CRTC got it right in its preliminary views of VoIP regulation: cable industry

The cable industry says the CRTC got it mostly right in its preliminary views on a regulatory framework for Voice over Internet Protocol (VoIP) telephony services. Cablecos agree that services that provide universal access to and from the public switched telephone network (PSTN) and use telephone numbers based on the North American Numbering Plan (NANP) should be considered under the same regulatory framework that the CRTC has developed for other telephone services. "In most respects, the introduction of VoIP technology as a means of provisioning voice telecommunications services does not in itself require the creation of a new and distinct regulatory regime," reads the June 18 submission to the CRTC by the Canadian Cable Television Association (CCTA). The CRTC states in Telecom Public Notice 2004-2 that VoIP services should be subject to the existing regulatory framework governing switched telephone networks, in keeping with its principle of a technologically neutral regime, including forbearance. In separate submissions, Rogers Communications Inc., Cogeco Cable Inc. and Quebecor Media Inc. (QMI) also support this view. Telephone giant Bell Canada is calling for a new regulatory regime for the telephone business that would apply the same rules for all service providers (CCR, Feb. 27/04). Quebecor Media states that Bell Canada has "resorted to rhetoric reminiscent of the most feverish months of the dot.com craze" and "when rhetoric reaches these heights, it is time for a reality check." Quebecor tells the CRTC that if Canadians are to enjoy the full benefit of VoIP technology, then it is essential that the regulator focus on facts, not hype, and regulate services using VoIP technology in a technologically neutral fashion as required by the Telecommunications Act. "…QMI is not convinced that VoIP has the near-magical qualities attributed to it by Bell Canada," reads Quebecor’s submission. "In any event, speculation about the future impact of VoIP is not a basis for regulation. Regulation must be based on facts." Rogers VP of regulatory Ken Engelhart writes that: "Since IP telephony is either a very close substitute for, or the same service as, primary exchange service, it should be part of the same regulatory regime as primary exchange service. The commission’s first and most important goal should be control of monopoly power by the incumbent telephone companies that possess it. In that regard, the commission must ensure that the phone companies do not use their monopoly power to prevent the emergence of VoIP as a competitive form of local telephone service." Engelhart points out that there is evidence that phone companies are already abusing their dominant power to ensure that VoIP telephony will be stillborn. Rogers charges that currently no incumbent phone company allows their primary exchange telephone service to be sold separately from their high-speed Internet service because the telcos say if the phone line is used only for DSL the splice points on the wires will corrode. "As a result of this phone company tied selling, telephone company DSL customers have no ability to cancel their primary exchange line and obtain a phone service from Vonage or Primus," states Rogers. The CCTA remains adamant that VoIP services should be regulated on the nature of the service and service provider, not the underlying technology. Thus, cablecos entering the telephony market with a VoIP offering should be considered a competitive local exchange carrier (CLEC). The association notes in its submission that TELUS IP-One, the IP-based service launched on Nov. 17, 2003 in Ontario and Quebec where the telco operates as a CLEC, took place "without any amendments to the regulatory requirements that apply to the offering of local services by a CLEC." Incumbent phone companies that switch to VoIP to deliver telco services should still be considered ILECS within their respective operating territory because they would continue to have substantial market power, argues the CCTA. The association states that ILECS could switch their existing customers from primary exchange services to VoIP with virtually no disruption and the customers need not know of the change. The customers would use the same telephone sets, have the same telephone number, and receive the same monthly billing statement with the same payment options. "An ILEC would also leverage its well-established brand and reputation with respect to offering voice services. This would allow the ILEC to carry over all aspects of the market power it currently holds in the local voice market," states the CCTA. "In light of their significant market power in the local voice services market, it is appropriate that the ILECs continue to be subject to the same regulatory requirements when offering local VoIP service." While the CCTA wants non-dominant carriers to be permitted to offer VoIP services under the existing CLEC regulations, it points out that "it may be necessary to take account of both enhancements and limitations of technologies where these warrant different approaches." These limitations would include 9-1-1 services, which might be hard to offer initially with VoIP technology. The CCTA also points out that some CLEC requirements create economic barriers to entry. It urges the CRTC to resolve these outstanding issues, including concerns about trunk interconnection, point of interconnection and point of interconnection for common channel signaling. The commission heard submissions on these matters at a workshop in June 2000, and asked for comments in the proceeding initiated by Public Notice 2001-126 but has not yet released its decision. Cogeco agrees, stating in its submission that "as long as the current local interconnection regime remains unchanged," the introduction of competition in the local telephony market will remain unsustainable. After being granted CLEC status in 1998, Cogeco says that three years ago it wrote off $29 million for its investment in IP telephony primarily because of the cost of interconnection. "Based on its experience, Cogeco submits that it is economically unreasonable that CLECs be required to establish local interconnection exchange by exchange and thus replicate the ILEC network. Such a requirement and several others create a barrier to entry in the local telephony market," the cableco says. The CCTA also sees value in the resale/partnership model for VoIP service to expand the benefits of competition to smaller centres where it may be uneconomic for a CLEC to enter. It also agrees with the CRTC’s preliminary view that VoIP that originates and terminates on an Internet connection without the benefit of being interconnected to the PSTN should remain unregulated.

CRTC got it right in its preliminary views of VoIP regulation: cable industry

News | 07/05/2004 4:00 am EDT

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