OTTAWA – Despite the CRTC’s announcement today that it has deregulated the local telephony market in Fort McMurray, Alberta – where resident have been among the keenest adopters of cable telephony – Canada’s two largest incumbent telcos remain unhappy.
Shaw Cable boasts a high speed Internet penetration rate in the city of over 80% of its basic cable customers there. Convincing those customers to add cheaper VOIP phone service has been easy so far and incumbent Telus has admitted it’s lost well over 25% market share in the community when it applied for forbearance last fall.
Today, the Commission announced it will deregulate residential telephone services in the bustling northern Alberta town, but only when Telus, "demonstrates that is has provided competitors with fair access to its network."
The release is similar to one in 2006 where the Commission told Bell Aliant to reapply for forbearance in the Halifax market once it could prove it was providing fair access to interconnections by competitors.
"This decision reflects our commitment to act quickly to bring the benefits of competition to Canadians," said Konrad von Finckenstein, chairman of the CRTC, in the press release. "In recent years, Fort McMurray has experienced a high rate of economic growth due to the development of oil sands projects, and the Commission has found evidence of strong competition in the residential local services market.
"Our decision ensures that consumers in Fort McMurray will be able to enjoy the benefits of competition, including greater choice and lower prices, as soon as Telus demonstrates that it has provided competitors with fair access to its networks."
The Commission set out this part of its criteria for the deregulation of local telephone services in the forbearance from the regulation of retail local exchange services (Telecom Decision CRTC 2006-15, 6 April 2006). Among the criteria were the stipulations that the incumbent local telephone company must have lost 25 per cent of its market share in a given market and have provided competitors with fair access to its networks by meeting specified quality of service indicators for a six-month period.
Until that is satisfied, Telus must continue to abide by certain marketing restrictions like submitting local rate changes to the Commission for prior approval and abiding by the 90-day win-back rule.
Telus quickly pronounced itself "extremely disappointed" by the decision.
"It is an undeniable fact that Fort McMurray residents have a choice of competitors for their basic phone service, and yet the CRTC insists on maintaining outdated restrictions on Telus’ ability to make its best offers to customers," said Janet Yale, Telus executive vice-president of corporate affairs. "The conditions for deregulation they set out for local phone service are unattainable in any practical sense, and were rejected as such by the federal government. Their decision today runs entirely contrary to the government’s directive."
Telus applied for forbearance in Fort McMurray in October 2006. This was based on the fact that in less than seven months, more than 25% of customers had switched to competitors.
"Today’s CRTC decision stands in stark contrast to both the Government’s policy direction and its budget statements," adds the Telus missive.
"It is imperative that the Government immediately reverse today’s CRTC decision and continue to deregulate local phone service in competitive markets for the benefit of all consumers by implementing the test for deregulation proposed and published by the Government in December 2006.
The policy directive Telus references, however, has not finished passing through committee or the House of Commons yet and will not come into force until later in the year. (Search "forbearance" on Cartt.ca and you can see how often we’ve covered this topic in the past months.)
While the decision doesn’t affect a Bell Canada territory, the company’s executive vice-president and chief corporate officer Lawson Hunter said in a statement: "Today’s announcement by the CRTC is not forbearance. It does not bring the benefits of competition to consumers of local telephone services in Fort McMurray."
"Rather, it confirms that the CRTC’s original framework for local forbearance, established in April 2006, is fundamentally flawed and cannot lead to timely, meaningful forbearance in any market," he added.
"This proves the need for the government to move forward on its commitment, as confirmed in the recent federal budget, for a new regulatory framework for local service forbearance that will bring the full benefits of open competition to consumers."
