CCTA wants CLEC rules changes for small cablecos entering telephony market

The Canadian Cable Telecommunications Association (CCTA) is asking the CRTC to "refrain from applying some of the CLEC obligations" on small cable operators looking to enter the telephony market. The cable association says in a Part VII application filed on September 9, "Without concessions, these companies will effectively be barred from local telephone markets and customers will be denied access to these competing services." Under rules set out in the landmark Voice over IP decision (Telecom Decision 2005-28), all cable companies wanting to offer VoIP services have to become CLECs. This means that among other obligations, they are required to provide equal access, number portability and direct interconnection arrangements with other local exchange carriers (LECs) and wireless carriers. The CCTA writes that it is "not…economically viable" to require small cable companies to abide by these rules. "The costs associated with establishing reciprocal interconnection arrangements with other LECs and equal access, for example, are prohibitive for a small cable company and there is no reasonable prospect of recovery of these costs through local service revenues. Therefore, if relief is not granted from these obligations, smaller cable companies will not be able to offer local telephone services," reads the association’s application. The commission has the authority to do this, says the CCTA, referring to section 34 of the Telecommunications Act if doing so is consistent with Canadian telecommunications policy objectives. "The relief sought is therefore wholly consistent with and will foster the objectives of Canadian telecommunications policy, including the objectives of enhancing and facilitating competition in telecommunications services and ensuring that regulation, where required, is effective and efficient," writes the CCTA. Establishing applicable criteria The cable association suggests that the same criteria that applies to Group 2 CLECs should apply to smaller cable companies and should recognize the limited size of the company, scale of operations and financial resources. This, says the CCTA, sets out clear guidelines as to which entities would meet, or not meet, the established criteria. Annual revenue is an appropriate threshold, according to the association, noting that if the cable company has annual revenue of less than $10 million, then it should qualify as a Group 2 CLEC. The CCTA points out that this level is used in other commission policies, including the requirement to file detailed information and an obligation to pay contribution. Several small cable operators have already launched VoIP services, some through reseller agreements with Galaxy Telecom. They generally serve less than 10,000 cable TV subscribers. The cable association calculates that these small cable operators will only generate approximately $5 million a year in annual revenue. The CCTA points out that there are commission policies distinguishing the differences between larger and smaller telephone companies and the same should then hold true for smaller cable companies entering the telephony arena. "There is therefore broad-based precedent for lessening the regulatory obligations applicable to small carriers, so as to ensure that the regulatory burden does not impede the achievement of the Canadian telecommunications policy objectives," writes the cable association.

CCTA wants CLEC rules changes for small cablecos entering telephony market

News | 09/16/2005 4:00 am EDT

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