Phone companies hail 'new era,' critics fret as CRTC deregulates home service

TORONTO (CP) - Home telephone bills and services are being freed from federal control in more than 200 exchanges across much of Canada with the latest decisions from the federal telecommunications regulator.

The big phone companies promise lower rates and exciting new services, but critics doubt that consumers will see major - or perhaps any - benefits.

The Canadian Radio-television and Telecommunication Commission granted what it calls forbearance on Friday for 191 Bell Canada (TSX:BCE) exchanges, including Central Canada's major cities; 11 Telus (TSX:T) exchanges, including Vancouver, Victoria, Calgary and Edmonton; MTS Allstream (TSX:MBT) in Winnipeg; and Saskatchewan Telecommunications in Saskatoon.

All those areas meet the requirement that there be at least two independent service providers capable of handling at least 75 per cent of the market.

"Consumers are the big winners," said Kevin Crull, president of residential services for Bell, which declared a "new era" of deregulation in Toronto, Montreal, Ottawa-Gatineau, Hamilton, London, Quebec City and many other communities in Ontario and Quebec.

"Competition in the local phone market is going to heat up, and consumers can look forward to new and innovative service offerings becoming available from Bell in the near future."

Others were more pessimistic, predicting that many phone users could suffer.

"Telephone services are going the way of banking services - any discounts will be for big customers and the competition will not be strong enough to produce real benefits for ordinary consumers," stated Michael Janigan, executive director of PIAC, a non-profit group of organizations representing pensioners, the disabled and rural residents.

"And there will be no CRTC oversight to ensure quality of service does not go down at the same time."

At emerging competitor Vonage Canada, marketing vice-president Joe Parent expressed doubt that complete deregulation will benefit many users.

"Our feeling is that the telephone companies are not interested in delivering new features and services to the Canadian public, nor are they interested in delivering lower rates," said Parent, whose New Jersey-headquarted company offers Internet phone service in 160 Canadian centres including most major cities.

He suggested the incumbent phone companies will "simply practice selective price discounting in specific circumstances."

The CRTC began its deregulation announcements July 25 with Fort McMurray, Alta., and parts of Nova Scotia, New Brunswick and Prince Edward Island including Halifax, Fredericton and Charlottetown.

The commission's policy change followed the decision by Industry Minister Maxime Bernier last December to overrule the CRTC and let the big telephone companies ease out of regulation earlier than previously planned.

Bernier has said open competition will produce more affordable and varied service.

However, John Lawford, legal counsel at the Public Interest Advocacy Centre, predicted Friday that high-volume customers may be able to extract concessions from the phone companies, "but average consumers will have to eventually foot the bill for those individual discounts and will carry the full weight of telephone companies' drives to increase profit. It could get expensive."

Telus, meanwhile, joined Bell in proclaiming a new era.

"Deregulation of telecommunications services will bring the full benefits of competition to anyone who has a home phone in the communities announced by the CRTC today," said Janet Yale, executive vice-president of corporate affairs.

"We are entering a new era where Telus will have the flexibility to quickly bring creative offers to the marketplace while continuing our investment in technology and innovation for the benefit of Canadian businesses and consumers."

Telus will soon apply for deregulation in all areas where competition is deemed significant, while Bell already has submitted applications for 58 other exchanges.

MTS Allstream's chief regulatory officer, Chris Peirce, welcomed Friday's approval and said Manitoba Tel expects forbearance will be granted in other markets.

In addition to the Winnipeg deregulation, MTS received a final CRTC ruling allowing it to double the cost of a pay-phone call to 50 cents.

© The Canadian Press, 2007