As Canada's telecommunications regulator heads into 2005, it faces a litany of challenges at a time when the $32-billion industry is poised to go through extraordinary change.
Among the most pressing issues the Canadian Radio-television and Telecommunications Commission must address are whether/how to regulate Internet telephony; finding a replacement for David Colville, who retired recently as vice-chair, telecom; dealing with a heavy backlog of regulatory decisions and applications; and the start of the next price-cap regime.
At the same time, the CRTC is being pressured to implement a comprehensive regulatory review. BCE Inc. has been leading the charge for more than a year, and assembled a small regulatory army to push CEO Michael Sabia's agenda.
Obviously, there is a lot of urgency abound but it would be a surprise to see the CRTC change its current ways. Under the helm of chairman Charles Dalfen, the CRTC has become a methodical, pragmatic and some would say slow-moving body. Rather than move quickly, the CRTC tends to take its time to make sure the right decisions are made.
This approach frustrates the carriers because the telecom industry is experiencing tremendous change. The Internet has made it possible for companies to offer a wide variety of telecom services to residential and business consumers. Using high-speed networks, competitive services can be offered from anywhere in the world.
This has dramatically changed the competitive landscape because you do not need your own network to do business. All you really need is a compelling service and savvy marketing. A good example is Vonage Holdings Corp., which has attracted more than 300,000 Internet telephony customers in in North America with relatively simple technology.
In many respects, some parts of the telecom service market have become a free-for-all. How does the CRTC or the U.S. Federal Communications Commission regulate a company offering service to North American consumers over the Internet from Thailand or Romania? It raises the notion of whether telecom regulators are becoming less relevant or effective. There is a legitimate role for regulators but their responsibilities and mandates are evolving.
For the CRTC, Internet telephony will be an important and defining regulatory landmark. The CRTC's preliminary view is incumbent carriers such as Bell Canada and Telus should be regulated while competitors such as Vonage and Rogers Cable Inc. should be free to set their own prices. Bell and Telus argue this approach will hobble them in a fast-growing market, and the industry and consumers will be better served by having a level competitive playing field.
If the CRTC follows its original thesis, this suggests it will try to regulate Internet-based services. This will be a major policy reversal given a 1999 decision concerning New Media suggested the CRTC would not try to regulate the Internet. How the CRTC intends to regulate Internet-based services will be fascinating to consumers and regulators around the world.
The CRTC's telecom bench strength will be tested with the departure of Mr. Colville, who played a key role in defining Canada's telecom policy over the past 14 years. Who replaces him is important because the telecom industry needs a vice-chair who has a strong grasp of the regulatory and technical realms. Mr. Colville's successor will no doubt play an instrumental role in defining how Canada adopts and operates in an Internet-based world
While the CRTC needs to look forward, it must also tackle a regulatory backlog. There are decisions to be made involving fundamental issues such as Competitor Digital Network Access that have been in the system for more than a year. This is inexcusable because incumbent and competitive carriers need regulatory certainty more than ever.
Without a doubt, 2005 is going to be a big year for the CRTC and Mr. Dalfen, whose five-year term as chairman expires at the end of 2006. For the CRTC to stay relevant, it needs to move decisively and dramatically this year. Anything less will hobble the industry, which has provided Canadians with world-class service at bargain-basement prices.
CRTC's 2005 Mandate
As Canada's telecommunications regulator heads into 2005, it faces a litany of challenges at a time when the $32-billion industry is poised to go through extraordinary change.
Among the most pressing issues the Canadian Radio-television and Telecommunications Commission must address are whether/how to regulate Internet telephony; finding a replacement for David Colville, who retired recently as vice-chair, telecom; dealing with a heavy backlog of regulatory decisions and applications; and the start of the next price-cap regime.
At the same time, the CRTC is being pressured to implement a comprehensive regulatory review. BCE Inc. has been leading the charge for more than a year, and assembled a small regulatory army to push CEO Michael Sabia's agenda.
Obviously, there is a lot of urgency abound but it would be a surprise to see the CRTC change its current ways. Under the helm of chairman Charles Dalfen, the CRTC has become a methodical, pragmatic and some would say slow-moving body. Rather than move quickly, the CRTC tends to take its time to make sure the right decisions are made.
This approach frustrates the carriers because the telecom industry is experiencing tremendous change. The Internet has made it possible for companies to offer a wide variety of telecom services to residential and business consumers. Using high-speed networks, competitive services can be offered from anywhere in the world.
This has dramatically changed the competitive landscape because you do not need your own network to do business. All you really need is a compelling service and savvy marketing. A good example is Vonage Holdings Corp., which has attracted more than 300,000 Internet telephony customers in in North America with relatively simple technology.
In many respects, some parts of the telecom service market have become a free-for-all. How does the CRTC or the U.S. Federal Communications Commission regulate a company offering service to North American consumers over the Internet from Thailand or Romania? It raises the notion of whether telecom regulators are becoming less relevant or effective. There is a legitimate role for regulators but their responsibilities and mandates are evolving.
For the CRTC, Internet telephony will be an important and defining regulatory landmark. The CRTC's preliminary view is incumbent carriers such as Bell Canada and Telus should be regulated while competitors such as Vonage and Rogers Cable Inc. should be free to set their own prices. Bell and Telus argue this approach will hobble them in a fast-growing market, and the industry and consumers will be better served by having a level competitive playing field.
If the CRTC follows its original thesis, this suggests it will try to regulate Internet-based services. This will be a major policy reversal given a 1999 decision concerning New Media suggested the CRTC would not try to regulate the Internet. How the CRTC intends to regulate Internet-based services will be fascinating to consumers and regulators around the world.
The CRTC's telecom bench strength will be tested with the departure of Mr. Colville, who played a key role in defining Canada's telecom policy over the past 14 years. Who replaces him is important because the telecom industry needs a vice-chair who has a strong grasp of the regulatory and technical realms. Mr. Colville's successor will no doubt play an instrumental role in defining how Canada adopts and operates in an Internet-based world
While the CRTC needs to look forward, it must also tackle a regulatory backlog. There are decisions to be made involving fundamental issues such as Competitor Digital Network Access that have been in the system for more than a year. This is inexcusable because incumbent and competitive carriers need regulatory certainty more than ever.
Without a doubt, 2005 is going to be a big year for the CRTC and Mr. Dalfen, whose five-year term as chairman expires at the end of 2006. For the CRTC to stay relevant, it needs to move decisively and dramatically this year. Anything less will hobble the industry, which has provided Canadians with world-class service at bargain-basement prices.