New DSL competitors covet Canadian market; CLECs want barriers maintained

Canadian CLECs are urging the CRTC to reject a plan by Bell Canada that would result in the emergence of a new high-speed competitor in Canada. At issue is a tariff application which, if approved, would allow Bell to lease copper loops and connecting links to companies not bound by foreign ownership limits. Bell has asked the commission to approve the tariff by May 29. Bell Tariff Notice 6475 has stirred up some heated debate on both sides of the Canadian border. Santa Clara CA-based Covad Communications Group Inc - the largest independent provider of wholesale DSL services in the U.S. - has set its sights on Canada. It has established a new subsidiary, Covad Canada Communications Inc, the contact for which is listed as Jonathan Daniels, director of regulatory affairs. Not surprisingly, Covad supports Bell's proposed tariff. As currently presented, it would give DSL service providers (DSLSPs) like Covad access to unbundled network components and services on terms and conditions that are identical to those made available to CLECs. DSLSPs are currently limited to offering ADSL service, and only on a line-shared basis. The new tariff would enable Covad to provide a variety of DSL services, on par with CLECs, as well as local area network extensions. Covad contends that Canada's regulatory environment - which favours CLECs - has stunted the growth of a DSL market in this country. "Covad Canada views TN 6475 as the first step to implementing the types of changes that are necessary in order to ensure meaningful competition in the market for DSL services," the company states in comments filed May 4 with the CRTC. That same day, Covad Canada also filed a Part VII application asking that other ILECs follow Bell's lead and allow DSLSPs to take advantage of the same unbundled network components and co-location arrangements available to CLECs and other Canadian carriers. In its application, the company contends that the inability of DSLSPs to lease unbundled local loops on the same basis as CLECs violates Canada's commitments under the World Trade Organization. The argument isn't finding many supporters among Canada's CLEC community. In a May 3 letter to the CRTC, Optel Communications Corp warns that approving the tariff would allow new competitors into the market that are not bound by the same conditions as Canadian carriers. "Presumably users of this tariff would not have to be Canadians carriers; yet they would achieve access to services, such as unbundled loops and a tariffed right to co-location, that the Commission has until now restricted to CLECs and/or Canadian carriers," Optel writes. Optel goes onto to warn that DSLSPs would not be regulated, "and would thus not be bound to adhere to the consumer safeguards that bind CLECs." The absence of foreign ownership limits also worries Optel. "They would not be subject to the Canadian ownership and control rules that bind CLECs, and thus potentially would have greater access to the much larger foreign pools of capital than to CLECs - and yet they would be free to compete in the most attractive and fastest growing segment of the local access market," it writes. Optel is calling on the CRTC to hold a broader proceeding to consider the full implications of the tariff.

New DSL competitors covet Canadian market; CLECs want barriers maintained

News | 05/09/2000 4:00 am EDT

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