Bell states case for adoption of Policy Direction to CRTC

Comments to Industry Minister Maxime Bernier’s proposed Policy Direction to the CRTC are rolling in with respective parties arguing why it should or should not be adopted. Below is an excerpt from Bell Canada. It is widely agreed that telecommunications regulation in Canada is urgently in need of reform. It places insufficient emphasis on market forces, and is extensive, intrusive and overly interventionist. Bell Canada urges the government to adopt the Policy Direction, as set out in the Canada Gazette, at the earliest possible opportunity. The principles it embodies – namely, relying on competition to the extent feasible and, where regulation is required, ensuring it is efficient and proportionate – are fully consistent with the federal government’s Telecommunications Policy Review Panel. Recent statistics from CRTC are just one more clear demonstration that the industry, including local service markets, is competitive. On 27 July 2006, the commission issued its 2006 Monitoring Report to the Governor-in-Council showed that, as of the end of 2005, in Toronto, Guelph, London, and Montréal, competitors had captured 12% to 15% of local residential lines. In the business market, local providers had made competitive inroads of more than 21% in Toronto, Barrie, and Kitchener and between 16% and 18% in Montréal and Québec City. And these statistics do not reflect the fact that wireless service has increasingly become a substitute for local wireline services. Given this highly competitive environment, the time has come to put an end to regulatory micro-management and to let market forces prevail. The most recent results of the cable companies’ telecommunications businesses also demonstrate that successful competition is continuing apace. The footprint of households passed is expanding rapidly, growth in subscriptions is exceeding expectations, telephony is already making a strong positive contribution to cable company financials and margins are improving as the companies leverage their fixed costs. Analysts are increasing their forecasts for 2006 and beyond. Competition is vigorous and competitors continue to expand. Rogers Communications, Shaw Communications, or Videotron will not exit the market simply because the traditional telephone companies are freed from economic regulation of normal marketing practices. On the contrary, they will compete more intensely. They will have greater incentives to innovate, speed up product development and provide better customer service. The Policy Direction provides principles, criteria and operational practices for regulation of both retail and wholesale services. On the retail side, proper implementation would result in elimination of regulatory restrictions on otherwise normal competitive behaviour such as winbacks, price de-averaging, bundling, promotions and lowering prices. On the wholesale side, CRTC regulation of wholesale services is currently too extensive and too detailed and should be reviewed. Bell Canada remains apprehensive, however, about whether the commission will embrace the type of regulatory reform that is clearly contemplated by the government. As a result, the company urges the government to monitor the situation closely. An early opportunity to assess matters will be the commission’s VoIP reconsideration decision which must be rendered by 1 September 2006. Should it become evident that the commission is not acting in accordance with the spirit of the Policy Direction, either through its actions or, indeed, inactions in removing regulatory obstacles, then the government should consider further measures, including potentially modifying the Policy Direction prior to its finalization in order to ensure that there is no misinterpretation of the government’s intentions by the commission.

Bell states case for adoption of Policy Direction to CRTC

News | 08/17/2006 4:00 am EDT

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