In the best interest of consumers and industry members, QCISP welcomes a
progressive deregulation of the Telecom market supervised by a competition
tribunal to ensure consumer protection and control of anti-competitive
conduct. This reflects some of the key recommendations made last week by a
panel of experts in a report commissioned by the Government of Canada.
The panel recognizes what the CRTC had denied in the past which is that
the residential high speed Internet market is a duopoly composed of incumbent
phone companies and cable companies. In order to protect consumers and
industry members, the panel recommends eliminating market entry barriers for
new competitors. The intended result is to reduce the market share of
incumbent phone companies and cable companies below the mark of 50%.
In this regard, the Coalition had already started soliciting the CRTC’s
intervention on November 23rd 2005 in order to reduce the extravagant profit
margins set by incumbent phone and cable companies for the mandatory
provisioning of the service to competitors while setting profit margins for
their own retail offer much lower.
The Coalition represents the interests of 15 Internet service providers
and dozens of thousands of customers across Quebec who have chosen an Internet
provider other than their phone or cable company.
However, in order for the Coalition members to be able to compete with
incumbent phone and cable companies, it is crucial that the wholesale rates
allow a progressive transition towards ownership of the installations by
competitors. Since the wholesale tariffs are maintained abnormally high by the
big players, the competitors’ total cost structure is systematically higher
than that of the phone and cable companies. This situation perpetuates a
duopoly without any real competition, which the panel has concluded is against
the public interest.
Contrary to the position recently retained by the FCC in the United
States, the 5-year transition period proposed by the panel recognizes the
necessity for rigour, accountability and transparency during this transition.
The aim is to avoid unrolling the red carpet for the duopoly, whose potential
effects are:
1) the intensification of the big companies’ dominant position over
the market;
2) elimination of competition;
3) and ultimately, costs increase for consumers.
