Gov't overrules CRTC phone decision

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TORONTO -- The Canadian government on Monday overruled the country's TV and phone regulator for the second time in as many months by indicating it will allow telecom giants to set their own local phone rates.

In a blow to domestic cablers looking to compete against established telecom giants with their own local phone offerings, federal industry minister Maxime Bernier said BCE Inc., Telus Corp. and other phone giants can charge what they wish if they face competition in any local market.

"The government's proposal is intended to stimulate competition and innovation among local telephone service providers so that Canadian consumers and businesses will benefit from even more choice, improved products and services, and lower prices," Bernier said at a Toronto press conference.

The fight over local phone pricing represents the latest battle between domestic phone and cable giants that are moving onto each other's turf in an increasingly converged digital space.

Local phone rates for BCE, Telus and other phone giants have long been set by the Canadian Radio-television and Telecommunications Commission, Canada's TV and phone watchdog.

In an April directive, the CRTC conceded that deregulation of local phone rates could occur if established phone companies held less than a 75% share of a local market. Currently, telecom giants have a 92% share of the Canadian phone market.

But the telecoms have long protested that new entrants like cable giants already can set their own local phone rates, and that they deserved reciprocity.

In an earlier deregulatory move, Bernier last month told the CRTC that it will not be able to regulate voice over Internet protocol (VoIP) phone services provided by domestic phone and cable companies, as it had sought (HR 11/16).
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