Will CRTC Free the Hands of Telco Integrators?

Commission vice-chair suggests business local service tariffs need a rethink Incumbent telephone companies have good reason to worry about inroads into the business telecom services market by systems integrators. And judging by the comments of Richard French, CRTC vice-chair of telecommunications, these concerns are beginning to resonate with the Commission. The former monopoly telcos complain they suffer a disadvantage in marketing service bundles that include a large IT component in addition to basic voice services. Systems integrators can price these bundles free of regulation, while telcos must gain prior tariff approval of the bundles (termed Customer Specific Arrangements). Bell Canada filed an application with the Commission in September seeking more flexible treatment of mixed CSAs—agreements that include regulated and non-regulated services (see Telemanagement #229). In a recent interview with Telemanagement, French indicated that the CRTC is aware of incumbents’ concerns and recognizes the conundrum they face. "The CRTC has got to ask itself what its role is in a $175 million contract, the local service component of which is vanishingly small," he says. "A supplier comes to you and says, ‘Listen, I’m competing with EDS and Accenture and XYZ Company, and I’m the only one that has to fuss and fume about the regulatory approval of my bundled services because I happen to have local service in it. It’s put me at a disadvantage.’ Frankly, at that level it’s very hard to argue otherwise. So the question is, is the cost of that disadvantage outweighed by the benefit of continuing to regulate that part of those contracts?" French said. "It’s an issue that has been conveyed to the Commission as one we’re going to have to think about." Incumbent Local Exchange Carriers (ILECs) face a challenge from another quarter as well. Recent CRTC figures indicate that competitors are taking a greater share of the business telecom sector away from the incumbents. But competition is coming not from independents or new entrants, but from out-of-territory operations of the ILECs themselves. French acknowledges this fact, but notes that at this point competition from any provider is good news for the industry. "Our view would be that an alternative supplier, whatever its corporate antecedents or background, is an offer in the marketplace that some customers would like to avail themselves of…. I don’t think we’re in the business of saying that a customer that migrates to an out-of-territory ILEC is somehow a lesser public-policy consideration than a customer who migrates to a reseller or to a CLEC or to whatever," he said. Nonetheless, the original vision of competition was that it would be achieved by creating a greater number of competitors: more competitors would equal greater competition. French believes this notion is still relevant in today’s environment. But it’s now posed mainly in terms of technology: different modes of facilities-based access. In this context, the future role of wireless access is worth attention. "Is wireless delivery going to turn out to be the third route to the premises or not?" French asks. "I think that’s a very interesting, important technological and commercial development, and I don’t think we’re going to have an answer to it—based on the evidence so far—for another four or five years," he said. Telecom Bills Die on Order TableProposed legislation to give law enforcement agencies greater wiretapping rights died on the order table when Parliament was prorogued in November. Telecom services providers criticized Bill C-74 because it would make them pick up the tab for upgrading their networks. As well, the Canadian Association of Internet Providers was upset with the proposed three-year deadline for small providers to come into compliance with the legislation. Bill C-73, designed to give the CRTC the right to levy fines ("Administrative Monetary Penalties") also died on the order table. Many have linked the commission’s inability to effectively regulate to a lack of fining powers. Do-Not-Call Law Gets Royal AssentBill C-37, legislation designed to govern the telemarketing industry and to create a national Do-Not-Call registry, was fast-tracked through the Senate and received royal assent last month. The bill creates special exemptions for political parties, election candidates, polling firms, newspapers and for businesses with existing relationships with their clients. Regulations concerning creating the national registry and paying the costs associated with running it will be proposed in a CRTC public notice expected early this year. Surplus Spectrum Holds Up InukshukBell Canada and Rogers Communica-tions’ plan to pool their broadband wireless spectrum in Inukshuk Internet Inc. is on hold because it would put the company over the spectrum cap. Industry Canada has asked the two companies to return spectrum in 27 licence areas to comply with the cap, which remains in place until January 27, 2007. Ken Engelhart, VP of regulatory affairs at Rogers Communications, told Telemanagement last month that Rogers does not intend to return any spectrum. "We obviously won’t do anything to put ourselves in jeopardy before . We’re looking at all our options, but we’re not going to transfer the spectrum into Inukshuk," he said.

Will CRTC Free the Hands of Telco Integrators?

News | 01/01/2006 5:00 am EST

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us