Vonage Canada president smiles through the gloom

Under the cloud of a troubled initial public offering and a lawsuit from Verizon, Vonage Canada president Bill Rainey put on a brave face during our interview last month. He talked up the VoIP provider’s plans, and explained how the firm expects to create a brighter future for itself, customers and shareholders. DeregulationNL: The government is trying to deregulate the local phone service market in Canada. What do you think of their methods? Rainey: We’ve always, from day one, known this market would move to deregulation. It has to. It’s the right thing to do….The issue in our minds, which is what people are struggling with today, is what’s the orderly transition to get there? We think it’s unrealistic to think you can just press a button and all of a sudden you have a deregulated market. You have to make sure things are happening to get you there. All we’ve ever questioned is, is there a transition process? First the CRTC created one. They had a pretty darn good plan.NL: This was the plan that suggested incumbent service providers had to lose a certain percentage of a given market’s share before the commission would grant forbearance from regulation?Rainey: Right. They thought it through. They’re experts. They may be a government group, and that may come with certain connotations, but they are absolute experts. They got it right, in ours and a lot of other people’s estimation, including the cable companies, all the other independents. The only people to question it were the ILECs – with good reason. It’s their market share. You’d expect that.NL: But Industry Minister Maxime Bernier proposed a less stringent forbearance formula that does away with the market-share percentage portion, and counts the number of facilities-based competitors in the area instead. What do you think of that?Rainey: We feel it’s a little unreasonable to think that just because you have facilities, you have competition. It could be wireless, which today hasn’t matured to the point of wireline for VoIP services. Does that mean you have competition – especially when some of those companies happen to have both wireless and wireline? Do we really have what the minister is looking for? Innovation, choice for customers, hopefully some price savings, and most of all sustainable competition – we’re suggesting that won’t be the outcome. It’s not in the best interests of the incumbents to move in that direction. We’re suggesting that whichever way you go as long as there’s a transition plan that allows competition to be sustainable, we wouldn’t be against that.NL: But it’s not the government’s job to protect companies from the risks of competition.Rainey: In theory, we should let market power show its end result. The problem in a world of a monopoly is it abuses its market power to squash the competition. Let me give you an example: phone companies are known for building networks. They’re not known as well for innovating new services. They’re masters at taking someone else’s idea and mass marketing it. A good example is VoIP. Who brought VoIP to Canada? Vonage. Primus launched, then we re-launched. Small companies are the ones that innovate….It’s that innovation that makes the world go ‘round. This is only part of a larger interview Network Letter conducted with Bill Rainey. A full transcript of the interview will soon be available on Decima Reports Website.

Vonage Canada president smiles through the gloom

News | March 19, 2007

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