Feds step in to open up VoIP market in Canada


The federal government is preparing to override the Canadian Radio-television and Telecommunications Commission’s (CRTC) plans to regulate Voice-over-Internet Protocol (VoIP) service.

In a speech to the Economic Club of Toronto, Wednesday, Industry Minister Maxime Bernier said there was no reason to regulate large incumbent providers like Bell Canada and Telus while allowing other providers to set their own prices.

Stripping away the regulations restricting how incumbent providers can offer VoIP won’t have a negative impact on existing businesses, but will make the consumer VoIP market more competitive, according to a Canadian telecom expert.

“Enterprises already have the benefit of a carrier free-for-all,” notes Iain Grant, managing director of Montreal-based telecom consultancy the Seaboard Group.

Grant cited upcoming but unannounced services from Rogers Business Solutions as an example of how businesses have access to creatively packaged VoIP offerings from multiple carriers.

“We’re excited about seeing that creativity in the consumer space,” he says.

The CRTC had planned to regulate VoIP services much like it regulates traditional voice offerings. This means the CRTC would set minimum prices dominant incumbent carriers would have to charge for VoIP services.

Non-incumbent VoIP carriers like Vonage fear that if VoIP isn’t regulated, incumbent carriers will sell VoIP services at a loss in order to drive competitors out of the business.

But Bell Canada and Telus argue that competitors, including Vonage and Canadian cable providers, have already won a significant share of the Canadian VoIP market and have enough subscribers to survive in a free and open market. The federal government shares that opinion.

In May, Minister Bernier said the CRTC should re-examine its 2005 decision to regulate VoIP. Last month the CRTC responded that it would stick by its decision to regulate VoIP.

“Mr. Bernier has been giving not-so-subtle signals to the CRTC for some time that he wants to see less regulation in the process,” Grant notes.

The cable companies and smaller VoIP providers have had enough of a head-start to allow for open VoIP competition, Grant believes. “It’s time to see if Bell and Telus can be creative as they say they can.”

Grant isn’t entirely convinced the incumbents will be up to the challenge. “I think there will still be room for companies like Vonage,” he says.


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