THE MERE EXISTENCE OF COMPETITIVE FACILITIES IS NOT SUFFICIENT TO ENSURE SUSTAINABLE COMPETITION IN THE LOCAL TELEPHONY MARKET
PRESS RELEASE
For immediate release
THE MERE EXISTENCE OF COMPETITIVE FACILITIES IS NOT SUFFICIENT TO ENSURE
SUSTAINABLE COMPETITION IN THE LOCAL TELEPHONY MARKET
Montreal, December 11, 2006 – Cogeco Cable disapproves of the new competitive facilities test
proposed by the Honourable Maxime Bernier, Industry Minister.
The measure announced today by the government is contrary to sound public interest policy and practice
for deregulating the telecommunications sector, and it ignores the relevant recommendations of the
Telecommunications Policy Review Panel issued earlier this year. Indeed, the government has yet to
issue a comprehensive position on the recommendations made by its own expert panel in this report nine
months ago.
“We are witnessing another piecemeal announcement essentially designed to please the incumbent
telephone companies rather than to ensure real sustainable competition in the best interest of Canadian
consumers” indicated Mr. Louis Audet, President and CEO of Cogeco Cable.
Today’s announcement may have lasting adverse consequences for Canadian consumers of local
telecommunications services. The government is clearly sidestepping the existing independent process
for deregulating local telephone services established by the CRTC, on the mistaken assumption that
consumers are adequately protected by the mere existence of competitive facilities even where the
incumbent telephone company retains a dominant position in the market.
The government’s announcement also suggests that Bill C-41 tabled in the House of Commons last week
will give ample protection to consumers against anti-competitive conduct by incumbent telephone
companies by providing for administrative monetary penalties under the Competition Act. First, the
government is proposing to end existing CRTC regulatory safeguards prematurely, without prior
evaluation of significant market power, and regardless of the actual passing of Bill C-41 or its coming into
force. Second, the announcement squarely contradicts the government’s own expert panel which
specifically stated the following in its report last March:
… [W]hile the Competition Bureau has a higher level of expertise in defining markets and
assessing market power than does the CRTC, the Panel is not satisfied that the Competition Act
provides an appropriate framework for the resolution of competitive disputes in the
telecommunications sector where SMP still exists or where markets are in transition from SMP.
Nor does it provide an appropriate framework in situations where the development, ongoing
monitoring and supervision of sector-specific competitive safeguards may be required. As a body
with responsibility for administering Canada's competition laws in all sectors of the Canadian
economy, the Competition Bureau clearly lacks the degree of sector-specific knowledge
possessed by the CRTC.
In addition, the Competition Bureau is constituted as an enforcement agency rather than as a
quasi-judicial body. Its process does not allow for the timely resolution of disputes that routinely
arise in the dynamic and rapidly changing telecommunications sector. The Competition Act has
constituted the Competition Bureau as an investigative body that investigates and reviews
complaints of anti-competitive conduct. It then decides whether there is sufficient evidence to
pursue either civil or criminal proceedings before the Competition Tribunal or the courts. This two-
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stage process involves significant time lags, sometimes measured in years, between the lodging
of complaints and the resolution of issues. This lengthy process is not well suited to an
environment in which competitive disputes arise on a fairly frequent basis and require prompt
resolution. In addition, the Competition Tribunal does not view itself as a regulator that monitors
behavioural remedies on an ongoing basis.
(Telecommunications Policy Review Pan el – Final Report 2006, Chap. 4, page 4-14)
“Consumers as well as new competitors in the local telephone market should rightly feel concerned when
the government not only sets aside but actually rewrites a key decision of the independent administrative
agency concerned and ignores the recommendations of its own experts on telecommunications policy
reform,” concluded M r. Audet.
ABOUT COGECO CABLE
Cogeco Cable (www.cogeco.ca), a telecommunications company offering a diverse range of services to
its customers in Canada and in Portugal, is the second largest cable operator in Ontario, Québec and
Portugal, in terms of the number of basic cable service customers served. The Corporation invests in
state-of-the-art broadband network facilities, delivers a wide range of services over these facilities with
great speed and reliability at attractive prices, and strives to provide both superior customer care and
growing profitability to satisfy its customers’ varied electronic communication needs. Through its two-way
broadband cable networks, Cogeco Cable provides its residential and commercial customers with analog
and digital video and audio services, high speed Internet access as well as telephony services. The
Corporation provides about 1,556,000 revenue-generating units (RGUs) to approximately 1,477,000
homes passed in its Canadian service territory and 629,000 RGUs to approximately 826,000 homes
passed in its Portuguese service territory. Cogeco Cable’s subordinate voting shares are listed on the
Toronto Stock Exchange (CCA).
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Information: Marie Carrier
Director, Corporate Communications
Tel.: (514) 874-2600