September 04, 2006
Are Telcos Getting Short Shrift On VoIP?
Canada's CRTC (equivalent of US FCC) ruled last week that they would be regluating VoIP service in Canada, basically reinforcing their decision from May 2005. The big telephone companies in Canada were unhappy with this decision because it prohbits them from offering VoIP services below cost, as a loss-leader for other packages. On the other hand, apparently new VoIP companies can set whatever price they like. Furthermore, telecoms have to file a tariff for VoIP services, whereas cable companies do not. I'd assume soft VoIP providers wouldn't have to, either.
The odd thing is, Canada has a law in place since at least the 1970s, if not earlier, which prohibits any business from charging different prices to different clients for the same service. It appears, however, that the inverse is not true. While I have no love for telecoms, and have worked for some, on the surface, this decision would seem some what unfair to the telecoms. On the other hand, it gives VoIP startups a chance to compete against otherwise incumbent companies with deep pockets.
Where I don't think the ruling is fair is that cable companies get a leg up. If you know Canadian cable industry history, you know that in many areas, cablecos owned regional monopolies on service. When the giant Rogers Cable started buying out smaller regional cable providers, in at least the province of Ontario, in the late 1970s and through the 1980s, they became more powerful and allegedly incredibly uncaring about customers. At least, that's what I hear from Canadian friends, acquaintances, and insiders. Rogers Cable also owns mobile phone services that are competitive with Bell Canada's Bell Mobility division. So why Rogers Cellular, for example, should get an advantage in VoIP services over Bell Mobility, I'm not sure. They are probably about par in their power and resources.
In this situation, both should be shackled equally. Dare I say it: are the telcos getting the bum's rush? Gazing into my crystal ball, the worst case scenario shows that traditional telcos will crash and burn in the next 10 to 15 years, while cable providers will enjoy the richesse of exponentially increasing triple-play subscribers. But then again, my crystal ball is bit spotty.
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