Chris MacDonald to the annual conference of the Canadian Communications Systems Alliance

Speech

September 17, 2018
St-Andrews, New Brunswick

Chris MacDonald, Commissioner, Atlantic Region and Nunavut
Canadian Radio-television and Telecommunications Commission

Check against delivery

Good afternoon and welcome to New Brunswick.

I want to start my remarks by acknowledging that we are meeting on the traditional territory of the Peskotomukhati. I pay respects to their Elders.

It is my distinct pleasure to speak to you today. I say this for two reasons. One, as the CRTC’s Commissioner for the Atlantic Region, it’s not often that I’m called upon to speak on behalf of the Commission in my own backyard. I was born and raised in New Brunswick—about 90 minutes from here. I have spent my career working in Atlantic Canada. I even rent a cottage each summer just a few blocks away from this hotel, so being here in St. Andrews is like coming home.

The second reason I’m happy to be here today is to pay tribute to the rich history and broad diversity of the CCSA. Think of how far your organization and its member companies have come in the last 25 years.

As you well know, when the CCSA was created in 1993, it was a purchasing group for small, independent cable operators. Its focus was to buy programming, hardware and services for its member companies. The idea of incorporating telecommunications services into CCSA’s mandate was undoubtedly far-fetched.

In 1993, cable was the name of your game—and indeed of your association. (Congratulations on adopting your new, more forward-looking brand, by the way.)

In 1993, the Internet as we know it did not exist. Connectivity was about bringing high-quality television services into your subscribers’ homes and convergence with telephony was a decade away.

Tuned in

How much has changed in a quarter century! I am pleased to say that CRTC and CCSA have forged a mutually beneficial working relationship over that period.

Your organization successfully brings the unique perspectives of more than 100 independent Internet, television and telephone service providers from across the country into our public discourse on the future of Canada’s communications system. You have provided essential input in our hearings into the future of television, basic telecommunications services, the Wholesale Code, and countless other proceedings.

You contribute in other ways as well. Each year, the CCSA provides the Commission with invaluable data on the profiles, subscribers and activities of your members. This effort to coordinate the collection of data is greatly appreciated by the CRTC staff and Commissioners.

We at the CRTC are also very appreciative of the role played by CCSA in representing the interests of smaller, independent service providers. Your members are the companies that provide connectivity to Canadians in under-served and traditionally hard-to-reach markets.

They create competition in the market for Internet, telephone and television services and, more broadly, allow even greater numbers of Canadians to participate in the digital economy.

I salute you for this, and I want you to know that the CRTC is doing all it can to modernize and streamline our processes to be of as much help to the CCSA and its members as possible.

Support for small TV providers

Some Canadians may overlook the vital role played by small television service providers in the marketplace. It’s easy to do when our biggest cities are served by a variety of large, high-profile companies. But I would like to take this opportunity to outline a few of the steps the CRTC has taken in recent decisions to support the interests of small providers and to give them the tools they need to serve their customers.

I’ll start with two of the outcomes that came from our 2015 review of our television policy—a review that the CCSA made important contributions to.

Let’s rewind to March 2015, when the CRTC released a roadmap that would maximize choice and affordability for Canadian television viewers. Our goal was ambitious: to arrive at a point where Canada’s television system adapts to the universe of choice in front of it.

I won’t delve deeply into all the changes we made, but I will say that we took steps to enhance the profile of smaller TV service providers in the marketplace. We heard from the CCSA, and from Canadians from all across the country, that there was a need to foster competition among television service providers. That the market for such services would suffer if it were left in the control of just a handful of the biggest companies.

We listened, and we acted. We changed our existing exemption order for smaller TV service providers to allow them to enter larger markets and compete against licensed providers while remaining exempt.

Flexible regulation of this kind opens the door to competition in markets that have traditionally been dominated by large players. It also challenges incumbents to offer greater choice and more innovative services to Canadians. Those are positive steps that I hope are helping you reach new subscribers.

Of course, that step on its own was not enough to guarantee the sustainability of smaller TV service providers. Knowing that many of you depend upon wholesale relationships with larger providers to bring programming to your subscribers, we took steps to help ensure a more level playing field in negotiations with programmers.

Our Wholesale Code prohibits terms that prevent the distribution of channels on a pick-and-pay or build-your-own-package basis; that impose large packages and bundling requirements or prevent changes to bundles; and that set minimum penetration or revenue targets.

