Big Telcos Celebrate, but Small Providers Have Plans

Rule changes favour incumbents"Change" is the apparent trend today in Canadian telecommunications: the government recently ordered a hands-off approach to access-independent VoIP services; meanwhile, the CRTC is exploring a new wholesale services regulatory regime. The commission is also looking at changing the definition of "essential service."All of the above could be good news for ILECs. But as the incumbents celebrate, a movement is afoot from Canada’s independent VoIP providers. They aren’t happy with the way the telecom regulator treats them, and they are looking for a better shake.VoIP Providers Seek Equal TreatmentThe Canadian Association of VoIP Providers (CAVP) aims to convince the CRTC that VoIP companies should be treated the same as competitive local exchange carriers (CLECs) for regulatory purposes. While the CAVP had not yet made its plans public by press time, the group’s president John Lange did say the association was studying its options. "We’re considering right now how to best pursue having the CRTC review to make it a more technology neutral platform," he said.Leveling the regulatory playing field between CLECs and resellers was one of the 127 recommendations made by the Telecommunications Policy Review Panel (TPRP) when it released its report in March 2006. Recommendation 3-30 reads, "Resellers in the local telecommunications services market who choose to undertake all the obligations of a competitive local exchange carrier should have all the regulatory rights and obligations applicable to competitive local exchange carriers."The problem for VoIP providers, and resellers in general, is that the government hasn’t made this recommendation a high priority. Instead, the government is bent on bringing in changes that make it easier for incumbents to price their local services without prior regulatory approval from the CRTC.Lange said the government appears to be picking and choosing TPRP recommendations – implementing some, ignoring others. He suggested that the government must implement many recommendations before bringing in a free-market approach.Access-Independent VoIP UnregulatedBut just as the CAVP contemplated its next steps to create a more level playing field, the Minister of Industry declared on November 15 that the CRTC erred when it decided to regulate ILEC access-independent VoIP services – the very same type of services that most, if not all, CAVP members offer. The following services are now forborne from regulation: Bell Canada’s Digital Voice Lite; Bell’s Business IP Voice for Broadband, and; SaskTel’s WebCall.The impact of this ruling on independent VoIP providers was not clear immediately following the announcement, and won’t be felt for at least a little while. Telus Corp. has yet to launch an access-independent VoIP service, and Bell’s and SaskTel’s offerings are fledglings, so their effect on smaller players is minor. But in time, the incumbents could ramp up their services, and perhaps even offer access-independent VoIP out of territory – Bell in the West, Telus in the East, for instance. The fallout could affect numerous smaller VoIP providers.CRTC Considers New Wholesale RulesOn November 9 the CRTC issued Telecom Public Notice 2006-14, announcing that it would review the regulatory framework for wholesale services and the definition of an essential service. The proceeding will consider not just the ILECs’ control of bottleneck facilities, but also essential and non-essential services provided by the cable companies and CLECs to other competitors at regulated rates. One of the key aspects of the consultation will be whether to adopt the Competition Bureau’s definition of an essential facility as laid out in the bureau’s draft bulletin on abuse of dominance in telecommunications (see below). The commission is also seeking comment on pricing principles for both essential and non-essential wholesale services.Preparing for a Competitive EnvironmentRecognizing the changing regulatory environment, the Competition Bureau prepared a draft bulletin on the abuse of dominance in telecommunications. The document, which can be found at www.competitionbureau.gc.ca/internet/index.cfm?itemID2195&lge, lays the foundation for how the bureau would treat an abuse of market dominance, and it explains the circumstances that would constitute an abuse. Comments on the document are due December 29 and are to be submitted to Masood Qureshi at qureshi.masood@cb-bc.gc.ca.What to Watch ForThese are perilous times for Canada’s independent competitive providers and they should prepare for the worst by working hard now. Getting CLEC-like recognition in front of the CRTC is a good first step. It’s clear, however, that independent VoIP services have experienced a tough time in Canada, and with the way things are going, it seems the situation won’t get any better. We can only hope that telecom competition won’t be summed up in the future by this ancient adage: the more things change, the more they stay the same.Fee Collectors Widen NetsTelecom Decision 2006-71 expands the number of companies that have to pay fees to the CRTC to cover the cost of regulating the telecommunications industry. David Watt, VP of regulatory economics at Rogers Communications Inc., said the decision will increase the amount his company has to pay to the CRTC because revenue from wireless operations will now form part of the payment formula. The commission said it would collect revenue from service providers that generate more than $10 million in revenue annually.

Big Telcos Celebrate, but Small Providers Have Plans

News | December 1, 2006

Rule changes favour incumbents

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