Skating Toward Deregulation: Canadian Developments

Canada had recently undertaken significant steps to forbear from regulating the last regulated offering in the telecommunications sector, local exchange service. Tests that Canada's telecommunications regulatory agency had imposed were overturned by order from the Canadian Cabinet Ministers. Notably, competitors to the incumbent local exchange carriers ("ILECs"), primary cable systems offering voice over Internet protocol ("VoW"') service, argued for the retention of regulation to prevent the ILECs from cutting price to customers who had switched to cable VoIP or were most likely to do so. We review here both the institutional developments leading to the forbearance decision and a number of economic issues presented during the course of the policy debate.