Thursday, October 19, 2006

 

Will policy direction make a difference?

The government's proposed policy direction to the CRTC is being reviewed by the House of Commons in committee today. There are 3 panels appearing - each with 45 minutes: ILECs (Bell, Bell Aliant, TELUS and Sasktel); Cable companies (Rogers, Shaw, Videotron and Cogeco); and, New entrants and the public interest (MTS Allstream, Primus, Cable Systems Alliance, PIAC, Quebec Coalition of ISPs and L'Union des consommateurs).

Interesting groupings, with MTS Allstream not appearing as an ILEC and CCSA not appearing with the other cable companies.

Recall that at The Canadian Telecom Summit last June, Industry Minister Bernier announced a proposed direction to the CRTC that it should rely on market forces above other objectives set out in the Telecom Act.

Darren Entwistle spoke at an Ottawa lunch hosted by the Canadian Chamber of Commerce yesterday, calling for "a regulatory revolution in Canada" to bring changes at the CRTC.

While I support the intent to have regulation migrate to an increased reliance on market forces, I would ask 'will it make a difference?' What aspects of which decisions would the CRTC have dealt with differently with this policy direction in place versus the way they ruled?

Do we actually think that the CRTC ignored the potential for an increased reliance on market forces? Is it possible that the CRTC considered whether market forces would be sufficient and decided 'no'? Will the policy direction change these results?

Take a look at the VoIP reconsideration Decision. In that instance, the Cabinet sent the CRTC's VoIP Decision back for reconsideration with a specific view to increase the weight of market forces. On September 1, the CRTC came back endorsing its original conclusions [note: Cabinet has until the end of November to decide if the CRTC's confirmation of its original conclusion is acceptable].

So what will be the difference with the government's policy direction in place?

If Cabinet wants to end up with specific results on the CRTC's decisions, then it appears it has to issue specific directions. For that reason, elements of part (c) of the proposed direction will be the most contentious:
(c) in order to promote efficient, informed and timely operations the Commission should adopt the following operational practices:

(i) provide for maximum efficiency in regulation by using only tariff approval measures that are as minimally intrusive and as minimally onerous as possible,

(ii) with a view to providing increased incentives for innovation, investment in and construction of competing telecommunications network facilities, conduct a review of its regulatory framework regarding mandated access to wholesale services, in order to determine the extent to which mandated access to wholesale services that are not essential services should be phased out and the appropriate pricing of mandated services to encourage investment and innovation in network infrastructure,
On a prospective basis, if government wants the CRTC to change its overall approach, then we should be watching for changes to the CRTC and the Telecom Act itself.

There are a number of Commissioners of the CRTC with terms expiring soon. We'll be watching for a shift in the direction of the CRTC in appointments of the Chair and Commissioners.

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