TORONTO – With the telecom industry taking swing after swing at the Commission he runs for three straight days, CRTC chairman Charles Dalfen jabbed back on Wednesday.
He was given the last word by Canadian Telecom Summit organizers and spent much of his speech at the conference defending the CRTC’s VOIP decision. The May 12th voice over Internet protocol regulatory decision said, mainly, that for the incumbent local exchange carriers VOIP will be regulated the same as their traditional circuit-switched systems in that they must file tariffs each time they want to alter their pricing.
Telephony newcomers like cable companies and others such as Vonage and Primus do not have to file such tariffs. The ILECs will soon appeal the decision to the Federal Cabinet.
To the telco CEOs who are demanding change, and change now, Dalfen said “staying the course” is what’s required, even in the face of disruptive industry transformations.
Staying the course, however, “does not mean continuity for its own sake,” he said. “Nor.. does it mean change for its own sake or for the sake of what might dazzle us, particularly when the dazzle has not yet razzled, as it were.
“What it does mean is being deliberate, disciplined and consistent. It means adapting our rules to technological and market changes on a timely basis, and it means properly discharging our role as a quasi-judicial tribunal, giving careful consideration to the facts and arguments that are presented by all of the parties before us.
“Why staying the course is important is that it has resulted in a successful telecommunications system for Canadians, by any measure,” Dalfen added.
In the VOIP ruling, the Commission said that no matter how a telephone call is routed or marketed, in the end, consumers will buy VOIP because they intend to use the option as their phone service, making calls just as they have in the past.
Earlier in the day, Telus CEO Darren Entwistle said in his luncheon keynote that the CRTC was poorly regulating the industry, in part because of how it measures competition. Dalfen shot back, saying:
“Today, eight years after competition was introduced for local telephone service, the incumbent telephone companies continue to account for 98% of revenues for local residential services, and 92% of revenues for local business services.
“Our luncheon speaker today said that our reliance on these figures represents an ‘outdated assessment of market conditions’, and shows that the Commission pursues ‘a strategy seen through a rear-view mirror’… The fact of the matter is that no better figures, and no superior methodology have been presented to us that would support a credible alternative view of the telecom market,” he explained.
The truth is that no one can predict the future and that the Commission must regulate for today, Dalfen continued, regardless of what telco CEOs think is barreling down the road at them, threatening to strip revenues away.
“We share the hope that all of you have, that VOIP will bring real competition in the local market. And this is precisely why it is important to stay the course and ensure that the market is not pre-maturely deregulated, while incumbents are so dominant, and so capable of nipping that competition in the bud,” he said.
And besides, with the Commission now committed to providing tariff decisions within 10 business days, will forcing telcos to continue filing those requests really be so bad? The decision doesn’t keep the ILECs from the market, keeps them from clubbing the competition with the stick of their near-monopoly on local lines.
“Will the exciting – dare I say revolutionary – prospects of VOIP be stillborn, and all future innovation cease, if the incumbents – holders of 95%+ market share are not allowed to price below cost, or, for example to specifically target the 4.3% of lines that competitors have been able to attract, after nearly a decade of trying?” he asked himself, rhetorically, seemingly referring to the previous day’s speech by BCE CEO Michael Sabia.
“Can this tariffing requirement on incumbents really be the factor that will hold back Canada’s progress in adopting ICT technology and doom our international competitiveness?”
I guess we’ll see.
– Greg O’Brien
