Government to block CRTC plans on VoIP regulation

15 Nov 2006

The Canadian government will announce today its intent to rewrite the Canadian Radio-television and Telecommunications Commission’s (CRTC’s) ruling on Internet-based telephone services, in a highly unusual move that could mark a big step toward a more open and consumer-friendly sector. According to local daily The Globe & Mail, Industry Minister Maxime Bernier is expected to say in a speech today that the Conservative government will once again block the CRTC’s repeated efforts to regulate VoIP services. Mr Bernier and the CRTC are both trying to foster competition in the VoIP market, but have different ideas about how best to do so. The minister, a staunch advocate for free markets, wants to let consumers determine the winners and losers, while the regulator wants to approve prices for internet-based telephony in the same way it does for conventional phone services.

More than a year ago, the CRTC announced it would regulate the rates the incumbent telcos charge for VoIP, in the same way as it does them in the local phone market. The CRTC argued that the move would protect smaller providers. But the telcos appealed the decision in the courts, arguing that their competitors didn’t have to operate under the same restrictions. Instead of backing the regulator, Mr Bernier surprised industry observers in May by telling the CRTC to take another look at its decision. The commission, however, responded last month by holding firm to its earlier ruling, although it added that it would reassess the ground rules for how long the broader retail phone market should continue to be regulated. The CRTC had earlier ruled that major phone companies can escape CRTC pricing regulations only when they can show that they have lost 25% market share to alternative providers.