TELECOM Digest OnLine - Sorted: Canada Wants Deregulated Internet Phone Service

Canada Wants Deregulated Internet Phone Service

Wojtek Dabrowski (
Wed, 15 Nov 2006 17:11:01 -0600

By Wojtek Dabrowski

TORONTO, Nov 15 (Reuters) - The Canadian government has told the
country's telecoms regulator to keep hands off some types of Internet
phone services because it wants to open up further competition in the
sector, a move that drew praise from Canada's two biggest phone

Industry Minister Maxime Bernier said on Wednesday that the minority
Conservative government has called on the Canadian Radio-television
and Telecommunications Commission to start deregulating Internet
telephone services that are considered access independent, or
available over any broadband connection.

"We firmly believe that eliminating unnecessary economic regulation
will stimulate competition in this new and fast-growing market. It
will mean lower costs, fewer regulatory proceedings, and more
competitive markets," Bernier said in a speech in Toronto.

"Barriers to entry in this market are very low. There is no reason to
regulate it."

Telus Corp. (T.TO), Canada's No. 2 telephone company, does not have a
Internet telephone product in the consumer market yet and had delayed
launch due to concerns over regulatory disadvantages.

"Today's announcement will really encourage companies like ours to
bring competing (Internet telephone) services to consumers," said
Janet Yale, Telus's executive vice-president of corporate affairs.

Telus rose C$1.17, or 2 percent, to C$57.17 on the Toronto Stock
Exchange as investors bet the company would soon wade into consumer
Internet telephony, also known as Voice over Internet Protocol or

Market heavyweight Bell Canada <BCE.TO>, which already offers access
independent VoIP service, also lauded Bernier's statements.

"I thought it was a very encouraging speech, both in the specifics of
VoIP but also in the general direction that (Bernier) set out," Bell
Canada executive vice-president Lawson Hunter told Reuters. "This is one
more step in the necessary reform."

Bell Canada stock finished 2 Canadian cents higher at C$27.01.

The government is aiming to deregulate access independent VoIP
services, which are available on any broadband connection, as opposed
to other types of VoIP provided over a managed network.

Deregulating all Internet telephone service would be "like
deregulating the local telephone market," Bernier told reporters
following his speech.

In September, the CRTC upheld a previous ruling that allows it to set
prices for voice over Internet services. Bell Canada and Telus argued
this was unfair because it restricts their ability to compete with
cable firms and smaller rivals in the sector.

In 2005, the regulator decided Internet phone service should be
subject to the same regulatory framework as traditional phone services
because of similarities between the services.

This meant that generally, large incumbent companies would be subject
to regulation, while new-entrant competitors would not.

"In a competitive sector, there is no reason to regulate some
companies, while others can offer the services they want at the prices
they want," Bernier said in his speech.

"It is time to have a level playing field from which consumers and
small businesses will benefit."

Copyright 2006 Reuters.

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