Notes for an address by Konrad von Finckenstein, Q.C.
Chairman, Canadian Radio-television and Telecommunications Commission to the 2008 Canadian Telecom Summit
Toronto, Ontario
June 17, 2008
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Thank you, Mark [Goldberg, President, Mark H. Goldberg & Associates]. I'm grateful for the opportunity to speak to you today.
I looked at your schedule, and it's going to be an exciting day. The next event is described as a"Regulatory Blockbuster: Our annual action-packed review."
I can only hope there will be no unnecessary violence.
If there is, the CRTC may have to intervene.
The past year at the CRTC
We have certainly had an action-packed year at the Commission.
- In response to the government's Policy Direction, we have launched a new market-oriented approach to telecom regulation. We are giving priority to market forces, and we will intervene only when market failure makes it necessary.
- To implement the Policy Direction, we decided to review all our regulations. We consulted all stakeholders, and determined which regulations should have priority. The result was a three-year Action Plan for this review.
- As telephone competition increases, we have moved forward with forbearance from regulation. By now, we've deregulated 71 per cent of Canada's residential phone lines and 65 per cent of the business lines.
- In a deregulated environment, the consumer must be protected. Late last year, we approved plans for the Commissioner for Complaints for Telecommunications Services - an office established by the industry in response to an order from the government. In late May, we responded to the concerns of some service providers and modified our decision slightly to provide further clarity. But we have not deviated from the central purpose of protecting the consumer.
- We've designed a new framework for the essential services that the incumbent carriers must provide to their competitors. We are progressively phasing out those that are not truly essential, in order to encourage investment in competitive facilities.
- And we've established the parameters for the National Do Not Call List to allow consumers some relief from unsolicited telemarketing calls.
This morning I'd like to discuss some of the main issues and proceedings that are on our agenda for the year ahead.
I'll begin with the National Do Not Call List (National DNCL). We all know how inconvenient and annoying it can be to be interrupted by unsolicited calls. The National DNCL, which should go into effect by the end of September, will allow Canadians to say,"Don't call us."
The List will be operated by Bell Canada under a five-year contract with the Commission.
Canadians will be able to register their landline, cellphone and fax numbers on the List. Most telemarketers will be prohibited from placing unsolicited calls to any registered number.
If the number continues to get unsolicited calls, the subscriber will be able to call a toll-free number to complain.
The CRTC will investigate these complaints. If a violation of the rules is found to have occurred, the Commission can impose a monetary penalty on the offending organization.
Exemptions
There are some callers, and some types of calls, that will be exempt from the rules of the National DNCL.
- Exempt callers include registered charities, political parties and newspapers of general circulation.
- Exempt types of call include those made for surveys and opinion polls, as long as there is no attempt made to sell something.
- Also exempt would be calls from an organization that already has a business relationship with the person being called.
However, consumers will still have the right not to be called even when such exemptions apply. Exempt organizations will be required to keep their own do-not-call lists. They must add subscribers to these lists upon request, and then refrain from calling them. The only exception will be organizations that are collecting information for a survey.
What happens when a consumer has asked to be placed on the do-not-call list of an exempt organization, but continues to receive calls from them? That consumer can make a complaint.
As a first step, the Commission will send a letter to the organization, requesting that the consumer's name and number be added to the list and that there be no further calls. The Commission will keep a record of this warning.
If the violation is repeated, the CRTC will proceed to either facilitation or enforcement.
Facilitation begins with a talk between CRTC staff and the offender. If corrective measures are taken, the investigation is over. If not, the Commission will apply a monetary penalty and make a public identification of the offender.
Accessibility proceeding
I'd now like to turn to the issue of accessibility.
About one out of every seven Canadians reports having some kind of disability - and that rate increases steadily with age. This means that millions of people may face obstacles in accessing and using telecommunications and broadcasting services.
It is part of the CRTC's mandate to make sure that Canadians with disabilities do not suffer discrimination when they want to take advantage of these key services.
In January, we approved initiatives to improve accessibility to telecom services in six provinces for people with disabilities. They are funded from the deferral accounts established in 2002 by the major phone companies. About $35-million has been earmarked for these initiatives.
Earlier this month we announced a proceeding to explore how accessibility can be further improved. It will cover both telecom and broadcasting - including broadcasting services provided over the Internet.
