The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports. Recent research from the Yankee Group argues that IP telephony will struggle as an alternative to existing local telephony offerings until cablecos finally enter the fray. The conclusion is unlikely to be a surprise to anyone. After just two years of service, Vonage’s impact on the competitive landscape has been so great that existing service providers have jumped into the market for fear of losing significant market share to the upstart. In real terms, however, the actual impact has been negligible with the company possibly signing up 150,000 to 200,000 subscribers in the U.S., which some estimate as being a whopping 1% of the entire American local telephony market.  Just because U.S. incumbent operators are now offering or will soon be offering an Internet telephony play in response to competitive threats from new entrants doesn’t mean there is actual competition in the market. The same should hold true here north of the 49th.  Do we know how many customers have signed up for a VoIP service from Primus Canada or Yak Communications? No. But it certainly hasn’t been in numbers that warrant a total opening of the telecommunications market. Will enough people sign up for these competitive services to cause a revisiting of the rules in the future? Possibly.  But let’s get one thing straight. The number of subscribers that competitive VoIP providers may hope to sign up is significantly greater than those that actually will. This is because consumers can’t be guaranteed quality of service that mirrors existing circuit-switched services.  Canadians have been “spoiled” in terms of telecommunications services. We have come to expect that same quality of service in any future offering. So where’s the value proposition of current VoIP services? It can’t be price. Bell Canada made sure of that when it lowered long distance prices to 2 cents per minute. It stands to reason, then, that there aren’t really any compelling reasons to give up that existing local telephone service for an IP telephony offering – at least for the time being.