been changed. Competition brings many benefits to customers. However, as competitors claim increased market share, the subsidy available for basic service diminishes. While some competitors are required to contribute to local service, their contribution is significantly less than BC TEL. As well, few people realize that BC TEL is currently required to subsidize our competitors’ entry into the market -- competitors which now include AT&T, the world’s largest telecommunications company. = : PAGE 23.