OTTAWA (CP) — The federal government announced today that it wants to deregulate local phone services in areas where there is competition.

Industry Minister Maxime Bernier says the government intends to reverse a CRTC decision regulating local services.

Critics have slammed the idea, warning it could drive up prices in areas where competition is weak.

Part of the CRTC’s mandate is to ensure consumers have affordable access to residential service.

It had put in place price ceilings and floors on how much Bell and other telephone giants could charge in markets where they controlled more than 75 per cent of the local phone game.

Bell and the other incumbents have been aggressively lobbying for an end to local regulation, arguing like the minister that free competition will eventually mean lower prices and better service.

But consumer groups and the small local-phone players say there is no real competition in the local phone market.

They fear that the bigger companies will simply drive down their prices in order to stave off the competition, and then raise prices.