The CRTC issued its much anticipated VoIP decision earlier today. Much to the chagrin of the major telcos, the Commission has adopted a strong regulatory approach. While it exempts P2P VoIP providers such as Skype, the traditional providers face a VoIP framework that looks a lot like the current local regulatory framework.
The Commission reasons that for consumers, local VoIP service looks a lot like (and is marketed like) traditional local phone service. Accordingly, the Commission has set a regulatory framework that addresses everything from reseller registration to phone directory listings to privacy protection.
Up to this point, I’d argue that Commission is on solid ground. Robust competition requires a level playing field and ensuring that all providers can offer equivalent services that consumers rely upon may require regulatory intervention of this kind.
The decision goes awry once the Commission moves on to price regulation. It plans to treat VoIP in the same manner as local service and thus institute tariffs and the traditional price regulation found in local service. This is a mistake. Not (as the major telcos argue) because it will result in higher consumer prices, which are headed downward no matter what the Commission does. Rather, VoIP holds the promise of offering the strongest telecommunications competition we’ve even seen. If this marketplace doesn’t create reduced prices, the CRTC sure isn’t going to manage to do so.
More troubling is the CRTC decision to stay away from the issue of service impairment – the fear that the telcos and cable co’s will lock out third party providers either technologically or through poorer quality of service. The Commission says there is no evidence of this happening, but we’ve already seen instances of it occur in the U.S. This was the one spot where it was essential for the Commission to act, yet it puzzlingly decided to stay on the sidelines.
More on this to come — I’m on CBC’s As It Happens tonight to discuss and I’ll devote my column next week to the issue as well.