Access to networks major hurdle facing competitors

Canadian telecom pioneer Mike Kedar recently presented his overview of the national telecommunications scene in a webcast to analysts and other observers. Kedar is the founder of Call-Net Entrprises and of Microcell Communications. Edited highlights of his remarks appear here. Growth in this industry now cannot be building further overlays of more structure, but it has to come from applications that will on the one hand introduce efficiency in the marketplace, in the production and operation of various companies; and on the other hand allow information dissemination in a much more efficient manner. In order to do that, access to the existing network is the key. My assertion is that in the last few years the meltdown in the CLECs, the fact that many companies went out of business, even though they had good product, good applications, did not only happen because of the state of the economy but also had to do with the fact that a lot of development went into applications and then during the implementation the reality of the ILECs’ strong hold over the access hit those CLECs right in the face.... I think that as we move forward, we have to address this issue of access and understand how it can be managed and regulated to prevent anticompetitive behaviour. The true cost of access That has been the difficulty all the way since opening up competition, not just in Canada but in the U.S. and in Europe. I think everybody has been focused on how do we value the 100-year network that the telephone companies have built. The telephone companies and the cable companies, when they were still regulated, had a guaranteed rate of return. They were not suffering during the years that they built those networks. They have earned good return on those networks and it’s time that those networks should be available at practically no cost because they have written them off. The only cost is maintaining those networks and that’s the cost that should be spread between the people that are using them. But not the building of them and the expansion of them, there’s enough contribution in the system for small communities and special dispensation which is usually compensated by business lines. This is a big issue. I think our regulators, being the CRTC and the government and the bureau of competition, should focus collectively. Create a committee and say ‘how do we focus to open up the network in allowing new services and new applications to be implemented?’. If there’s the will to do it, it’s going to happen. I think the obstacle is always ‘how do we compensate the telephone companies for 100 years of deployment?’. And that cannot be answered. I think we have to put a line in the sand and say, ‘that’s it. From now on, we only have to compensate the incremental costs, not the old costs.’ Charles Dalfen as CRTC chair I’ve known Chuck very well for the last 15 years. What I said when he was nominated I said I can’t think of anybody better suited for coming in to take on this post at this time, as we are facing maybe back to the future and as more and more new startups are going bankrupt. Now Charles is a very fair person but also a very determined one, and I’m sure he would not have taken the position unless he knew that he would have the ability and the power to make a difference. Foreign ownership limits If access is going to open up and opportunity for new applications and services are going to be a reality, then I think to fuel those businesses which are in any event not distinctive at the moment, may become an issue. But on the infrastructure side, I don’t think that foreign ownership is a huge problem right now. And it may be a red herring.... As long as the foreign ownership investment in the service side is not curtailed, I don’t see a big problem. As far as I’m concerned, the infrastructure is there now. We just need to open it up and make those services affordable on it. Let us know what you think of Mike Kedar’s comments or formalize your views in a Newsmaker column of about 650 words. Email ppark@decima.ca

Access to networks major hurdle facing competitors

News | 02/11/2002 5:00 am EST

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us