Four of Canada's major telephone companies held a joint press conference in Ottawa Thursday, calling on Industry Minister David Emerson and the Federal cabinet to overturn the Canadian Radio-television and Telecommunications Commission (CRTC)'s decision on the regulation of voice over Internet protocol (VOIP).
On May 12, the CRTC ruled VOIP service by incumbent carriers like Bell and Telus would be regulated much like regular phone service, so their strong market position wouldn't muscle out emerging competition, which includes major cable companies Shaw and Rogers.
"It's not every day that Bell, Telus, Aliant and SaskTel come together with one common position, but then for our industry these are not ordinary days," said Lawson Hunter, Bell Canada executive vice-president and chief corporate officer.
Hunter said by choosing to impose old telecom rules the CRTC failed to recognize realities of the technology and the market. He rejected the CRTC's notion that newcomers to the VOIP market need protection from the incumbents, saying when it comes to VOIP there are no incumbents.
"Because our sector is such an essential enabler for businesses of all sizes, everywhere, this decision puts at risk the overall competitiveness of our national economy," Hunter said.
SaskTel vice president John Meldrum said the CRTC's regulatory burden is hampering its ability to bring a VOIP offering to the Saskatchewan market. The rules also restrict the bundling of regulated and non-regulated services and marketing to win back lost customers.
"We're being constrained by the regulator as we're just getting out of the starting block," said Meldrum.
In the end, the four telcos said the real losers are Canadian consumers, through artificially higher prices and less innovation.
However, global VOIP service provider Vonage has a different take on the issue.
Vonage is active in the Canadian market, and Vonage Canada vice-president, marketing and development Joe Parent said in an interview from Toronto that his company just wants to compete in an open, vibrant and competitive market.
"We think we're quite capable or bringing new and innovative products and services to Canadians, and we're well on our way to doing that," said Parent. "In fact, we feel we, to a large extent, created the industry in North America."
A group representing Canada's cable companies also gave the appeal by the four telcos a thumbs-down. In a press release, the Canadian Cable Telecommunications Association said the CRTC ruling was necessary to promote competition and ensure lower prices.
"Local telephone service has been a monopoly for over 100 years and VOIP services could also follow in the same direction," said CCTA president Michael Hennessy. "There is no reason to appeal the CRTC's VOIP decision, when consumers will immediately benefit from lower prices and innovative services."
The ball now is now in the court of Federal Industry Minister David Emerson, who has up to one year to make a decision.
Emerson spokesperson Christiana Fox said in an interview the Minister would take the time to analyze the petition, as well as any other submissions received by interested stakeholders, before making any comment. "At this point it would be inappropriate for the government to comment further on the matter, as the decision remains subject to appeal," said Fox.
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