We have invited comments on how we can improve our determinations in the following areas:
- video relay service
- teletypewriters (TTYs)
- captioning
- described video
- customer service and support
- emergency services, and
- the portrayal of persons with disabilities.
We recognize that increasing awareness of the issues encountered by persons with disabilities is an important part of the proceeding.
For this reason we hired an independent consultant to gather input from interested groups and prepare a report, which is available on our website.
As in other cases when we commission independent reports, we did not dictate the outcome. Nor have we made any commitment to any conclusions it may reach.
I should point out that some of the issues raised in the report may lie outside the jurisdiction of the CRTC.
A public hearing will begin on November 17. The regular procedures for our hearings will be adjusted to meet the needs of those who wish to take part.
This process on accessibility typifies our response to convergence in the industries we regulate. It will take place under the auspices of both the Telecommunications Act and the Broadcasting Act, and will cover New Media as well.
Net neutrality
Another issue of increasing importance is net neutrality.
On April 3, the Canadian Association of Internet Providers - CAIP - asked the Commission to issue a cease-and-desist order to Bell Canada.
It would direct Bell to stop the practice of traffic shaping on its wholesale broadband access services.
The members of CAIP buy these tariffed services from Bell to enable them to serve their own Internet customers. Traffic shaping is the slowing down or"throttling" of Net activity.
CAIP said that this practice by Bell was interfering with its members' ability to serve their customers.
As part of its application, CAIP asked for interim relief in an order that would require Bell to immediately stop throttling its Gateway Access Service.
On May 14, after receiving further submissions, we denied CAIP's request for interim relief. We determined that they had failed to show that their members would suffer irreparable harm without that relief.
Since then we have asked for, and received, more specific information from CAIP and Bell. We expect to deliver our final decision on CAIP's application in the fall.
We are currently addressing the traffic-shaping issue in the context of Bell's wholesale broadband access tariff.
But this particular dispute is just the tip of the iceberg. Under the heading of"net neutrality" lies a whole range of questions affecting consumers and service providers. Fundamental issues of technology, economics, competition, access and freedom of speech are all involved. Here are some of them.
Access to content or services
- Blocking of services or websites.
- Preferential treatment for certain content providers.
- Modification of content.
Carriage-related issues
- A review of limitations on which devices can be connected to the networks of different providers.
- Disclosure by ISPs to ensure transparency in their service agreements with consumers. This would cover issues such as network management and speed.
And there are also privacy concerns.
In the coming year, we will continue to study the issues surrounding net neutrality. This process could evolve into a major public consultation in order to obtain the views of interested parties.
It is one of the polarizing issues of the day. It will have to be addressed and debated by all of us.
Dispute resolution
We are also taking a look at our role in the process of dispute resolution.
As competition in the industry has developed over the years, competitive disputes have quite naturally multiplied. And over the years, the CRTC has developed and refined a set of tools to help resolve these disputes as quickly and efficiently as possible.
We have at our disposal two basic approaches:
- On the one hand, Alternative Dispute Resolution, or mediation.
- On the other, arbitration, including expedited hearings.
With mediation, Commission staff can help the parties to break through an impasse and arrive at their own negotiated settlement.
In the more formal process of arbitration, the Commission receives submissions from both sides, and then renders a binding decision.
Both these approaches are useful and important. We are now in the process of clarifying how they can best be structured within the CRTC.
- The roles of mediator and arbitrator are very different and must be sharply separated to avoid any conflict or appearance of conflict.
- Mediation and arbitration must be performed by different people within the organization.
- The two areas must be sealed off from each other so that there can be no horizontal flow of information between them.
We believe that expedited hearings will become more and more prominent as forbearance continues. So we want to make it as efficient as possible. Technology can help; we are considering the introduction of videoconferencing as a key part of the process.
Convergence
I would now like to return to a subject that I raised when I spoke at this Summit a year ago. I said then that we need to rationalize our telecom regulation.
That need has become still more pressing.
The telecommunications system that serves the Canadian public consists of three elements:
- technology
- industry, and
- regulation.
The technology of telecom has converged with the technology of broadcasting. The digital stream doesn't care if it's carrying a text message or a movie.
Similarly, the telecom industry has converged with the broadcasting industry. Phone companies deliver television, and cable companies deliver phone calls. And they're chasing each other's customers.
