TORONTO – The regulatory experts from competitors Bell Canada, Telus, Rogers Communications and MTS Allstream pulled no punches in their criticism of each other’s positions on the hot-button issue of "essential” facilities yesterday at the Canadian Telecom Summit.
Ken Engelhart, vice-president of regulatory affairs for Rogers Communications, quipped early in the discussion that members on the panel may find themselves out of work sooner than they expected.
“Once local telephone is deregulated, telecom is sort of done,” Engelhart said. “Essential facilities could be an ongoing source of work. But we don’t realize it yet – telecom regulation is 70 per cent over.
“These could be the dinosaurs here and don’t realize it. The mammals are in the ascendancy,” he said to laughter from the audience.
Earlier, Engelhart had suggested that Bell and Telus appear to be in denial about not only the need for mandated access to essential wholesale services but about their even existence.
“As far as (Bell and Telus) are concerned, essential facilities are a bit like the Loch Ness monster. They’ve never seen one,” Engelhart said.
MTS Allstream’s chief regulatory officer, Chris Peirce, chimed in that it is just not tenable for wholesale services providers to argue that there are no “essential” facilities when clearly their competitors rely upon access to wholesale services and need the quality of service associated with those facilities.
Peirce said history has shown that the CLEC model of “build it and they will come” was inefficient and ultimately failed. This resulted in the telecom policy move toward mandated access to wholesale facilities, he said, adding that competitors are disadvantaged if there isn’t a policy provision for ongoing regulation of these essential facilities.
“Oh man, this comes up every year,” lamented Mirko Bibic, chief of regulatory affairs for Bell Canada. “I don’t understand why it’s so difficult. Nobody is saying overbuild. If you have more fibre than everybody else, then ‘bravo’. When you pass a building and there’s a customer there that wants service, bid, win the bid, and build your spur to the building. It’s not that complicated.
“If you need to tide yourself over in the meantime, then negotiate. You have options. You can buy from us, you can buy from anybody else who is co-located on our network, you can buy from a cable company, and you can buy from a telco.”
Janet Yale, executive vice-president of corporate affairs for Telus, expressed a similar frustration. “In the circumstance where there are duplicate alternatives out there, it isn’t clear to me why we have to have mandated access at a prescribed discount to ensure competitors have an opportunity to compete. The rationale just doesn’t exist.”
Responding to the suggestion that competitors such as Rogers and MTS Allstream should negotiate for access to essential facilities, Engelhart said: “Mirko and Janet are saying there’s a whole bunch of different companies that have wire to these buildings, so why don’t you just negotiate? The answer is because there isn’t a whole bunch of different companies with wire to this building. Yeah, negotiate with the monopolies, negotiate with the only guy that has the wire to the building!”
He added that the United States, for example, has said that DS-1 and DS-3 loops are essential facilities – a point that Bell’s Bibic quickly took issue with, saying the U.S. has no requirement for unbundling of copper loops in “greenfield” areas or for mandated wholesale Internet access.
Engelhart went on to say that the U.S. telecom regulator has said where there are four competitors, then you can get rid of the essential facilities regime. “The FCC test, the Rogers test, exactly the same test,” Engelhart said.
“Do you guys see the day when there is meaningful wholesale forbearance, and if so when?” asked Bibic.
“Yes, we do,” Engelhart answered. “It’s exactly the same as the FCC rules. When there are a critical number of wires to wire centres and four competitors.”
“Four competitors that have no unbundled loop requirements? So never, in other words,” Bibic said.
