OTTAWA – While three Commissioners dissented with the majority in today’s renewed VOIP decision, not all balked for the same reasons.
While commissioners Stuart Langford and Barbara Cram agreed with the confirmation of the 2005 VOIP ruling but not the announced review of the local forbearance decision, Andrée Noel simply reaffirmed her opposition to the first VOIP decision.
"I agree with the majority that the regulatory regime for local voice over internet protocol (VoIP) services decision is correct and should be reaffirmed," wrote Langford. "I disagree absolutely, however, with the majority’s determination… to reconsider the suitability of one of the forbearance criterion established just four months ago in unanimous Decision 2006-15. In my view, today’s majority ruling is both procedurally odd and, on the basis of the records of this and the Forbearance proceedings, difficult to justify."
Canadian incumbent local exchange carriers (ILECs) have complained long and loud about both decisions and appealed both to federal cabinet. The ILEC s disliked the VOIP decision because it continued to stay the course in terms of regulation: Where new telecom competitors would have pretty free rein when it came to its service – most of whom are offering voice over IP telephony – while the CRTC would maintain certain regulatory shackles on traditional telcos such as tariff approval, win-back restrictions and other marketing restraints, regardless of whether Bell, Telus and the other ILECs offered VOIP or not.
The ILECs (and really, lots of others) despised the local forbearance decision mainly because they had to lose 25% market share in certain regions before they could be deregulated and the companies disagreed with how the Commission defined those regions.
However, cabinet has not yet issued an order on what to do with the ILEC appeal over the local forbearance decision, so the inclusion of a review by the CRTC itself was something of a surprise.
And, it should have been left alone, said Langford and Cram.
"In reaction to a few statistics forming part of the record in one proceeding, the VoIP reconsideration, the majority may have cast doubt on the appropriateness of Commission conclusions in another, the Forbearance criteria decision. In my opinion, this may result in confusion, regulatory uncertainty and demands for a piecemeal review of most if not all of the other criteria set down in Decision 2006-15, a unanimous decision that is only four months old," writes Langford.
"Why has the majority done this? Their explanation is contained in paragraphs 79 to 85 of their decision. In my view, it is far from persuasive. Competition, the majority says, ‘has developed rapidly in the last year and a half.’ Customers are subscribing to competitors’ products. Competitor revenues are up. Churn rate is low; that is, people who try VoIP products offered by cable companies and others appear to like them.
"To this I say: So what?"
Langford is concerned that recent gains made by cable and other new telephony entrants will flatten out because the first few hundred thousand customers aren’t hard to attract.
"Lee Bragg, Co-CEO of EastLink, to date Canada’s most consistently successful new entrant in the telephony market, may also have been correct when he said that the first 5 or 6% of an ILEC’s customers are relatively easy to lure away. After that, the hard work begins," said Langford.
Such quick revisiting of major regulator decisions is a bad idea, added commissioner Cram. "Within 2 months and one week (of the local forbearance decision) the Commission chose to consider changing the bargain by commencing a process to decide if in fact wireless phones were now a substitute for wireline phones and therefore part of the local market subject to forbearance rules," she writes. "This was done at the Commission’s initiative. While some may argue that this proceeding injected uncertainty into the forbearance regulatory regime, others would say the impact may be minimal.
"Within less than 5 months from the initial unanimous decision my colleagues have now chosen to reassess the core of the original decision, the market share loss threshold. Again, this is done at the Commission’s initiative. The Commission has broken the regulatory bargain and will now leave the telephony market in uncertainty."
As for commissioner Noel’s dissent, hers was a reaffirmation of the original disagreement where she and former vice-chair broadcasting Andrée Wylie disagreed with the VOIP call altogether.
"Even though the Commission concludes that VoIP service is equivalent to primary exchange service, a view which I do not share, in my opinion the Commission should have forborne from regulating VoIP services for all the players pursuant to section 34 of the Telecommunications Act (the Act) because VoIP is a class of services in which none of the telecommunications carriers, whether ILECs or competitive local exchange carriers (CLECs), had a dominant position in May 2005," she wrote
– Greg O’Brien
