OTTAWA – Contrary to how Canada’s incumbent telcos spun last week’s local forbearance decision, the deregulation process will not take a year or more, says the chair of the CRTC.
Last week, upon release of the CRTC’s local forbearance decision (which set out the rules upon which local telephony deregulation will happen), ILECs such as Bell, Telus and Aliant were up in arms, not just about the terms of deregulation, but of the process. They claimed it could take up to 18 months from an application to deregulation.
No way, CRTC chairman Charles Dalfen told www.cartt.ca on Wednesday. Four months, tops. The ILECs last week complained that since the Commission will be using numbers from its annual Report to the Governor in Council on the Status of Competition in Canadian Telecommunications to determine if a market is competitive, de-reg applications will languish and ILECs will suffer.
Dalfen said that the report will certainly be a big piece of the equation, but it can’t and won’t be the only thing the CRTC relies upon when it comes to deregulating local phone markets. (The main aspects to the local forbearance decision are: 1. Competitors must gain 25% market share in designated markets; 2. There are over 80 designated markets set out in the decision; 3. Win-back restrictions have been cut from 12 months to three; 4. The incumbent must have provided competitors stable access to its network for at least six months.)
However, in its attempt to keep things current, the Status of Competition Report has already been moved up from an October publishing date to July in order to get recent data to the market as quickly as possible. It will feature 2005 data.
So, if a deregulation application was made in August, the report’s figures would be pretty recent and useful. However, if ILECs start losing customers at a pace that outstrips the time it takes to gather the data and publish the report – or if an application is made next March, well beyond the publication date of the Report, the Commission wants the telco to bring its newest numbers forward. It won’t rely solely on its Report to the Governor in Council, Dalfen insisted.
"If it’s a few months on and (an ILEC) sees some things happening rapidly, faster than they thought, they can say: ‘here’s the new number,’ and we’ll look at it. We’re not going to build lag into the system… you don’t have to rely on the Commission’s last set of memories," he said.
The incumbent telcos also don’t have to wait until they hit the 25% threshold before applying for deregulation. "An applicant is entirely free to come in, in advance of reaching the 25%. They can say: ‘Look, I’m at 23 and counting, it’s going to happen so give me an approval conditional on hitting the thresholds.
"We do see these things being turned around for the market, from the time of application, in four months, no more," Dalfen added, pointing the Commission’s commitment to quicker responses – such as providing retail tariff decisions for telecom rates in under nine days now.
Also in the decision – and not noted in many media reports – is that the new 90-day win back restrictions fall away at 20% competitive market penetration, with a simple application process, he said.
The final hurdle the incumbents have to clear – and the reason why Aliant wasn’t granted its de-reg request – is that they haven’t been providing fair, stable access to their incumbent telephone system, the necessary link for the competitors to the public exchange. If Aliant had been doing this, their request for deregulation would have been approved.
This stipulation has to remain, says the chair, because of the problems telecom newcomers have had when it comes to connecting to the ILEC backbones. "The quality of service from incumbents has been generally low in this area over a long period of time and we feel that for them to take this seriously – because competitors are so dependent on it – is a very important thing to do for sustainable competition on the play for the consumer," said Dalfen.
"The incumbents need to recognize that these competitor quality of service things are important and if they satisfy them, they’ll be deregulated. If they don’t, they’re going to prolong it.
"This is something entirely within their control."
