As reported by the Globe and Mail this morning, the federal cabinet has overturned the CRTC’s conviction that all VoIP services should be regulated like conventional voice service.

In his speech today to the Economic Club of Toronto, Canadian Industry Minister Maxime Bernier announced that it is telling the CRTC to deregulate access-independent VoIP services. This will impact services like Bell’s Digital Voice Lite, but not their full Digital Voice product. As a result, the announcement will not immediately impact the more reliable managed VoIP services that compete more directly against the cable companies.

The Minister stated:

…many people believe that it is up to the government to bring about economic growth. As one once said, such a view of the economy could be summed up in a few short phrases: if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. This is not a view that I share.

Today’s announcement is more likely a further indication of policy direction, rather than having substantial impact on the marketplace.

The CRTC’s position, set out in a decision in May 2005, was that the Commission has always adhered to principles of technology neutrality and VoIP was just another technological means to deliver wireline voice. In May 2006, responding to an appeal from the incumbent telcos, Cabinet asked the CRTC to reconsider its position and told it to report back in 120 days.

On September 1, the CRTC affirmed its original decision that voice is voice, regardless of the underlying technology. To some, it seemed as though the Cabinet and CRTC were talking on a VoIP line while their staff were downloading Schwarzenegger films: every other word was garbled so the messages just weren’t getting through.

In a white paper, we offered a solution that leads to the conclusion endorsed by the Minister today – unbundle the service from the access and examine the state of regulation on the access component to determine how to regulate the service. Our solution allows the CRTC to remain true to its principle of technological neutrality while considering the market and political realities.

As we mentioned on Monday evening, the Telecom Act allowed Cabinet 90 days to ‘vary or rescind’ the CRTC’s September 1 decision. Today’s announcement instructs the CRTC on how it must deal with the issue.

Observation:
The clock is also ticking on a number of other files, including the Minister’s Policy Direction to the CRTC. In his speech today, he indicated that he is still reviewing “comments before commencing the finalization process.”

Last summer, I asked when will TELUS launch the LG Chocolate, the phone that looks like an iPod. Verizon’s launched the phone in July.

The Chocolate is now available and I would expect it to lead some hot sales during the upcoming Christmas season. TELUS is calling the campaign Hot Chocolate, bundled nicely with a set of Bluetooth headphones and a 1GB memory card. Yesterday, TELUS announced an accompanying ‘all you can eat’ mobile music plan to help fill up that memory card. For $20 per month, download all the music you want to the Chocolate and a few other TELUS MP3 enabled phones.

Mobile Music is a differentiator for TELUS, especially knowing that Rogers is set to launch its own GSM version of the Chocolate (with a slightly different keypad) next week.

Interesting question: can the music I download to my phone be transferred to my other devices as well? We note that TELUS CEO Darren Entwistle has spoken about copyright issues [Oct 18 Ottawa Chamber of Commerce as reported by Michael Geist]:

copyright has to be flexible enough to permit Canadians to use and transfer legally obtained copyrighted materials – like songs and TV programs – from one technology to another. . . from their TV to their PVR, and from their ipod to their mac

So, what about moving Mobile Music from my cel phone to my PC and iPod?

About a month ago, a bunch of us were asked “how do you convince non-telecom people that telecom policy reform matters?” Why would the average citizen care about telecom policy reform? Why would this issue rank above, say repairing pot-holes on the government agenda?

We have a cookbook in the report of the Telecom Policy Review Panel – a recipe for reform that has been sitting since late March. A cup of this, a teaspoon of that – changes to the CRTC, a new consumer advocacy panel, a little this, a little that. But it isn’t clear that we have seen a clear picture of the final product. You know, that image of a sizzling crispy dinner coming out of the oven to make you want to run out and buy the ‘set-it-and-forget-it’ thing.

What is the grand vision? The pot of gold at the end of the rainbow. Where is the rainbow?

In order to move telecom policy reform higher in the priorities of average Canadians, we need to grab their imaginations. We need to demonstrate relevance. What is the vision of tomorrow’s communications environment in order to adequately describe the need to change the regulatory model?

The future of communications is more than just the web – so selling Telecom Policy Reform is more than simply countering the recent Maclean’s cover story.

We need to see a vision laid out that describes a better, safer, cleaner, more fun tomorrow. Will we be followers, importers and adopters of other countries’ communications technologies and services? Or will be be creators, exporters and leaders?

What is your vision?

We’re coming up to the deadline for Cabinet to accept or reject the CRTC’s VoIP reconsideration. On September 1, the CRTC affirmed its original decision that voice is voice, regardless of the underlying technology that provides the service. It launched a proceeding to review the criteria to liberalize all types of local phone service, but said that, on review of its original decision, the CRTC was correct that IP telephony should not be handled differently.

The Telecom Act allows Cabinet 90 days to ‘vary or rescind’ the CRTC’s September 1 decision.

The clock is ticking. Minister Bernier is booked for a couple speaking engagements this week. Will he make changes to VoIP regulation?