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Last December, Minister Bernier announced a variance to the CRTC’s local forbearance decision. This afternoon, the order was finalized, accelerating the deregulation of the industry. According to the Minister, this order is in the interests of customers and taxpayers, to deliver lower prices, recognizing the level of competition in major urban centres across the country.

The order was issued, despite a report from the Parliamentary Industry Committee (INDU) to withdraw the variance order, but it took into account the concerns of parties that provided responses to the consultation process, especially targetting the concerns of smaller cable companies.

The final order maintains the simple test that was set out last December, but clarifies a few points – it broadens and clarifies the definition of who are competitors, tightens the definition of a forbearance region.

The Telecom Policy Review panel had made an extensive number of recommendations to update the industry framework in a competitive global environment. Some of these will require legislative changes and it seems unlikely that the current incarnation of INDU will set aside politics to move forward on policies that should attract bipartisan support. Recall that the TPR panel was created under the Liberal government and its report was delivered to the current Minister. Still, we may need to wait for a majority government to bypass the tone of the committee meetings.

As we have noted before, it strikes me as more than a little ironic that the initial implementations of the TPR’s recommendations are derivatives of cabinet appeals that may not be permitted when reform is completed.

Parliament’s Standing Committee on Industry, Science and Technology (INDU) has been conducting an investigation into Deregulation in Telecommunications, in the wake of Minister Bernier’s decision to proceed with cabinet’s policy direction to the CRTC and its interventions into a few CRTC Decisions. There are a number of sessions taking place through the month of February.In October, the INDU committee recommending the Minister to delay interventions to the CRTC until the Committee had a chance to conduct more studies.

Yesterday’s National Post had an article about CRTC Vice-Chair Rick French appearing as a witness on Monday. Sheridan Scott, from the Competition Bureau also appeared. There is another meeting scheduled for this afternoon, with witnesses from the cable companies and CLEC community.

With news reports breaking about the government’s position on Net Neutrality, it will be interesting to see if the Committee’s agenda gets side tracked. I published my free-market viewpoint on the story last night. For a contrary view, see Michael Geist.

Playing politics in a minority government is delicate work. If there are to be legislative changes to give effect to the report of the Telecom Policy Review panel, we’ll be watching for a compromise approach to working with the INDU parliamentary committee.

I recently met with John Maduri, who is now heading up a company with a rather unique approach to rural broadband, Barrett Xplore.

What’s unique? He isn’t looking for a government handout. He hasn’t gone to government agencies saying ‘Give me $$$ and I’ll deliver broadband to the unwashed, underserved, your down-trodden.’ Instead, Barrett is delivering a 99.99% available, city-quality broadband experience to anyone in Canada who wants it, no matter where they live or work.

What Barrett Xplore has done is built a viable business plan that uses various solutions, including Motorola Canopy technology where appropriate or Telesat Ka-band in other areas. They are actually adding customers at a respectable clip, with reasonable prices, and a positive NPV. The entire country is within their potential serving area.

Unfortunately, the CRTC’s Deferral Account Decision has created problems for Barrett. That Decision told the incumbent telephone companies that they could and should use excess payments (that subscribers made to prop up local rates in urban areas) to subsidize the incumbent broadband roll-out to rural areas. It was a Robin Hood decision – taking money from one group to give to another. Bell has appealed a part of the Decision to the courts; we can expect to see an appeal (or more) to Federal Cabinet in the next few weeks.

With the best of intentions, it seems that whenever we see these kinds of programs, there are problems. As I mentioned in my post about ICT Toronto, it just seems that we need to avoid trying to pick winners and we need to resist the temptation to intervene in the market. Like it or not, rightly or wrongly, Decision 2006-9 made it tougher for John and his venture to go out and compete. And it was all with the best of intentions by everyone concerned.

I’d like to think that we should be clearing out of the way of entrepreneurial ventures like Barrett Xplore, not putting obstacles in their way. Hopefully, John and Barrett Xplore will be able to look back at this as just a speed-bump, not a barricade, as they continue to bridge the digital divide.

I just received a copy of the 5 inch stack of paper that makes up Bell’s Federal Court Application to appeal the CRTC’s Deferral Account Decision. We wrote about this earlier in the week and I haven’t seen it picked up by the rest of the telecom news business.

There is $650 million at stake here, folks. The appeal seems to be arguing two points: that the spending on rural broadband is actually just an option for ILECs (a $480M option); and, that the CRTC over-stepped its jurisdiction in ordering the ILECs to rebate any of the money that they don’t spend on the broadband program.

Is this a case that the CRTC used poorly chosen language that allows ILECs to make the rural upgrade plan optional? The March 10 follow-up letter to ILECs has some strange language in it as well:

The CRTC didn’t say ‘equivalent’. They said ‘comparable’. Does that mean that, as long as the ILEC provides a table indicating how the proposed services compares, it is permissible to have a slower, higher-priced offering?

In the meantime, the clock is ticking – proposals are supposed to be submitted by June 30. With a half billion dollars in Bell territory alone at stake, this appeal strikes me as something that merits wider coverage and analysis.