Panel recommendations......seem positive for the telcos, but will the gov't go along with the recommendations? From today's Globe and Mail...
Panel calls for ‘fundamental' change to telecom regulation
CATHERINE MCLEAN
From Thursday's Globe and Mail
It is time for a dramatic shakeup of the regulations and policies that govern telecommunications companies to contend with sweeping changes from new technologies, a federal review panel said Wednesday.
“Fundamental” changes are required or competition in the $33-billion sector will suffer, the government-appointed Telecommunications Policy Review Panel warned Wednesday. It called for a reliance on market forces “to the maximum extent feasible.”
In an unexpected move, the panel also opened the door to a similar review in broadcasting, which is experiencing its own technological shifts.
The panel's suggestions for the telecom industry include easing up on economic regulation, expanding Internet broadband access to all Canadians by 2010, and creating tax credits so that more businesses adopt information and communications technologies.
“Telecommunications technologies and markets today are in the midst of a profound transformation and the panel believes the policy and regulatory framework should change to reflect the new environment,” the panel said.
Greater reliance on market forces rather than regulation, as the report recommends, would prove a boon for the nation's top telephone companies, including BCE Inc. and Telus Corp. They have waged a lengthy battle for change.
“The call for significant change is something we've always said needed to be done,” said Lawson Hunter, BCE's chief corporate officer.
He added that the recommendations exceeded his expectations. “If the report were implemented it would make a fundamental change to the way we're regulated.”
Ottawa decided last year an update was in order to reflect changes in the industry, which has evolved dramatically since the rules that govern it were set before the rise of the Internet. New products are evolving from Internet technology, including voice over Internet protocol (VoIP) phone services and IPTV. As a result, phone companies and cable operators have become each other's biggest competitors as they offer the same services in different ways.
Last April, then Industry Minister David Emerson appointed industry veterans Gerri Sinclair, Hank Intven, and André Tremblay to the panel, giving them a mandate to review the current framework and make recommendations to boost the competitiveness of the telecom sector. They pored over more than 200 submissions, listened to presentations at two forums, and consulted regulatory authorities and telecom experts worldwide.
Now it's up to the new Industry Minister, Maxime Bernier, to decide whether the recommendations, some of which would require legislative changes, will be implemented. Mr. Bernier said Wednesday in a statement that the department will review the recommendations over the coming months.
Among the report's suggestions is that, over a 12-to-18-month transition period, the big phone companies should be able to start setting their own rates for local phone service in areas where they don't have a significant market share. It also recommends lifting so-called win-back restrictions under which the big telcos are prevented for one year from trying to win back local phone clients who have left for another carrier. The carriers should also decide themselves what rates they will charge competitors to use their “non-essential” facilities, the report said.
“It's a clear rejection of policies to micromanage competitive outcomes in the telecom sector,” said Willie Grieve, vice-president of government and regulatory affairs at Telus.
As the panel recommends the shift to a more market-oriented approach, it sees the need for a new body to deal with competition in the telecom sector for a five-year period. It says the Telecommunications Competition Tribunal, which will be led by the CRTC (Canadian Radio-television and Telecommunications Commission) and the Competition Bureau, should handle complaints about anti-competitive practices.
Not all telcos were impressed.
“It equates greater efficiency in the market with greater bureaucracy,” said Chris Peirce, head of regulatory affairs at Manitoba Telecom Services Inc.
But Rogers Communications Inc., one of the cable companies that had been pushing to maintain the status quo as far as regulation was concerned, was satisfied with the report.