Canada Regulates VoIP Pricing

Bell Canada and Telus face a potential setback as The Canadian Radio-Television and Telecommunications Commission reject their bid to keep VoIP (Voice over Internet Protocol) unregulated.

The ruling means that the leading Canadian phone companies will not be able to set their own pricing on on-line telephone services. Both telecommunications companies reacted negatively about the ruling and plan to appeal the ruling to the federal cabinet. There are also possible legal avenues the companies could explore.

“The Commission dropped the ball with this decision,” said Telecommunications Workers Union President Bruce Bell, referring to the Canadian Radio-television and Telecommunications Commission (CRTC) decision on Voice over Internet Protocol.

“They focused totally on promoting competition among the companies that will provide the service,” Bell explained. “Their underlying assumption seems to be that by setting the terms of competition, the workings of the ‘free market will take care of everything else.”

“This focus is way too narrow,” Bell continued. “The TWU has always taken the position that the CRTC’s most important responsibility is to ensure that all Canadians have universal, affordable access to the full range of communications services – wireline as well as the internet and VoIP. Nothing in this decision addresses that issue.”

“During the VoIP proceeding, we asked the Commission to consider the impact that growth of VoIP service will have on wireline subscribers. It’s great that the CRTC decided to regulate phone companies’ VoIP rates. But it should regulate the VoIP service that is provided by the cable companies, as well. Otherwise, as growth in VoIP use reduces phone companies’ wireline revenues, subscribers who continue to rely on wireline service will be forced to pay higher and higher rates. Nothing in this decision addresses that issue,” Bell noted.

“The Commission has a key role to play as protector of the public interest. It is not merely an arbiter responsible for ensuring that competitors providing a new service capture a certain amount of market share. This focus ignores the forest for the trees. Millions of Canadians who don’t have Internet access and who depend on wireline service rely on the CRTC to ensure that this service remains high in quality and affordable,” Bell said. “With this decision, the Commission abdicated its responsibility for protecting the interests of those subscribers.”

While the decision got negative reactions from the leading companies, smaller firms cheer the ruling. Shaw Communication’s Peter Bissonnette stated that his company’s newly announced VoIP service would prosper from the decision. Bissonnette said that it would be “virtually impossible” to compete without the CRTC’s ruling.