Getting ahead of the curve - Jean-Pierre Blais to the Canadian Chapter of the International Institute of Communications
November 16, 2016
Jean-Pierre Blais, Chairman
Canadian Radio-television and Telecommunications Commission
To the annual conference of the Canadian Chapter of the International Institute of Communications
Check against delivery
Thank you for inviting me to be here today.
Before starting my remarks, I’d like to acknowledge that we meet on the traditional territory of the First Nations. I’d like to thank the Algonquin people and pay respect to their elders.
I would also like to congratulate Judith LaRocque, our new Vice-Chair of Broadcasting, for her appointment. I am certain that her experience and her knowledge will be an asset to all of us at the Commission. Welcome, Judith.
With us here today are three special guests I’d like to acknowledge. Daniel Mackwood, Mary Elizabeth Luka and Daniela Mastocola are the first-ever winners of the CRTC Prizes for Excellence in Policy Research. I thank them for the great work they’ve done to advance the study of public policy as it relates to information and communication. Well done.
As I planned today’s remarks, I gave some thought to the last time I spoke at your annual conference—in October 2012. Back then, I forecasted that by the end of my mandate, the CRTC would place Canadians at the centre of their communication system. I outlined a vision for re-shaping the CRTC into an institution that Canadians trust to not only maintain and develop a world-class communication system, but also to defend their interests as creators of content, consumers of media, and citizens of their country’s democratic, economic, social and cultural lives.
Mark Carney, the former governor of the Bank of Canada and current governor of the Bank of England, once observed, “Trust comes in on foot and goes out in a Ferrari.” He was absolutely right. For public institutions, such as the Bank of Canada and the CRTC, trust is difficult to build and even harder to maintain. Yet without the public’s trust, our work is flawed. And once trust is lost, it can be hard to regain.
In the CRTC’s case, trust is something bestowed upon us by the public as a result of doing good work. It is the by-product of doing the right thing. Over the past four years, I and my 16 colleagues that currently sit or have sat on our Commission, dozens of members of our senior staff and more than 450 employees across the country have acted to restore the public’s confidence in this institution. We have taken bold steps to do the right thing in the face of sweeping and transformative change, to earn the public’s trust by re-thinking our approach to regulation. Let me explain.
We live now in a post-convergence age where that which is communicated has been completely de-materialized. Voice is an application, content a bit. In the post-disruption age, everything is about broadband. That simple fact opens up a whole new range of issues and challenges that many of the world’s top information, media technology and communications companies grapple with every day: data protection, digital inclusion, mobile payments, cloud-based computing on servers beyond national borders, privacy, security, the Internet of Things, malware, the dictatorship of algorithms. And so on.
We as a nation have to stop spinning our wheels on legacy issues and embrace where we’re heading. We have to get ahead of the curve. The conversation is no longer about the number of hours of Canadian content on TV. It’s about telling good, made by Canada stories to the world. The CRTC’s role now is to focus on outcomes, rather than making rules. As we do so, we leave outdated concepts behind, we prove to the public that we’re doing the right thing, and we regain their trust.
Four years is the normal mandate of a majority government in this country. It’s also a good length of time in which to take stock of accomplishments. That’s what I want to do today. I want to tell the story of how the actions taken and decisions made by the CRTC over the past four years have been inspired by our desire to get ahead of the curve and regain the trust of Canadians.
Getting ahead of the curve
In 1924, the American journalist Robert Quillen famously observed, “Progress always involves risks. You can’t steal second base and keep your foot on first.”
I couldn’t agree more. Getting ahead of the curve is a risky proposition, whether in product development, social progress or regulatory adaptation. Such thinking is always greeted loudly by naysayers, many of whom come out in droves when the CRTC issues a new decision. They take to TV and radio broadcasts and their own private blogs to spread fear and worry, and I dare say make false and misleading statements.
Yet the change that we at the CRTC have implemented over the past four years wasn’t created arbitrarily. Nor was it universally panned. It was carefully meted out, and rooted in good, measurable evidence. It was based on the public record. On the facts and stories that Canadians—people across the country—have told us.
