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Canadian telecom deregulation spurs quad-play

- December 12, 2006 - 0 Comments

OTTAWA, CANADA – In an earlier October blog about convergence issues within Canada, I stated that the Canadian government was leaving consumers in the cold. What a difference a few weeks make. The fire has been stoked and reform of the Canadian telecom sector is heating up.Industry Minister Maxime Bernier, responsible for the telecom sector, is promptly making his mark by introducing major, market-oriented reforms of Canada’s $33B telecommunications sector. Last month the Minister deregulated access independent VoIP services meaning all companies would be free to set prices as they see fit, allowing major players such as Bell Canada and TELUS to set their own prices. Previously the Canadian regulator (CRTC) would dictate VoIP price floors to major telcos. Meanwhile other competitors were essentially free to undercut that pricing.Yesterday Bernier went further by announcing he was extending a similar decision to wireline services. Under existing regulation, telcos had to demonstrate they had lost 25% of market share before they could lower prices. The Minister’s announcement outlined changes that would remove the restrictions and merely require firms to show that there was more than one wireline service provider in a market.In reacting to the decision, Janet Yale, Executive Vice-President of Corporate Affairs at TELUS commented that they were now free to bundle its services into “quad-play” packages and would do so immediately upon the implementation of the new policy.In the same October blog previously referenced, I additionally mused that Minister Bernier was starting to signal he understood how an over-regulated sector hinders innovation and productivity. Those signals have quickly turned into a beacon, with the Minister leading Canada’s telcom industry into a new era. Does this mean increased foreign competition and reform of Canada’s broadcasting policy can be that far behind? Well-. it is almost Christmas.

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