Ian Scott to the IIC Canada Communications Law and Policy Conference
November 14, 2017
Ian Scott, Chairperson and CEO
Canadian Radio-television and Telecommunications Commission
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Good morning. Thank you for the opportunity to speak with you today.
Before I start 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.
As many of you know, my term began in September. What you may not know is that, although my immediate past experience is in the private sector, I have a long history of work in the public service. I began my career at the Competition Bureau and worked for several years in the CRTC’s telecommunications sector in the 1990s.
Although a great deal about the CRTC and the industry as a whole has changed since then, many of the challenges facing the communications industry today—carrier neutrality, deepening the public record, ownership concentration—are ones that the staff and Commissioners have dealt with almost routinely during the 50-year history of this organization. And they did so by emphasizing the importance of the public-hearing process as a conduit through which Canadians have made known their views and preferences on particular applications and issues.
I have a great admiration for the work that has been done by those who held this office before me. It is an honour to follow in their footsteps.
A commitment to Canadians
I expect many of you will listen to this speech closely and parse its contents carefully for some indication of which way my fellow Commissioners and I intend to steer this organization in the years to come. You are perhaps looking for a grand vision statement, a tip of the cap that we are pro this or opposed to that. I’m sorry to disappoint you. You won’t find that here today.
I say this in part because the major issues that we have before us will dominate our work for a period of time.
For example, in the policy vision for Canadian content in a digital world that she released in September, Minister Mélanie Joly asked the CRTC to draft a report on future content distribution models and the extent to which these models will support the creation, production and distribution of Canadian programming. We are due to submit that report to the minister’s office by next June.
In addition, we will soon be launching a proceeding to reconsider our renewal decisions for television licences of the large French and English-language ownership groups.
Minister Navdeep Bains has also asked us to reconsider our decision not to mandate access to the incumbent’s networks for providers that rely on WiFi to offer their services to Canadians. Our reconsideration must be completed by the end of March 2018.
So, for the next six or seven months, at least, it’s fair to say we know how we will be spending our days. Additionally, we have a work plan of our own in place that will address current issues as they emerge—such as setting up the $750-million fund to improve broadband access in rural and remote communities that we announced last December. It also includes the licence renewals for the television services with mandatory distribution on the basic service.
I won’t deliver a bolder pronouncement than that about what lies ahead. Instead, I will give Canadians a commitment. Over the next five years, the CRTC will commit to ensuring that we regulate in the public interest and maximize participation in our proceedings using innovative digital tools and social media, and best practices from other regulators.
That’s perhaps not the glorious pronouncement some of you were hoping for. But I hope you nonetheless recognize that the importance of this commitment is in no way diminished by its lack of shine. As a regulator, the CRTC is tasked with acting in the public interest. Our role is to balance many competing ideas and approaches while consistently fulfilling our statutory mandates, and we will uphold that public duty to the best of our abilities. That’s what this organization has done throughout its history. Its course will not change.
The CRTC turns 50
I am a great admirer of history, and the history of the CRTC in particular. So, as I stand before you on the eve of its 50th anniversary, I do so with great pride.
This organization has a long tradition of being at the forefront of regulatory change. The many hundreds of men and women who have worked here since 1968 have adopted thoughtful, creative and made-in-Canada approaches to deal with a vast array of complex regulatory challenges.
Much is discussed today about the changes that broadband and the Internet have rung—and are ringing—across the broadcasting and telecommunications sectors. But let’s be clear: The CRTC has confronted equally disruptive technologies over the last five decades. For example, with the advent of cable, then satellite, and the Internet, the CRTC had to strike a balance between giving Canadians access to a diversity of programming and ensuring that Canadian-made content, which reflects our realities, had a pride of place in the Canadian broadcasting system.
The CRTC has responded in stride to transformative developments in the past half century.
Let me take you back to 1976 when the then Canadian Radio and Television Commission assumed responsibility for regulating telecommunications carriers. Prior to that, the responsibility belonged in the hands of the Canadian Transport Commission—the entity responsible for regulating Canada’s air, sea and land transportation systems.