Canadians told us they wanted to see new approaches to regulation that responded to the disruption created by broadband and that gave them a choice of affordable and innovative services.
Canadians told us they wanted to see new approaches to regulation that enabled them to more fully participate in their democratic, economic, cultural and social lives.
Canadians told us they wanted to see new approaches to regulation that stripped away old entitlements and empowered them to make better-informed choices.
We listened, and we delivered.
Our responses to these calls stand out as perfect examples of the changes we have made to propel the CRTC ahead of the curve and back on a course to becoming a trusted Canadian institution.
Adapting to the disruptive nature of broadband
I’ll start with broadband, because it’s easily been the greatest single driver of change—for regulators, consumers and companies—in generations. Consider for just a moment a then-and-now comparison of the world’s 20 largest information, media technology and communications companies based on market capitalization in 2005 and 2015.
Half of the companies that led 2005’s list are no longer among the top 20 in 2015. By the same token, those leaders in 2015—Apple, Google, Facebook, Amazon and Disney—are service providers and content creators that have thrived in the broadband age.
Trends from 2012 to 2015 show important broadband-driven changes in the way in which people use technology. In 2012, about 60% of Canadian households subscribed to services of at least 5 megabits per second (Mbps), and all high-speed households downloaded about 28 gigabytes worth of content each month on average. By 2015, about 80% of households subscribed to download speeds of at least 5 Mbps, and all high-speed households downloaded a whopping 93 gigabytes of content a month. Those are increases in the realm of 230%.
They used that extra bandwidth to stream more TV and movies—about twice as much as they did in 2012. But they also used it to do business and access a range of services—government, health care, education, banking and others.
As a result of such change, the top players in the media today are changing. They’re not the same as they were 10 years ago, and they won’t be the same 10 years from now. Regulation has to change too, in order to stay current and to achieve the policy objectives set out by Parliament.
The CRTC has embraced this duty. The decisions we have taken since 2012 were made with the goal of redefining Canada’s communication system for years to come, and enabling Canadians to be active participants in the digital economy. They are paving the way for fast broadband service—fibre, in other words—to be offered at competitive rates across the country. They are facilitating the delivery of broadband services and 4G wireless services to hundreds of rural and remote Canadian communities. And they are preparing Canadian television creators and producers to imagine and develop content for a global, digital marketplace that is found and enjoyed by people the world over.
Ten years ago, the CRTC talked in terms of sustaining a broadcasting regime that protected Canadian content. No longer. Broadband has forced us to re-visit that discussion—to think in terms of outcomes, rather than rules. Parag Khanna wrote “connectivity, not geography is our destiny.” Those in the cultural sector who believe that we will be able to build a great protective wall around Canada, so we only tell narratives by Canadians to 36 million Canadians divided into two linguistic markets, are bound to be sorely disappointed. The future, as I have said before, lies in promotion, not protection.
We find ourselves today in the fourth industrial revolution, in the post-disruption age, when cultural expression and human imagination are coded in bits that can travel around the planet at the speed of light. Our cultural sovereignty must be defined, promoted and evaluated on a world stage. Connectivity makes it so. I will not foolishly attempt to stop the tide of connectivity through ineffective and nostalgic regulatory action.
Creators must now think in terms of promoting and branding content made by Canada, in terms of outcomes, in other words. They must shift their resources to productions that tell fabulous stories to the world about Canada, rather than to programs that just tell Canadian stories to Canadians.
Guy Lawrence, the now-departed CEO of Rogers Communications, recently called Canada “a global cultural powerhouse.” He is right. Canada’s hot. Drake is Spotify’s most streamed artist ever. This summer, four of the top 10 spots on Spotify’s global playlist were performed by Canadians. Ryan Reynolds, Rachel McAdams, Ryan Gosling and Denis Villeneuve are among Hollywood’s A-listers. Xavier Dolan’s films have won prestigious prizes at Cannes. Lilly Singh is one of the top YouTube stars in the world today. Toronto and Vancouver are thriving film production hubs.
