Thank you. It is an honour to be here, Mr. Chair, and members of the committee.
Bell Aliant Regional Communications is the successor to the companies that offered telephone service in the four Atlantic provinces for many years. As of July last year, we acquired the regional operations of Bell Canada in Ontario and Quebec. As a result, today we operate a rather vast geography spanning six provinces.
Our serving territory includes some of the most rural and remote areas in Canada. At the same time, it includes some of the most intensely competitive telecommunications markets in Canada. In fact, competition from cable telephony was pioneered in Nova Scotia eight years ago, when cable operator EastLink entered the market. The CRTC itself has acknowledged the intense competitive rivalry in various parts of our region. As EastLink proclaims on its own website, the 902 area code is the most competitive telephone exchange in North America.
Customers may be forgiven for wondering why on earth, after eight years of competition, they are not offered the same types of bundled service offerings from us as they are from our competitors; or why they cannot be offered the same types of promotions from us as they are from our competitors; or why we cannot even offer to waive service charges when they are considering switching their service to us; or why we in fact cannot even contact them, not only about local telephone service but about any service, for three months after they move their local service to a competitor.
Customers do not comprehend these rules. In fact, most people I talk to have trouble taking me seriously when I explain that such rules persist in this marketplace. Yet persist they do.
Mr. Chair, almost three years ago we asked the CRTC to remove retail price regulation in certain parts of the Atlantic region, most notably Halifax. Some two years later the request was denied in the very forbearance decision at issue here, despite the fact that we had lost 35% of our wire lines in the Halifax market at the end of 2005. Atlantic Canadians can be again forgiven for perceiving a grave injustice from a regulatory regime that produces such an outcome.
It is why, in our comments on the proposed order, we have asked the government to right this wrong by granting forbearance in Halifax. At the very least, Halifax must be added to the list of cities to be processed on a priority basis. It would indeed be ironic if the Atlantic region, with the most competitive market in the country, were to be unrepresented on this list.
With all due respect to the CRTC, in our view, it's lost sight of the purpose of regulation, and that should be to protect consumers from potentially high prices in areas where they have little or no choice. Instead, as the TPR Panel confirmed, the CRTC has misplaced its efforts on attempting to shield competitors from market forces with rules that have long ago been abandoned or never implemented in other countries. Ironically, most of the countries with far less regulation have far less competitive infrastructure than Canada.
It is for all these reasons that we are so supportive of the leadership demonstrated by the minister’s proposed changes to the CRTC’s forbearance decision.
Many of those who oppose this change, typically our well-established and well-funded competitors, have attempted to scare the public by conjuring up images of dire consequences flowing from what they call “deregulation”. Let us be clear, Mr. Chair. What is being proposed in the order is not deregulation—far from it. Remember what the proposed changes will do.
In areas where the competition test is not met, likely in the more rural areas, there will continue to be full retail regulation by the CRTC, including regulation of prices and quality of service. But even in areas where the competition test is met and forbearance is granted, a retail price ceiling will remain for all residential customers. I ask you, how many competitive industries have that?.
Furthermore, the CRTC will continue to regulate essential wholesale services and interconnection, thereby ensuring that competition will not be inhibited. They'll continue to impose social regulation to ensure that things like 911 and services for the disabled continue to be provided.
I would thus ask you to consider this. Does this reality coincide with the image of widespread deregulation that our competitors would have you believe will result from the proposed order? I think we can all agree that it does not.
Is it reform? Yes, it is reform, and it's long overdue regulatory reform. It's reform that is in keeping with rules adopted by Canada’s major trading partners, it is in keeping with the types of reforms recommended by the TPR Panel almost a year ago, and it is in keeping with what Canadian consumers and businesses want and deserve.
Canada cannot afford to delay regulatory reform when other nations are already ahead and moving forward. As Ofcom, the U.K. regulator, recently found when it removed retail price controls, “regulation, if overbearing, can have adverse effects on the development of competition, service innovation and long term investment”.
As well, we should not forget the link between productivity and regulation. In a study released late last year, the OECD found that lower productivity results for those countries with more restrictive marketplace frameworks.
For all these reasons, Mr. Chair, we believe Canada should embrace regulatory reform in this critical sector of our economy. We can take an important step in this direction by implementing the types of changes embodied in the proposed order.
Thank you, Mr. Chair, and members of the committee.