If that surprises you, consider that the thinking in those days was that the same principles of carrier neutrality that applied to the railway lines ought to apply to the country’s telephone and telegraph networks. Owners and operators of each system were forbidden from discriminating against cargo based on its owner or destination.
(Isn’t it interesting that 40 years later, the CRTC addressed the same question of carrier neutrality when we issued our framework for Internet neutrality? The more things change, the more they stay the same! But I digress.)
In the mid-1970s, the transport commission regulated in a very prescriptive and narrow fashion. It looked upon the burgeoning telecommunications industry as a public necessity—as a utility, in other words, the rates for which had to be kept in check. Its established regulatory procedures were very much like those of a court’s: sworn testimony, cross-examinations and other similar procedures.
When the CRTC took over such responsibilities, it changed the face of telecommunications regulation. It understood what the transport commission perhaps did not: that there were social and cultural implications inherent in every decision it took.
Consider the following statement issued by the CRTC on July 20, 1976. In it, our organization laid bare the approach it intended to take with regard to regulating telecommunications practices.
“The principle of ‘just and reasonable’ rates,” we said, “is neither narrow nor a static concept. As our society has evolved, the idea of what is just and reasonable has also changed… Indeed, the Commission views this principle in the widest possible terms, and considers itself obliged to continually review the level and structure of carrier rates to ensure that telecommunications services are fully responsive to the public interest.”
Those who study the history of Canada’s telecommunications industry consider this statement to be a regulatory apex. The idea that a more flexible, more inclusive approach to regulation beyond simply “just and reasonable rates” would be adopted by this newly expanded regulatory body was a clear signal to Canadians that the CRTC would consider other criteria—social as well as economic—in arriving at decisions that created the greatest public good.
How did the CRTC propose to deliver on this much-expanded vision? By putting in place the procedures with which anyone who observes our work closely is familiar. Procedures that ensure the broadest possible public participation.
Let me share with you another quote from our earliest days of telecommunications regulation. This is from a different announcement, again made in the summer of 1976, in which we described the new tack we would take to review our procedures—first for telecommunications hearings and, shortly thereafter, for broadcasting.
The statement says, “…it is nevertheless the view of the Commission that no single person or group embodies the public interest, and that the assistance and active participation of significant numbers of the general public are indispensable to the decision-making process.”
Now considered routine, this approach was seen as innovative, dynamic and inclusive in the mid-70s. It was a breath of fresh air in contrast to the transport commission’s formal, judicial and constrained processes.
Although much has changed from a technological standpoint since the 1970s, these fundamental notions of innovation, dynamism and inclusivity remain steadfast. Modern technology has opened new conduits for us as a regulator to communicate with the public, and vice-versa. And while the seeds of such developments were undeniably planted years ago, my predecessor deserves credit for bringing the CRTC into the digital age and delivering the ideas and opinions of everyday Canadians into our hearing rooms in real time.
Whether the question before our Commission is about content production, wholesale or retail pricing models, corporate ownership, long-distance telephone competition (a difficult issue that we faced when I worked in the telecommunications sector in the 1990s), the expanding role and significance of the Internet—or any other issue you care to mention, the CRTC’s approach to regulating in the public interest has always been the same.
We invite—indeed, we encourage—stakeholders from across industry, the government and the public at large to share their comments and opinions on the issues before us. We do so with a view to building as complete a public record as possible. To ensure that the views of everyone affected by our decisions—sometimes comparatively few people; sometimes nearly everyone in the country—are reflected in the decisions we make. The decisions we take are based on the evidence presented to us on this public record, and the processes we follow to arrive at those conclusions are entirely open and transparent.
This model has been at the core of the work performed by this Commission since its inception, and will never change.
Regulating in the public interest
When any regulator, the CRTC included, performs its work in the name of the public interest, it must balance various points of view, some of which conflict. It’s not always appropriate to lean on one side of the fence or another: in the interest of corporations or in defence of what the average Canadian needs or wants. The public interest is much more dynamic than that.
