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BCE Chief Calls For Shakeup At CRTC


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BCE Chief Calls For Shakeup At CRTC
Cites New Technology: Sabia's Move Timed With Paul Martin's Ascent To PM's Office


December 2, 2003

By Mark Evans

Michael Sabia called for a comprehensive review of Canada's telecommunications policy yesterday -- a move that reflects BCE Inc.'s growing frustration with the pro-competition policies of the federal regulator.

Mr. Sabia, president and chief executive with BCE and Bell Canada, said the emergence of more competition in the market and new technologies such as Voice over Internet Protocol makes it the right time to explore a new policy framework to set the stage for the $33-billion industry's future.

"There is a new game and I think from a policy point of view, government needs to open the window and government needs to think through how will it set a framework for an economically and socially crucial industry like communications," he said during an interview at Bell's office in downtown Toronto.

The timing of Mr. Sabia's call for a regulatory review is no accident. With Paul Martin to soon succeed Jean Chrétien as Prime Minister, BCE is seizing a window of opportunity to unleash a campaign for change. Mr. Sabia is no stranger to the political game, having spent 10 years as senior civil servant with the federal Department of Finance and the Privy Council Office before moving to the private sector with CN Rail in 1993.

Ian Angus, president with Angus Telemanagement Group Inc., said a telecom policy review would take years to complete so BCE's short-term goal is to put political pressure on the Canadian Radio-television and Telecommunications Commission.

Until a year ago, he said, Bell supported the CRTC's direction. This has been replaced with a mantra that competition has increased so there is no need for the CRTC to micro-manage the industry even though Bell still dominates the market.

"They would like to see a substantial reduction in regulation," he said. "They would like to have everything about competition to be taken away from the CRTC entirely. They want it to go to the Competition Bureau. They want a lot more freedom."

At the heart of Mr. Sabia's call for a review is BCE and Bell's annoyance with the effort to increase competition, which has been a core mandate of CRTC Commissioner Charles Dalfen. In a series of significant decisions, the CRTC has been seen to have almost bent over backwards to level the playing field for competitors of Bell and other incumbent carriers such as Telus Corp.

Among the issues that have raised the ire of BCE and Telus is the price-cap decision in April, 2002, which forced incumbent carriers to give deep discounts on services to competitive carriers. Bell was also dealt a major setback earlier this year when the CRTC ruled that a subsidiary, Bell Nexxia, had sold services to business customers below cost.

Framing his call for a policy review around social and economic issues, Mr. Sabia is hoping Mr. Martin and his cabinet will appreciate the importance of the telecom industry and make it a high priority on the political agenda.

"My hope is that there will be a great enough sense of urgency to capture the benefits of this sea change that's going on in our industry; that that will be enough to cause the new Prime Minister and his government to want to have this issue debated, want to open the windows, give stakeholders an opportunity to express their views, and come to a view on what is the future of this industry," he said.

To prepare itself for a regulatory battle, BCE has beefed up its regulatory team. In April, it appointed Lawson Hunter as head of regulatory affairs and public policy. Mr. Hunter had been a partner with law firm Stikeman Elliot LLP and he was a director with the federal Competition Bureau.
Last week, Bell announced the hiring of Stephen Markey as chief, government relations, and Johanne Senécal as vice-president, public affairs. Mr. Markey is a well-known senior lobbyist who worked with Canadian Airlines, while Ms. Senécal, who was a special policy advisor with Office of the Prime Minister, is well-connected politically.

Mr. Martin's view on the telecom sector has not been front and centre. However, Bell's efforts to effect change hit a roadblock last week when Mr. Martin named Francis Fox as principal secretary in the Prime Minister's Office. Mr. Fox had been president of strategic alliances with Rogers AT&T Wireless Inc.

While BCE attempts to sway CRTC policy, the hard reality is the company's growth prospects are, at best, modest. The business telecom market, which has been a traditional cash cow, is not growing as companies adopt a cautious approach to spend or move to rivals such as Telus, Allstream Inc. or Call-Net Enterprises Inc.

In the residential market, Bell has been hurt by the price-cap decision, which limits price increases to inflation, while new Internet-based rivals such as Vonage Holdings Corp. are poised to steal local and long-distance business.
At the same time, Bell also faces a growing threat from cable companies such as Rogers Communications Inc. that will eventually move into the telephony market and offer consumers a bundle that also includes high-speed Internet and wireless services.

Acknowledging there is no one "silver bullet" to drive a growth strategy, Mr. Sabia said BCE must leverage its broad delivery platform to provide consumers a number of integrated services.



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

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