Commission proposal to extend price cap regime upsets TELUS

The CRTC has proposed extending the current price cap regime an additional two years, saying the telecommunications services market hasn’t changed to enough to warrant a review. "The commission considers that the current regime is achieving the objectives set out in Decision 2002-34 and, as such, current circumstances within the industry do not warrant a review at this time," concludes the commission in Telecom Public Notice 2005-3. Janet Yale, executive VP of government and regulatory affairs at TELUS Corp., doesn’t agree with the CRTC’s assessment. One aspect of the price cap regime that requires immediate attention, she says, are the deferral accounts. Yale says that the current reality of cable company entry into local telephony doesn’t reflect the need for the use of deferral accounts. "We really think that is the key circumstance that has to be taken into consideration now that Shaw has entered the local telephone market; to keep residential rates artificially high to allow the deferral account to continue to grow really is not reflective of the new reality of cable entry into local telephony," she says. A decision is pending on what the commission is going to do with the money in the ILEC deferral accounts, but Yale says that doesn’t solve the problem of June 2006 and beyond. "It’s that piece that we think is critical to resolve and we will be putting forward in our submission a specific proposal around how to prevent the further increases in the deferral account," she explains. Not only doesn’t she agree, but she doesn’t understand how the commission could arrive at such a conclusion. What’s frustrating, she tells NL in an interview this week, "is the commission’s statement in its public notice that there’s no reason they can’t delay for two years because the factors and circumstances at the time of the last review haven’t changed significantly. On what basis can you reach that conclusion? "There’s substantial change with cable entry. We believe cable entry is a significant change that did not exist at the time the last price cap regime was put in place. There’s a huge amount of other changes whether it’s Bell moving aggressively into Western Canada in its purchase of 360networks, Rogers now purchasing Call-Net, the arrival of VoIP providers like Vonage and Primus, changes to the entire unbundling regime with the CDN decision…I don’t call those changes insignificant and the notion that nothing has to change in the regulatory regime for ILECs is predicated on the notion that we are pretty much in a status quo environment (and) we’re not." Not only has the competitive environment changed since 2002, but it will have changed even more by 2008 if the proposal to extend the current regime by an additional two years is adopted, Yale argues that "to say we don’t need to do anything until 2008, ‘I find it hard to understand’ would be charitable to describe it," she says. While TELUS is disappointed that the commission has proposed extending the current price cap regime, the company can take solace in the fact that the CRTC has decided to address the other key piece of the regulatory puzzle: local service forbearance. "We’re pleased that the roadmap to forbearance is going to be defined, and 2005 is about doing that…I can take some comfort from the notions that if the path to getting out from under price caps is we’re just going to take more and more services out through deregulation, I can live with that piece of the puzzle," she tells NL. First round comments are to be submitted to the commission by June 13, and Network Letter will follow the proceeding as it progresses.

Commission proposal to extend price cap regime upsets TELUS

News | June 9, 2005

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