Speech by John Keogh, Senior General Counsel, and Christianne Laizner, General Counsel, Telecommunications, Canadian Radio-television and Telecommunications Commission

To the Senate Standing Committee on Transport and Communications

Ottawa, Ontario
May 30, 2012

Check against delivery

 

Thank you, Mr. Chair.

We are pleased to appear before the members of this Committee to explore how the implementation of Bill C-38 will impact our activities at the Canadian Radio-television and Telecommunications (CRTC). As you are aware, several elements of the legislation have a direct bearing on the Telecommunications Act and the delivery of our mandate under that Act.

I’d like to introduce my colleague from the CRTC. Christianne Laizner is the General Counsel for Telecommunications.

The CRTC’s Chief Compliance and Enforcement Officer, Andrea Rosen, is unable to join us this evening due to a scheduling conflict. She is attending a meeting with the members of the International Do Not Call Network, which is an important component of our compliance strategy. We will explain this strategy in greater detail in a few moments.

Foreign Ownership

I would like to begin with the proposed changes to the foreign ownership rules for telecommunications companies. I understand that you explored these issues in depth with Minister Paradis [Chrisitan Paradis, Minister of Industry and Minister of State (Agriculture)] and representatives from Industry Canada yesterday, so I will keep my remarks short.

I would first note that our role on this file is quite limited. The government and Parliament are responsible for setting policies and passing legislation. The CRTC implements federal legislation, ensuring that the policies are followed.

I would point out that we track total annual telecom revenues and publish this number in our annual CRTC Communications Monitoring Report. This means that the 10% threshold referred to in the legislation will be known to industry players.

We also continue to track ownership levels for telecommunications entities operating in Canada through regular filing requirements.

I would now invite my colleague, Christianne, to address the changes to the National Do Not Call List.

National DNCL

Thank you, John.

The National Do Not Call List, or DNCL for short, is a very successful program that is maturing and proving to be very popular with Canadians.

Chances are, you are among the Canadians who have registered over 10.8 million phone, fax and cell numbers since its launch in September 2008. The National DNCL allows Canadian consumers to register free of charge to reduce the number of unsolicited telephone calls they receive. With some exceptions, established by Parliament, telemarketers are prohibited from calling consumers who are registered on the list.

Public feedback about the National DNCL’s effectiveness in blocking unwanted calls is very positive. In a recent survey, nearly eight-in-ten registrants (78%) reported they now receive fewer telemarketing calls than they did before adding their telephone number to the national no-call list.

So we welcome the government’s decision, outlined in Budget 2012, to provide us with the authority to establish a mechanism that will ensure sustainable funding for our National DNCL activities. This will enable the CRTC to maintain its highly effective compliance and enforcement program so it can continue to meet Canadians’ expectations. Stable funding is critical to the National DNCL’s future success.

Public support for the program is impressive. Since December 2009, we’ve seen a 25% increase in consumer registrations. And we receive roughly 2,500 new registrations each day.

Equally encouraging, since December 2009 there has been a 25% increase in telemarketer registrations, with roughly 9,500 telemarketers currently registered with the National DNCL operator.

Most noteworthy, over the same time period, there has been a 40% decline in absolute numbers in the amount of monthly complaints we receive.

These results reflect both increased awareness of the program and how it works, and the effectiveness of our compliance efforts.

Our job at the CRTC is to ensure that, when Canadians register their numbers, they do so with the confidence that telemarketers will respect their wish to maintain their privacy.

We’ve adopted a two-pronged approach to achieve this objective: We make sure telemarketers understand their obligations under the law and we act in response to legitimate complaints.

We make every effort to manage our resources prudently and strategically to foster compliance with the law. We use a triage process to establish enforcement activities that are measured, predictable and fair.

We use different tools to encourage compliance and enforce the rules, ranging from outreach programs to warnings and monetary penalties. Many factors are taken into account to help us focus our resources, such as the number and frequency of complaints, and whether the telemarketer is a repeat offender.

As of April 30, 2012, we have issued 179 citations and 48 notices of violation with monetary penalties. Penalties are determined based on the size of the companies and the severity of the violations, among other considerations.

Through its enforcement activities, the CRTC has collected over $2.2 million in penalties, which have been remitted to the Receiver General for Canada.

Our efforts extend beyond enforcement, as our overarching goal is to maximize compliance.

We cover the entire waterfront when it comes to compliance. We put a heavy emphasis on outreach to telemarketers to help them understand the rules so they will respect their obligations.

We undertake public education activities to enable more consumers to benefit from the program and to help them understand how the National DNCL works. One of the rewards of these efforts is that Canadians now better understand exemptions under the program. We receive far fewer complaints than we did in the past and those we do receive are more often valid complaints.

We are also working with international partners to track down telemarketers operating outside our borders. For example, in October 2011, the CRTC reached an agreement with two Mexico-based telemarketers selling Cancun vacation packages to Canadians. This agreement, which was secured through a close collaboration with Mexico’s consumer protection agency, requires the telemarketers to abide by Canadian rules.

That same month, we were the co-founders of a new International Do Not Call Network. In partnership with the Australian Communications and Media Authority, we brought together 12 enforcement agencies to form this international network. The CRTC and our Australian counterpart serve as the network’s co-chairs while the U. S. Federal Trade Commission is hosting the secretariat.

We are engaged in both bilateral and multilateral discussions with our international counterparts. When Bill C-28, Canada’s anti-spam legislation, comes into effect, it will enhance our ability to share information with other jurisdictions. The legislation allows for reciprocal sharing of information for investigative purposes.

Mr. Chair, as I stated at the beginning of my remarks, stable funding is crucial if we are to continue this progress and build on our early successes. Proposed changes to the Telecommunications Act would allow the CRTC to create regulations to recover the cost of investigations and enforcement from the telemarketing industry. The amendments, subject to approval by Parliament, would permit the CRTC to establish the appropriate fees.

With these amendments, the cost of compliance and enforcement will no longer be charged to Canadian taxpayers. These funds will be provided by the telemarketing industry.

When the National DNCL was first established, the list operator was permitted to collect funds to recoup its start-up costs and to cover its ongoing operating costs. Since the initial start-up expenses have now been recovered, the portion that was collected from telemarketers for this purpose will be used to cover the costs incurred by the CRTC in investigating complaints and taking enforcement action against violators.

We will hold public consultations with telemarketers and other interested parties on the fee structure, which would come into effect on April 1, 2013. We expect that this cost-recovery model can be implemented without having to raise the total amount of subscription fees charged to telemarketers.

I want to emphasize that we are committed to minimizing the burden on small and medium-sized businesses, as we have been from the beginning. We will do everything we can to keep rates low.

Conclusion

This concludes our formal remarks, Mr. Chair. We would be happy to answer any questions you may have about our presentation.

Thank you.

 

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