OTTAWA – While businesses can make mistakes by altering course too quickly, industry regulators make most of their mistakes by moving not quickly enough, Rogers Communications vice-chairman Phil Lind said Monday evening at a conference in Ottawa.
He was the keynote speaker – pinch-hitting for company founder Ted Rogers, who is still in a Toronto hospital – at opening dinner of the International Institute of Communications Canadian conference in Ottawa. (While Cartt.ca will be there tomorrow, we were sent a copy of Lind’s speech, which is represented in this story).
With CRTC chairman Konrad von Finckenstein doing the intro – and with a passel of policy people from the cable, radio, television and telecom trade in the audience, Lind complimented the Commission for doing a very hard job during increasingly difficult times, but also added a pitch of his own – for a speedier shedding of outdated rules – which may, in turn, lead to “supersized” media players in Canada who are better able to chart a course through uncertain, choppy, waters.
“While at times we have shaken our heads in disbelief over specific decisions, Ted and I have long been convinced that, overall, the regulatory process shaping Canada’s broadcasting and telecommunications landscapes has worked reasonably well,” said Lind. “Though sometimes reluctantly, the Commission has freed industry players to innovate, to give consumers what they want and to profit from doing so. Simultaneously, it has served the public interest by defending Canadian culture and promoting Canadian ownership.
“Fulfilling their private/public mandate has compelled commissioners to develop a sense of balance more typical of high-wire performers than public servants. It’s a tough act. There’s no safety net. Disaster constantly threatens, particularly when the unexpected reaches out to give the high-wire a hearty shake,” added Lind.
Political involvement in certain decisions, economic turbulence, technological change, all can impact the businesses in the CARTT industry and the regulators overseeing them.
And just like Ted has made his share of mistakes, said Lind – referencing his boss’s new book, Relentless, and it’s tale of the $500-million dollar mistake that was Rogers’ investment in Unitel – so has the Commission made its share.
“One of (the book’s) lessons is that industry can make mistakes when it moves too fast. With regulators, though, it’s the other way around. They make mistakes by moving too slowly. Problems arise when they’re too slow to recognize the power of innovation, or when the Commission continues to enforce regulatory policies that have long since passed their ‘best-before’ dates,” said Lind.
“Look, for example, at the earliest days of cable, before it was dragged, unwillingly and unceremoniously, under the regulatory umbrella. Forty-one years ago, all you needed to start a cable operation was a 25-dollar licence from the Department of Transport, enough money to roll-out a network, and the inclination and stamina to work 24/7. Back then, Ted had the 25 bucks and the work ethic, but not enough money to go it alone. He teamed up with the broadcast interests owned by the Eatons and the legendary John Bassett.”
However, the Regulator soon created policy that forced broadcasters and cable companies to be separate operations, leading to the Bassett’s and Eaton’s divestiture of Rogers back then – nearly resulting in the bankruptcy of the then-nascent cableco.
“For the first time in its history, but by no means the last, a Commission decision forced a Canadian entrepreneur to abandon a well-crafted business plan and to plunge head first into damage control,” said Lind.
“I am certain that the Commission’s intentions were honourable. It was worried about the dangers of corporate concentration. It wanted to ensure a diversity of voices. These are very laudable goals. But I would argue that, in separating broadcasting and distribution to achieve those goals, the Commission chose far too blunt a regulatory instrument.”
Other “more sophisticated” remedies are now available, added Lind, who cited the CRTC’s recent “Diversity of Voices” decision as just such a new regulatory instrument. He also lauded the now decade-old New Media exemption order which allowed “Canadians to become world leaders in broadband rollout.” (Ed Note: That exemption order will be examined in 2009 when the Commission undertakes its review of New Media in February.)
“The 1998 Radio Policy is one more example of effective and pragmatic regulatory direction,” added Lind. “By allowing the ownership of up to four stations, depending on market size, I believe the Commission saved commercial radio in Canada. It had the courage to abandon tried, but no longer true, policies on ownership concentration and to adopt a new approach, one that did the job.”
However, Lind lamented how Rogers and other cable companies through the years have wanted to merge or purchase conventional television broadcasters, only to be rebuffed most of the time – until somewhat recently where, for example, Rogers now owns the OMNI TV multicultural broadcast stations as well as the Citytv network.
“(A)rtificial barriers create artificial environments, and artificial environments tend to fall apart fast in the face of real world pressures,” noted Lind.
“And, in the new economic reality, perhaps regulators at both the CRTC and the Competition Bureau could do a lot worse than adopt the approach underlying the 1998 Radio Policy. In these dire economic times, when both CTV and CanWest have already served notice that they can no longer fulfill all their conditions of licence, old remedies simply won’t work,” said Lind.
“Supersized national players may be our last best hope for revitalizing over-the-air conventional television, just as they were the answer 10 years ago to what ailed radio.”
– Greg O’Brien
