News release

April 6, 2006

CRTC sets criteria for the deregulation of local telephone service

 OTTAWA-GATINEAU — In a decision issued today, the Canadian Radio-television and Telecommunications Commission (CRTC) set out the criteria for deregulation of local exchange telephone services, the last major regulated telecommunications market in Canada.

“This decision reflects the CRTC’s commitment to a reliance on market forces and to innovation,” said CRTC Chairman Charles Dalfen. “From this point forward, there are essentially two criteria we will require before deregulating an incumbent local exchange telephone company. First, competitors must have a 25% market share. Second, the incumbent must have provided competitors with well-functioning access to its network for a six month period. Such access is necessary to ensure sustainable competition. These criteria will allow us to deregulate as market forces take over, while ensuring that local competition is sufficiently robust to protect consumers after deregulation.”

With these criteria, the incumbent telephone companies (Bell Canada, TELUS, MTS Allstream, Aliant, Télébec and Sasktel) will be able to apply for deregulation of rates on the local services they offer to both residential and business customers. After deregulation, they will be required to ensure affordable basic residential service to vulnerable customers, such as those with no competitive alternative and those with disabilities, and to ensure that certain consumer rights and safeguards are maintained. The Commission expects that most of these latter safeguards will devolve into a system of industry self-regulation.

Today’s decision specifies the geographic markets across Canada in which deregulation may occur. In general, these markets correspond to metropolitan centres and to social and economic communities of interest in rural areas, based on Statistics Canada designations.

The Commission has also, effective immediately, altered the ‘winback rule’ by reducing – from twelve months to three – the period of time before an incumbent telephone company can initiate contact with a competitor’s new customer after the customer has left the incumbent. The Commission will remove the winback rule entirely, once competitors have achieved a 20% market share.

Aliant applied, but did not qualify for deregulation of its local telephone services at this time. The Commission found that Aliant did not yet meet the criteria set out in this decision and indicated that it will deal expeditiously with a new application by Aliant for deregulation.

More detailed information on the Commission’s framework is available in the backgrounder following this release and posted on www.crtc.gc.ca. A copy of the decision is also available on the CRTC Web site.

The CRTC

The CRTC is an independent, public authority which was established to sustain and promote Canadian culture and achieve key social and economic objectives by regulating and supervising Canadian broadcasting and telecommunications in the public interest. As an expert tribunal it takes into account the wants and needs of Canadian citizens, industries and various interest groups. The CRTC is governed by the Broadcasting Act and the Telecommunications Act and reports to Parliament through the Minister of Canadian Heritage.

Reference documents:   Telecom Decision CRTC 2006-15 [.htm][.pdf]
                                    Telecom Decision CRTC 2006-16 [.htm][.pdf]
                                    Information - Backgrounder on Local
                                    Forbearance Decision

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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 # 1-877-249-2782
   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 documentation centre of any CRTC office. These documents are available in alternative format upon request.

Date Modified: 2006-04-06

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