Thank you. Good afternoon, everybody.
My name is John Piercy and I'm here representing the Canadian Cable Systems Alliance, the CCSA, of which I am a board member and chairman of their telecom regulatory committee. I am also president of Mountain Cablevision, a CCSA member company.
CCSA represents over 90 small, independent cable companies operating in all regions of Canada. Member companies are generally family owned businesses serving small and rural centres. All of these companies favour competition. We compete aggressively with large national companies in the provision of video services as well as in high-speed Internet.
We have taken the risks to make the investment to bring advanced digital and broadband services to our customers. We are also fully prepared to compete in offering local telephony services, the last bastion of monopoly communication services outside of the major urban areas.
One of the key differences in local telephone services is that our competitors currently have 100% of the customers we are seeking to attract. When we do succeed in attracting a customer to our local telephone service, we have to work with our competitor to transfer the customer to our service. We also have to interconnect with those competitors and rely on them to provide other services. This is not the usual structure of a competitive market.
The CRTC, through the local forbearance decision, has put in place a framework consistent with the Telecommunications Act. This framework will allow competition to develop and incumbents to be deregulated once that competition has reached a certain threshold. It also establishes how the relationship between incumbents and new entrants will be governed and provides recourse in the event of disputes.
This framework was put in place only six months ago. Cable companies, even the small ones, have begun to make investments required to provide competitive local telephone services to their customers. The draft policy direction would undercut this framework. This would put cable investment at risk and probably deter other companies from offering telephone services at all. The transition from monopoly to competitive local markets would be derailed, just as it's getting under way.
The shift to less regulation needs to be supported by enforcement tools, as recommended by the telecom policy review panel. It will not be enough to have the Competition Bureau conduct the post mortem on what went wrong. Our efforts to offer competitive local telephone service would already be dead.
The draft policy direction appears to put regulatory efficiency ahead of effectiveness. It does not recognize the need for regulation where there exists significant market power. It does not provide for enforcement powers and it does not recognize the need for a transition period. These were critical recommendations of the TPR panel itself. We believe that the policy direction should be amended to reflect these recommendations.
Our competitors exercise significant market power; our member companies do not. Sustainable competition, if allowed to develop, would limit our competitors' market power, but in order to get to that point, someone must have the authority to intervene, to impose sanctions, and to do so in a timely manner so that new entrants are not forced out.
Our customers in small-town Canada deserve choice in local telephone service as much as those in the large urban centres. As the only other companies with facilities, we are the best-placed alternatives to compete with the large telephone companies. We simply want a chance to compete, and we guarantee our member companies will rise to the occasion, as they have done in the past.
Thank you.