No need for Bell, Telus to share, report says

Cable firms create enough competition, advisor tells CRTC

Paul Vieira, Financial Post, 10/02/07

The emergence of cable companies as big-time phone players in the residential market means the incumbent carriers, Bell Canada Inc. and Telus Corp., should not have to open up their network to other would-be competitors, says a report commissioned by the federal telecom regulator.

Access to the incumbents' wires should still be available for companies looking to serve business customers, it is recommended. But it would be dependent on network-needy competitors to prove their case for access to regulators.

The report, by Toronto lawyer Michael Osborne, comes a week before the Canadian Radio-television and Telecommunications Commission begins hearings on the issue of the wholesale telephone market. In essence, the hearings are to determine whether the powerful incumbent companies, Bell and Telus, which have spent billions building networks that enable land-line phone communication, still need to be required to make their wires available to would-be competitors.

The CRTC has mandated that the incumbent phone firms make their networks available to other players in order to facilitate competition.

Hours after its release, the report was described as ill-informed, with one observer noting the author acknowledged he was neither an economist nor a telecommunications expert.

One telecom analyst said the main recommendations would lead to less competition. Eamon Hoey, senior partner at Toronto-based Hoey Associates, said Bell and Telus could be free to shut out competitors, such as Primus Canada and other long-distance resellers, if the recommendations are endorsed.

"We don't have a competitive infrastructure. To claim you can remove the wholesale limitations in [the residential] market is unreasonable. I don't know how you can arrive in to that conclusion," he said.

"This report is focused on the supply side and supports the supply side point of view. No one has gone out and asked the consumer anything."

Chris Peirce, chief of regulatory affairs for MTS Allstream Inc., said the report carries no weight given telecom stakeholders, such as his company, will not be allowed to publicly question Mr. Osborne.

"In sum, it is an interesting piece but it is almost wholly theoretical," Mr. Peirce said. "The underlying point is that there are years of facts. And to my mind facts trump theory."

The CRTC said it hired Mr. Osborne to write the report in an effort to add "another perspective" to the proceeding, scheduled to start next Tuesday.

Who needs "another perspective" from someone who is so ill equipped to offer one that makes sense? The CRTC may just as well have asked Moe and Curly for their perspective. It's nonsense like this that, again, makes me question the validity of the CRTC.