Industry Minister Maxime Bernier went a long way towards clearing up a murky picture when he told the audience at The 2006 Canadian Telecom Summit last month that the Canadian Radio-television and Telecommunications Commission (CRTC) should regulate the telecom market only when absolutely necessary. While Bernier’s message was welcome, the challenge now will be for the government to follow through on its plans.

Until Bernier’s speech there had been questions surrounding how much regulation the CRTC would enforce.

In March, a government-appointed Telecommunications Policy Review Panel recommended the Telecommunications Act be changed to “promote reliance on market forces to the maximum extent possible.”

But in April the CRTC issued a decision stating that full deregulation in specific markets could only occur once competitors had won 25 per cent market share.

It looks now like the government will follow the review panel’s recommendations, which should be good news for Canadian businesses. CRTC regulations are currently forcing incumbent carriers to charge more for some services than the carriers would like to charge. The regulations also slow the deployment of services by forcing the incumbent carriers to go through the often lengthy CRTC approval process.

The only good thing that can be said for regulation is that it has allowed competitive providers to get into the market and offer alternatives to the incumbent carriers. Cable companies like Rogers, Shaw and Videotron have made solid headway in the consumer market and can use their consumer revenues to help drive the launch of business services. Regulation made sense while these competitive carriers were getting their telecom businesses off the ground, but now with at least some of the competitors are well established, it’s time to back off.

Hopefully the government will follow through on its telecom policy statements quickly and reshape the CRTC’s regulatory framework before the CRTC completely stifles innovation in the Canadian telecom market.

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