OTTAWA – “Why did we find that VOIP is a telephone service? Because Canadians use it as a telephone service,” CRTC chairman Charles Dalfen said today at the Commission’s headquarters upon the release of its voice over Internet decision.
The decision confirmed what the Commission had said previously: that it would continue to regulate VOIP when it is provided and used as a local telephone service.
That means incumbents like Bell and Telus will continue to have to file rate tariffs with the Commission for approval – to make sure predatory pricing below cost doesn’t happen – while the newcomers, cable MSOs included, do not.
Peer to peer voice service will remain untouched.
To those who said this is a step towards regulating the Internet, like Bell Canada’s CEO Michael Sabia said here last week, Chairman Dalfen dismissed those claims. “We believe that approach is mistaken,” he said, clarifying that VOIP is not just some other Internet service like Telus, Bell, Sasktel and MTS said during the 2004 public proceedings. “Just because they use IP and travel on the public Internet, consumers don’t buy VOIP to access the Internet, you use it as a telephone service.”
However, today’s decision also told the country’s cable operators that they must crack open their own third party Internet access (TPIA) tariffs to be sure to allow third party Internet providers (like Vonage and Primus) to provide VOIP on the cable backbone.
The TPIA decision from 2000, which set out the wholesale rates third party Internet providers have to pay cable companies to use their networks, did not contemplate voice services at the time and the language is unclear, calling for cablecos to allow Internet services on their plant from third parties and not explicitly voice.
“While the CCTA submitted that the TPIA may not prohibit ISPs who use TPIA to provide their Internet access service from also offering VOIP services on an access-independent basis, the Commission considers that the wording of the restriction is not clear, and could be interpreted as restricting this type of service offering,” says the decision.
“Accordingly, the Commission determines that the TPIA restriction should be removed, and directs Rogers, Videotron, Shaw and Cogeco to issue, within 20 days of this decision, revised TPIA tariffs to remove the existing restriction in order to allow TPIA customer to provide VOIP services, in addition to retail IS.”
The Commission has also not identified when, exactly, the market will be deemed to be competitive. On the TV side, cable rates were deregulated when it was demonstrated they had lost 5% of their customers in a given market to competitors.
However, while cablecos did hold a monopoly on TV service, cable penetration at its best approached 70 to 75% across Canada and is now far lower. Telephone penetration is mainly at 100% (everyone’s got a phone, right?), with incumbents holding over 95% of the market. Best guess is that the level of customers switching away from the ILECs will be larger than 5%.
The Commission’s telecom forbearance proceedings, which have already begun to receive submissions and will see public proceedings this September (during cable week, of course), will decide that.
Dalfen committed the CRTC to issuing a decision on forbearance of local telephony by March of 2006.
– Greg O’Brien
