Thursday, May 12, 2005

Canada Regulates VOIP

by Mark Evans on May 12, 2005 04:52PM (EDT)
As expected, Canada's telecom regulator has decided to regulate VOIP. It means ILECs such as Bell Canada and Telus Corp. will have to seek pricing approval from the Canadian Radio-television and Telecommunications Commision to ensure they don't sell Internet telephony service below cost, while cablecos and third-party suppliers such as Vonage and Primus are free to price any way they want. Bell Canada, Sasktel and Telus have already said they will appeal the decision to the federal cabinet, and could pursue legal action. The bottom line is the CRTC decided telephony service is telephony service regardless of the technology used to provide it. The CRTC's decision to regulate is not a surprise because it made it clear in a recent ruling there still isn't enough competition in Canada's $10 billion local phone market. (The CRTC does not consider the 10 million wireless users as an alternative to local service). In regulating VOIP, the CRTC is bending over backwards to pursue its pro-competition mandate. If this means hobbling ILECs with regulatory requirements for awhile so be it. When I've had some time to digest today's ruling, I'll provide some more insight.
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