News release

April 28^th, 2005

CRTC Setting Criteria to Reduce Regulation
of Local Telephone Markets

OTTAWA-GATINEAU — The Canadian Radio-television and Telecommunications Commission (CRTC) issued a public notice today seeking comments on how to reduce regulation of residential and business local exchange telephone services.

“This is an important step towards deregulating local telephony,” said Charles Dalfen, Chairman of the CRTC. “Our goal is to create regulatory conditions for sustainable competition in local telephone services and, as that competition grows, to reduce our role as regulator.”

As part of its 3-Year Plan, released in 2004, the Commission said it would begin this process in 2005.

Today's announcement follows the Commission's announcement earlier this week (CRTC Telecom Circular 2005-6) that it would streamline its processes, in order to render faster decisions in those areas of telecommunications that it does continue to regulate. The Commission also released a decision earlier this week (CRTC Telecom Decision 2005-25) allowing regulated telephone companies to offer promotions to local service customers, subject to certain safeguards.

The Continued Evolution of Forbearance

Where there is sustainable competition, the Commission forbears, or refrains, from regulation and allows competitive forces to determine the market environment. The Commission's powers and duties with respect to forbearance are described in section 34 of the Telecommunications Act.

The Commission has forborne from regulating almost all areas of telecommunications, while ensuring that Canada is served by a strong and competitive telecommunications infrastructure. In 1979 the Commission began opening the data and private line markets to competition. Following this, in 1982 it opened the terminal equipment market, in 1984 the wireless market, in 1987 the long distance resale market and finally in 1992 the public long distance market.

Local telephone markets are among the few remaining telecommunications markets in Canada that are regulated by the CRTC. The CRTC opened these markets to competition in 1997. The continued regulation of the incumbent local exchange carriers reflects the fact that they continue to have market power.

At this time, the Commission considers it appropriate to determine the criteria it will use in the future to forbear from regulating those incumbent local exchange carriers, as market conditions warrant.

As part of this proceeding, the criteria will also be used to decide upon a forbearance application by Aliant Telecom Inc. Aliant is requesting regulatory forbearance of specific wireline local service markets in Nova Scotia and Prince Edward Island.

A Fast Process

Today's public notice sets out an expeditious process for setting those criteria, involving a public consultation in September, 2005. The Commission expects to issue its decision within 150 days from the close of the record.

The Commission is asking for comments on how it should forbear from regulating local exchange services, specifically:

• What local exchange services should be within the scope of this proceeding?
• What is/are the appropriate relevant market(s) for forbearance from the regulation of local exchange services, taking into consideration both services and geographic areas?
• What are the appropriate criteria to be applied to determine whether the relevant market(s) is/are sufficiently competitive for forbearance?
• What Commission powers and duties should be forborne?
• What post forbearance criteria and conditions should apply and why?
• What is the appropriate process for future applications for forbearance from the regulation of local exchange services?

The Canadian Radio-television and Telecommunications Commission is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.

Reference document: Telecom Public Notice CRTC 2005-2 [.htm] [.pdf]

- 30 -

Media Relations:
   MediaRelations@crtc.gc.ca, Tel: (819) 997-9403, Fax: (819) 997-4245

General Inquiries:
   Tel: (819) 997-0313, TDD: (819) 994-0423, Fax: (819) 994-0218
   Toll-free # 1-877-249-CRTC (2782), eMail: info@crtc.gc.ca
   TDD - Toll-free # 1-877-909-2782

Copies of today's documents are available through our Internet site (http://www.crtc.gc.ca) or by contacting the public examination room of any CRTC office. These documents are available in alternative format upon request.

Date Modified: 2005-03-28

Comments about our site

Today's Releases | File, Register and Epass | Decisions, Notices & Orders | Home | CISC | Industries at a Glance | Reference Centre | Canadian Content | Public Proceedings| Statutes & Regulations