Doing so affords CCSA members more flexibility in how they package TV channels and to offer compelling products to their customers.

The Wholesale Code goes a step further by ensuring that negotiations for affiliation agreements are backstopped by the CRTC’s dispute-resolution services. Our dispute-resolution team is committed to preserving the integrity of wholesale agreements and ensuring smaller providers continue to have access to the channels they need to meet their subscribers’ expectations.

Improving access to broadband

I referenced our basic telecommunications service decision at the beginning of my remarks. It’s one of our recent decisions that further prepares Canada’s communications system, its service providers and its customers for the challenges and opportunities of the digital age.

Having devoted most of my adult life to building and delivering connectivity to clients and communities, I strongly believe that this decision will positively impact Canadians from coast to coast to coast.

Briefly, the decision sets a universal service objective for voice and broadband Internet access services on fixed and mobile wireless networks. It sets three key targets:

  1. Canadians from coast to coast to coast and in urban, rural and remote communities have access to download speeds of at least 50 megabits per second and upload speeds of 10 megabits per second.
  2. Service providers such as yourselves offer unlimited data options for consumers with fixed broadband services.
  3. The latest mobile wireless technology is available not only to all homes and business, but also along all major roads in Canada.

Our decision called for 90% of Canadians to have access to such speeds by 2021; and for the remainder of the country to enjoy such service by 2026 to 2031 – and hopefully sooner.

That’s no small task. Because although roughly 84% of urban Canadians already have access to these new standard speeds, nearly two million households elsewhere in the country do not. And here’s the rub. By and large, these are Canadians who are served by the companies some of you represent. They are families who live outside major urban centres, and their ability to participate fully in the digital economy is hampered by a lack of access to Internet speeds that their fellow citizens in urban centres take as given.

Don’t mistake me. I’m not here to criticize your work. We know you’re trying. We know that Canadians in rural and remote regions are the most costly to reach and the most costly to service, and we are tuned in to your efforts.

To that end, the CRTC is introducing a $750-million fund to support broadband-development projects in areas of the country in which these new service standards aren’t available. Once implemented, it will help support challenging business cases in rural and remote areas by funding upgrades to existing infrastructure and the construction of new facilities to enhance and expand fixed and mobile broadband services.

We don’t expect that the broadband targets will be reached overnight. Achieving this objective will take time and may require incremental steps. It will require hard work and investments from the CCSA and its members. It will require focus and funding from all levels of government, and it will require diligence from me and my colleagues throughout the CRTC. We all will have roles to play.

Watch for more information in the weeks ahead. We are in the process of finalizing a number of matters, including the fund’s design, its governance structure, applicant and project eligibility criteria, assessment methodologies to select projects for funding and how funding will be distributed to the chosen recipients.

A call for funding applications will follow in 2019. Stay tuned.

Conclusion

In the broadband era, the role played by small service providers has never been more important. CCSA members connect Canadians in our country’s smallest communities with the services they need to participate in the digital age: data, voice and television. The significance of that role is amplified by the fact that the need for these services has grown and evolved in ways none of us would have imagined 25 years ago.

When the CRTC created the Television Service Provider Code, it recognized that truly small independent cable companies at that time already broadly embodied the principles laid out in the Code. It encouraged all of you sitting in this room to abide by the Code and to continue to offer customer-centric service. And I would urge the CCSA membership to continue to do that – offering high-quality service to your subscribers.

Connectivity is no longer just about bringing affordable, reliable, high-quality television services into the living rooms of your subscribers. It’s broader and far more fundamental. It’s a prerequisite for Canadians to access opportunities for education, employment and business growth, and to participate in our democracy.

Thanks in no small part to the contributions of the CCSA, the CRTC has taken steps to ensure that Canadians will not be left behind in this era of rapid change. Thanks to your association, the CRTC is ensuring the country’s communications system serves more than just those in the biggest cities. Thanks to your association, Canadians all across the country will soon have access to the services that they require to participate fully in the digital economy.

On behalf of the Commission and on behalf of the Canadians we are here to serve, I thank you for those contributions.

Once again, welcome to New Brunswick, thank you for the invitation to speak with you today, and best wishes for a productive and enjoyable conference.

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