Regulator delivers on consumer choice and fairness: Policy is a step toward serving the interests of Canadian consumers and business
August 30, 2010

OTTAWA, ON, August 30, 2010 After a proceeding that lasted 19 months and included intervention by the Federal Cabinet, the Canadian Radiotelevision and Telecommunications Commission (CRTC) has issued a policy decision concerning the future of broadband competition in Canada.

The proceeding explored wholesale access to network infrastructure that competitive telecommunication providers need to deliver their voice, data and Internet services to consumers. Included in this review was “speed matching” – the ability for competitive providers to provide access to broadband services at speeds equal to those that the incumbent telephoneand cable carriers provide to their own customers.

“Today the CRTC has made it abundantly clear that they consider adequate competition is not provided by a duopoly of telephone and cable carriers,” says Tom Copeland, Chair of the Canadian Association of Internet Providers (CAIP). “We have been making this argument for many years”.

CAIP was one of several parties who made presentations in early June at hearings overseen by the CRTC. CAIP’s panel of business and residential service providers illustrated the diversity of their services, their responsiveness to customer needs and ability to react quickly to market opportunities.

“By introducing competitive providers as real people who know their customers and contribute to the social fabric of the communities we live in, CAIP was able to help Commissioners understand, in concrete terms, the benefits that competition brings to the market,” notes Copeland who has been an independent Internet Service Provider since 1995.

In today’s decision, the CRTC upheld earlier decisions, some rendered as much as two years ago, that required incumbent telephone carriers to provide speed matching. The CRTC also required incumbent cable carriers to improve their wholesale offerings in order to render them a useful means for competitive providers to obtain access to endcustomers.

However, the CRTC provided incumbent telephone carriers the ability to charge an extraordinary mark up over and above their existing supra compensatory mark ups on these same higher speed services.

“The mark ups built into the current wholesale rates that competitive providers pay to the incumbent telephone companies are already extraordinary, given that the wholesale access services in question are essential to maintaining a vibrantly competitive marketplace. To consider that an additional mark up over and above the already extraordinary mark ups on these services is difficult to fathom,” says Copeland.

The Commission also failed to mandate further unbundling of the incumbent telephone and cable carriers’ wholesale services. In doing so, the Commission again missed the opportunity to enable new, facilities based competition and further innovation and price competition that would benefit the public. “What the Commission failed to recognize is that they have effectively said “no” to Canadian consumers and businesses by precluding services that are innovative and cannot be delivered over the current infrastructure,” Copeland points out.

“Today’s speed matching decision was long overdue and could have gone further in establishing the foundation required for competitors to deliver greater price discipline and innovation to consumers. We will continue to encourage the CRTC to establish the regulatory framework needed to continue to serve our customers in the future,” concludes Copeland.

About CAIP

Formed in 1996, CAIP's Mission is to foster the growth of a healthy and competitive telecommunication service industry in Canada through collective and cooperative action on Canadian and international issues of mutual interest. CAIP membership comprises commercial Internet Service Providers ("ISPs"), telephone companies, cable companies and enterprises interested or involved, directly or indirectly, in the industry of telecommunication serviceprovisioning.

The main aims of CAIP are to:

provide effective industry advocacy respecting public policy and regulatory matters (e.g., access, copyright, privacy and security issues, ecommerce guidelines) affecting Canada's ISP industry;

promote a positive image for the Internet industry and the Association through proactively educating Canadians about, and building awareness of Internet industry issues; and

offer value to members through the timely communication of relevant business information and the provision of special member benefit in partnership with Affinity members.

For further information, contact:

Tom Copeland
Chair, Canadian Association of Internet Providers
tom.copeland@caip.ca

905-373- 9313  Direct