The telecom party’s over: Now the hangover begins

The federal government is giving CLECs renewed hope that it will do something to ensure competition in the telecom market doesn't suffer the same fate as our airline industry. That new sense of optimism is making it into the public statements of several senior industry executives, who have assembled a wish list of solutions they believe will force Bell Canada and Telus to lose real ground to new competitors. Harry Truderung, president of AT&T Canada, shared his company's game plan for saving the industry with the Calgary Chamber of Commerce on June 14. The highlights appear below… The competitive fabric of this industry in Canada is starting to unravel. Most of the new entrant telecom providers are going out of business and customers have fewer choices when they buy. Six new entrants in telecom in Canada have failed in the last nine months. Without changes to the way the industry is structured and regulated, Canadians still face the spectre of remonopolization. And that's why we believe the goal of true and sustainable competition in Canada is still in serious jeopardy. AT&T Canada is fortunate to be the leading competitive telecom provider in the country. And yet, we are still finding that the playing field is still heavily tilted toward the former monopolies. Our industry's regulator, the CRTC, has made several decisions over the past year that show that they recognize how tilted the competitive landscape has become. That understanding will be crucial to the CRTC taking further corrective steps this year if Canadians are to benefit from sustainable competition in this industry. The introduction of competition is a complex undertaking and it's difficult to balance the needs of all involved: customers, incumbents and new entrants. Based on the market realities we have experienced, we are now putting forward an agenda of constructive changes to help competition survive…. The most important change to help sustain competition is to reset the terms of access to telco networks. New entrants who have demonstrated a commitment to invest in Canada should be allowed access to customers through telco networks at carrier wholesale costs. This would reduce the regulatory burden on competitive providers and help reduce the negative impact of cross-subsidization. The fact is, despite the best intentions of the government in introducing competition to the market, consumer local service is a monopoly and the market for business local service is a near monopoly. The CRTC's new competitive model needs to be a combination of the facilities based network model we currently use - plus access to local telco networks at a reasonable cost. This hybrid approach will allow competitors to complete connections to customers at reasonable rates. The key to the second issue - foreign ownership limits - is now on the government's agenda. We are in favour of allowing greater access to capital from foreign sources. But first we need to ensure that there are opportunities for investors to attract the capital needed to preserve competition…. These are some of the changes required to keep sustainable competition alive in Canada and preserve choice for customers. Without changes and if competition weakens further, Canada could be heading for a duopoly in telecom. For the full text of these remarks, see: http://www.attcanada.com/English/fAbout_Corporate.html?SubPages/About/Corporate/Speeches.html~Content

The telecom party’s over: Now the hangover begins

News | July 3, 2001

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