Some Modest Proposals for Legislative Change

Friday and Saturday of last week, I attended a conference Rebooting Canada’s Communications Legislation: A conference to examine changes to Canada’s broadcasting and telecommunications legislation, hosted by the University of Ottawa’s Centre on Governance and the Forum for Research and Policy in Communications (FRPC).

I was both surprised and gratified to observe that there was no talk of merging the Telecommunications Act and the Broadcasting Act, an idea whose demise should lighten the hearts of all those who understand all that is put at risk in entertaining such an idea.

It was likewise heartening to learn that nobody seems to believe that the Internet can be regulated as broadcasting – although, to be honest – there is still an appetite for diverting Internet access fees into one or more funds to subsidize Canadian programing.

What struck me most at the conference was the paucity of ideas for changes to the existing legislative framework. Most of the ideas for change revolved around the processes adopted by the CRTC.

The few legislative changes suggested revolved around the elimination of Governor in Council authority review CRTC decisions (an idea with which I do not agree); changing the emphasis placed in the objectives to the Telecommunications Act on reliance on market forces (another idea with which I cannot agree); the abolition of regional commissioners in the CRTC (an idea I am inclined to support); stating qualifications for commissioners of the CRTC in legislation (an idea that would have symbolic as opposed to real importance); permitting foreign ownership of broadcasters; and reorganizing the CRTC such that there would be functional separation between commissioners dealing with broadcasting and those who regulate telecommunications (an idea that I have previously endorsed in these pages).

I would like, modestly, to suggest some minor but significant changes that would have some real importance to the regulatory scope.

  1. Paring back the Definition of Broadcasting.

While I believe as a matter of law that the CRTC has no jurisdiction over point to point communications, there is too much confusion on this issue at a juncture where clarity is essential.

The Broadcasting Act should be amended to eliminate any pretense to the exercise of authority by the CRTC over video on demand services. This would also eliminate any concern that the CRTC has either the power to regulate Internet services or the power to exempt such services from regulation on conditions.

  1. End Licensing by Beauty Pageant

If auctions are good enough to allocate scarce spectrum resources to our mobile carriers, there is no reason why the CRTC or anyone else should spend its precious time and resources trying to decide whose beautiful child is the most adorable and worthy. Sell radio and TV station licences to the highest bidders. Set some minimum requirements up front so they are factored into the prices bid, but get out of the business of deciding who is best able to succeed and who is best able to contribute to the objectives of the Broadcasting Act. Let money speak in a place where money is critically important to success. The CRTC should be paying attention to diversity of voices, but this can be done through limiting the number of licences any player can hold in a particular market. The CRTC should also not consider financial viability in respect of applications for new licences in existing markets. Let the market decide.

3.  Lift the Foreign Ownership Restrictions on Cable Carriers

The existing ownership restrictions on all broadcasters are probably counterproductive for all classes of licence. I share David Colville’s belief that even programing undertakings could be foreign owned so long as the regulatory tools were in place to check degradation of Canadian programing and content. No study has ever found that ownership of program originators by Canadians has had a salutary effect on Canadian broadcasting. We have largely witnessed Canadian owners paying lip service to Canadian productions while making their money from the rights they have acquired to distribute American TV shows and music. Let’s stop this nonsense.

The ownership restrictions on broadcast distribution undertakings should be easier to lift. Beyond a certain role in determining the channels they will carry (most of it highly regulated), BDUs are nothing other than telecommunication carriers who, in the past, possessed only one-way communications capabilities. Now, however, cable carriers compete in all market segments with the telecommunications carriers. Cable needs access to capital to be able to compete by upgrading their capacity and infrastructure. Opening this sector to foreign investment would have notable upsides for existing and future customers, and retain some measure of competition in the wireline telecommunications market.  This one of the better ideas of the Telecommunications Policy Review Panel, and one that should, belatedly, be adopted by this government.

  1. Let the Evidence be Seen

I recently wrote on the overuse and misuse of confidentiality to deny challengers the ability to challenge evidence in cost proceedings and other regular business of the Commission. Even when considering specific complaints, the CRCT permits proceedings to be conducted on the basis of redacted evidence. This is fundamentally unfair and results in decisions whose factual basis cannot be relied upon.

The Telecommunications Act should be amended to permit confidential information to be disclosed to the experts and legal counsel of competitors, but not to the competitors themselves. This minor change would enormously contribute to greater confidence in the quality of CRTC decisions.

  1. Let s/he Who Hears Decide

The rules of natural justice dictate that those who hear a contested matter should decide that matter. The CRTC does not act in accordance with this principle under the Telecommunications Act. It is required to do so under the Broadcasting Act. I believe that it is time to apply the rule to all proceedings of the CRTC.

I think it is wrong that someone who has not heard the evidence or posed questions of the parties should vote on the outcome of a matter where they may have had little acquaintance with the record or the diversity of opinion that was present in the hearing room. I recognize that some coherence in decision-making may be lost – but coherence should not trump the decision of the persons who actually heard the matter.

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