Back to the Drawing Board on VoIP, CRTC
How - and if - VoIP is regulated in Canada was thrust into the spotlight yesterday when the federal cabinet told the telecom regulator to reconsider a contentious decision it made last year to regulate incumbent carriers while lettting the cablecos and the Vonages of the world the freedom to set their own prices. In telling the CRTC for a “do over”, the federal cabinet, told the CRTC it was wrong on two key approaches: one, it should allow market forces to play a crucial role, and two, it should not stand in the way of innovation. It's also an admission the VoIP and next-generation networks are changing the telecom industry, and it is becoming increasingly difficult and impractical to regulate Internet-based services. What will likely happen is the CRTC will let the carriers compete in the VOIP market on a level playing field with the large, well-financed cablecos. This should be good news for consumers because it should encourage more aggressive and creative competition in a market that has not grown as quickly as it has in the U.S. As important, the decision by the federal cabinet to have the CRTC reconsider the VoIP decision may set the stage for a major overhaul of the CRTC's role.
May 6th, 2006 at 12:12 pm
Please see my testimony at the CRTC from September, 2004
Jeff Pulver's Testimony at the CRTC
May 6th, 2006 at 2:16 pm
Mark - back away from the kool-aid!
This is not about cable companies and it never was. I never cease to be amazed that a tech writer like yourself can't distinguish between access-independent voip services like Vonage and carrier-grade voice services like those offered by the major cable companies. By describing these things as the same, you are easy prey for the argument that the phone companies operate at a disadvantage to the cable companies in the voip market because each starts with 0% of the market. But were you to recognize that cable companies aren't after the voice “application” market but rather the home phone market, you would have to accept that the phone companies start with 95% or better of the market as compared to the cable companies' 0%.
The CRTC understood this distinction. It's original ruling therefore didn't need to deal with the size of any given voip competitor and nothing in cabinet's decision to send the matter back to the CRTC suggests this was an oversight or error on the CRTC's part.
I am somewhat familiar with the original CRTC decision, the process that went before it, the market circumstances present then and now, and - more importantly - the text of the both the Minister's press release and the Cabinet order sending the matter back to the CRTC.
While I think it's fair to call it a “do-over”, I think you are wrong to suggest Cabinet in any way described the decision as wrong. Cabinet said market developments over the past year warrant having the CRTC take another look at the issue. That's it. Cabinet comments regarding market forces, innovation, etc…represent direction of the softest (not strongest) variety.
Interestingly, although it didn't really come out publicly during 2005, the largest VoIP provider by customer count from January right through to December was not Vonage, Primus or any other “competitor” but Navigata - a subsidiary of Sasktel. My guess is that when the CRTC looks at the Voip market again this year - which, to repeat, does not include cable companies - it will see phone companies have plenty of market share and have not been hurt in anyway by the rules in place this past year.
May 9th, 2006 at 6:57 am
I think this is very good news for customers and the industry in general. The CRTC has no business keeping an entire class of companies out of the VoIP market, and damaging fair market price competition.
Personally, I don't think telecom providers will be able to create a monopoly in the VoIP market. Introducing more competition will, however, force cable operators like Shaw to price their digital phone services a little lower, and stop trying to take advantage of customers with $55/month VoIP.