Friday, April 6, 2007

Bernier decision on local competition

Industry Minister Bernier has reviewed the CRTC's April 2006 decision, which set certain standards that had to be met before regulation of Bell and other major local service provider's local phone service pricing would be ended. Those regulations stopped Bell from raising or lowering its local prices too much or too quickly. One fear was that Bell might lower local service prices drastically, pushing newer phone services from new companies or VoIP companies out of business.
Bernier also announced that restrictions on "win-back" calls (where your old phone company calls you up and tries to convince you to return to the fold) from phone companies would be lifted. Companies were previously prevented from making "win-back" calls for a period of three months after a user switched services.
He has also called for the implementation of one of the Telecom Policy Review Panel's decisions: to create a Telecom Consumer Agency, which would take complaints from consumers regarding telephone services.
These announcements fall in line with the Telecom Policy Review Panel's recommendation to rely to a greater extent on "market forces" and to create a Telecom Consumer Agency.
Bernier's decision is good news several groups. First, it may lead to lower prices for local phone services from Bell and other incumbents. This will benefit people who stay with those big phone companies, rather than switching to some of the newer phone services. For those who switch, the end of "win-back" restrictions might lead to annoying phone calls from the old phone company, but, on the flip side, they might also lead to better offers. Bernier says "in a competitive sector, there is no reason to prevent consumers from getting the best offers."
The creation of a Telecom Consumer Agency will be good news for consumers, as it may be able to pressure companies for better phone service. On the other hand, the agency may not have adequate power to challenge dominant players that will soon be playing at full strength.
Most of all, the announcements are good news to Bell and other major phone companies, who will be in a better position to compete with newer services.
The decision isn't good news for the newer phone companies, who will now have to go up against a unrestrained giants with huge sources of revenue and dominant market positions. This could mean a loss to consumers as well, of innovative services and packages offered by competitors.

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