ILECs make plea for less regulation at Standing Committee

Echoing comments made by other incumbent telephone companies, SaskTel said February 27 that it will take too long to implement all of the recommendations set out in the report from the Telecommunications Policy Review Panel (TPRP) and that it’s better to move on matters more achievable in the short term."The length of time that it would take to implement the entire report would be…counted in a matter of years as opposed to a matter of months," John Meldrum, VP, general counsel and regulatory affairs at SaskTel told the House of Commons Standing Committee on Industry, Science and Technology in response to a question from Liberal MP Dan McTeague. "I think the current state of affairs in terms of forbearance and the decision of the CRTC was such that there was a need for the government of Canada to act." Bloc Québécois MP Paul Crête pressured the SaskTel executive on the issue of using only two measures to support telecommunications deregulation: the local forbearance order variance and the proposal to give fining powers to the Competition Bureau of Canada in Bill C-41. Meldrum said during his February 27 appearance before the committee that the company will continue to support the government in adopting on all the TPRP’s recommendations. "But to hold off any meaningful reform until legislation gets passed through the House or the new competition tribunal gets set up to me, is so far off into the future as to continue to really not be appropriate," he said. Brian Masse, NDP MP, reminded the committee that it’s been one year since the government received the report from the TPRP, and rather than introduce legislation to make wholesale changes, telecommunications is being reformed by executive fiat. Meldrum agreed that it would be nice if all parties could get together and draft new telecommunications legislation, "but from my experience in the industry it’ll be a long period of time before something like that happens." Conservative members of the committee were much more sympathetic to the plight of the incumbent telephone company. Colin Carrie, a Conservative MP, asked what the impact on SaskTel would be if the government’s progression to local telephony deregulation was slowed. Acknowledging that the company would "soldier on," Meldrum stated, " will be really competing with one arm behind our back. The current forbearance decision, unless it’s dramatically changed by the CRTC itself over the…next six to 12 months, we don’t expect we’d ever be able to apply for forbearance." He also suggested that the provincial Crown corporation would have a hard time competing in the future if the CRTC’s original forbearance regime were to remain in place. "The notion that we have to lose 25% market share before we can fully compete, for us being a smaller company, is extremely problematic. Today, the economics for SaskTel as a Crown corporation work," Meldrum said. "We’re able to provide high levels of service to the most sparsely populated province in Canada, but to say we have to give up 25% of our market, our core market, yet still continue to fulfill all those policy goals of giving high-speed to the hinterlands and cell service to all the unserved areas, I’m not sure that the economics will necessarily hang together for SaskTel." While opposition and government members on the committee disagree that the approach taken by Industry Minister Maxime Bernier is the right one, they believe that legislative change is the best way to move forward. Even ILECs and competitors are on the same page. Testifying before the committee on February 14, BCE Inc. executive VP and chief corporate officer Lawson Hunter stated that the minister isn’t cherry-picking from the report, but is doing what the TPRP recommended: make minor changes now and legislative reform later. In an interview in the middle of January, Hunter noted that legislative change is still required despite the local forbearance vary order from the minister and the adoption of the policy direction to CRTC. "The reason I would say legislative change is still required is that the decisions the basic structure of the Act," he told Network Letter at the time. "There’s some pretty core fundamental aspects of the Act which the TPRP recommended to be changed, and you cannot do those without legislation. And in my own view that still should be done because that’s the only way we will truly modernize the legislation and move more to an ex poste world." Janet Yale, executive VP of corporate affairs at Telus Corp., agreed with opposition MPs that the recommendations from the panel should be implemented in a holistic manner. She said the first step was the policy direction to the CRTC and now attention should be turned to the broader legislative implications. However, the Telus executive believes the local forbearance vary order to be a completely separate issue from the TPRP and should be treated as such, noting that forbearance was before the CRTC when the panel released its report. "We believe the changes that are set out in the proposed order-in-council should be implemented as quickly as possible," she said.

ILECs make plea for less regulation at Standing Committee

News | March 5, 2007

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