CRTC stands ground on VoIP regime

The CRTC is sticking to its guns with respect to the regulatory regime for VoIP services, saying these services should continue to be regulated in a manner similar to circuit-switched local exchange services (Telecom Decision 2006-53). The commission has, however, recognized that the competitive landscape is changing and has therefore commenced a proceeding (Telecom Public Notice 2006-12) to "reassess the market share forbearance criterion threshold of 25% for local exchange services" as set out in the forbearance ruling (Telecom Decision 2006-15). "The commission notes that service descriptions provided in response to interrogatories in this proceeding indicate that many local VoIP services are virtually the same as circuit-switched local exchange services with respect to functionality and price. Furthermore, the commission notes that local VoIP services are being marketed as an alternative for circuit-switched local exchange services," reads Decision 2006-53. It adds, "The commission considers that customers, in general, perceive circuit-switched local exchange services and local VoIP services to be interchangeable, and a large proportion are purchasing the latter as replacements for the former." The CRTC didn’t accept the ILECs’ proposal that VoIP services could be regulated differently from other local exchange services for the purpose of forbearance. "In the commission’s view, to define a service or class of services based on the use of a particular technology, such as IP, which could be implemented wholly or partially in a network, would lead to disputes regarding whether each service made sufficient use of IP technology to be considered part of the service or class of services that qualified for forbearance," reads the decision. During the reconsideration proceeding, the CRTC determined that competition in the local exchange market is strong and more deeply rooted than it had appeared during the proceeding that led to the forbearance ruling. And since much of this competition is coming from facilities-based providers, namely the cable companies, the commission believes it appropriate to re-evaluate one of the forbearance criteria. "Given these changes in the market conditions, the commission considers that it would be appropriate to reassess whether or not the market share forbearance criterion threshold of 25% with respect to residential services set out in Decision 2006-15 continues to strike the appropriate balance between the competing interests identified in that decision," writes the CRTC in its September 1 decision. The commission will also re-evaluate the level of 20% market share loss and whether it is still an appropriate threshold to allow ILECs to begin winback campaigns. The incumbent telephone companies are unlikely to be satisfied with the ruling as they had argued during the original proceeding which led to Telecom Decision 2005-28 and during the proceeding that led to this decision that VoIP services should be unregulated. Cable companies and VoIP providers will also likely be unsatisfied that the commission has decided to take another look at the 25% market share loss threshold, but at least they can take solace from the fact that they have secured additional time to continue to eat into the ILECs’ customer bases. Network Letter will have more on the CRTC’s ruling and its decision to reassess the 25% market share loss criterion in an upcoming issue

CRTC stands ground on VoIP regime

News | September 1, 2006

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