OTTAWA – Is access to an ILEC’s local loop – or even a cable operator’s plant – an essential service that must be opened to competitors?
That’s just one of the questions being asked of the telecom industry by the CRTC in a public notice released Thursday. It will be a huge and complex undertaking that involves the Competition Bureau, the Telecom Policy Review Report and the federal government and could end up redrawing the rules of the telecom game so that the Competition Act, and not the Telecom Act, takes precedence over the industry’s disputes.
In legalese, the Commission has begun a proceeding that will include a public hearing next October "to consider a revised definition of essential service, and the classifications and pricing principles for essential and non-essential services made available by incumbent telephone companies, cable carriers and competitive local exchange carriers to other competitors at regulated rates (wholesale services)."
Commission rules currently mandate that ILECs and MSOs must open their respective networks to competitors (at various regulated rates) in order to provide competitive telecom services (data and voice).
Over the years, network owners have resisted such rules under the basic tenet that if competitors want in, they should string their own wire.
The Commission, on the other hand, recognized through years of decisions that local phone competition would likely never arrive if competitors couldn’t lease lines – at regulated, some would say too-low, rates – to start their businesses.
The Commission had hoped that leasing lines would be a temporary measure and that newcomers would eventually build their own networks and become "facilities-based". Other than the three ubiquitous networks in existence (the ILEC’s legacy systems, MSOs hybrid fibre coax plants and wireless), that didn’t really happen in the way the Commission had hoped in its 1990s decisions.
Wireline networks developed by the likes of Metronet, Group Telecom, 360 Networks and others grew in Canada in the late 1990s, aimed primarily at the business or backhaul market and were eventually sold. Call-Net (Sprint Canada) made inroads as well but it struggled and was sold to Rogers Communications in 2005.
The Commission also noted a change of game from the Competition Bureau. On September 26th the bureau "issued for comment a draft Information Bulletin on the Abuse of Dominance Provisions as Applied to the Telecommunications Industry… In its September Draft Bulletin, the Competition Bureau described its proposed approach under the abuse of dominance provisions in the Competition Act with respect to conduct in the telecommunications industry to the extent that the Commission has made a determination to refrain from regulating such conduct. For the purposes of section 79 of the Competition Act, an essential facility was defined as an input that provides the firm controlling it with the power to lessen or prevent competition in a relevant downstream market," says the Commission’s public notice.
That draft bulletin was developed in response to provisions in the Telecom Policy Review Report, whose recommendations to let market forces rule have found favour with the current federal government, as reported several times previously by Cartt.ca.
For the telecom lawyer and consultant field, it looks as though 2007 will be as busy as 2006.
