Canada's telecommunications regulator is expected to make two decisions as early as this week that could have a major impact on how the $32-billion industry develops at a time when new technology is disrupting the competitive environment.
It is anticipated the Canadian Radio-television and Telecommunications Commission will name a new vice-chair, telecom to replace David Colville, who retired last month. The vice-chair will play an important role in setting a tone for the CRTC's regulatory and policy framework. Mr. Colville made his mark by encouraging more competition.
The CRTC is also expected to release its decision on competitive digital access services (CDNA), which involve how much competitive carriers such as Call-Net Enterprises Inc. pay to lease essential services from rivals such as Bell Canada and Telus Corp. For competitive carriers, a decision in their favor could save them millions of dollars a year.
It is unclear when the CRTC will unveil its decisions but there is rampant speculation within the industry it will happen soon. In particular, there is chatter the leading candidates to replace Mr. Colville are Ian Scott and Richard French. Mr. Scott is vice-president of federal government affairs and broadband policy with Telus Corp. Mr. French was a former executive with Bell Canada and a cabinet minister with the Quebec government in the 1980s.
Brian Sharwood, an analyst with Seaboard Research, said Mr. French could be the front-runner because he has a broad resume that includes working in the wireless industry in India, and helping develop regulatory regimes in other countries. “He has more of an international perspective and can offer what are we doing right, what are we doing wrong, and what can we learn from India, Europe and the U.S.,” Mr. Sharwood said.
Janet Yale, executive vice-president, legal, government and regulatory affairs, said regardless of who becomes vice-chair, it is important to have a person with a deep understanding and knowledge of the telecom industry.
“We need someone with vision and ability to think about the big picture perspective of where industry growth and public policy are going, and have the ability to stay the course,” she said.
Where Mr. Colville helped create a more competitive landscape, Ms Yale said the new vice-chair faces a major challenge to manage an industry where the lines between telecom and cable companies are blurring as carriers move into television and cablecos get into telephony.
“It's not just about telco anymore but the regulation of telecom and entertainment services that people will get from that pipe coming into their homes,” she said.
While the CDNA decision is far less sexy than a new vice-chair, it is important from a financial and strategic perspective. The issue dates back to the 2002 price-cap regime where the CRTC created a new class of essential services that competitive carriers buy from incumbent carriers at cost plus 15%.
Shortly after this decision, Call-Net filed an application to have more services deemed as essential so prices would be reduced. Analysts estimate that of the $40-million Call-Net currently pays incumbent carriers for digital access services, the company could save as much as $10-million if the CRTC approves its application.
Telus and Bell argue the entire CDNA regime makes no sense because its runs counter to the CRTC's philosophy to support telecom carriers who own and operate their own facilities – rather than those who lease network services from rivals.
Ms. Yale said it would be wrong to expand the CDNA portfolio because these services can now be bought from several suppliers. In Western Canada, she said, Call-Net can lease services from Telus, Bell West and Alberta's SuperNet.
With the exception of situations where there is only one supplier serving a remote community, Ms. Yale said the CRTC should let competition set prices. “At the very minimum, we want to keep the status quo but, obviously, our preference is not at all,” she said.
CRTC's Key Decisions (vice-chair, telecom & CDNA)
Canada's telecommunications regulator is expected to make two decisions as early as this week that could have a major impact on how the $32-billion industry develops at a time when new technology is disrupting the competitive environment.
It is anticipated the Canadian Radio-television and Telecommunications Commission will name a new vice-chair, telecom to replace David Colville, who retired last month. The vice-chair will play an important role in setting a tone for the CRTC's regulatory and policy framework. Mr. Colville made his mark by encouraging more competition.
The CRTC is also expected to release its decision on competitive digital access services (CDNA), which involve how much competitive carriers such as Call-Net Enterprises Inc. pay to lease essential services from rivals such as Bell Canada and Telus Corp. For competitive carriers, a decision in their favor could save them millions of dollars a year.
It is unclear when the CRTC will unveil its decisions but there is rampant speculation within the industry it will happen soon. In particular, there is chatter the leading candidates to replace Mr. Colville are Ian Scott and Richard French. Mr. Scott is vice-president of federal government affairs and broadband policy with Telus Corp. Mr. French was a former executive with Bell Canada and a cabinet minister with the Quebec government in the 1980s.
Brian Sharwood, an analyst with Seaboard Research, said Mr. French could be the front-runner because he has a broad resume that includes working in the wireless industry in India, and helping develop regulatory regimes in other countries. “He has more of an international perspective and can offer what are we doing right, what are we doing wrong, and what can we learn from India, Europe and the U.S.,” Mr. Sharwood said.
Janet Yale, executive vice-president, legal, government and regulatory affairs, said regardless of who becomes vice-chair, it is important to have a person with a deep understanding and knowledge of the telecom industry.
“We need someone with vision and ability to think about the big picture perspective of where industry growth and public policy are going, and have the ability to stay the course,” she said.
Where Mr. Colville helped create a more competitive landscape, Ms Yale said the new vice-chair faces a major challenge to manage an industry where the lines between telecom and cable companies are blurring as carriers move into television and cablecos get into telephony.
“It's not just about telco anymore but the regulation of telecom and entertainment services that people will get from that pipe coming into their homes,” she said.
While the CDNA decision is far less sexy than a new vice-chair, it is important from a financial and strategic perspective. The issue dates back to the 2002 price-cap regime where the CRTC created a new class of essential services that competitive carriers buy from incumbent carriers at cost plus 15%.
Shortly after this decision, Call-Net filed an application to have more services deemed as essential so prices would be reduced. Analysts estimate that of the $40-million Call-Net currently pays incumbent carriers for digital access services, the company could save as much as $10-million if the CRTC approves its application.
Telus and Bell argue the entire CDNA regime makes no sense because its runs counter to the CRTC's philosophy to support telecom carriers who own and operate their own facilities – rather than those who lease network services from rivals.
Ms. Yale said it would be wrong to expand the CDNA portfolio because these services can now be bought from several suppliers. In Western Canada, she said, Call-Net can lease services from Telus, Bell West and Alberta's SuperNet.
With the exception of situations where there is only one supplier serving a remote community, Ms. Yale said the CRTC should let competition set prices. “At the very minimum, we want to keep the status quo but, obviously, our preference is not at all,” she said.