Call-Net proposes more reforms

Sprint Canada Inc. subsidiary Call-Net Enterprises Inc. on Thursday filed an application with the Canadian Radio-television and Telecommunication Commission (CRTC), offering various proposals to improve competition in the local residential telecom market.

“While the CRTC has taken many steps to improve the regulatory framework since the price cap decision a year ago, unless the Commission intervenes in a more substansive way to jumpstart local competition, they will not be able to implement the government’s policy of healthy competition in all markets of the telecommunications sector,” said Call-Net President and CEO Bill Linton, in a statement issued by the company.

The proposals included in the filing will enable the removal of current barriers to fair competition, the company said. Among the proposals included in the application are:

– the formation of a public education program, to offer insight to residential customers about how local competition works, and to address their concerns about issues such as 9-1-1 services;

– improving the transfer/cutover process of customers;

– and reducing, for a two-year period, the costs of unbundled local loops.

One industry analyst noted that the move was an obvious one on the part of the company.

“When you are a company like Sprint Canada, and the only growth you are really seeing in your product line is from the local side and residential growing faster than business services, quite obviously you are banking a lot of your future on continued success for those markets,” explained Kanata, Ont.-based Mark Quigley, research director with the Yankee Group in Canada. “So anything you can do to help make your bottom line look better is certainly something you are going to take serious advantage of.”

He added while some of the proposals make a lot of sense, others are dubious. For example, the suggestion of reforming and improving consumers’ switchover processes makes sense for the company as well as customers. However, the idea of a public education program is questionable, Quigley said.

“[This] is kind of interesting given that Sprint itself claims to have been offering services for the past four years,” he explained. “It would kind of suggest that if Canadian consumers don’t understand local competition, perhaps they (Sprint) have not done their job on the marketing side. Four years is certainly a fair piece of time and the suggestion that the government somehow or the incumbents somehow should be responsible for getting the word out about competition is…well, I find that a little difficult to swallow.”

Quigley added that he believes competition in the Canadian local marketplace will improve – it is simply a matter of time.

“We will see competition from the cable companies around the corner…the revenue opportunity is significant enough that I think the cable companies are most definitely going to enter into the local business and they will do so rather rapidly. Once they start…I think it’s going to be a fairly quick and hard marketing push to consumers. It’s a matter of waiting for that to occur.”

According to Call-Net, its application was filed in part due to comments made in March 2003 by Industry Minister Allan Rock. At that time, the Minister indicated that competition is non-existent in all cities across Canada, except the larger ones. He proposed that the CRTC consider alternatives to promote competition.

More information about Call-Net’s proposals can be found on its Web site at