There’s talent here. It’s abundant. Canadian producers and creators just need to change their tacks to exploit it. They’re missing out on selling magnificent cultural products to the world. They’re thinking provincial when they should be thinking international.
The news media aren’t always helping. They are replete with spilled ink and exhaled air on the subject of lead actors and certification-system points. Our critics argue that the CRTC’s shift from protection to promotion will send shockwaves through Canada’s production business. That a difference of two points on a scale will cause entire industries to crumble.
Such talk undoubtedly makes good cocktail conversation, but it ignores the fact that we have adopted the same standard that has been used by the Canadian Audio-Visual Certification Office since 1995 for the Canadian Film or Video Tax Credit. And it ignores that the criteria have been around in some form since the 1920s.
Similarly, those who are calling for the CRTC to stop what it’s doing until the Minister of Canadian Heritage has completed her review ignores that Parliament has bestowed upon us a mandate to act in the public interest. It is for this reason that the CRTC is an arm’s length administrative tribunal. Those who are asking us to stop are operating under the belief that the Minister’s review will be favourable to them. The disruptive nature of broadband is not taking a pause while the review is ongoing. We cannot afford to be at a standstill. We have a job to do, as Parliament intended, and we’ll continue to do it.
It would be gravely irresponsible for the CRTC as the industry regulator to ignore such change and not adapt its regulations to suit. Already, more than two-thirds of the $65-billion sector that the CRTC oversees is tilted on the telecommunications side of our ledger. Broadband is a fundamental enabler that is shaping Canadian society and the world economy—and will continue to do so over the next two decades. As the industry continues to evolve, telecom regulation in the future will be much more focused on connectivity and capacity issues than on voice-related issues. Anyone who is still thinking of these legacy issues is spinning his or her wheels in the mud.
By the way, for all the hand-wringing that occurs in this country over the effects of changing rules on incumbents, it’s worth remembering that it’s sometimes easy to lose sight of the bigger picture. Those outside our borders are marveling at the work we’ve done. The world sees Canada as a leading-edge innovator when it comes to responding to broadband’s influence. Officials from India, the United States, Sweden and Australia are looking to us for advice and guidance on how to prepare for life in the post-disruption age.
More’s still to come. I haven’t mentioned our decisions on next-generation 9-1-1 services, on wireless public alerting, and on basic telecommunications services, all of which are scheduled in the months ahead.
Outcomes that serve Canadians
While broadband has opened new paths for citizens to connect with institutions that are fundamental to their democracies, in other cases, it has threatened a disservice to the long-term health of trusted traditional media.
The CRTC has balanced such interests in our work to regulate a communication system that serves Canadians as informed, aware and contributing citizens.
I have spoken publicly on a number of occasions about the importance of the traditional news media, and local news media in Canada. Yet local news is under threat. Newspaper owners and local broadcasters are closing the doors on their enterprises in the name of increased costs and lost revenues. Digital media, they say, can do just as good a job of reporting the facts—and at far lower costs.
I disagree. Because although these digital media offer innovative new approaches for people to access news, they fall well short of replacing the insight and intelligence brought to bear on the facts of the day by a trained reporter.
I’m not alone in holding this opinion. Canadians spoke loud and clear about their high regard for local news during our Let’s Talk TV conversation and our hearings into the future of local and community television. That’s why the CRTC took bold steps to ensure the continued longevity of local news programming. We mandated that local television stations be part of the small basic package that all television providers are required to offer.
We also set out a framework for local and community programming that sets new minimum requirements for broadcasting news and other locally relevant programming. That creates a new funding vehicle to help independent stations produce local news programming. And that rebalances funding already in the system to give large private broadcasters the flexibility to keep local stations open and fund the production of quality local newscasts.
The notion of fostering a communication system that serves Canadians also extends to meeting their particular needs. Not everyone communicates over conventional voice or print media.
This past September marked the launch of video relay service, which simplifies communications between Canadians who are deaf, hard-of-hearing or speech impaired and other Canadians. The service, which is a uniquely made-in-Canada solution, enables those whose first languages are American Sign Language or Langue des signes québécoise to participate fully in Canada’s communication system, and in Canadian society more broadly.
