OTTAWA – All the regional telcos used to work together to lobby the government like this under the old Stentor Alliance – an working group that was disbanded years ago when they all decided to compete with one another.
Today, the remaining former Stentor members (with one notable exception) held a joint press conference to make official their appeal to Federal Cabinet over the CRTC’s voice over Internet protocol decision.
The decision, as reported on numerous occasions by www.cartt.ca, says that incumbent telcos have to abide by existing telecom regulations in the way of win-back rules, tariff applications, and other practices. Local telephony newcomers, like Canadian cable companies and VOIP providers like Vonage, Primus and BabyTel, do not. The incumbent local exchange carriers (ILECs) have been angry ever since.
While today’s press release quoted all the CEOs of Bell Canada Enterprises, Aliant, SaskTel and Telus, the Ottawa press conference itself featured the front line executives on this file. “The CRTC has failed to recognize the realities of the technology and the market,” said Bell Canada’s chief corporate officer Lawson Hunter. “(The decision) puts at risk the overall competitiveness of the national economy.
The regional incumbent telco absent from the appeal is Manitoba Telecom Services, which now faces local competition in its major market. However, it also owns Allstream, which provides network services to competitive local exchange carriers in other parts of the country (such as Mountain Cablevision) and likes the VOIP decision.
“We think the decision is right,” MTS executive vice-president government and regulatory affairs Chris Peirce told www.cartt.ca this afternoon. “(The incumbent telcos) are not at a competitive disadvantage. They already have 97% of the market.
“This is about defending their market share, not the consumer.”
And that part about risking the overall economy? “I mean, come on. It’s a digital voice service. It’s important but it’s not that important.,” added Peirce.
The ILECs doing the appeal say this is all about the consumer. “Limiting choice will result in higher prices,” SaskTel senior vice-president John Meldrum told the press conference.
What the telcos are likely most afraid of is what has happened to Aliant in Nova Scotia and Prince Edward Island, which has faced stiff competition for over four years with EastLink, which launched local telephony in 2001. In response to a www.cartt.ca question, Aliant SVP Fred Cooks said that in the exchanges where EastLink now provides service, the cableco has 29% of the residential telephony market and in Halifax, the number is nearer to 32%.
Hunter said you only have to look at the quarterly results of MSOs Videotron and Shaw, which have been struggling to keep up with demand for their new VOIP services, to see that the market is competitive and the CRTC should step out of the way. “Why do we need to give these folks protection?” he asked.
Here’s why, according to the Canadian Cable Television Association, which had its press release out before the press conference was over.
"Local telephone service has been a monopoly for over 100 years and VOIP services could also follow in the same direction," said Michael Hennessy, CCTA president. "The CRTC VOIP decision provides basic safeguards and prevents targeted or below cost pricing. These requirements ensure that the local telephone companies can not use their monopoly position to unfairly drive out emerging competition and undermine investment in broadband networks."
Peirce pointed out that the telcos could launch VOIP outside their territories whenever they like and that Bell already has a VOIP service in the market in Quebec. “So what’s the problem?” asked Peirce. “There is no real impediment to them.”
This appeal is just one of several shots the telcos have been firing across the bow of Parliament Hill. They have appealed the winback rules to the Federal Court and will go before the CRTC in the fall for the local forbearance hearings and before Industry Canada for its Telecom Review, which began upon the urging of the telcos.
“It’s a real scatter-shot approach,” to telecom regulation, added Peirce.
“The clear issue you can see is with (the ILECs’) power in the marketplace, they are trying to exercise all of that power before competition even gets out of the gate.”
The telcos are hopeful the cabinet will tell the CRTC to change its VOIP decision before the end of 2005.
