Canada's controversial telecom policy and regulation procedures may
be headed for a shake-up early this summer.
The Telecommunications Policy Review Panel last month called on
Minister of Industry Maxime Bernier to cut back the role of the
Canadian Radio-Television and Telecommunications Commission (CRTC)
in setting rates. But Bernier now finds himself at a crossroads
after the CRTC laid out stringent conditions for local forbearance,
or circumstances where it might consider loosening its grip on
regulation.
Instead of leaning towards deregulation, the CRTC has listed
complex criteria under which an incumbent telephone company (telco)
can ask the CRTC to "forbear from regulating."
The decision shows that the CRTC will not change anything it is
currently doing or is likely to do in the foreseeable future, said
Tony Stikeman, a spokesperson for the Coalition for Competitive
Telecommunications.
"It's a complete re-emphasis and re-dedication to the status quo,"
he said. "The CRTC has thrown the gauntlet down and is not willing
to countenance any liberalization or deviation from their previous
position."
The Coalition, which represents industry associations comprised of
over 12,000 Canadian companies, has asked Bernier to force the CRTC
to back off on regulating the teleco industry, according to
Stikeman.
Bernier is scheduled to address the Canadian Telecom Summit in
Toronto from June 12 to 14.
"We hear there's a big policy statement being readied for that,"
said Stikeman. "The Coalition has asked the Minister to issue a
policy directive to the CTRC 'to change course.'"
Stikeman said the policy directive has been a feature of the
Telecommunications Act from the beginning, but has yet to be
implemented. "And we think this is the rainy day they've been
waiting for," he said.
The CRTC reports to Industry Canada on telecommunications and to
Heritage Canada on radio and television, said Stikeman. Industry
Canada is also responsible for the Telecommunications Policy Review
Panel, which last month turned in a report outlining 127 steps
towards greater deregulation.
"The Minister of Industry is now sitting with two diametrically
opposed reports and decisions in front of him," said Stikeman, "The
Minister is going to have to make a policy statement some time in
the near future, indicating what he likes or doesn't like."
Telecommunications analysts and other industry insiders will be
watching next month for early indications of where Bernier is
headed with the CRTC. Federal Cabinet is due by mid-May to reject,
approve, or amend the CTRC's decision from last year to regulate
the IP telephony (voice over Internet Protocol) industry.
The main points from last week's forbearance decision are that
residential and business services will be treated as separate
markets; the incumbent local exchange carriers (such as Bell and
Telus) must have lost at least 25 per cent market share to be
considered for forbearance; and incumbents must meet certain levels
of quality in the services they provide to competitor
companies.
The CRTC decision stands at 180 degrees to where the Review Panel
is pointing, and the Competition Act ought to play a much more
prominent role in the telecommunications industry, according to
Stikeman.
"We feel stunned," he said.
I don't think anybody was expecting that, not just that the status
quo would hold, but in fact that the status quo would be
re-emphasized and reinforced, Stikeman said.
The CRTC has introduced a layer of complexity into what should have
been a deregulatory decision, said Jeff Leiper, director, Canadian
market strategies for Yankee Group Research (Canada) Inc.
"In an effort to deregulate, they've actually added complexity into
the regulatory regime," he said. "It's an example of unnecessary
regulation."
The decision is really at odds with the thrust of the
Telecommunications Policy Review Panel's recommendations last
month, according to Leiper.
"We're seeing two different forces at work in Canada," he said. "At
a higher level it's very deregulatory, and the Commission continues
to try to hold on to that mandate to regulate."
Leiper points at the irony of the decision: "The actual effect of
the forbearance decision will certainly be to delay
forbearance."
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