Thursday, May 12, 2005

CRTC-VOIP: Silly Rule

Here's something that jumps out of the CRTC's decision today to regulate Internet telephony. It has adopted a rule called "equal access", which makes local service providers provide consumers with access to competitive long-distance service. This makes some sense in the traditional world because it gives consumers an alternative to the LD service provided by their local service provider. In the VOIP, however, "equal access" makes little sense because most people who sign up for Internet telephony are doing so for the long-distance plans. In other worlds, when they subscribe to Vonage, they realize 500 minutes of LD or unlimited LD is part of the package. The CRTC said "equal access" has been extended to Internet telephony because it's a voice service, and "equal access" is part of the traditional phone world. The CRTC also contends LD also involves international calls, which are often not part of Internet telephony plans. Therefore, the CRTC believes it is serving the needs of consumers by giving them LD choice. This strikes me as the CRTC's attempt to force old rules and ways on to a new technology. It also illustrates a fundamental flaw in the CRTC's approach to Internet telephony - despite the difference in technology, it views voice as voice - except when it comes to wireless. While I'm all for encouraging for competition, creating an unlevel playing field to achieve competition is misguided.
On another note, one of the most bizarre post-decision statements came from the head of the Canadian Cable Television Association, who claims cablecos will not sell telephony below cost otherwise they would be penalized by investors. If you think the cablecos aren't willing to take advantage of every marketing tool at their disposal - including lower prices - you're missing a big point.
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