KINCARDINE, ON – Bryan Walden just wants a chance to compete.
The president of Kincardine Cable has asked the CRTC to level the playing field and allow small cable companies like his the chance to offer local telephone service to their customers, in the same way that the independent telcos in his rural region can offer television services – or that big cable companies can offer in their urban territories.
But a leftover protection in our telecommunications regulations is standing in his way and he’d like to know why.
“(The CRTC) opened local exchange competition years ago, saying the small (telcos should) have slightly different rules because they’re so small”, Walden told Cartt.ca. “So (the Commission) said, ‘well, let’s give them a little more protection’. Being Canadian, I grumbled a little and said ‘that’s fine’. Well, that’s been six years now. How long do you protect a company? They’ve had a protected monopoly for 100 years.”
Walden sent a letter to the CRTC in December explaining his unique situation, and urging the regulator not to extend the protection afforded to the small incumbent local exchange carriers (SILECs) any longer, a safeguard that he calls “very unfair and extremely anti-competitive”. He has yet to receive a reply other than to be told it will be included in yet another public proceeding this Fall, 2010-43, the “proceeding to review access to basic telecommunications services and other matters”.
The decision from this process will likely be released in early 2011, delaying Kincardine’s telephony launch by yet another year.
Kincardine Cable is based in Kincardine, a town of about 12,000 on the eastern shore of Lake Huron in Ontario, approximately 225 km northwest of Toronto. The company has approximately 6,000 cable customers across 27 systems, ranging in size from 2,800 subscribers in its largest down to seven subscribers, all spread over an area spanning some 1,500 square kilometers.
Walden said that 80% of his company’s cable subscribers are located within three different SILEC territories. And when his company loses a cable customer, he says it’s most often because Kincardine Cable can’t bundle all of their services, including telephone, “like they do in the city”.
With the regulatory shackles off, Walden said he could be ready to offer phone service very quickly.
“(T)he SILECs have been able to prevent competitors from entering their markets for five years longer than any other telephone companies in Canada”, reads Walden’s letter to the CRTC. “In that time they have been able, without restriction, to enter the video distribution business in competition with cable companies. That is enough of a head start. They should now have to take the steps and bear the costs of allowing their customers to move to competitive telephone services if they choose to do so.
“They should have to port local numbers, to bear some of the costs of interconnection and to respond in a timely manner to requests for customer transfers. Their customers deserve choice in telecommunications services just as much as those in larger markets.”
Walden noted his cable company had to learn to become “more competitive” to counter the arrival of direct-to-home (DTH) satellite about ten years ago, and it’s long past time the local telcos in his region learned the same lessons.
In his letter to the CRTC, Walden said that Kincardine Cable saw its subscriber penetration of homes passed fall from approximately 80% to a low of 35% in some communities on the introduction of DTH competition, and to a new high of only 55% in others, a move that “significantly affected” his cable business.
“We lost about 30 to 40% of our customers to satellite”, Walden admitted to Cartt.ca. “We went from 80 to 85% penetration – we’re at 50% now – so we have 12,000 homes in our market, we’re sitting at under 6,000 customers. We’ve take a shit-kicking, and what have we done? We learned to compete. We’re doing as well as we were before.
“Obviously, we would have done a lot better if we had not had satellite, but the CRTC didn’t say, ‘oh, you can only launch satellite in Toronto, Montreal, and Vancouver, and in any town under 10,000, you can’t’. That’s the comparable situation to this,” he asserted.
With testing and upgrades to its billing and computer systems already completed, Kincardine Cable could be ready to launch local telephone within about 60 days, Walden said. It took the company about five years to organize and launch a competing product to satellite.
“So now we are back to the same position that we were over ten years ago,” Walden’s letter continues. “Only this time, we have no solution because the CRTC has shut us out of local phone service market! This time we may be unable to compete. This time we may be unable to stop the flow of our customers to our competitors. There is no fat left to trim in our business.
“All the fat has been removed to allow us to compete with DTH. To begin losing huge numbers of customers at this point will be devastating to our company.”
With files from Greg O’Brien