What has not yet converged is the legislation and the regulation.
It's our view that eventually but inevitably, telecommunications and broadcasting must be governed under one converged Act.
But in the meantime, there are intermediate steps that can be taken.
First, we can make administrative and regulatory changes using the authority that we already have under the existing legislation.
We will soon be making public a series of changes that we are proposing to make in our Rules of Procedure. Our aim is to harmonize and streamline those rules to suit the converging world in which we are already operating.
These changes will also help us pre-position ourselves for future legislative developments.
They have emerged from a major strategic review called Future Direction. We launched it to ensure that the CRTC adapts itself to suit the changing realities. It covers all aspects of our operations, with input from people throughout the organization.
The changes in Rules of Procedure will, of course, affect all stakeholders in the industry. We will therefore be inviting your comments on them.
We can also respond to convergence by seeking a more rational assignment of responsibilities. This will require amendment of the existing Telecommunications Act.
Spectrum regulation
A good exAMPle is spectrum regulation, which was one of the issues raised by the Telecommunications Policy Review Panel in 2006. Their report noted that most other OECD [Organisation for Economic Co-operation and Development] countries had merged these spectrum and telecom regulation within a single agency.
Canada, however, has not. Here's an exAMPle of what can happen under our present divided regime: When a radio applicant wants to launch a new station or change a broadcasting frequency, they must receive approval from both the CRTC and Industry Canada.
This often creates delays in licensing, additional expense for applicants and duplication of activities.
As a first step, the Commission and Industry Canada must fully integrate their processes so as to ensure that:
- there are no outstanding issues as to starting the process and the sequencing of the various steps required
- there are clear time limits and no unnecessary delays, and
- there are no determinations that are incompatible with each other.
These are interim steps. In the long run, we should attempt to heed the Review Panel's recommendation that spectrum management be moved to the CRTC to ensure a consistent and unified approach.
This makes sense in view of the convergence of technologies and industries.
But so far nothing has been done in response to that recommendation. Evidently, it is for the government to decide how much of the authority over spectrum shall move to the Commission. But we believe that it makes sense for the CRTC to assume responsibility for the licensing of spectrum for both telecom and broadcasting.
There is another improvement we would like to see in a revised Telecommunications Act. We need stronger powers of enforcement.
Specifically, we need to have the government grant us the power to impose AMPs - Administrative Monetary Penalties - in all the areas under our jurisdiction.
This need is more important now than ever before, given our new regulatory approach. We are following the government's Policy Direction that requires the Commission to give priority to market forces. We are moving toward smarter and lighter regulation.
In this spirit, we are looking for ways to give up the old ex ante model of regulation, which required our seal of approval in advance of any significant changes to be implemented by a service provider.
With a move to an ex post approach, providers will have more freedom to innovate, and the Commission would intervene only when they have violated the rules.
However, in order to protect consumers and other customers of the service providers, our interventions must have some teeth. That is why I have been insisting, every chance I get, on our need to have full AMPs powers in this age of forbearance.
We currently have those powers in limited areas. For example, we can levy financial penalties for violation of telemarketing rules, including those that cover the National Do Not Call List.
We need to have these penalties available to us across the board. To regulate in a converging environment, we need converging powers of enforcement, not a patchwork. AMP are the tools that will make it possible to make the new streamlined system work effectively.
I've made this point repeatedly and I will continue to make it. I urge you to let the Minister hear your voices heard in support of this important change.
A single Act
Even as the Commission works toward incremental improvements in telecom regulation, we recognize that a unified legislative framework must at some point be enacted for telecom and broadcasting.
Developing a strategy
But it is going to be a complex and difficult process to develop a converged regulatory strategy.
- First, we need to build up a very clear picture of convergence in technology and in the telecom and broadcasting industries - including broadcasting over the Internet.
- Second, we need to develop a whole new concept for the regulation of the converged industry that is now taking shape.
- Third, we need to validate and refine that concept by consulting with industry.
- And finally, we as the regulator, jointly with industry, must propose this concept to the government and support it with our advocacy.
There is a lot of thinking and a lot of hard work to be done.
I'm very glad to be here today, because this Summit provides an ideal opportunity for all of us to trade ideas on all these issues that demand our attention and action.
Thank you very much.
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