OTTAWA – Monday was deadline day for submissions to Industry Canada’s Telecom Policy Review Panel.
Not surprisingly, all stakeholders are calling for massive changes, with each pointing towards different ways to change telecommunications policy in Canada. Featured here are snippets from the Bell Canada, Telus and CCTA submissions. Look for more on this from www.cartt.ca as we wade through the submissions –everything from the large stakeholders in this story to the angry Telus workers complaining that the company is blocking their web access.
Bell Canada – change everything, promote ICT and R&D
The country’s largest telco says that the use of information and communications technologies (ICT) in Canada lags the rest of the world and any new policy should ensure that changes.
The Bell submission estimates 56% of the productivity gap between Canada and the U.S., stems from more limited use of ICT in Canada. Bell’s recommendations focus on the role of a more competitive and robust telecommunications industry in closing that gap and called for immediate deregulation.
"Telecommunications is experiencing profound change at an unprecedented pace," said Lawson Hunter, executive vice-president and chief corporate officer, BCE and Bell Canada. "An updated policy direction is needed to ensure the industry’s continued role as a key enabler of Canada’s overall economic performance."
Bell’s submission says public policy must promote accelerated awareness, development and use of ICT. Bell’s new policy would:
* Establish specific targets for ICT-related research and development, investment and adoption;
* Strengthen government’s role as a model user of ICT in its own operations and procurement process, as well as in healthcare and education;
* Provide for financial incentives that encourage ICT innovation and adoption in business, particularly for small and medium-sized enterprises; and
* Adopt a next-generation model for regulatory reform that relies largely on market forces.
"Public policy needs to focus on setting broad principles and frameworks, rather than setting detailed rules on services and prices," added Hunter, obviously alluding to the incumbent telcos’ recent loss at the Commission on the voice over Internet protocol (VOIP) decision.
At a hefty 1,000 pages, Bell’s submission “reflects intensive research by over a dozen international experts in the fields of economics, regulation, the telecom industry, public policy and law. Their work covered areas such as: global trends in telecom regulation; the Australian experience in telecom regulation; lessons learned from the Canadian transportation sector; broadband deployment; and Canadian productivity and the role of telecom,” says the company.
More highlights of Bell’s policy proposal:
* A comprehensive and forward-looking ICT policy would promote investment in and development of the broader ICT industry, while recognizing the natural competitiveness of the telecommunications sector.
* The role of the government of Canada should be targeted and selective. Drawing on the best practices of other industrialized nations, it should elevate the production and use of ICT to a national priority by:
* Putting in place a National ICT Strategy, under the leadership of the Prime Minister, with input from leading representatives of the public and private sectors.
* Setting performance targets for ICT-related R&D, investment and adoption, and measure and report on progress against them and against those of other countries.
* Conducting an audit of all federal R&D spending to ascertain how much of the funds actually go to ICT-related work and how effective these investments have been.
* Consolidating existing federal R&D efforts and institutions under one program/agency.
* While R&D leads to the production of valuable ICT products and services, productivity gains depend, for the most part, on their adoption in the marketplace.
* ICT investments pay dividends in terms of business operations and the bottom line, yet Canadian companies, small and medium-sized enterprises (SMEs) in particular, have not embraced ICT to the extent they could and should.
* In order to encourage broader diffusion of ICT the government of Canada should:
* Enable companies to accelerate the write off of the cost of ICT investments in the first year of acquisition, for a temporary five-year period; and
* Provide financial incentives to help SMEs hire or contract ICT professionals to support their ICT strategies
* While the Canadian government has done an admirable job of providing the accessible and user-friendly on-line information and transactional services that Canadians expect from their governments, in other important ways, our public-sector ICT performance can still be greatly improved.
* As the largest employer in the country, the federal government ought to become a role model for the use of ICT in its operations and procurement process, as well as in health care and education.
* Electronic health records represent an important opportunity. The government and Canada Health Infoway should accelerate efforts to complete the electronic health records system, as well as to encourage the broader deployment of telehealth applications.
* With current advances in wireless and satellite technology, Canadian industry could bring commercially viable connectivity to every household, including in rural and remote parts of the country, possibly before the end of the decade. If, for social or economic policy reasons, the government wants Canada to reach the target sooner, incentives to the private sector may be needed.
* Governments and the private sector must also work together to make fast, simple and useful applications universally available across this powerful backbone. From telehealth and e-government to financial services and retail, these applications will improve – in some cases even save – the lives of Canadians.
* Competitive market forces should be allowed to flourish in telecommunications sector.
* Toward that end, Canada should urgently implement a "next-generation" regulatory framework that would rely on market forces to the maximum extent, while regulatory institutions would address any abuse of significant market power.
* Achieving effective reform of Canada’s telecommunications regulatory regime requires an integrated approach. The statutory objectives, substantive rules and institutional structures must be consistent with each other. Such integration is reflected in Bell Canada’s seven guidelines for next-generation telecommunications regulation:
* Guideline One: The existing "presumption of regulation" should be replaced with a presumption in favour of market forces. The current framework starts from the idea that everything should be regulated. Given today’s competitive environment, a greater reliance can be placed on market forces, and regulation should only be used where an abuse of significant market power has been found.
* Guideline Two: The existing ex ante approach, where regulatory approval is required before telecommunications carriers can act, should be replaced by an ex post approach where competitors have more freedom to act in the market. If anti-competitive behaviour occurs, regulators would have the power to intervene in the public interest.
* Guideline Three: Retail price distinctions, including between geographic regions or among customers, should not be prohibited, unless found to be anti-competitive. All industry players should be permitted to respond to competition where they find it, including having different retail prices in different markets.
* Guideline Four: Regulation should only be applied at the retail level if wholesale regulatory measures are insufficient.
