Thank you for the opportunity to provide the committee with SaskTel's opinion on what the policy direction means to us.
First of all, for those of you who may not be familiar with us, SaskTel is the incumbent telephone company in the province of Saskatchewan. In terms of size, SaskTel is less than one-half the size of Shaw Cable, one-eighth the size of TELUS, and about one-fifteenth the size of Bell.
In our view, the policy direction is a positive step for the telecommunications industry in Canada and, more particularly, for Canadian consumers. Paramount in that view is the direction for the CRTC to rely on market forces to the maximum extent feasible.
Today, CRTC decisions are often designed to curtail market forces, with the goal of forcing artificial market share losses on SaskTel and the other incumbent phone companies. An unlevel playing field in telecommunications has been created to achieve this objective. Let me bring this unlevel playing field concept to life for you with an example.
SaskTel and Shaw compete against each other in Internet and cable television and will soon compete in local telephone service. As competitors, we are both faced with the prospect of winning back lost customers, but the rules each one of us faces are totally different.
When SaskTel loses a telephone customer to Shaw, we will be unable to contact that customer for a period of three months to try to win them back. Even when we do contact the customer to try to regain them, we will have virtually no pricing flexibility or opportunities to offer them a promotion, waive installation charges, or bundle their local service with other SaskTel services. Those are the CRTC-imposed rules.
On the other hand, when Shaw loses a cable television customer to SaskTel, 75% of the time Shaw can contact that customer immediately, often before we even complete our installation. They can and do offer those customers various incentives to return to Shaw, such as reduced monthly charges and free months of service. They are also free to bundle their television service with high-speed Internet or any other services they provide in the market.
For customers, curtailing market forces means less competition, less innovation, and ultimately higher prices than would otherwise be the case. Today, the fiercest competitive battles are fought in front of the CRTC rather than in the marketplace. The time has come for this culture of regulation to end.
In our experience, you don't need regulatory assistance to successfully compete. With partners, SaskTel successfully built and operated a local telephone and cable company in both Leicester, England, and Wellington, New Zealand, in the 1980s and the 1990s. In New Zealand, there was not even a formal regulator in place when we took on Telecom New Zealand, yet we succeeded, and customers benefited from the unbridled competition that occurred.
In closing, the telecom policy review panel report recommended major regulatory reform in Canada: rely on market forces; let consumers decide; and assure fairness among competitors. We believe the proposed policy directive is consistent with those fundamental principles, and we fully support it.