People like free

Free is a good price. Consumers like free offers.

However, some service providers find it is tough to compete with free offers from their competitors.

In March, GATPE Services, operating as Miniphone.ca filed an application with the CRTC, seeking an order to direct Fongo, Dell Voice, and Fibernetics  to stop offering VoIP services for free in Montreal, claiming that free services contravene two sections of the Telecom Act:

27. (1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable.

…

27. (6) Notwithstanding subsections (1) and (2), a Canadian carrier may provide telecommunications services at no charge or at a reduced rate

The file itself is somewhat interesting. It appears that the application had been filed without the use of regulatory professionals or lawyers and the filings read somewhat like a transcribed stream of consciousness conversation. To its credit, the CRTC set out a process to review the complaint, helping to ensure that Miniphone’s complaint was able to receive a proper review.

The Commission notes that it forbore from regulating the rates for retail telecommunications services provided by CLECs because it found that those services are subject to competition sufficient to protect the interests of users. The Commission also notes that this is consistent with the Policy Direction, which directed the Commission to rely on market forces to the maximum extent feasible.

In the end, however, the CRTC was not going to order the end of free VoIP services. The CRTC denied Miniphone’s request. To start with, Dell Voice and Fongo aren’t Canadian Carriers, and so the relevant sections of the Telecom Act didn’t apply to them. Sections 27(1) and 27(6) don’t apply to CLECs – these sections have drawn interesting complaints in the past when incumbents offered free services, but that is a different matter.