* Guideline Five: Regulatory regimes should not place marketing restrictions on one group of service providers in an effort to protect certain competitors.
* Guideline Six: Competitors should be encouraged – and indeed given incentives – to make their own interconnection and wholesale arrangements free from regulatory review. Carriers should be able to negotiate agreements that reflect their own circumstances without having to make the same arrangements available to all competitors.
* Guideline Seven: Regulation should be restricted to basic and essential services. There should be no economic regulation of discretionary services such as three-way calling and call forwarding.
* In regulating the telecommunications sector, specific responsibilities would fall to the authority with the greatest institutional competency in the area. The CRTC, for example, would have jurisdiction over social needs (such as services for the disabled) and technical matters (such as interconnection) where specific regulatory rules may be appropriate.
* Economic issues, including matters related to competition in the market, would be handled in the first instance by the competition authorities – the Commissioner of Competition and the Competition Tribunal. Where any significant abuse of market power is found, the CRTC would have authority to remedy the situation.
* These changes would be implemented through a combination of a policy directive in the short term and legislative amendments in the long term.
* According to recent research conducted by Decima on behalf of the Public Interest Advocacy Centre, Bell Canada and Telus, a clear majority of Canadians believe competition already exists in the telecom industry. In fact far more Canadians believed they had adequate choice in local telephone service (66%) than in cable television service (38%).
* The overwhelming majority of Canadians believe the same rules should be applied to all competitors, including new entrants. When it comes to local telephone services, 89% believe cable and telephone companies should be treated the same way.
* There is also strong support among Canadians for light-handed regulation. Over 70% of Canadians believe telecommunications services should be offered to customers without prior government approval. Almost 80% believe government should ensure there is adequate competition but let competition determine price.
Telus – de-regulate asap
Canadians are being denied the full benefits of competition and innovation, says the big western telco.
"The regulatory approach now in place is contrary to the Government of Canada’s commitment to end unnecessary and wasteful regulation that stands in the way of more efficient and innovative Canadian companies, lower prices for consumers and businesses, and a more productive Canadian economy," said Janet Yale, Telus executive vice-president, corporate affairs.
"By denying the major telephone companies the opportunity to respond quickly to the dynamic telecommunications market, regulation reduces their ability and incentive to invest in new services such as voice over Internet Protocol (VoIP) services," said Yale. "Indeed, it creates a double whammy by reducing the incentive for non-regulated companies to be innovative in response to the telephone companies’ offerings. It’s like forcing a runner in a race to wear ankle weights. The other contestants don’t have to run as fast to win."
Telus’ submission notes that the CRTC’s regulatory approach is rooted in the past, designed for an era when it was possible to impose orderly regulation to encourage orderly market development. The same is true for the objectives of the current Telecommunications Act. The result is that public policy and regulation are standing in the way of Canadians receiving the benefits of multi-faceted competition, including higher productivity and innovation and lower prices, with respect to communications technology.
Telus recommended important changes to modernize telecommunications legislation and regulation, including amending the Telecommunications Act to focus on the overarching objective of having competition and market forces guide the provision of telecommunications services. In practical terms, this would mean using regulation only where it is demonstrated that market forces cannot protect users from the abuse of market power or to ensure public safety, security or access to telecommunications services for persons with disabilities.
As a starting point and pending legislative change, Telus proposed that the Government establish a panel to consider which telecommunications services should be deregulated immediately and consider directing the CRTC to immediately begin implementing this new, market-oriented approach.
CCTA – Telecom Act is working well, so take a longer-term view, and include broadcasting
The Canadian Cable Telecommunications Association recommended that the Canadian Radio-television and Telecommunications Commission (CRTC) be permitted to complete its mandate to introduce competition in the local telephone market (the local forbearance hearings coming in September), while the Telecommunications Policy Review Panel addresses a new communications framework for Canada based on the convergence of broadcasting and telecommunications over the internet.
"Over the next five years, the Internet will evolve from a graphic- and text-based medium into a video-based communications infrastructure that will revolutionize how consumers communicate, become entertained and receive or distribute information," said Michael Hennessy, CCTA president. "Rather than amending the current Telecommunications Act which is working well, the Panel should consider how convergence will affect all communications policy by the end of the decade."
"New broadband networks will allow consumers to obtain entertainment and information from anywhere in the world online and on demand," said Hennessy. "The best way to accelerate investment in these networks is to support CRTC efforts to promote facilities-based competition in telecommunications."
CCTA advised the Telecommunications Panel that the current regulatory framework for telecommunications does not have to be changed in the short term. By any standard, Canada is a world leader in communications and, as the success of most telecommunications markets in Canada demonstrates, the Telecommunications Act already contains the fundamental tools that are necessary to promote facilities-based competition.
"Current challenges to the CRTC’s authority are not justified when we measure Canada’s success against international benchmarks that do not have comparable broadband penetration rates," said Hennessy. "The existing regulatory framework has resulted in universally accessible and affordable service, as well as the introduction of competition in all telecommunication markets except local telephony."
However, there will be implications on communication policy when video, music, data and communications services can be accessed either from traditional suppliers (TV networks, radio, telephone companies and the cable industry) or directly by consumers from anywhere in the world through the internet. CCTA endorses a communications policy that focuses on an integrated approach to communications.
"Once all content is available via broadband, a closed broadcast environment will be fundamentally incompatible with the open structure of the internet," added Hennessy.
CCTA also recommended the Telecommunications Policy Review Panel:
* Establish a single Communications Act, before the end of the decade that would cover broadcasting, telecommunications, and the internet.
* Consolidate of all communications policy-making functions within a single federal government department.
* Merge all communications administrative and regulatory functions within a single agency.
