Copyright 2005 Toronto Star Newspapers, Ltd.

The Toronto Star

October 18, 2005 Tuesday

By Allan Swift

From Lexis Nexis

Media entrepreneur Ted Rogers has accused rival Bell Canada of hiding behind federal regulations for protection, while secretly lobbying Ottawa cabinet ministers to change the rules in Bell's favour.

Rogers said yesterday Bell and the other legacy telephone companies are "sucking and blowing at the same time" to prevent competition from cable TV companies such as Rogers Cable Inc. and Videotron Ltee. from cutting in on local telephone service.

The federal regulator has allowed local telephone competition for about eight years, but it only began to seriously emerge this year, thanks to voice-over-Internet protocol technology, or VoIP.

"But true competition is not here yet, and Bell and the other ... (telephone companies) will do everything to choke off competition if the proper regulatory framework is not in place to nurture sustainable competition," Rogers said in a speech to the Canadian Club, which is sponsored by Bell Canada.

Bell Canada was not available for comment yesterday. The legacy telephone companies still have 95 to 97 percent of the local phone market, Rogers said.

Bell got permission from the Canadian Radio-television and Telecommunications Commission to lower local telephone rates on the company's VoIP network, Rogers said.

But now Bell is lobbying to be allowed to lower the local rates only in those markets with competition.

The phone giant wants to keep the same rates everywhere else.

"They would rather engage in political, behind-the-scenes lobbying of cabinet, and predatory pricing, instead of letting a framework develop through public CRTC hearings," Rogers said.

"Bell has a good service, one of the best in North America; why do they have to go skulking over to a closed cabinet meeting room and try to get relief?" Rogers asked after his speech.

"If they're allowed to lower rates on selective clients, then they wipe out the competitor."

Quebec-based Videotron and Rogers Cable began their local telephone service earlier this year in Quebec and Ontario, and the business is growing rapidly.

The Convergence Consulting Group estimated in a recent study that cable companies will have 16 percent of Canada's residential telephone market by the end of 2007, or about 2.1 million subscribers.