We are fortunate to live in a day and age when modern communications tools allow the participants in our proceedings and our hearings to deliver their essential arguments to our Commission quickly and easily, and in ways that invite contributions from more than just the usual suspects: consumer groups, big business and intervenors. The public at large has played a greater role than ever before in the history of this organization in expressing their thoughts directly to the Commission.
The job before us as Commissioners is to weigh what at times can be contrasting ideas. On the one hand, business has its own interests to present and defend. It must answer to its shareholders and maximize returns on investment. Which is entirely appropriate. It is not business’s duty to always promote the public interest.
On the other hand, businesses are but one group of stakeholders. They alone cannot control the market. This is why contributions from individual Canadians and consumer-advocate groups are also critical to informing our decisions. We must hear how proposed changes will affect the lives and livelihoods of everyday people across the country—now, more so than ever, given the prevalence and significance of broadband technology. Anything less would be irresponsible. It would be to exclude the public from the public interest.
When this Commission makes its decisions, it does so based only on the facts it has at its disposal. We depend on the public record to inform the choices we make. When that record is fully developed and rich with information, the decisions we take are strongest and most supportive of the public interest.
Responding to Canadians’ needs
Before concluding, I’d like to take you back to the opening statement I made in September. In it, I indicated that I was looking forward to the new challenge before me: of ensuring that Canadians have access to a world-class communications system.
A world-class communications system is one, in my view, that listens to its citizens and responds to those wants and needs. The public has a role to play by expressing its views, the industry has a role to play by offering those services that meet those needs, and the regulator has a role to play by acting as intermediary between the two. In other words, by acting in the public’s interest when market, or other, forces swing issues too far in one direction or another.
Let me share with you six things that Canadians have told us, loud and clear, they want from their communications system, and let me explain how the CRTC has listened, and is responding to, those expressions.
First, Canadians say they want fast, affordable and reliable Internet access. That’s why, last December, the CRTC announced that broadband is a basic telecommunications service. We also set an ambitious target: all Canadians should have access to minimum download speeds of 50 megabits per second and upload speeds of 10 megabits per second for fixed broadband Internet access services, as well as access to an unlimited data allowance.
Data from this year’s edition of the Communications Monitoring Report shows that industry is well on track. Eighty-four percent of Canadians have access to such speeds. We want to see that figure rise even further.
We also set out that the latest mobile wireless technology, which is currently long-term evolution or LTE, must be available along major Canadian roads, as well as in homes and businesses.
Our decision also established a $750-million fund that service providers may access to build or upgrade their infrastructure for voice and broadband access on fixed and mobile networks. We are currently in the midst of a public consultation to determine how that funding will be rolled out. As is our practice, we opened a public consultation on the matter in April. We are currently reviewing a wide range of comments on the public record with the goal of issuing a decision—in the public interest, of course—next year.
Second, Canadians want to have access to, and be able to create, high-quality and diverse content. This year’s Communications Monitoring Report shows that, in 2016, broadcasters invested more than $3.5 billion to create Canadian-made TV, musical and spoken-word content.
That’s great news, but production is only half of this story. Canadians also want to access that material in the ways that suit them best.
The Communications Monitoring Report shows us that weekly viewing of traditional television—especially among those aged 34 and younger—declined in 2016. At the same time, weekly viewing of Internet television became more popular. Radio listening is following a similar path. Traditional radio listening is also on the decline—again, chiefly among young people—while more than half of Canadians said they streamed audio content online.
These trends are telling, particularly when viewed through the lens of the report on the future of audio and video programming in Canada that Minister Joly has asked the CRTC to prepare.
To inform that report, and so that we may develop as fulsome a public record as possible on the matter, we have opened a two-phase consultation. During phase one, which concludes later this month, we asked Canadians to weigh in with their thoughts on such issues as how they access programming, what they think are the hallmarks of a vibrant domestic content-creation and distribution market, and what policy measures are needed to support that market.
During the second phase of our consultation, we will conduct further public-opinion research to inform our future-looking report even more fully.
