Panelists talk C-10, competition and of course, the Rogers/Shaw deal
By Lynn Greiner
TORONTO – Every ISP Summit, a highlight session is the regulatory panel. The CRTC always seems to generate enough controversy to make the panel entertaining as well as interesting.
This year was no different.
Moderated by Monica Auer, executive director of the Forum for Research and Policy in Communications, the panel featured two CRTC alumni who are less than impressed with the way the organization has operated recently.
Konrad von Finckenstein, a consultant and arbitrator, was CRTC chair from 2007 to 2012, and Timothy Denton, now chairman of the Internet Society Canada chapter, was a CRTC commissioner from 2008 to 2013.
Chris Tacit, principal at Tacit Law, set the stage by describing recent controversial decisions impacting independent operators, including the CRTC’s wholesale rate flip-flop and its refusal to mandate access to in-building wiring in multi-dwelling buildings.
“There are a couple of other interesting developments also taking place in the last year that deserve an honorable mention,” he said.
“First of all, Bill C-10, which would require streaming services to offer certain amounts of Canadian content on their sites and contribute financially to the production of Canadian cultural industries wound its way through Parliament but died when the recent federal election was called. The big question now is, will it be revived? And if so, how long will constitutional challenges remained? That will take a long time to sort out, I guess time will tell.”
Tacit also mentioned the deal between Rogers and Shaw, pointing out the “transaction is still being reviewed by regulators. One extremely important issue for independent service providers is how competition in transport, which they already view as being anemic, would be affected by the merger.”
Finally, Tacit noted that we still do not know how the disaggregated broadband connectivity services regime will be resolved, or when other problems with mandated incumbent wholesale broadband services will be resolved, and whether it will be in a way that fosters competition.
Auer’s first question cited commentary on Bill C-10 that described it as “a hysterical response by coddled stakeholders”, and came in two parts: what was the government’s policy, and is there a difference between what the statutes say, what the government is saying, and what the CRTC is doing?
“What’s the government’s policy on communications? Frankly, I don’t know, I don’t think anybody knows,” von Finckenstein laughed.
“We’ve never had, unfortunately, a Royal Commission on the digital challenge of how to proceed. We have a digital charter, which is really basically enumerations of issues that have to be done. And we are fiddling with various statutes and various things out there. I don’t think there is a holistic view.”
“C-10’s essential error was to call everything broadcasting, which is code for saying everything shall be regulated unless we say it isn’t,” Denton added.
Between that and Bill C-136, he sees Heritage Canada engaged in a quest to control the internet so it conforms to the needs of what he called a “privileged class of Canadian licensees called broadcasters.”
He does not believe the government plans to introduce any legislation conducive to free communication across Internet platforms.
Both panelists agreed the legislation should be redone from scratch. “We need to start with the view that the Internet has been invented and previous conceptions of how communications take place need to be amended,” Denton said.
“I think the CRTC has become obsessed with the view that the only proper form of competition is that which is engaged by those who have massive capital investments, which is called facilities-based competition, is thought to be the only, excuse the phrase, ‘manly and legitimate’ form of competition,” he went on.
“The idea that competition can occur through different arrangements of business techniques, different arrangements of customers, different arrangements of software and technology seems to be utterly beyond them.”
Furthermore, von Finckenstein said the CRTC is not doing what Parliament told it to do, instead clinging to the notion that broadcasting is predominant, and communications is the stepchild.
“I don’t understand why they don’t look at these things the way they were told, from a competition view and foster as much access and communications as possible,” he said.
“In this day of the pandemic, of communications being absolutely so central, they should be focusing on this and nothing else and saying, ‘How can we get as much access, as much competition and widen the field as much as possible’,” he added. “Instead, they seem to favour purely facility-based providers,” and make decisions that limit access.
Denton argued all parties affected should be involved in consultations, and he thinks that it is important that commissioners be drawn from both worlds: Internet and broadcasting. Today, he said, the Internet Society maintains that there is an excessive focus on broadcasting, both in time devoted and in the commissioners’ selection.
“In any case, there’s far too much amateur fiddling about with these issues from people who just in the course of five years will not learn enough, fast enough, to really make credible decisions,” he said.
“I would like to see a commission with some sense of the backgrounds in technologies and businesses that govern the Internet.”
Auer wondered if the TVA vs Bell court case over the price of TVA Sports strengthened the CRTC’s role in dispute resolution.
Denton’s response was a simple yes, but von Finckenstein sees it differently.
“You have to have a healthy industry,” he said. “That’s the number one reason why we regulate. We regulate… to have order and prevent abuse, but you have to start off with a healthy industry. If we don’t have a healthy industry, then everything else becomes secondary. And obviously, that healthy industry will then accept the regulations that they will impose. To ensure that they are healthy, you have to look at the commercial goals and then see what is feasible or not.”
He argued the CRTC engages in baseball arbitration because it lacks expertise, and thus the outcome usually favours the incumbent.
The discussion wound up with one final question: Shaw and Rogers – yea or nay?
“I think it will go through,” von Finckenstein said. “If you look at it, it would really be very difficult to cause them to divest of the sexy, significant portion. And don’t forget there’s a billion-dollar breakup penalty to be paid if it doesn’t go through. So, I think the regulator will be very careful before they make a decision.”
“The lesser the competition, the more the need to regulate,” Denton added, noting that sometimes it is a good thing to regulate.
