Several months after establishing conditions under which small incumbent local exchange carriers (ILECs) would have to face competition in their local markets, the CRTC has put those plans on hold.
In a consultation issued late last month, the Commission decided to reconsider the competition framework for small ILECs, as well as the potential impact that wireless number portability (WNP) could have on them. As a result, 12 cases of local competition implementations and one case of WNP have been suspended pending the outcome of the proceeding.
Jonathan Holmes, executive director of the Ontario Telecommunications Association (OTA), says the CRTC’s decision is a good one, particularly since competition was going to be problematic for most small ILECs.
“I think it’s going to be a very important proceeding for SILECs, not just because of their review of local competition and WNP, but all of the other issues that are key to our continued success as well,” Holmes told Cartt.ca in an interview.
The Association des companies de telephone du Québec (ACTQ) wasn’t ready to offer comments on the current consultation.
“As you know, this consultation encompasses many elements for which the ACTQ and the OTA have to analyze and discuss before filing arguments with the Commission”, wrote Serge Désy, president and general manager for the ACTQ, in an email to Cartt.ca.
Holmes explained that one of the problems with the current framework for small ILECs is that it’s based on the failed premise that competition would occur through collocation and leased loops. But this hasn’t happened, he added, noting that competition has come mostly from the cable companies.
“[They] have the potential to quickly hollow out the core of some of our members’ exchanges, leaving them to serve only the outlying areas and lose what for SILECs is a comparatively large part of their customer bases,” Holmes continued. “So they’re left with only serving the very high cost areas, dealing with potential lower revenue customers.”
Recognizing that WNP could also have a negative impact on the small ILECs, the Commission also opted to include it in this review, which Holmes says was the right thing to do.
“We think that WNP would only accelerate competition and market share loss in our operating territories,” he said. “It also raises some issues for OTA members to consider in the context of their interconnection agreements as well.”
The proceeding, which will culminate in a public hearing scheduled to begin in October, is a broad one that also includes issues relating to the telcos’ obligation to serve, the basic service objective, and the contribution regime. The consultation will also look at applying the Internet Traffic Management Practices framework to mobile data services.
Concerns about competition in rural and remote towns came to light last summer in the wake of the Commission’s forbearance framework for small ILECs. Released last June, the framework established a number of elements that would govern the introduction of competition into these outlying areas. But as competitors began to file plans to enter some of these areas, the small ILECs pushed back. Click here to view those comments.
The OTA appealed the decision in December, noting that as a result of the rules, many small ILECs in Ontario would never be able to take advantage of deregulation. The appeal has since been suspended pending this proceeding.
