Appealing to the top

Published: June 16th, 2009

An aide to a federal Liberal cabinet minister once told me that allcabinet decisions are political. So what are the odds of success forMTS Allstream's appeal of an important CRTC decision to the cabinet?Pretty good, Allstream CEO Pierre Blouin told me in an interview duringthis week's Canadian Telecom Summit in Toronto.

“Politicsalways has an influence on what an elected government does,” admitted.But he believes cabinet rulings are also based on “business principlesand common sense.”

The ruling is important to Canadianbusinesses. The CRTC decided that Ethernet services of Bell and Telusare not essential, and therefore don't have to be provided at discountrates to competitors like Allstream and dozens of ISPs across thecountry hoping to provide alternate broadband service. To Blouin, theruling contradicts earlier CRTC policy, which opened up voice services.Hence the appeal.At least one industry analyst, the SeaBoard Group, called the decision”a significant blow to the competitive communications environment andrepresents a major victory for the telephone company monopolists.”Should the decision stand, it predicts competition in business serviceswill wither, innovation will dry up, prices will rise, and servicelevels will decline.”

The appeal puts the cabinet in an awkwardposition. Politicians don't like to interfere with the rulings ofindependent bodies like the CRTC. And a minority government has moreimportant things on its mind – like survival – than this. Still, thesedays politicians are sensitive to broadband pricing, especiallycompared to the rest of the world.

Blouin argued that Allstreamhas spent some $4 billion building its network, but the CRTC'scontention that competitors can afford to build networks similar to atelco's is unreasonable.

“We're not asking for more regulation,”Blouin said, “but just having a level playing field.” Bell, of course,would argue that it can't afford to give away the store.

Speakingof Bell, it tossed a hand grenade to the cabinet as well by appealinganother CRTC decision. on a somewhat similar issue of access to its newfibre optic network. Cabinet has to make a decision within a year ofthe appeals being filed. It can either make policy, or send issues backto the commission.

How hot is this potato? Blouin is, forgive the pun, working the phones.

“Fromthe discussions I've had with government officials, ministers or MPsand the Prime Minister's Office, they are considering this issuecarefully,” he said, “because it does have an impact on a tool that'spretty important to Canadians, which is access to broadband at decentpricing.”

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