MTS says CRTC missed the boat on Ethernet and ADSL; takes fight to Federal Cabinet

MTS Allstream Inc. insists the CRTC’s decision to deregulate both the retail and wholesale sides of incumbents’ businesses is wrong, and that its new rules won’t lead to greater investment by competitors in telecom facilities. The company is hoping that the federal government will intervene and overturn key CRTC decisions so that competitors can get fair and reasonable access to Ethernet and ADSL – key elements for making a competitive business telecom market. In an appeal to Cabinet launched last week, the company says the commission is out of step with reality. “The CRTC has lost its way,” MTS writes. “At a time when public policy should support and encourage competition, innovation and productivity, the CRTC has refused to remove the roadblocks to full and fair competition in the provision of broadband services.” MTS Alltstream argues that making competitors pay retail rates for access to incumbent facilities won’t lead to more facilities-based competition. The CRTC’s policy “is rooted in the outdated and failed notion that the way to encourage investment is to permit incumbents with a dominant market share to charge competitors monopolistic rates for access,” reads MTS’ appeal. In an interview with Network Letter, Chris Peirce, MTS Allstream’s chief corporate officer, says the experience in the United States should serve as a stark reminder to the commission that deregulation is not the way to go. Rather, he says, the CRTC should be looking to the United Kingdom for evidence that careful and well-placed regulation at the wholesale level can spur greater telecom investments. “Our evidence clearly shows that in the UK where they have mandated access for competitors to BT infrastructure, BT has in fact invested more – certainly more than they were saying before this regime was entered into and more than most were expecting in next generation investments,” he says. “And our US evidence pretty clearly shows that during the period of time in which mandated access was a part of their framework, investment was much higher by both incumbents and competitors than it has been since.” Peirce suggests that there is a growing movement in the US under the new Obama administration for the Federal Communications Commission to revisit mandated access “because the competition in the business market is failing.” Even BT and an incumbent in the US acknowledge that competitors can’t serve customers if they don’t have access to incumbents’ local broadband infrastructure. “I was on a panel in Washington in the last couple of weeks with a Verizon International representative and a BT International representative and both of them said what everyone knows is that if you don’t provide competitors with assured access to the local network of the incumbents then competitors can’t reach the customer,” Peirce says. The Bell Canada versus Public Works and Government Services Canada dispute is also a case in point of the market dominance the incumbents currently have in the enterprise market, according to Peirce. “I mean it seems pretty basic that if a provider can say then there’s a problem in terms of competitive market forces,” he says. Mirko Bibic, senior VP of regulatory and government affairs at Bell Canada, says MTS Allstream has got it all wrong. “The CRTC decided that Ethernet facilities were duplicable and they should be deregulated in three to five years. It’s a form of next generation service. We’re saying the very same philosophy that the commission used there should be applied to the FTTN (fibre to the node) situation that we’ve put forward.” Peirce counters though that the definition of a competitive provider in the enterprise market requires the CRTC to make local network elements available at mandated cost-based rates. A competitor in the business market is one that uses its own facilities as well as those leased from other providers, including incumbents, to provide service to end user business customers. “If you then deregulate and don’t provide the competitor with access to those network elements you’re cutting out the platform upon which you’ve based your retail deregulation,” contends Peirce.

MTS says CRTC missed the boat on Ethernet and ADSL; takes fight to Federal Cabinet

News | March 16, 2009

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