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In The Forum:
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Vonage Customer Review: One month with Vonage, and...
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Internet Phone Rules Requested


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February 6, 2004

By Tamara Gignac

Ottawa has a responsibility to clarify the future of telecommunications regulation in Canada as the industry shifts telephone traffic onto Internet-based networks, BCE Inc. chief executive Michael Sabia said Thursday.

BCE -- the parent company of Bell Canada -- has asked the Canadian Radio-television and Telecommunications Commission to review its policies, arguing the federal agency should encourage innovation at a time when new technology is changing the competitive landscape.

It's time to open the door and create a regulatory environment that supports investment and the kind of services Canadians are going to need," Sabia told an RBC Capital Markets investor conference in Banff. "There are broad and important issues associated with keeping the Canadian telecom industry in a leadership position."

BCE is hoping the CRTC will take a hands-off approach to the regulation of Voice over Internet Protocol (VoIP) networks because the telephone giant recently announced an aggressive plan to migrate all of its voice, data and video traffic onto an IP network by 2006.

In abandoning its older, or "legacy," services, BCE expects to shave 25 per cent off its costs, enabling it to launch a host of new services -- including video phones and e-learning initiatives -- to residential customers and businesses at competitive prices.

Sabia called the strategy "critical" to Bell's future and a means for the company to remake its networks to grow affordably and fend off the threat of new entrants in the local telephone market.

Many in the industry, including Shaw Communications and Rogers Communications, have said they intend to get into the telephony business as early as next year. Primus already sells a voice-over-Internet package in major Canadian cities, including Calgary, while Vonage, a New Jersey-based telecom firm, also plans to aggressively market its own technology to consumers and corporate clients.

CRTC chairman Charles Dalfen told the conference Ottawa has no immediate intent to regulate Voice-over-Internet Protocol (VoIP) services because it is still unclear whether there is a need to do so.

The regulator's main objective in the telecom industry, he reiterated, is to foster competition to ensure Canadians have a choice of providers, which is still not the case in many provinces.

But for Sabia, more regulation is not the answer. "From a public policy perspective, I say 'mission accomplished, chapter closed.' Let's move on to the next issue, which is how to use telecom to encourage IP capability and stimulate economic development and investment," he said.

BCE reported a $386-million fourth-quarter profit

Wednesday, or 41 cents cents a share, down from a profit of $1.7 billion, or $1.88 a share, in the year-earlier period. The decrease is due to a one-time gain from the sale of the company's directory business.

Sales were $4.91 billion, a decline of 2.7 per cent from $5.05 billion in the fourth quarter of 2002.

BCE is re-evaluating its approach to growing market share in Alberta and B.C., where its Bell West unit competes with regional monopoly Telus Communications for business clients.
"I think we've got work to do. Our tendency has been to build an operation in the West that mirrors our core markets (in Ontario and Quebec). That's not necessarily the best way to build a presence here," he said.

Voice over Internet Protocol

Voice over Internet Protocol is a web-based technology that allows telephone and cable companies to send voice, video and data traffic over high-speed networks in digitized packets.

Calgary-based Shaw is planning to launch telephony packages within a year to compete with Telus and Primus.

Traditional local phone service is regulated by Ottawa, but it's uncertain whether companies offering Internet-based calls will be subject to similar rules and price caps.



 
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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.

** Certain call types excluded.

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