Global Insight Perspective | |
Significance | Under the government's direction, the regulatory approach regarding telecoms has undergone seismic shifts in the last year. In a speech to the 2008 Canadian Telecom Summit, the chairman of the CRTC has outlined the direction for the body. |
Implications | Having done the pro-market government's bidding, the CRTC is looking to make its case for new structures and enforcement powers that will meet the challenges of a deregulated and converging telecoms and broadcasting market. |
Outlook | The CRTC has long sought greater punitive powers—the shift towards deregulated markets should make the teeth it seeks a necessity while the case for cohesive regulation of broadcasting and telecoms becomes more persuasive. |
In an address to the 2008 Canadian Telecom Summit this week, Konrad von Finckenstein outlined the achievements of the CRTC over the last year and looked ahead to the forthcoming challenges that the regulator will be addressing.
Deregulation Has Proceeded: Von Finckenstein noted that over the last year, the CRTC has been implementing the government's policy direction under then-Minister for Industry Maxime Bernier to launch a new, market-oriented approach to telecoms regulation (see Canada: 12 December 2006: Canadian Government Moves to Deregulate Local Phone Market). There appeared to be a false start when the CRTC attempted to apply criteria including quality-of-service indicators, the provision or "fair access to its network" to competitors, and the loss of 25% of market share in any given market area before forbearance was finalised (see Canada: 28 March 2007: Forbearance Granted in Fort McMurray, Bell Canada Criticises Limitations). The provisions of that direction prioritise market forces, deregulating markets where more than three consumer- or two business-oriented facilities-based service providers (including mobile providers and at least one other fixed-line provider) are in operation. It also proposes regulatory intervention only in the case of market failure. The first markets were deregulated just under a year earlier, and von Finckenstein noted that 71% of Canada's residential phone lines and 65% of business lines are now deregulated (see Canada: 26 July 2007: First Residential Markets Deregulated in Canada; Complaints Commission Inaugurated). This is higher than the 60% originally estimated by Bernier. The process is still ongoing, with Telus receiving a positive forbearance decision this Tuesday (17 June) for 7 of 13 requested local exchanges in Quebec. As part of this process, a complaints commission was established, effectively moving competition regulation from a proactive to reactive process.
Wholesale Deregulation Clarified: The CRTC has also created a framework for the deregulation of services that incumbent operators are required to provide to competitors. This aims to encourage investment in competing facilities over a defined timescale (see Canada: 5 March 2008: CRTC Schedules Deregulation of Non-Essential Wholesale Telecoms Services)
Outlook and Implications
Looking at the forthcoming agenda for the regulator, von Finckenstein noted the creation of a national "Do Not Call" list, to be maintained by Bell Canada under a five-year contract. This will mainly affect telesales calls, with exemptions including charities, political parties, and newspapers.
Dispute Resolution to Be Addressed: Dispute resolution will be examined over the coming year with the current two approaches of negotiated mediation (alternative dispute resolution) and formally binding arbitration undergoing clarification of structure and process. These will include delineating the differences between the two processes and improving efficiency, including using video conferencing to expedite hearings.
Accessibility: The agency is also looking to address issues of accessibility, ensuring that disability does not inhibit access to telecoms and broadcasting services. These were initially part of a decision taken in January that opened access to deferral accounts to fund this and rural broadband plans (see Canada: 21 January 2008: CRTC Approves Rural Broadband Plans). The commission will be further examining accessibility, covering provision of video-relay services and teletypewriter services as well as broadcasting-related issues.
Net Neutrality: One of the key areas that the CRTC will address this year is "net neutrality". This follows the request by the Canadian Association of Internet Providers (CAIP) to stop traffic-management techniques being applied to wholesale gateway access services. These throttled certain services—specifically peer-to-peer file sharing—but allegedly also affected other services (see Canada: 15 May 2008: CRTC Refuses Interim Injunction on Traffic Shaping and Canada: 22 April 2008: Bell Responds to Wholesale Traffic-Shaping Allegations as AT&T VP Predicts Network Overload). A final decision is expected to be issued on the application in the late third to early fourth quarters.
However, von Finckenstein noted that "this particular dispute is just the tip of the iceberg." The CRTC therefore will be addressing the wider issues raised by traffic management, beyond the context of Bell's wholesale broadband access service. Von Finckenstein notes that "Under the heading of 'net neutrality' lies a whole range of questions affecting consumers and service providers. Fundamental issues of technology, economics, competition, access and freedom of speech are all involved."
The CRTC appears to be viewing internet services as increasingly analogous to broadcasting in terms of information control. Specific net neutrality issues to be addressed noted in the speech include:
- blocking of services or Web sites;
- preferential treatment for certain content providers;
- modification of content;
- control of end-user devices;
- transparency and accuracy of service agreements including traffic-management techniques and network speeds; and
- privacy—tools for managing traffic analyse that traffic, raising privacy issues.