Canadians’ third want is to use applications and services on the devices of their choice. As companies continue to innovate in their offerings to Canadians, the CRTC will continue to ensure that Canada’s Internet neutrality provisions are respected. Just as the transport commission before us kept the railway lines open for any and all users, the CRTC has set a clear tone in its regulation of content delivery. The owners and operators of the country’s communications may not discriminate against content based on its origin or destination.
Fourth, Canadians tell us they want the benefits that come from competition: affordable prices and greater choice. Our Commission has issued a series of decisions and held a number of proceedings in the past two years to stimulate even more competition in the wholesale market. These, in turn, will yield greater choice, innovation and affordable prices in the retail market.
We have built an architecture and issued a schedule of interim rates for wholesale wireless services that will give competitors in the marketplace access to the wholesale high-speed services of the large incumbent companies, including over fibre facilities. That will be a significant step forward for those businesses and for consumers. Our next step is to finalize those wholesale rates. Our review to inform that decision is underway. Look for it next year.
In much the same way we did with fibre access, we established interim rates and final terms for wholesale mobile roaming rates among the major national wireless companies and their competitors. Again, we expect this decision will spur further competition into the wireless market, bring innovation into the sector, and offer a wider range of choices to Canadians.
Moreover, at the request of the government, we are now reconsidering whether WiFi-first mobile service providers should have mandated access to roaming on incumbents’ networks.
Here is Canadians’ fifth want. It’s something we can all agree to, I think. They want to be protected against spam and unwanted telephone calls. The CRTC has of course been the administrator of the National Do Not Call List since the tool came into being in 2008. And it’s been used to great effect since. In 2016–17 alone, we issued more than $1 million in penalties and more than 700 warnings to companies that violated the rules. Also last year, more than 3,600 new telemarketing companies from Canada and around the world registered with the National DNCL operator. That’s an increase of nearly 500% from the previous year.
Here’s the fact that I find most compelling about the National DNCL. Since the list was introduced, Canadians have registered 13.4 million telephone numbers. This tells me that Canadians trust the list and believe in the work being done by the CRTC to enforce its rules.
I’ve taken these numbers, by the way, from the most recent annual report of the National Do Not Call List report. The CRTC released this report for the first time in 2017 as a digital-first product. It is a much more accessible and reader-friendly document than ever before, and it sets the template for how we will release similar reports going forward.
The CRTC is also one of the organizations responsible for enforcing Canada’s anti-spam legislation. Alongside our partners in enforcement agencies around the world, we will continue to work diligently to share knowledge and expertise that will help us all improve our ability to shut down spammers and other Internet threats.
The last want I would like to draw your attention to is one expressed, not by the public at large, but by businesses in Canada. Although important, remember that the public’s wants and needs are only part of the conditions that the CRTC studies when we make our decisions. Businesses’ interests matter too.
It’s this: companies are prepared to satisfy Canadians’ demands for world-leading content and technology, but they want to earn reasonable returns on their investments at the same time. In 2016, Canada’s communications businesses spent more than $11.6 billion on upgrading their networks to provide high-quality services to Canadians. It is entirely fair of them to expect returns on those investments.
This list of wants paints a clear picture of the mandate before the Commission over the next five years. They are expressions of the size and shape of a world-class communications system that were given to us at the CRTC from Canadians and the businesses that serve them. These are the targets we have been tasked to meet.
And we will do so as we always have: by regulating in the public interest.
Over its nearly 50-year history, the CRTC has faced countless challenges when it comes to making regulatory decisions. Broadband and wireless are the transformative issues before us today, but cultural protection, long-distance telephony and foreign ownership have proven equally challenging and contentious throughout our history.
As we prepare to pay tribute to the CRTC’s golden anniversary next year, we do so with two goals in mind. First, of drawing on innovative tools and adopting best practices from other jurisdictions to maintain our envied status of being a leading communications regulator—one that always serves the public interest. And, second, of ensuring that Canadians have access to a world-class communications system.
This is the promise that I and my fellow Commissioners make to you today, and the mantra that will guide us over the next five years.
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