Regulation & Policy: Regulation steals the show at Summit

Despite a broad agenda that included presentations from business communications firms, networking equipment makers, carriers and consultants at this year's installment of the Canadian Telecom Summit, the regulatory debate stole the show. If it wasn't talk about the upcoming wireless spectrum auction and whether the federal government should explicitly encourage new competitors through spectrum set-asides, it focused on the essential-facilities proceeding and a new telecommunications act. But perhaps one of the more important regulatory mechanisms for businesses received little attention at the summit, which took place from June 11 to 13 in Toronto: rate de-averaging. This allows an incumbent telephone company to charge different rates to customers in cities of comparable size in markets that are still under CRTC regulation. Currently, this is not permitted in the business sector, but the April 30 price cap decision allowed ILECs to de-average their prices in the residential market, and now the commission is studying whether this should be allowed in the enterprise market. In an interview with Telemanagement at the summit, MTS Allstream Inc. chief regulatory officer Chris Peirce said the issue really boils down to incumbents being able to target pricing at specific customers and lower their rates to such a level that it would be uneconomical for the competitor to compete. This is a particularly important proceeding because competitors could be squeezed on price if the ILECs are given the same pricing flexibility as they now have in the residential market, combined with the sometimes high mark-ups competitors have to pay to access incumbents' facilities to provide service.Who needs ‘essential' services?Nadir Mohamed, president and COO of Rogers Communications Inc., says his company absolutely requires access to essential facilities so that it can compete in the business market. Bell Canada chief of regulatory affairs Mirko Bibic wonders if essential facilities really are essential. So, what are essential facilities? That was one of the questions put to panelists during a summit regulatory session. It was no surprise that Bell and Telus Corp. argued that either there is no such thing as an essential service or there are few network facilities that can be considered essential. Both companies maintained that there are enough alternatives to incumbent network access - alternatives such as access to networks owned by utility telecoms, for example - that these so-called essential network services should be deregulated. Competitors, on the other hand, vehemently opposed any narrowing of the definition of essential services. And they argued that the local forbearance regime established by the Minister of Industry Maxime Bernier on April 4 actually requires certain ILEC facilities to be made available to competitors. According to local forbearance rules, the market for business services can be forborne from regulation when the location in question includes a competitor providing service using its own facilities in conjunction with those of the incumbent telephone company. This means that essential facilities do, in fact, exist and ILECs have to provide them to competitors. Telemanagement will continue to monitor the proceeding and will report back on key developments.Konrad wows crowdKonrad von Finckenstein, chair of the CRTC, noted that the commission has fully embraced the idea of relying on market forces to the maximum extent possible and regulating with as little intrusion as possible. But the chair said this comes at a cost, and if the commission is to render decisions more quickly and come to terms with the "new way" of regulating then it will need additional staffing resources. "My point is that making the transition to the new world of less telecom regulation is not without significant costs in time and effort for the CRTC," von Finckenstein said during his presentation. "But this additional workload has resource implications. If we are to carry out the transition at a satisfactory pace, then additional resources - mainly human resources in the form of staff and consultants - will have to be made available to the commission." The chair noted that the commission will soon be launching consultations with industry stakeholders - the aim of which will be to come to an agreement on an increased budget from for the commission.DNC back in actionIn May, Telemanagement published an article about the sorry state of the implementation of a national telemarketing Do Not Call registry (see "Telemarketing restrictions might not come until 2010"). Well, it looks like the commission is taking up the cause again and will issue a request for proposals (RFP) for the operation of the national DNC.

Regulation & Policy: Regulation steals the show at Summit

News | June 18, 2007

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