Industry Canada

Industry Canada

November 15, 2006 13:00 ET

Industry Canada: Canada's New Government Calls on the CRTC to Deregulate Certain VoIP Services

TORONTO, ONTARIO--(CCNMatthews - Nov. 15, 2006) - The Honourable Maxime Bernier, Minister of Industry, announced that the government has varied a decision by the Canadian Radio-television and Telecommunications Commission (CRTC). The government is calling on the CRTC to refrain from economic regulation of certain Voice-over-Internet Protocol (VoIP) services.

"Canada's telecommunications landscape has changed dramatically in recent years, and it's time for our regulatory approach to evolve as well," said Minister Bernier. "A more competitive environment will translate into greater choice, newer products and better services for the Canadian consumer."

Earlier this year, the Governor in Council had referred Telecom Decision CRTC 2005-28, Regulatory Framework for Voice Communications Services Using Internet Protocol, back to the CRTC for reconsideration. This decision was re-examined in light of the increased demand for VoIP services, recent changes to the regulatory environment and the recommendations of the Telecommunications Policy Review Panel (TPRP). In its reconsideration, the CRTC confirmed its original decision.

In June of this year, Minister Bernier had tabled a proposed policy direction to the CRTC, signalling the government's intention to direct the CRTC to rely on market forces to the maximum extent feasible under the Telecommunications Act and regulate only when necessary.

"The government's variance of the CRTC's decisions is another step towards deregulation and is consistent with the proposed policy direction we introduced this year," said Minister Bernier. "Our goal is to reshape telecommunications policy so that it supports an internationally competitive and robust telecommunications industry here in Canada."

The text of the government's variance of the CRTC's decision on VoIP will be published in the Canada Gazette on November 29 for public comment.

Backgrounder

Government's variance of the CRTC's VoIP decision

According to the Telecommunications Act, telecommunications policy should enhance the efficiency and competitiveness of Canadian telecommunications, foster an increased reliance on market forces, and ensure that regulation is efficient, effective and encourages innovation in the sector. The need for flexible and efficient telecommunications policy is greatest for emerging technologies, particularly technologies that are swiftly being adopted by consumers.

Voice-over-Internet-Protocol, or VoIP, telephone service is a new and rapidly evolving technology. It also represents a fast-growing segment in the Canadian telecommunications sector, as increasing numbers of Canadians adopt VoIP technology in their homes and businesses.

In May 2005, the Canadian Radio-television and Telecommunications Commission (CRTC) determined that local VoIP services should be regulated as traditional local phone services (Telecom Decision 2005-28, Regulatory Framework for Voice Communications Services Using Internet Protocol). Following the release of the CRTC's decision, the Governor in Council (GIC) received a joint appeal from Aliant Telecom Inc.; Bell Canada; Saskatchewan Telecommunications (SaskTel); Telebec, societe en commandite; and TELUS Communications Inc. as well as separate appeals from the Province of Saskatchewan, the Coalition for Competitive Telecommunications, the Vancouver Board of Trade, and the Communications, Energy and Paperworkers Union of Canada. The appeals called for the GIC to vary, or change, the decision or refer it back to the CRTC for reconsideration.

In March 2006, the Telecommunications Policy Review Panel (TPRP) issued its final report after nearly a year of examining Canada's telecommunications policy framework. It recommended that Canada's laws, regulations, policies and institutions guiding telecommunications needed to be fundamentally reformed in order to keep pace with the evolution in the telecommunications industry already underway.

In May 2006, the GIC referred the CRTC's decision on VoIP back to the Commission for reconsideration, citing progress in the VoIP market, changes to the regulatory environment, and the recommendations made by the TPRP as the rationale for a review. The CRTC had 120 days to reconsider and report back.

The Minister of Industry tabled a proposed policy direction to the CRTC in June, signalling the government's intention to direct the CRTC to rely on market forces to the maximum extent feasible under the Telecommunications Act and regulate only when necessary. Since then, all of the statutory requirements for an order under Section 8 of the Telecommunications Act have been fulfilled in the development of this proposed policy direction.

The department has carried out consultations with the CRTC and with its provincial counterparts. The proposed direction was published in the Canada Gazette for a 60-day period for public comment, during which over 60 submissions were received from a broad range of stakeholders. As provided for in the Act, the proposed policy direction was referred to both Houses of Parliament, providing their respective committees with an opportunity to review the proposed direction during a 40 sitting-day period.

The CRTC announced on September 1, 2006, that it was re-affirming the regulatory regime set out for VoIP services in its original decision.

The GIC has decided to vary the CRTC's decision on VoIP, requiring the CRTC to forbear from economic regulation of "access independent" VoIP services, those services that can reach the customer through any broadband Internet connection. Access independent services are significantly different from traditional phone service, requiring special customer equipment and offering distinct functionality. As well, the barriers to entry for access independent VoIP services are much lower than "access dependent" VoIP services (which connect customers over the service provider's own network) as they do not require ownership of network facilities. The government believes that forbearing from economic regulation of this type of VoIP service will lead to increased competition in the VoIP market, which will ultimately benefit the consumer.

As required under the Telecommunications Act, public, provincial and territorial consultations were completed prior to the Governor in Council's decision.

The full Order-in-Council can be viewed at: www.pco-bcp.gc.ca/oic-ddc

Contact Information

  • Office of the Honourable Maxime Bernier
    Minister of Industry
    Isabelle Fontaine
    613-995-9001
    or
    Industry Canada
    Media Relations
    613-943-2502