The buck stops with Bell

TORONTO (02/24/2004) - Bell Canada says it's time for the Canadian government to stop regulating its business in "the highly competitive market for high-speed, fibre-based digital services" so customers can "realize the full benefits of competition, including market-driven prices."

The incumbent local exchange carrier (ILEC) in a press release Monday said it is asking the Canadian Radio-television and Telecommunications Commission (CRTC) to forbear from regulation digital network access services at DS-3 speeds and higher, special routing services at DS-3 speeds and higher, high-speed metro services and future services that fall under the same umbrella.

"It would not, however, include any digital services below DS-3 and those that would be used to connect to the PSTN, as well as analogue network access services, or competitor, CDNA services," said Lawson Hunter, executive vice-president of Bell's parent company BCE Inc., during an interview with IT World Canada.

Asked if customers would see higher prices as a result of forbearance, Hunter said no. "Prices have been falling for these services. That's one of our concerns, something which we think reflects how much competition there is out there. As a matter of fact, last week we filed applications to reduce our tariffs for some of these DNA-type services by as much as 54 percent.

"You might say, 'If you did that, why are you seeking forbearance?'" Hunter continued. "The problem we have is we have to get approval every time we do that. It doesn't give us the flexibility to respond to the current market pricing."

Mark Quigley, a telecom industry analyst at The Yankee Group Canada, wondered if Bell's application stemmed from "the hand-slapping" that the carrier received last year, when the CRTC found that Bell had offered regulated services for below-regulation prices.

But Hunter said the application is the result of a healthy, competitive market for network services, and no particular incident, although he also pointed out that municipal electricity companies such as Toronto Hydro are coming on strong in this sector.

"The enterprise business is just very, very competitive. But we are still heavily regulated in that space. We just decided that we should look at the facts to see which services we're offering that could meet the Commission's forbearance test. This was one of them, and there will be others."

Hunter added that Bell is not looking to apply forbearance across its entire ILEC operating region, Ontario and Quebec, but only in places where competition is strong.

"It would be about 120 out of about 1,000 exchanges in our territory that would meet the test. But they're the larger ones, so it's the great bulk of our revenue."

Hunter said people have 30 days to respond to Bell's CRTC application, and then Bell has 30 days to respond to those responses. After that, the Commission might ask for more details from Bell or others participating in the debate, and then it will make a decision for or against forbearance.

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