Canada`s federal government is taking an important step towards deregulation of the local telephone industry, announcing plans to do away with government price controls in areas where competition exists.

To do this, the Conservative government intends to overrule a decision by the Canadian Radio-television and Telecommunications Commission, which imposes price ceilings and floors on how much telecom providers like Bell and Telus can charge for local line access.

Major telecom carriers have lobbied for this change for some time now, arguing that free market competition will eventually allow for lower prices and better services. This is especially true now that cable companies are entering the market with their own low-cost Voice over IP digital telephone offerings.

Although some consumer groups say that deregulation will allow big telecom providers to run smaller competitors out of business, most analysts believe that the presence of cable VoIP will keep things in balance.

Now the competition is other ‘big, bad guys’ like Rogers or Shaw, explained CTV`s business editor, Linda Simms. These are big companies that can manage to compete very nicely against the telcos.