Speech by Stephen Simpson, Regional Commissioner for British Columbia and the Yukon, Canadian Radio-television and Telecommunications Commission

To the International Institute of Communications’ International Regulators Forum panel on “How to create relevant and sustainable regulation”

Singapore, Singapore
October 7, 2012

Check against delivery

 

Thank you for that kind introduction.

I’m very pleased to be with you today, to do what regulators do best: talk about regulations!

For the next few minutes, I’d like to share Canada’s experiences with you.

Canada’s communication sector

Let me begin by briefly explaining the role of the Canadian Radio-television and Telecommunications Commission (CRTC). The CRTC oversees Canada’s broadcasting and telecommunications systems in a manner consistent with the public interest. We work to ensure that Canadians have access to a variety of Canadian programming and high-quality, affordable communications services.

We do this in a way that promotes Canadian culture. As Canadians, we are intent on showcasing our culture through our communications sector. This is more than just a passing sentiment. In fact, it is explicitly built into the legislative and regulatory foundations of our sector: Canada’s Broadcasting and Telecommunications Acts.

To that end, the CRTC requires that a fixed percentage of Canadian programming be widely available on television and radio. In addition, broadcasters and distributors must devote a portion of their revenue to the creation and promotion of Canadian content.

And, we regulate in a way that positions Canada’s communications industry to keep pace with emerging technologies, giving it the freedom to innovate, compete and respond to changing consumer demands.

Today, our sector is dominated by four large integrated companies, which account for 67% of all communications revenues in the country. These companies act as broadcasters and distributors, controlling program rights and delivering content to consumers on the full range of platforms.

Focusing on consumer needs to ensure our regulations remain relevant and sustainable

As the CRTC has considered how best to protect Canadian culture and regulate an industry defined by fewer, but larger players, our role has had to shift. We have continued to rely on market forces where appropriate, but have also intervened to ensure Canada’s big corporate players don’t stifle their smaller competitors or restrict consumer choice.

Canadian consumers are demanding more from their service providers all the time. They want to choose from quality communications services that are accessible, affordable and reliable.

In 2011, the average Canadian family spent more than $180 per month on communications services. That represents approximately 4.1% of their total household spending, making communications spending almost equal to that of healthcare. Given the importance Canadians attach to their services, we have a duty to help them make informed choices in the marketplace.

Accordingly, we are putting Canadians’ needs and interests at the heart of our decisions.

Let me give you some examples.

(1) The CRTC’s Chief Consumer Officer

First, at the end of August, the CRTC announced the creation of a new position—our very first Chief Consumer Officer. This person’s role will be to better understand consumer concerns and bring them to the CRTC’s attention during the decision-making process.

(2) Possibility of a wireless code

Second, over the past year, the CRTC has been seeking views on whether to intervene in Canada’s wireless market by developing a code for wireless services. Since 1994, the CRTC’s practice has been to rely primarily on market forces when dealing with retail wireless services, as we have been satisfied that consumer interests have been sufficiently protected.

Recently, however, some lower levels of government have passed, or are considering, legislation regarding cellphone contracts. According to a number of people, this creates a patchwork of different rules across that country that is inefficient for both service providers and consumers.

The CRTC is considering whether it needs to develop a code that would apply to all service providers and would ensure clear and consistent contract terms for consumers.

(3) Wireless Theft

The third example is the growing problem of wireless theft. Canadians are increasingly worried about the trend.

We’ve asked the Canadian Wireless Telecommunications Association, what its members are doing to protect Canadian consumers from these thefts. Similarly, we’ve asked it to consider how its members could participate in international initiatives, such as the International Mobile Equipment Identity database, to combat wireless theft.

Evolution of the marketplace

When I joined the CRTC four year ago, Canada’s broadcasting and telecommunications sectors each had their roles to play, and carried them out relatively independently of each other—or definitely more independently than they do now.

Times have changed. Industry convergence and vertically integrated corporate structures have revolutionized our sector. As I explained before, we now have fewer, but larger, industry players.

As a result, we’ve been approaching this trend with the public interest first, and foremost, in our minds. We’ve established a policy framework on vertical integration that applies to companies that own or control both programming and distribution services.

The framework prohibits the exclusivity of television content for digital platforms. The only exception is if a company creates programming specifically designed for an Internet portal or a mobile device.

It also prevents a vertically integrated company from launching a new programming service on its own affiliated distribution platform before making it available to competing distributors.

And it establishes a standstill rule so programming will not be taken hostage during a re-negotiation.

Finally, it includes principles to ensure integrated companies do not engage in anti-competitive behaviour. We want all industry players, including independent programming and distributions services, to be able to negotiate on fair and equal terms.

These principles have already been put to good use, serving as the basis for resolving two disputes between one of Canada’s largest integrated companies and independent distributors.

Looking ahead

Let me conclude by looking ahead. Technology will continue to drive the market and competitive opportunities in ways we can’t even imagine.

And this will require all of us to take a hard look at whether our regulations truly work in the “real world.” Will they remain relevant and sustainable? Will they continue to respond to the needs and interests of consumers? Would acting or not acting on certain issues cause harm to Canadians or the communication system?

We’ll also need to work together to consider whether and how to develop more effective, coordinated regulatory approaches in areas where we share a common concern, while still respecting national sovereignty and domestic objectives. This issue will, no doubt, be front and centre during the International Telecommunication Union’s conference in Dubai later this year.

And these issues are just the tip of the iceberg.

Canada is certainly taking these issues seriously, as we work to make our regulations more relevant and sustainable in a post-analog world.

I look forward to our discussion.

 

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