Major deregulatory changes in Telecom sector in Canada

Canada's Government has ordered the immediate deregulation of a majority of the Canadian phone industry. Canada's major telco's have been given the right to launch a battle to regain customers lost to both pure-play VoIP houses and cable companies offering VoIP services. Predictions are for a price war in very short order. Bell Canada is said to have lost 181,000 subscribers to VoIP-based competitors in the latest quarter alone, and Telus may have lost 31,000.

The orders have been issued despite opposition from Canadian regulator the Canadian Radio-television and Telecommunications Commission. The commission had passed its own set of "market-based" rules covering the regulation of voice carriers. But Canadian law gives the minister the ability to overrule the CRTC.

Under the new rules, a telco will only have to show there are three different competitors offering phone services, including wireless, in a given residential market or two in a business market, in order to apply for the deregulation of its rates. The CRTC then has a limit of 120 days to act on the applications. Previously, telcos had to prove they had lost 25 percent of their customers before their rates could be deregulated. The new rules also eliminate the so-called "win-back" restrictions the CRTC had imposed, forcing phone companies to wait three months before trying to lure back customers who had defected.

Canada's New Government is pursuing an ambitious policy agenda for the telecommunications sector, the essence of which is a new regulatory framework that is more modern, flexible and efficient.