The CRTC rejected an appeal by MTS Allstream of a couple of earlier Centrex forbearance decisions, Decisions 2007-80 and 2008-10.
MTS Allstream had argued that these Decisions had the effect of foreclosing any possibility of sustainable competition in Centrex services. It said that maintaining these Decisions would cause irreversible damage to competition.
Among its arguments, MTS Allstream provided evidence that showed that ILECs had in excess of 95 percent market share of business local exchange services to large and very large business customers. MTS Allstream claimed that the ILECs had “significant market power” in Centrex services as seen by the ability to raise prices as much as 19 percent within a year, with no loss of ILECs’ market share.
However, the Commission found that the market share data submitted by MTS Allstream was inconclusive. For example, the data submitted by MTS Allstream did not separate the in-territory from out-of-territory regions where ILECs operate as competitors.
The Commission remains of the view that market share is but one measure of competition. The Commission considers that competitor presence is widely accepted in economics and competition law as a measure of a market’s competitiveness and notes that it was the required test in the local forbearance framework set out in modified Telecom Decision 2006-15.
The Commission noted that the forbearance framework for wholesale services would ensure that competitors have access to inputs needed to compete in retail markets, independent of the regulatory determinations in the retail market. And of course, the Commission retains its powers to address issues related to undue preference and unjust discrimination.
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CRTC, centrex, MTS Allstream