November 15, 2006

A Move Toward Telecom Deregulation

Canada's Federal Minister of Industry - Maxime Bernier, in a speech in Toronto today announced that he is reversing the Canadian Radio and Telecommunications Commissions (CRTC) recent ruling where they were set to begin regulating Voice Over IP (VoIP).

Here's a quote from his speech: "We are telling the CRTC to start deregulating “access independent” VoIP services. These are the telephone services you get through a broadband Internet connection. Barriers to entry in this market are very low. There is no reason to regulate it. In a competitive sector, there is no reason to regulate some companies while others can offer the services they want at the prices they want. It is time to have a level playing field from which consumers and small businesses will benefit."

He goes on to say: "The VoIP changes reflect a new approach to economic deregulation in the telecom sector. New technologies can be cutting-edge one day and virtually obsolete the next. In government just as in business, we cannot afford to be slow in adapting. We cannot afford to lag behind while other countries leap forward. There is no reason why Canada should not be the model for other countries in the field of regulation."

Simon Tuck (of the Globe and Mail newspaper) has a big picture view of this move: "Analysts, however, say the battle for the VoIP market is a flashpoint in a larger, high-stakes war between two converging sectors: cable and telephone. Technology is overhauling telecommunications as the two sectors increasingly roll out similar products in a domestic industry worth more than $20-billion."

It will be interesting watching this battle unfold. Either way, increased competition through the elimination of excessive regulation will enhance productivity, growth and innovation.

Click here to read the text of Bernier's speech.

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