The CRTC reaffirmedFriday its previous decision on voice-over-internet protocol (VoIP), but said it will review its regulations because of changes in the local telephone market.
In its decision, the Canadian Radio-television and Telecommunications Commission said competition in local phone service is expanding faster than anticipated and so it will review certain aspects of its regulatory scheme.
VoIP technology allows phone calls to be made over high-speed internet lines. VoIP costs less to operate because it doesn't require expensive wires and switching equipment.
The CRTC's previous decision on VoIP in May 2005 ruled against the big telephone companies, saying they could not use their pricing power to undercut smaller businesses and newcomers to the telephone market, such as cable companies.
The agency said it would regulate internet-based phone service the same as any other local phone service, meaning large telephone companies such as Bell and Telus can't offer internet-based phone services below cost.
New companies entering the VoIP market, however, can set prices as low as they want, said the CRTC.
Bell Canada,Telus and Aliant, along with provincially owned SaskTel, appealed the ruling.
A CRTC rulingin April 2006relaxed some of the marketing restrictions, but said local telephone companies should be regulated until they lose 25 per cent of the market share.
That policywill be reviewed because of new data that shows competitors in the local phone market are keeping most of the customers they attract and exceeding their own expectations.
Also under CRTC regulations, telephone companies are obliged to file tariffs for VoIP services and prices, a requirement that is waived for other VoIP competitors such as cable companies.
In May 2006, the federal cabinet asked the CRTC to re-examine its policy framework on VoIP, saying "it is in the public interest for the CRTC to reconsider its decision."