Time for less regulation

The recently released Telecom Policy Review report promises a better communications environment for enterprises in the near future. While some of the report’s recommendations sounded vague, for the most part the report’s points were positive and should result in less red tape and better pricing for business telecom customers.

Perhaps the report’s most positive suggestion to Industry Minister Maxime Bernier was to ensure the Canadian Radio-Television and Telecommunications Commission (CRTC) relies on market forces as much as possible. Currently Bell and Telus are forced to charge more for some services than they would like, because the CRTC wants to allow competitive providers an opportunity to establish themselves in a market before allowing unregulated pricing.

Forcing Bell and Telus to charge a set minimum price allows competitive providers to undercut Bell and Telus to build up the competitors’ customer bases, but it also results in artificially inflated prices.

Bell’s and Telus’ competitors have already established themselves in many consumer markets. Across Canada, Shaw, Cogeco, Videotron and Rogers are on pace to have around one million cable telephony subscribers combined by the close of 2006. That’s a significant chunk of the consumer market and gives the cable companies a firm revenue base that can sustain them in the future as they grow their business offerings.

Just to be clear, the report isn’t encouraging a complete telecom free-for-all. It acknowledges there will be some markets where incumbent providers have too much market power and there are few, or no, viable alternatives. In those cases the CRTC would still be free to impose restrictions to encourage a more competitive landscape.

Another positive report recommendation is having telecom tariffs take effect seven days after they are filed if the CRTC doesn’t get around to ruling on them before then. In the past telco providers, and their customers, have had to wait too long for tariff changes to be approved.

Finally the report recommended the federal government push to make technology more available to Canadian consumers and businesses. In the consumer space the report said the government should make broadband available to 98 per cent of Canadian homes by 2010. On the business front the report calls for the government to form a strategy to increase the adoption of communications technology, including a tax credit for small and medium businesses.

The report recognizes that telecom competition is alive and well in much of Canada and it’s time to take the shackles off the incumbent providers in the most competitive markets. This should result in lower prices, more varied services and more creative bundling options for Canadian enterprises.

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