Canada’s federal government has made a move to ease telecom regulation, by asking the CRTC to reconsider a decision made last year to control the pricing of VoIP telephone services.

In an effort to allow new competitors into the market, including cable comapnies, to compete effectively the regulator decided in May 2005 that it would not allow the country’s biggest telephone companies to set their own prices when launching IP-based communication services. Former monopoly telephone providers are instead forced to gain CRTC approval for their services.

Despite the good intentions behind the decision, many of the competitors, including Shaw, are now taking advantage of the situation by charging above-market prices for their digital phone VoIP services.

“After careful study … and the subsequent appeals, the government believes it is in the public interest for the CRTC to reconsider its decision,” said Canada’s Industry Minister, Maxime Bernier in a statement on Friday. “This will give the CRTC the opportunity to take into account the increase in demand for VoIP services and changes to the overall regulatory environment since the original decision was announced last year.”

This will give the CRTC a 120 day opening to reconsider its ruling, and adjust the regulations as necessary.

“In order to encourage innovation and productivity, it is imperative that regulatory measures interfere as little as possible with competitive market forces,” Bernier said. “I look forward to reviewing the CRTC’s conclusions after it reconsiders this important decision.”

This attempt to restore a more fair state of competition in the telecommunications industry is definitely an encouraging sign from Canada’s recently elected Conservative government. Only time will tell whether Prime Minister Harper’s party will build momentum and put effort into creating a better free market competitive environment industry wide.