TORONTO – Don’t expect Bell Canada Enterprises to let up on the CRTC any time soon.
Still stinging from the Commission’s May 12th VOIP decision, which maintains traditional regs on telcos’ voice over IP offerings while cablecos and others get a head start, BCE CEO Michael Sabia made plain today in his keynote address at the Canadian Telecom Summit in Toronto that the company will keep pressuring government for wholesale change.
The situation is dire, he said, as Canada loses ground in the information communications technology (ICT) space to forward-thinking countries like Ireland and Korea. “By making a conscious decision to foster the sector, Korea has vaulted into first place in high performance broadband penetration,” he said, “burnishing Korea’s ‘brand’ as a leading edge, knowledge-based economy and making it the destination of choice for research and development centres for some of the world’s leading companies. Creating unique services and products. Bringing investment, jobs and higher living standards.”
Canada, he said, is going in the other direction. “Here in Canada, we know that ICT is the key to making productivity gains, but we’re spinning our wheels – and losing ground… We were once the most connected nation on the planet, with the highest penetration of telephones, cable and the Internet – the first country to bring the Internet to every school. Today, we rank 10th in the Digital Access Index, according to the World Telecommunications Development Report,” said Sabia.
“Equally disturbing, Canada is one of the countries that dropped the most in that survey between 1998 and 2002. Year by year, we have slipped in international rankings – slipped in the key indicators of an information society. Slipped in the areas that will drive productivity. According to the World Economic Forum on Global Competitiveness, Canada has fallen seven places – from ninth to 16th in just a few short years.”
The stakes are high, the pace of change scary-quick, and the regulation, terrible, said Sabia in his speech.
“With digitization transforming words, music, film and photos into bits and bytes – a common code that can be commonly shared – transmission is taking place by satellites, over cable and DSL. Opening the way for disruptive, transformative applications such as VOIP to be brought into people’s homes and businesses,” he explained, “changing the way individuals communicate and manage information and the way businesses drive productivity.
“The result – companies like Rogers and Bell, Telus and Shaw, no longer operate in parallel universes, but an overlapping one. The products and services we offer increasingly intersecting. Totally redefining the nature of our businesses – and the relationship with our customers.”
Old advantages, old ways of defining industries are gone and the regulatory regime simply is not reflecting that. It’s rapidly becoming a no-barrier world.
“Let’s understand, this isn’t a matter of regulation versus deregulation, it’s a question of what approach to regulation accommodates the world as it really is. And an appreciation that either the wrong kind of regulation – or regulatory mistakes – could limit the ability of creative innovators to participate fully or effectively. Restricting competition. Harming consumers. And limiting productivity gains.
“If we had any doubt about the need for new thinking, the recent CRTC decision with respect to VoIP provided the answer. We’re appealing this decision because it is fundamentally wrong,” he continued.
“Wrong in its characterization of VoIP as just another step in the evolution of telecommunications – when VoIP and IP are revolutionary. Turning broadband connections into phone lines and creating the ultimate convergence – of voice, video and text – opening the door to innovative new services.
“Wrong in failing to grasp that the competitive paradigm for VoIP is fundamentally different from traditional switched telephony. That because the barriers to entry are so low, there is neither the incentive – nor the ability – for ILECs to undercut the competition. That the landscape has shifted. That there are no incumbents. That we are all new entrants.
“Wrong in its assumption that ILECS will act anti-competitively – when the record on wireless and the Internet tells a different story. In both cases we have vigorous competition and in both cases there was no economic regulation. The result? Impressive innovation and tremendous choice for consumers.
“And wrong in its understanding of the fundamentals of the technology itself – for instance creating artificial distinctions between long distance and local calls when VoIP, by its nature, makes no distinction,” Sabia said.
“In effect, it’s a decision about industrial strategy. One that protects competitors, not competition. Resulting in less innovation. And less choice for consumers. What the decision on VoIP really does is two things. First, it protects big cable which doesn’t need protection. And second, it benefits foreign re-sellers – which have no incentive to invest in innovation.”
So, look for a forceful Federal Cabinet appeal of the VOIP decision – a joint one, actually from BCE, Aliant, Telus and Sasktel – and more BCE pressure on the government and the CRTC as Industry Canada’s Telecom Review proceeds and the Commission’s local forbearance hearings begin in the fall.
– Greg O’Brien
