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Vonage In The News
Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2013 Results

Carolyn Katz Elected to Board of Directors of Vonage Holdings Corp.


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Phone Companies Criticize CRTC

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Phone Companies Criticize CRTC's `Hasty Procedure'
Dispute Over Net-Based Service
Bell, Telus Favour Slower Process

April 16, 2004

By Tyler Hamilton

Eager to have the rules set for providing Internet-based telephone services, the big phone companies urged the federal regulator to move quickly.

Now they're asking it to slow down.

Bell Canada, Telus Corp. and other incumbent phone carriers said yesterday the Canadian Radio-television and Telecommunications Commission breached its common law duty when it announced last week that Voice over Internet Protocol (VoIP) service is just another local phone product and should be subject to existing rules.

Those rules place controls on local prices and would prevent established carriers such as Bell from bundling Voip services with other unregulated products. New competitors, such as Primus Canada or Rogers Cable, wouldn't have such restrictions.

It was only a preliminary view, meant to kick-start a public consultation, but the carriers say the regulator jumped the gun by expressing its opinion and, as a result, risks causing "serious prejudice" to the proceedings.

"The preliminary views indicate a strong predisposition on the part of the commission," the carriers said in an application filed yesterday to the CRTC, which was also taken to task for not showing evidence to back up its view and for cramming the entire public consultation into a 45-day period.

"This is an extremely hasty procedure," the application states. "It does not allow meaningful review of the factual or policy issues raised by the rapidly accelerating deployment of a technology widely recognized as being capable of transforming the entire electronic communications industry."

The carriers want the proceedings to be extended, and that a two-day public hearing scheduled to begin May 19 be a preliminary "fact-finding" meeting instead, not a final step towards a commission ruling. This would be more aligned with the year-long public process being conducted by the U.S. Federal Communications Commission.

A spokesperson for the CRTC, which is usually criticized for moving too slowly, said the request for more time - which also came from the Public Interest Advocacy Centre in Ottawa - will be "dealt with quite rapidly."

Voip technology breaks voices into packets of data and can transmit our conversations similar to how we send e-mail. A form of Voip service, sometimes referred to as a broadband telephone service, lets us make phone calls over our high-speed Internet connections, making it possible for foreign companies to offer local service by piggybacking on the phone company's broadband infrastructure.

Toronto-based Primus Canada and Vonage Holdings Corp. of Edison, N.J., have both launched broadband telephone services in Canada. Others are expected to follow, including Rogers Cable and Bell.

Mark Quigley, research director for the Yankee Group in Canada, said the regulatory issues surrounding Voip are too complex and the long-term impact on the industry too large for the commission to cut corners.

"The fact they're trying to push this forward so quickly I find a little worrisome," he said. "This is going to be the most important regulatory decision in this decade. Everybody is going to pay if this thing isn't handled properly."

Lawson Hunter, head of regulatory affairs at Bell parent BCE Inc., said the tight timeframe makes it "almost impossible" to put together evidence and other research needed to establish sensible public policy.

He commended the CRTC for trying to move quickly on the issue, but said the commission put the cart before the horse with its preliminary view. This creates a concern the process is "skewed to achieve a result."

Telus said the commission made some assumptions about Voip services and other issues that are open for argument. For example, the industry has begun to make a distinction between low-quality secondary line Voip and primary line service.

The latter would have a higher standard of quality, 911 service, backup power, and is generally considered a replacement for traditional telephone service.

"Is that a meaningful distinction or not, and what's the regulatory treatment?" said Janet Yale, executive vice-president of regulatory affairs at Telus. "There are so many different flavours or varieties of VoIP, you have to look through and ask yourself which ones are properly characterized as a local exchange service?"

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