The telecommunications revolution is pushing voice technology into a new era, but outdated laws are slowing Canadians to a crawl.
The government needs to retool legislation, under the Canadian Television-radio and Telecommunications Commission, then take a big step back, according to a recently released federal review.
The Telecommunications Policy Review Panel has recommended a dramatic overhaul of laws governing the industry, with a focus on deregulating telephone, internet and cable services.
This includes more foreign ownership, opening service rates to market prices, and tax breaks for businesses looking for telecom upgrades.
“It is time for significant changes to Canada’s current policy and regulatory approaches,” reads the report.
“These proposals seek to accelerate the pace of deregulation of competitive telecommunications markets and will rely more on market forces to achieve Canada’s economic goals.”
Loosening government control over telecommunications is good for business, according to Rick Nadeau, telecommunications expert for national market research firm Decima Research.
“The least amount of government interference in any market is going to lead to efficiencies,” he said.
“Companies are probably going to function at much more efficient levels when there is competition in the market space.”
Less government intervention would also pave the way for small and medium-sized telecom companies to claim room in cyberspace.
“Advances in technology have decreased the barriers of entry, and have allowed companies, small and large, to broaden their service offerings,” he said on the phone from Ottawa.
By allowing up-and-coming companies to compete with the national giants, like Bell Canada, gives consumers more choice.
“These are turning out to be massive changes for consumers,” Nadeau added.
More choice means greater power.
“Because of this added artillery the consumer now has, it necessarily forces companies, both the new ones and the incumbents, to stay alert to consumer attitudes and issues, and to be a little more innovative in their products and services.”
Opening the regulatory floodgates for new options, like Voice over Internet Protocols, or VoIP, will take a big bite out of traditional long-distance phone revenues, said Nadeau.
“I’ve always seen voice over the internet as a natural evolution of the spectacular technology that is the internet,” he said.
This is will come as no surprise to telephone service providers.
“Their long-term plans are revolving around the fact that they will no longer be able to rely on long distance revenues to sustain their business model,” he said in an interview today.
Some companies, like Bell, are countering the move away from phone lines by aggressively pursuing new technologies, like VoIP, he added.
The Royal Bank of Canada recently issued a contract to Bell Canada to integrate all of its information technology and voice services into a VoIP network.
“What’s particularly important for the telco competitors is that voice services are just part of a larger pie,” said Nadeau.
If someone cancels their long-distance phone plan, they may start looking elsewhere for internet and cable TV.
If telecommunications are relaxed to allow an influx of fledging companies, established names still have an advantage, he added.
They are well-known companies with time-honoured services and reliable technology.
“(New companies) can attract (customers) but they’ve got to keep them,” he said. “They’ve got to live up to their promises.”
The 400-page document also stresses the importance of democratizing technology.
This means “promoting affordable access to advanced telecommunications services in all regions of Canada.”
To ensure Canadians in rural and remote regions, like the North, can afford cutting-edge telecom services, the government should step in and shell out.
“Regulation would continue in markets where there is significant market power, such as rural and remote Canadian markets.”
Ottawa views internet access as a necessary for all Canadians, said Nadeau.
“Our research with Canadians shows (they) are very supportive of government involvement in those kinds situations,” he added.
“Where, ultimately, it becomes uneconomically feasible or viable for private enterprise to offer those kinds of services, Canadians are very welcoming of having the government be involved in those spheres.”
So, while the government is being told to move on back, it’s also being asked to stay involved a little longer.
It will take time comb through the report, according to federal Industry minister Maxime Bernier.
He told media last week he will spend the next few months considering the panel’s recommendations.