We also launched a trial of text with 9-1-1 emergency services, and required telephone and wireless companies to upgrade their networks to accommodate such a facility, so that Canadians with hearing or speech impairments can more effectively access emergency services. We are also about to open a hearing into next-generation 9-1-1 emergency services that will explore the possibility of sending text messages, photos and videos to 9-1-1 operators, and to give emergency responders new ways of keeping Canadians safe.
Finally, we required broadcasters and television service providers to relay emergency alerts—such as Amber Alerts, severe weather alerts and alerts about water contamination, industrial disasters and other emergencies—to Canadians. We also launched a consultation into the role that wireless service providers have to play in the National Public Alerting System.
By helping to protect local TV news services and promote digital inclusion for those not always well served by conventional communications technology, we demonstrate our commitment to stay ahead of the curve and deliver the outcomes that Canadians need and want.
A dynamic marketplace and an empowered consumer
The CRTC has applied innovative regulations in the public interest. We have acted to foster a dynamic marketplace in which an empowered consumer can make informed decisions.
Consider the changes we introduced as part of Let’s Talk TV that required television service providers to offer reasonably priced bundles of channels that speak to Canadians’ diverse interests and needs. Beginning next month, all television providers must offer a basic service package and give consumers the option of choosing channels individually, or in small bundles.
Broadcasting wasn’t the only industry to which we applied innovative regulations in the public interest.
We took a long look at the relationships between large and small wireless service providers, and the relationships between Canadians and their providers. We reasoned that regulation could help restore fairness in each. We therefore began regulating some of the wholesale rates that Bell, Rogers and TELUS charged other Canadian wireless companies to ensure that the smaller players can compete in the market, that Canadians can benefit from sustainable market competition, and that the big players continue to invest in essential network infrastructure.
We took a similar approach for wireline services to foster competition in the broadband market. Large companies will have to share their fibre networks with competitors, in order to give Canadians more choice of faster Internet service that will power the broadband home and business of the future.
Some incumbents grumble about having to provide wholesale access to their competitors. I invite them to look abroad. In Australia and the UK, for example, consumer pressure and government policy has resulted in, or is seriously contemplating, the structural separation of broadband providers between wholesale and retail. If the winds of change blow too hard and they refuse to bend in the wind, the tree may break at the trunk rather than lose a few leaves.
We also believe that consumers ought to have the freedom to change their service providers—television, wireless, Internet or otherwise—as they see fit. We stripped away the requirement that consumers give 30 days’ notice prior to cancelling their services. In addition, we drafted codes for television and wireless service providers that help subscribers better understand their service agreements, empower them to make informed choices about their providers, and give them tools to resolve disputes fairly and effectively.
Finally, we’re addressing issues about net neutrality. In other words, the ways in which providers offer their Internet services to consumers. In 2014, we examined an application that claimed that Bell Mobility, and later Videotron, gave themselves an unfair advantage in the marketplace by exempting Bell Mobile TV and Illico.tv from data charges. Their competitors, however, were not afforded the same privilege. Content that their subscribers watched from other websites or apps counted against their data cap. We ordered Bell and Videotron to eliminate such exemptions. We want an open and fair marketplace for mobile TV services to spur innovation and choice for Canadians.
Some might say that decisions of this nature curb providers’ ability to innovate in the changing marketplace. That regulators are getting in the way of progress. I couldn’t disagree more. We’re all for innovation. We want broadcasters and telecommunications providers to move their industries forward by creating new content and opening new channels for consumers to access media. But when the drive to innovate steps on the toes of the principle of free and open access to content, we will intervene. Abuses of power in the system will not go unchecked.
This application wasn’t the last word on net neutrality, by the way. We recently held a hearing into differential pricing—the practice of service providers offering the same or similar products or services to customers at different prices. We heard a number of different views during the hearing, and during our consultation, and will issue our decision in 2017. This hearing—and no other—was the most crucial on our fall schedule. You do not drive into the future looking through a nostalgic rearview mirror.
