Local telephony deregulation policy to take effect on 18 April

5 Apr 2007

Canada’s Industry Minister Maxime Bernier announced yesterday that the federal government has approved his December 2006 proposal to accelerate deregulation of local telephony services, the last market in the country where prices are still restricted. The move paves the way for large incumbent telcos, including Bell Canada and TELUS, to lower prices of bundled services and better compete with triple-play cable operators, which enjoy price flexibility. ‘We think we [already] have competition in the big urban centres and it’s time for deregulation,’ said Bernier. The policy change will go into effect on 18 April, replacing an April 2006 decision by regulatory authority the Canadian Radio-television and Telecommunications Commission (CRTC) which stated that deregulation would only apply to areas in which new entrants had captured 25% of the market. Under the new rules, former regional monopolies such as Bell and TELUS will no longer need regulatory approval to change tariffs. The rules will apply in regional markets that already have three competing phone service providers covering 75% of the population in a given area, including wireless operators. The CRTC will have 120 days to review a telco’s application for deregulation in a given market, Bernier said, and in the case of small new entrants, the government says it will delay deregulation for 18 months from their launch. The incumbent wireline providers will also be allowed to contact lost customers immediately, replacing the current three-month ban. Bernier said the changes, which go against the guidance of a parliamentary committee, will impact roughly 60% of Canadians, resulting in more choice of telephone services and lower prices in major centres across the country. TELUS welcomed the decision, saying that it would swiftly move towards offering deregulated local services in key markets across British Columbia, Alberta and eastern Quebec. Bell also praised the new rules and said it will seek deregulation ‘very quickly’ in Montreal, Ottawa, Quebec City, Toronto, London and Hamilton.

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