The battle over bundling has ratcheted up a notch as Rogers Communications Inc. filed a Part VII application with the CRTC late last month asking it to prohibit the packaging of local telephony with other services offered by ILECs. At the same time, a regional cableco has accused its rival incumbent of not adhering to the existing regulations. On June 27, Rogers submitted an application asking for a ban on bundles that include "monopoly" local telephone service, citing the lack of competition in local service as the reason for the move. "This prohibition would include, but is not limited to, the bundling of ILECs’ tariffed primary exchange residential tele-phone services with long distance, Internet, broadcast distribution services, broadcast programming services and cellular/PCS," Ken Engelhart, VP regulatory for the communications company, writes to the commission. He stresses that Rogers is not against bundling per se. But it wants an even playing field. "We think bundling is a good thing. It’s good for consumers. It’s good for service providers," he explains to Network Letter. "But it’s precisely for that reason that we think a bundle that contains monopoly services and competitive services shouldn’t be allowed." Rogers is no stranger to bundling, offering deals on its cable service, wireless phones, high-speed Internet, and magazine publishing wing. That amuses one telecom executive. "It struck me as a little ironic that Rogers would be taking this position because they’ve arguably been at the forefront of encouraging bundles based on their cable and other services as well," Lawson Hunter, executive VP of Bell Canada, tells NL. "The CRTC has ruled, and relatively recently established rules, that deal with bundling (NL, Dec. 16/02). They’re pretty clear and we’ve been following them and would expect to continue to follow them. And they apply not only in the consumer market but they apply in the business market as well." While the Rogers filing is targeted at the national market and seeks to change the rules governing the five major ILECs, two regional players are fighting over the current regulations. On June 26, EastLink, a cable company serving communities in Nova Scotia, New Brunswick and P.E.I., filed its own Part VII with the CRTC demanding that Aliant Inc. follow the provisions of Telecom Public Notice 2003-1-1 regarding promotions and winbacks. "The fact that Aliant’s promotions are ‘not available in all areas’ further supports that their purpose is to target markets where EastLink provides service," Natalie MacDonald, director of regulatory matters for the cableco, writes to the CRTC. "Upon inquiry, it becomes clear that these promotions are available only to Aliant customers in the provinces where EastLink offers services." As an example, she paraphrases a letter sent to an Aliant customer in Dartmouth NS. The letter is dated May 20, long after the provisions of PN 2003-1-1 took force on March 13. MacDonald notes that EastLink is currently upgrading its network in Dartmouth with the aim of providing local telephony. "These Internet promotions require that customers take the HSI service for a 12-month period in order to benefit from the reduced price," she tells the commission. "That 12-month period is critical in that it prevents a customer who has only recently accepted the promotion from taking EastLink’s tele-phone service for one year." Earlier this year, Call-Net Enterprises Inc. submitted a filing calling for changes to the local competition rules (NL, June 2/03). Rogers’ Engelhart is buoyed by all the activity on the regulatory front. "I do think the EastLink application was sort of complementary," he opines. "We’re saying the existing rules aren’t enough; you need some new rules. The two do sort of present an interesting picture. There’s no question everybody knows that there’s something wrong with the way competition has or, more precisely, has not rolled out. Everyone’s been making different suggestions to the commission as to how to solve the problem and we think the main focus should be on anti-competitive conduct. We think that’s the best way that the commission can remove barriers." Bell’s Hunter sees differences in all three filings. He hesitates to guess how the CRTC will rule, but thinks the issues raised by the competitors are distinct. " not really saying ‘change the rules,’ like Rogers is," he says. "It’s saying ‘you didn’t follow the rules.’ Call-Net is really very different." In its application, Rogers cites the cases of cable players such as Vidéotron ltée and Cogeco Cable Inc., which ran up huge losses before abandoning local telephony trials. But Hunter wonders how much of the delay in cable telephony is attributable to the fact that Voice-over-IP (VoIP) technology is not quite ready for deployment. He doubts that the financial situation for cablecos is a factor. "Their revenue growth is significantly greater than the telcos’ revenue growth. Their profitability growth in the last couple of years is also significantly greater," he notes. "It’s a question of will, it’s not a question of whether, they can do it. It’s whether they want to put capital into it or not." VoIP not ready to rollEngelhart concedes that VoIP is not at optimum level for rollout. But he is adamant that costs are a major concern."The cable network needs to be considerably modified and there has to be quite a lot of systems and processes added before you can provide a phone service. And that costs a lot of money," he states. "It’s really similar to the kind of comments Call-Net made in their application. When you’re incurring those kinds of vast expenses, the last thing you need for your business plan is if the incumbent can engage in anti-competitive conduct, because that’s just going to make the whole entry incredibly difficult." To bolster his argument that competition does not exist, Engelhart’s submission quotes Industry Canada minister Allan Rock, CRTC chair Charles Dalfen and the House of Commons Standing Committee on Industry, Science and Technology report on foreign ownership. That fails to impress Hunter. "They all run around making the same quotes. I’ve seen Allan Rock’s one statement about 25 times now in all of them, because it’s all there is," he laughs. What none of the competitors have yet addressed, the Bell executive maintains, is that the commission has not wavered from its policy of promoting facilities-based competition. Hunter dismisses many of the current arguments as being anti-consumer.