AT LAST COUNT, THERE WERE 103 submissions to the three-person panel in charge of Industry Canada’s Telecom Policy Review.
Boy, do they have some summer/fall reading in front of them.
Not counting appendices, Telus’ submission is 266 pages. Bell’s submission is on a CD ROM and is over a thousand. I wish Dr. Gerri Sinclair, Hank Intven, and André Tremblay the best of luck wading through this sea of advice, recommendations – and in some cases, outright silliness. They’re all telecom talents and will come up with something good, we hope.
Players have until September 15th to respond to what’s been submitted and the panel must then report to Industry Minister David Emerson by the end of 2005 with their recommendations. The review could change telecom policy in Canada as we know it – or it could be another pointless exercise producing a “white paper” that finds a permanent home on a shelf somewhere.
We’re hoping for the former – as are the authors of all the submissions.
For example:
The Canadian Electricity Association is worried (still) about pole attachments. The Federation of Canadian Municipalities is concerned (still) over telecom rights of ways, saying, “carriers’ infrastructure can not be built on the backs of municipal taxpayers.”
Those in remote communities made submissions likely to make sure the panel doesn’t forget about their needs. Sheridan Scott, the former Bell Canada executive and current head of the Competition Bureau, says foreign ownership laws should be relaxed.
The cable industry for the most part said it likes the way telecom policy has been developing (likely because it keeps the regulatory clamps on big telcos while they establish their telephony footprint – to growing success), while the big telcos say – in many, many words – big change is an absolute must.
And then there are the submissions by Astral Media and CanWest Global which say – and I’m paraphrasing enormously here – “we’re keeping an eye on you.”
CanWest’s short submission recognizes that any discussion on telecom policy can no longer avoid broadcasting. After looking over the panel’s discussion paper, “it was clear to us that many of the issues for comment included in this discussion should not, and cannot, be isolated to the telecommunications sector, but necessarily spill into the ‘sister’ sector of broadcasting. In retrospect, this should not have been a surprise,” says the submission from CanWest’s director of regulatory affairs Jon Medline.
“A number of the issues raised in the Consultation Paper necessarily impinge on broadcasting activities which are outside the Panel’s Terms of Reference. As such, we believe that the Panel’s recommendations should explicitly recognize these cross-sector ties in its eventual report and highlight areas of convergence where telecommunications recommendations trespass on broadcasting issues that are outside the Panel’s Terms of Reference,” it concludes.
Astral’s submission, a bit longer, is similarly focused but goes steps further – even saying that revenue which BDUs earn from TV delivery should not be allowed to be spent on their new broadband or telecom service development.
With the ongoing, slow, shift to fully digital networks, and soon, all-IP systems that allow the easy movement of any content, the panel’s recommendations should reflect the needs of content producers and broadcasters in Canada, says the Astral submission authored by v-p regulatory and government affairs Sophie Emond.
And, despite the converging cable, radio, television and telecom industry as a whole, separate silos should be maintained within BDUs, says Astral.
“Using their multiple roles as a BDU, a telecommunications common carrier (telephony) and a telecommunications service provider (broadband ISP), some distributors are now offering an increasing array of new services. One of the consequences of this development is that broadcasting programming services are now only one of several services offered on the BDU platform,” says the Astral submission.
However, money earned from delivering Astral’s The Movie Network or Super Ecran, for example – no matter how it’s bundled in on the marketing side – should be kept unbundled on the balance sheet. “[T]he traditional preoccupation in the telecommunications sector that dominant telecommunications common carriers do not cross-subsidize their competitive offerings from revenues earned from monopoly or bottleneck activities has now become a significant issue for broadcasting regulators: integrated companies can use retail revenues from their broadcasting distribution activities to support other bundled products,” says Astral.
“This suggests that governments and regulators should be vigilant to ensure that BDU revenues earned from the carriage of broadcasting services such as pay and specialty services should not be used by BDU ‘telecommunications service providers’ to subsidize new competitive ventures such as high speed Internet access or other nonbroadcasting services.
“Any revenues earned by BDUs in respect of their role in providing broadcasting services to the public should be preserved within the broadcasting system,” says Astral.
Astral also insisted that foreign ownership rules for BDUs should remain as restrictive as they are now but, “[i]f, ultimately, changes to the BDU ownership rules are recommended, we submit that the following “ownership limitation” should be introduced: if a non-Canadian acquires control of a Canadian BDU, it would be limited from thereafter acquiring or retaining any interest in a Canadian programming company. This minimum safeguard would mitigate the impact of foreign BDU control on our broadcasting operations. This limitation would preclude a non-Canadian investor from holding a voting interest in a programming company once such investor elects to acquire control of a BDU under newly liberalized ownership rules.”
Does it all sound a little like broadcaster paranoia? Not if you take a look at the Shaw Communications submission, which calls for regulatory symmetry between telecom and broadcast sectors and the removal of protections for Canadian programmers.
“True competition in broadband broadcasting services and the attendant benefits to Canadians is undermined by the continuation of strict protectionism with respect to the content and packaging of programming services that make up the offerings of broadcast distributors,” says the Shaw submission, from the desk of senior v-p corporate and regulatory affairs, Ken Stein.
“As a result, for example, while consumers of broadband broadcasting services in Winnipeg can receive television service from a variety of sources… the customers of the legal Canadian distributors have limited opportunity to tailor the services that they receive. Bluntly, Canadians cannot get the services they want.
“BDUs are highly constrained in their ability to differentiate their products and to introduce new innovative services. Innovation in the distribution of broadband services is much less evident than it could and should be. Consumers increasingly have other communications options to meet their demands,” says the Shaw submission.
The company points out, and asks for a remedy for the following points:
• Consumers cannot simply pick and pay for what they want. Rules for basic carriage, mandated services, and linkage rules require them to take other services they often do not want.
• The CRTC decides what foreign services can be distributed.
• In addition to paying GST and PST directly on their monthly fees, other indirect charges are reflected in subscriber monthly fees including a 1.9% fee for the CRTC and a 5% mandatory allocation to Canadian programming production funds.
• A key objective of the Canadian system is to ensure that a majority of Canadian services are available. However, the rules require customers to receive a majority of Canadian services. Canadians often do not understand why they should be forced to buy Canadian services. When they go to a newsstand, they are not forced to buy a Canadian magazine.
• CRTC rules limit the distribution of services that are owned by a cable or satellite company. No such limitation is placed on any other broadcaster, newspaper, magazine or media outlet. For example, Global CanWest can refer to the National Post, CTV can refer to its other services and to the Globe and Mail without limitation.
• CRTC rules prevent advertising spots in U.S. services paid for by Canadian BDU’s to be used to promote cable from informing customers of our telecommunication bundling products and options. As well, CRTC rules also prevent us from using those spots to raise revenue that would reduce rates and allow us to invest in new technology. Consumers expect and have a right to be informed of the services and discounts provided by their BDU.
• Channel line-ups of cable companies are largely determined by carriage rules. The reality is that distributors have no real freedom to develop unique products and respond to what its customers want.
So while it may say “Telecom Review Panel” on the cover page, with all the crossover stakeholders with fingers in so many pies (see chart from Astral’s submission), this is one panel all broadcasters had better pay close attention to.
