CRTC doesn’t understand ramifications of deregulated enterprise market: MTS

The CRTC’s decision to close the books on a second appeal of Centrex deregulation demonstrates that it misunderstands the impact of giving incumbent telcos too much pricing flexibility in the enterprise market, according to MTS Allstream Inc. In an interview with Network Letter, MTS’chief corporate officer Chris Peirce, says that while the commission was correct in its definitions of essential facilities, it has missed the boat by deregulating the enterprise market at the retail level. He also points to the CRTC’s recent decision settling a dispute between Bell Canada and Public Works Government Services Canada (PWGSC) as evidence of commission misunderstanding. “I think in decision and what they’ve done with PWGSC complaining about Bell’s conduct in their attempt to transition to a competitive choice, the CRTC is just missing it in terms of the real consequences in the marketplace right now of unregulated dominance,” Peirce tells Network Letter. In a February 6 letter, the CRTC closed MTS’ second appeal of Centrex services that it had launched late last year, noting that the telecom company hadn’t provided enough evidence to warrant a further examination of the matter. MTS had appealed Telecom Decision 2008-57, which sought a review and vary of two previous CRTC decisions on Centrex. “Commission staff has carefully reviewed the record and is of the view that MTS Allstream has not provided any relevant and compelling evidence to support its review and vary request. Further, commission staff considers that MTS Allstream has failed to adduce evidence that would justify parties and the commission having to address the substance of MTS Allstream’s application,” reads the letter. The commission has made positive steps to ensuring lasting competition in the enterprise market such as properly defining what is considered an essential service, but they are being overshadowed by its faulty interpretation of those rules, says Peirce. “They’ve just not applied that definition properly and they’ve not seen through the consequences of what you have to do if you’re going to deregulate at the retail end to ensure there are competitive market forces,” he says. “If we’ve just moved beyond that, that there’s no need for an efficient regulator, we’d say have you looked at the financial markets recently? Clearly appropriate and smart regulation is going to be an ongoing feature and should be for a network-based industry like this.” Despite failing at its second attempt to convince the commission its decision to regulate Centrex was wrong, MTS will continue to fight for more equitable access to ILEC wholesale facilities. And there’s no indication the company will to take the Centrex appeal further, MTS will argue for better access to other incumbent high-speed services at the federal Cabinet in the near future. The company vowed to take its fight to the federal government following a December 11, 2008 CRTC decision denying a request by MTS to reclassify certain Ethernet and transport services. “The CRTC’s decision to deny competitors fair access to essential broadband network elements controlled by the former monopolies means that many Canadians and Canadian businesses will not receive the innovation and choice they need to compete to win in the 21st century,” Peirce said in a statement last year. “The CRTC refuses to recognize what the government of Canada could clearly see when it announced the rules for the recent wireless spectrum auction. This is not the first time that the CRTC has ignored the need for appropriate regulation to ensure that competition and choice are a reality for all Canadians and Canadian businesses. It seems that the CRTC is determined to deregulate regardless of the consequences on customers and ultimately the Canadian economy.” The dilemma in the enterprise market, Peirce told Network Letter last week, is that under the current rules the incumbents have too much power and the Bell versus Public Works decision was a prime example. “Here you have one of the largest customers in the country, so no one is going to have more economic clout, call it, presumably than the government of Canada in terms of what a service provider should or should not be able to do. And really that service provider was apparently able to say ‘We’ll shut you off,’” he says. “Now how can that be? How can that a) be a competitive market if a service provider has that kind of clout and b) how can a regulator possibly let that happen when its job is to ensure that there is competition sufficient to protect the interests of users?”

CRTC doesn’t understand ramifications of deregulated enterprise market: MTS

News | March 2, 2009

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