Let me share just one final thought on change in the broadcasting market. The CRTC has watched the development of streaming, video-on-demand services like Crave and Shomi with some interest since they were launched in 2014. It came as a shock, therefore, to hear in September that Rogers and Shaw were closing the doors on Shomi. Far be it for me to criticize the decisions taken by seasoned business people, but I can’t help but be surprised when major players throw in the towel on a platform that is the future of content—just two years after it launched. I have to wonder if they are too used to receiving rents from subscribers every month in a protected ecosystem, rather than rolling up their sleeves in order to build a business without regulatory intervention and protection.
Innovations in consultations
I’ve spoken at length on what we did to restore Canadians’ trust in the CRTC. I’ve not yet spoken of how we went about this important business. I opened my remarks in 2012 by talking about the imperative before us to listen to Canadians and bring them into the centre of our hearings, so it seems fitting that I close there today. Recall that back then, Canadians had recently named the CRTC among those national institutions they trusted least. That finding was a slap in the face for us, but it gave us pause to re-think the ways in which we upheld the public interest.
Everything we have done from that point to this has been with a view to upholding the public interest and bringing Canadians into the centre of discussions about the current and future states of their communication system. Responsiveness engenders trust.
Our approaches have been creative and, I dare say, innovative—ahead of the curve, undoubtedly. We’ve hosted online discussion forums, opened a Reddit thread and staged Facebook live events. We’ve held hearings in American Sign Language and Langue des signes québécoise. We’ve introduced choicebooks, questionnaires and Flash conferences. We’ve travelled to points never before visited by CRTC Commissioners in their official capacities, for instance to Inuvik, which is north of the Arctic Circle. Now others are emulating our lead.
We did all of these with the goal of transforming our hearing room in the National Capital Region into a national forum for open debate.
I’m proud to say that most of our innovations have born fruit. Canadians have welcomed the opportunity to participate in hearings in new and current ways, and the opinions they’ve shared have opened our eyes to a multitude of ideas. They see themselves at the centre of their communication system and I hope they trust us at least a little more than they did four years ago.
I’m also proud to say that our work has been recognized by the broader public sector. Since 2014, CRTC and its employees have been decorated with five Public Service Awards of Excellence (including two for Excellence in Policy: for our work on modernizing telecommunications in Northern Canada, and for our efforts to modernize the television system), two awards from the Community of Federal Regulators and one APEX Award. Clearly we’re doing something right in the eyes of our peers!
What does the future hold for communications in Canada? More change, I’m certain.
Forty years ago, none of us would have ever imagined a day and age where we carried supercomputers in our purses and pockets. Ten years ago, we wouldn’t have foretold of Facebook becoming one of the world’s most important media and technology companies. Who knows what’s next?
I have no doubt that innovative new technologies and processes will bring new products and services to bear on the market, both here in Canada and around the world. I am equally sure of three other things.
I am sure that the major players in the communications and media industries 10 years from now will not be the same as those that dominate the market today. Change begets change. Those companies that listen to consumers, that read the tea leaves, that lift their feet off first base with a view to stealing second will join their rightful places among the world’s leaders. Those that don’t, that rest on their laurels and grow comfortable on entitlements will see their positions usurped.
I am sure that consumers will become further empowered to access audiovisual content on devices, in ways and on schedules of their choosing. Content may be king, but the viewer is emperor. Choice is the imperative that drives communications today. Woe betide anyone who ignores that imperative.
I am also sure that, to be effective, regulators must listen and respond to those whom they serve. Trust, as Mr. Carney tells us, is hard to build and easy to lose. Yet once lost, trust is not irretrievable. It can be rebuilt, but doing so takes time, and an unwavering commitment to responsiveness. That is what we have done here.
I am proud of the changes that we at the CRTC have introduced in the past four years. They’re ahead of the curve. They respond to broadband’s disruptive nature. They create a dynamic marketplace for products and services. They empower consumers. Most of all, they respond to needs and ideas expressed to us by the very people in whose interests we act: Canadians.
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