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Ottawa overrules CRTC`s decision on VoIP service
2006-11-24
The CRTC made the decision in May 2005 to regulate voice over Internet protocol (VoIP) services and put restrictions on Canada''s larger telecommunications corporations to allow smaller companies to compete.
But Ottawa disapproved and is exercising its rarely used power to step in and make changes to some of the CRTC`s VoIP regulations, Bernier said.
"We think barriers to entry in this market are very low; there is no reason to regulate it," he said. "In a competitive sector, there is no reason to regulate some companies while others can offer the services they want at the prices they want. It is time to have a level playing field from which consumers and small businesses will benefit."
In its original decision, the CRTC said it was concerned the bigger companies, such as Bell and Telus, would sell VoIP services as below-cost "loss leaders" and destroy the competition. The federal government asked the commission to reconsider, but the decision was allowed to stand until now.
CRTC spokesman Denis Carmel said the commission will act on the changes and put up no resistance.
"The government rendered a decision ... and the government has the power to do so," Carmel said. "The commission gives effect to it immediately."
He said the move is not unprecedented, although it has been about a decade since the government intervened on a CRTC decision, which dealt with the White Pages telephone directory.
Bernier said cutting away some of the regulations would help consumers and the industry, but the Canadian Association of Voice Over IP Providers said the move will help only the big telecommunications conglomerates.
"Letting the telcos exercise their significant market power without regulation means that competition has been dealt a serious blow," said CAVP president John Lange.
But Vonage, one of Canada`s leaders in VoIP, said the news is not all bad and may actually help the company`s business by promoting the technology to more consumers who are still unaware of how it works.
"It also raises the awareness that (consumers) have a choice, they don''t have to just go to their telephone company or their cable company for their home phone service," said Joe Parent, Vonage''s vice-president of marketing and business development.
"Vonage and other independent companies are the ones that are really driving innovation, and innovation is not going to come from the telcos. It never has and is unlikely to start."
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