GOVERNMENT OF SASKATCHEWAN APPEALS CRTC DECISION TO FEDERAL CABINET

Released on July 6, 2005

The Province of Saskatchewan today filed an appeal to the federal cabinet of the Canadian Radio-television and Telecommunications Commission (CRTC) decision to regulate prices for Voice over Internet Protocol (VoIP) services in a manner that maximizes benefits to potential competitors at the expense of consumers.

"This government is committed to the development of a competitive environment in Saskatchewan, we encourage the entrance of new service providers and we believe in providing the people of this province with competitive choices," Minister responsible for SaskTel Maynard Sonntag said. "However, we do not believe that this should be accomplished by handicapping Canadian companies in favour of foreign-based providers and other large domestic companies. The CRTC's regulatory approach is simply bad public policy."

In addition to hindering our home-grown companies who develop our telecommunications infrastructure, provide employment and support our local quality of life, the CRTC is attempting to maintain artificially high prices in favour of specific categories of companies. In a recent analysis of the Saskatchewan marketplace, consulting economists Michael Trebilcock (University of Toronto) and Andrew Tepperman (CRA International) concluded that the CRTC's regulations on VoIP services lead to higher prices for consumers, and that a relaxation of the current approach would allow "more flexibility to respond to competitive threats and offer benefits to consumers."

This type of policy approach is unacceptable to the Government of Saskatchewan and Saskatchewan residents, as demonstrated by a recent poll which indicated that 92 per cent of our residents believe there should be regulatory fairness between all companies providing the same service.

"This type of 'one-sided' regulation, geared toward specific companies rather than creating a fair competitive environment for telecommunications is becoming common practice within the CRTC. Saskatchewan is calling on the federal government to level the playing field for all companies and ensure that the needs of consumers remain paramount in the regulation of telecommunications," Sonntag said.

In 2000, the federal government went to great lengths to ensure that SaskTel was regulated by the CRTC. Professor Trebilcock and Dr. Tepperman have examined the results of that regulation (including the VoIP decision) and suggest that CRTC rulings fail to consider Saskatchewan's geography, its marketplace and the needs of its consumers. The Province of Saskatchewan is determined that the federal government must consider the needs of Saskatchewan when making national decisions.

The new rules make Canada the only major industrialized nation to regulate retail rates for Internet telephony.

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