Canadian gov't calls off watchdog on VoIP


TORONTO -- The Canadian government said Wednesday it will reverse a recent decision by the country's broadcast watchdog to regulate Internet-based phone competition, a move that blocks planned regulation of the Internet.

Maxime Bernier, the federal minister of industry, said he will stop the Canadian Radio-television and Telecommunications Commission from carrying through with attempts to regulate voice-over-Internet protocol (VoIP) services.

"Barriers to entry in this market are very low. There is no reason to regulate it," the minister said of Internet-based telephony before the Economic Club of Toronto.

Ottawa's intervention will stop the CRTC from setting pricing and competition rules for new Internet-based phone services, just as it already does for conventional phone and TV services here.

Bernier instead called for market forces to determine winners and losers in an emerging Internet-based phone market being fought over by domestic phone and cable giants.

A rare intervention by Ottawa into the affairs of the CRTC follows regulator in May 1999 ruling that it will not regulate new media services on the Internet.

But the CRTC appeared to contravene that hands-off policy when a May 2005 decision ordered VoIP services to be regulated as traditional local phone services.

The federal government immediately referred that decision back to the CRTC for "review." That was followed in September by the CRTC reaffirming its original decision to regulate VoIP services.

In response, Bernier on Wednesday effectively called for deregulated VoIP services that consumers will use via the Internet, arguing they are "significantly different" from traditional phone services.