Local phone market gets more competition from Clearnet and Microcell

Canada’s new entrant wireless players are now in a better position to battle incumbent telcos for telecommunications market share following two landmark decisions released by the CRTC on September 8. In Decisions 2000-830 and 2000-831, the regulator granted Clearnet Communications Inc and Microcell Connexions Inc interim competitive local exchange carrier (CLEC) status. The decisions clear the way for both wireless service providers (WSPs) to compete on an equal footing with incumbent LECs. It could also lead to a new generation of wireless user, as consumers become more comfortable with the idea of swapping their land-line phone for a wireless phone. According to a Decima Research study, released earlier this year (RoW, May 30/00), a significant number of wireless phone users or those planning on acquiring a mobile phone within the next year are highly likely to replace their landline with a mobile phone. The country’s first wireless CLECs can now take advantage of the same benefits that incumbent telcos have enjoyed for years, including access to the $800-million annual contribution pool. Both Microcell and Clearnet will also be able to introduce local number portability, something the WSPs have sought for some time. The companies hope that by the middle of next year, its customers can keep their numbers when they switch from a landline to a mobile phone. The CRTC, however, didn’t grant everything on the carriers’ wish lists. Clearnet’s proposal to not offer equal access to interexchange carriers (IXC) when end-users roamed outside of their local calling area was met with some stiff opposition from Bell Canada and its affiliates, and Telus Corp. On this issue, the commission sided with the incumbents and directed Clearnet to provide equal access on mobile terminating calls "where an end-user is roaming outside the local calling area associated with the home exchange." It also noted that users of wireless CLECs "should have equal access to the IXSP of their choice on mobile terminating calls, as long as they are roaming outside the local calling area associated with the end-users home exchange," the commission wrote. "Although the roaming subscriber does not dial the long distance call, the subscriber causes the call by roaming and is responsible for the applicable charges. In its application, Microcell Connexions outlined plans to operate as a wholesaler of local services through its affiliate Microcell Solutions Inc and other resellers. "Microcell proposed to enforce its obligation to provide equal access to Solutions’ end-users through contractual arrangements between itself and its affiliate," it wrote. Telus argued that this clause wasn’t sufficient to address concerns outlined in Order 99-1127. The regulator sided with the incumbent telco and ordered Microcell to make amendments in its contractual arrangements between itself and its resellers. "The commission considers that the contracts between Microcell and the resellers of its local service should specifically identify CLEC obligations set out in Decision 97-8 for which resellers will be responsible," the CRTC wrote in the September 8 General Tariff. In terms of distance sensitive pricing, both Clearnet and Microcell came under fire from the incumbents Bell Canada and Telus. Both WSPs proposed to negotiate agreements on pricing in order to make caller location available to the IXCs and the IXSPs. The incumbents noted that according to Decision 97-8, the ILECs are required to interconnect their interexchange networks with every CLEC. Both submitted that "with wireless users roaming, it is not possible for an IXSP to determine where a wireless call originated, and hence to apply distance-sensitive rates." Again, the CRTC agreed with the incumbents. It exempted the ILECs from having to interconnect their interexchange networks with Clearnet and Microcell "in view of the billing and routing issues raised for IXSPs when a wireless CLECs subscriber roams. The commission also exempts Clearnet (and Microcell) from having to file executed CLEC-IXC agreements with the ILECs to achieve CLEC status."

Local phone market gets more competition from Clearnet and Microcell

News | September 18, 2000

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