Telco competitors weigh pros and cons of CRTC essential services decision

The CRTC's decision this week extending regulation over some of the incumbent telcos' networks was a "missed opportunity" to promote more facilities construction by competitors, the chief of regulatory affairs at Bell Canada tells Network Letter. In its decision, the commission lays out a plan to eliminate the regulation on some of the ILECs facilities such Ethernet and the higher-speed access in three to five years, but kept the shackles on other elements such as local loops and ADSL. Referring generally to services on which regulation won't be phased out, Mirko Bibic suggests the new rules don't go far enough to encourage competitor network deployment. "In my view, there was a missed opportunity to further incent competitors to build more elements of their network, and I think the prospect of more aggressive alternative network construction has taken a step back here," he says. "I wouldn't say it's necessarily a step backwards, but it's a missed opportunity to move forward which is what the policy direction I think instructed the commission to do." Even though the CRTC decided to eliminate regulation of Ethernet and competitor digital network (CDN) services in three to five years, Bibic isn't convinced the commission went far enough. "Because the transition is as long as it is, I think it will slow down what would otherwise have been the pace of alternative network construction," he says. Ted Chislett, president and COO of Primus Telecommunications Canada Inc., disagrees, noting that the new rules will incent competitors to build more of their own facilities. "Certainly, competitors will have an incentive to build facilities," he says. "And this is just going to increase the incentives to go faster." While the Primus Canada chief believes this was the right decision for the CRTC, he questions the regulation phase out periods. "Can it all get done in the time frames ?" he asks. "The answer is no." One example is intra exchange transport facilities. While Chislett agrees that building these types of facilities makes sense, the prescribed three-year time frame isn't long enough. "There's still lots of impediments in getting rights of ways getting access," he says. Ted Woodhead, VP of regulatory affairs at Telus Corp., is also critical of the decision, noting that it isn't much different from the previous regime. "My problem with this is it seems like much of the same old. We'll end up in endless regulatory proceedings every time we try to launch a new service with someone wanting to force us to share," he says. "And in the brave new world of high-speed fibre facilities deeper in the network and even to the home...that isn't the kind of certainty that helps anything." ILECs aren't satisfied with other parts of the decision as well. For example, Bibic suggests the commission should have allowed two parties to negotiate wholesale supply agreements for services that are still regulated. "If we're willing to enter into a forborne supply agreement for any wholesale service, regulated or not, and the competitor is willing to do it...I don't see why that would have been a problem," he says. "That's disappointing and could have been a move to a more market-oriented approach even for essential and regulated wholesale services without striking at the fundamental notion that essential services need to be regulated." Woodhead was a little confused by the commission's decision to maintain regulation of local loops when the cable companies have established an alterative with their cable plant. "The fact that the cable companies have built a duplicative infrastructure such that the vast majority of Canadian residential customers are served by at least two wireline facilities, not to mention other options available or soon will be available in terms of wireless, it seems odd that the loop is left deserted on this island of essentiality when clearly there are alternatives available," he says. Not all was bad for the ILECs, however, particularly the commission's decision to eventually eliminate regulation of CDN and Ethernet services. "The fact that the commission recognized that there are competitive options for these services, including self supply, and that self supply is taking place in the marketplace now is good," says Bibic. "The fact that they will be forborne at the end of the transition period without another process is good and corrects a wrong back from 2002 and 2005 when these services were mandated." Woodhead agrees, saying "it's positive" most CDN services such as high-speed fibre and Ethernet have been put into a category that will see regulation phased out in either three or five years. "We know when mandatory access ends for these non-essential services and the reliance on market forces begins," he says.

Telco competitors weigh pros and cons of CRTC essential services decision

News | 03/06/2008 6:20 pm EST

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