OTTAWA - Bell Canada has been granted regulatory approval to challenge the nation's cable companies by delivering television services over phone lines.
The decision by the CRTC will allow the company, owned by media giant BCE Inc. of Montreal, to begin delivering converged communication and media services to major cities in Quebec and Ontario, including Ottawa.
In all, the approval includes 11 urban centres including Toronto, Ottawa, Montreal and Quebec City. Bell plans to deliver its television services over the same fibre and copper lines it uses to deliver its "Very High Speed Digital Subscriber Line" Internet services.
In making its decision, the CRTC dismissed cable industry concerns that Bell would be able to use its dominance in the local telephony market to gain unfair advantage in the broadcast distribution market. The CRTC has estimated that Bell controls 95 per cent of the local residential and business phone market in 2002.
"The commission is not persuaded by the arguments of intervenors that the approval of Bell's applications would have anti-competitive effects in either the local telephony or the broadcasting distribution market," the CRTC said in a statement.
"Should the applicant behave in an anti-competitive fashion, the commission is satisfied that it has adequate tools to address that behaviour."
Manitoba Telecom Services Inc. is currently selling TV service to 25,000 customers in Winnipeg, while Saskatchewan Telecommunications is also building its regional customer base for television over phone lines.
Telus received the greenlight for its television services from the CRTC last year for 16 Western Canadian cities, including Victoria, Edmonton and Calgary. On the east coast, Halifax-based Eastlink has begun selling phone service.
Both the phone carriers and the cable operators are racing to bring new technology to market that will let each other to fight it out in each other's traditional markets. All the major cable companies have outlined plans to begin offering phone service over high-speed Internet connections by next year, while the telcos continue to develop technologies to deliver video service over their phone lines.
When Bell applied for the licenses, it said its costs for launching the service would amount to $676-million, and that the service would be competitive with cable at about $23 a month. Bell did not say Thursday whether those projections had changed.
Under the terms of the CRTC decision, Bell has two years to launch its service before it has to apply for an extension.
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