Copyright 2004 Toronto Star Newspapers, Ltd.

The Toronto Star

April 8, 2004 Thursday Ontario Edition

Companies that offer Voice-over-Internet service in Canada will have to offer 911 emergency features "as soon as practicable" when competing with local phone companies, the CRTC said in a preliminary policy yesterday.

The federal regulator also said there is a need to set out its views and invite debate following requests by phone companies for clarification on the rules governing voice-over-Internet-protocol service, or VoIP.

"Consistent with its principle of technological neutrality, it is the commission's preliminary view that its existing regulatory framework should apply to VoIP services, including its determinations related to forbearance," the policy statement said.

That means VoIP service providers will either have to provide 911 service and other mandatory services as soon as possible, and clearly warn customers when the services aren't the same as they'd expect from a typical phone company.

Internet-based calls are cheaper for consumers and carriers than circuit-switched calls. However, industry observers said the reference to "forbearance" also indicates the CRTC plans to continue to regulate the big phone companies, which must get federal approval before setting their prices and service offerings — a requirement not imposed on the smaller carriers.

However, telecom consultant Ian Angus said the CRTC policy statement is favorable to cable companies, Internet service providers and resellers who want to offer voice-over Internet services.

"The CRTC does not regulate the prices that are charged by people who are not incumbent phone companies. They have the authority to (do so) but they have forborne from doing so," Angus said. "The people who will be mainly unhappy with this decision will be the phone companies."

Bell Canada will likely argue that if VoIP services offered by cable companies aren't going to be regulated, then neither should theirs. A Bell Canada spokesperson contacted yesterday said the Montreal-based company was still reviewing the CRTC statement and had no comment.

But the CRTC policy statement was welcomed by a spokesperson for Rogers Communications Inc., which owns Canada's largest cable company and is a potential entrant in the VoIP market.

"I think this policy statement is a small but important indication that the CRTC is on the right track," said Ken Englehart, the Rogers vice-president responsible for regulatory affairs.

"What the CRTC is saying in this public notice is that their preliminary view is that whether it's VoIP or any other technology, the incumbents will not be deregulated until there's real competition," he added. "We have said all along that all new competitors are going to get squashed if the CRTC deregulates the incumbent phone companies."

However, Rogers is also waiting for the CRTC to clarify its position on other pricing-related matters, including whether the phone companies would be able to get approvals for targeted price cuts for specific customers or services, he said.

Janet Yale, Telus Communications Inc. executive vice-president for regulatory affairs, withheld comment on the CRTC notice.

Separately, East Coast telecom giant Aliant Inc. is asking the CRTC to stop regulating residential phone service in markets that are highly competitive.

Aliant's requests came a day after the CRTC agreed with rival EastLink, which also provides local phone service, that Aliant has breached rules by offering value packages to customers that include local telephone service.