Thank you.
Good afternoon, everybody. My name is John Piercy. I am here representing the Canadian Cable Systems Alliance. I am a CCSA board member and chair of the CCSA's telecom regulatory committee. I am also president of Mountain Cablevision in Hamilton, Ontario, a CCSA member company.
CCSA represents over 90 small independent cable companies operating in all regions of Canada. Our member companies are generally family-owned businesses serving small and rural centres.
CCSA member companies are the only potential facilities-based competitors in virtually all the markets they serve. These companies have very serious concerns with the draft order.
Let me explain those concerns. The order, as currently drafted, would allow the incumbent telephone company to apply for forbearance as soon as a second facilities-based competitor enters the market. A cable company will satisfy that test as soon as it offers telephone service. The incumbent telephone company would then qualify for forbearance in that market. At that time the local cable company will have few, if any, telephone customers. Even so, the incumbent telephone company will immediately be able to make targeted offers to those customers who indicate an intention to switch to the competing cable company.
The draft order also proposes to eliminate the win-back rules immediately upon its coming into force. With the win-back rules removed, the incumbent' s special offers would be targeted only to those customers who inform the telephone company of their intention to move to a competitive service. Most of the telephone company's customers would not receive these offers. Few of those customers would experience lower prices or new service offerings.
In no other business does a competitor have to inform the dominant player that one of its customers is discontinuing service. In the telephone business, however, the competitor almost always has to request the dominant player to transfer the customer's telephone number before it can serve that customer.
During the number porting process, the incumbent telephone company could target the transferring customer with a better offer before the customer has had chance to try the competitor' s service. While that practice currently violates agreed industry standards, we know that it happens. Without the win-back rules in place, there is little prospect that a competitor could prove when the win-back offers actually begin.
If this order remains as currently drafted, many of our members will not enter the market; the business prospects will be just too bleak.
Our recommendation to the minister is quite simple: retain the market power test for all markets outside the ten identified in the draft order. Once the incumbents can demonstrate, using the Competition Bureau's current test, that they no longer have market power, they should be forborne from regulation. Win-back restrictions should be kept in place until forbearance has been granted in a particular market.
Such an approach would ensure sustainable facilities-based competition in small markets across Canada. If the order is not revised, not only will residential customers not have access to competitive offerings, but small and medium-sized businesses in these communities will not have access to them either. They will continue to pay the higher prices they have always paid, and their plight may well worsen. Without a viable base of residential customers, our members will never be able to launch a sustainable competitive telephone service that can be made available to local businesses.
The changes that we propose would maintain the streamlined regulatory process and increased reliance on market forces, while fostering sustainable competition in markets where otherwise there would be none at all.
l look forward to your questions.
Thank you.