Telecom reform required as quickly as possible: CCT

The Coalition for Competitive Telecommunications notes in its comments on the proposed Policy Direction to the CRTC that there is ample evidence to support less regulation of incumbent telephone companies. It suggests that the Policy Direction should be adopted by Parliament as it’s written as quickly as possible. Below is an edited excerpt of the CCT’s comments. The draft policy direction is the result of substantial analysis and significant consultation. The Gazette Notice states that the government consulted with the provinces, territories and the CRTC before its draft policy direction was tabled in Parliament. Given the urgency to begin the reform process, which has been acknowledged by both the Telecommunications Policy Review Panel and Minister Maxime Bernier, the Coalition is opposed to any changes to the draft policy that would significantly alter its focus and to any changes that would cause a delay in its enactment. Because of the requirement of the Telecommunications Act to place the draft direction before Parliament for 40 sitting days after it is first tabled and because of the House’s summer recess, it will be well into the fall at the earliest before the policy direction could come into effect. The need to start the reform process expeditiously is critical. Competitors will purport to be speaking on behalf of customers, but they are definitely not speaking for any of the thousands of business customers represented by the Coalition, nor any other business customers or groups of business customers of which the Coalition is aware. Competitors of the incumbent telecommunications carriers may submit comments that, while paying lip service to the benefits of competition, will nevertheless call for continued economic regulation of the incumbent telecommunications carriers’ (ITCs’) local voice services. This is not surprising because it is completely rational behaviour on their part; they benefit from the status quo. Competition is less intense when the ITCs’ local services are subject to economic regulation and the ITCs’ competitors are thereby better off. The ITCs’ competitors attempt to conceal their support for continued regulation of the ITCs’ local services in the guise of it being necessary to protect customers. The thousands of business and institutional customers represented by the Coalition can and do speak for themselves. They say in no uncertain terms that economic regulation of the ITCs’ local services is not required to protect them. Such regulation is in fact not only unnecessary, but also harmful to their interests since it creates uncertainty and delay, limits price competition, restricts marketing and promotions, and constrains innovation. Competitors say if economic regulation were removed, the ITCs would lower prices and in so doing they would eventually drive all competitors from the market, thereby creating a monopoly that will allow the ITCs to push prices upward in the longer term and thus hurt customers. In other words, customers must endure short- term pain in the form of higher prices, slower supplier responsiveness, and restricted innovation in return for ensuring there is competition in the longer term. The business and institutional customers represented by the Coalition find this hypothesis – that the ITCs could substantially reduce or eliminate all competitors if their local services were forborne – to be completely lacking in credibility. It has never happened in any of the other telecommunications markets that have been deregulated over the last two decades. Customers therefore are suffering needlessly, as is the economy as a whole.

Telecom reform required as quickly as possible: CCT

News | 09/15/2006 4:00 am EDT

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