FORMER ROGERS EXECUTIVE Len Katz has been overseeing the restructuring and re-organization of the administrative functions of the CRTC.
As reported by www.cartt.ca, the Commission’s processes have been streamlined and the structure from which it works, remodeled. A new "centre pod" of oversight that will examine new technologies, help navigate the paths upon which those technologies lead us, and help bring together the telecom and broadcast portions of this converged industry, has been created. 
Some in the industry will say it’s long overdue. Others will chafe at the changes because one of those alterations means that applicants – no matter who they are – will have to submit much tighter, more complete and informative applications. Staff won’t be holding as many hands and massaging those documents like they have in the past.
For a detailed explanation on what’s going on and the thought process behind it, www.cartt.ca recently went to Ottawa to chat with Katz (right), the Commission’s executive director, broadcast and telecom. What follows is an edited transcript.
Greg O’Brien: Tell me about the reorganization and restructuring here. How did it come about and why was it necessary?
Len Katz: I think over the last year or two, there’s been a rapid change in technology, both on the telecommunications side as well as the broadcasting side, and I think friends of the industry, the industry itself, and the CRTC, all recognize the need for the government to move forward and be more responsive.
With that said, we’ve been looking for the last six months at how best to reorganize the CRTC in order to be more responsive to the needs of the industry – and the opportunity came about last year with my coming into the telecom branch, to start looking at the telecom industry and then eventually migrate to the broadcasting side as well.
So, we spent last year focusing on telecom and making some major changes to how we’re structured, how we process applications, how we process tariffs, and ultimately how we execute.
GOB: Correct me if I’m wrong, but is this what led to the expedited proceedings and getting things done (like tariff applications) much quicker?
LK: No, the expedited procedures started before I was here, (former telecom vice-chair) David Colville had the vision for those. We executed against it, but the actual decision-making process was done by David Colville and (chairman) Charles Dalfen. Both of them thought there was a need to be more responsive to the challenges of the industry players – that maybe in some cases didn’t need government involvement necessarily, but needed a mediator or facilitator, to try and bridge the gap.
GOB: Okay, so you reorganized the telecom side first and then late last year you began to do the same to the broadcast side as well.
LK: Well, I think late last year there was a change made to the leadership in the broadcasting side (with the departure of vice-chair Andrée Wylie and hiring of Michel Arpin in that post), so the opportunity presented itself to take the next step and look at how we best evolve with the broadcasting industry. The first thing we did was look at telecom and broadcasting together. Yes, there definitely are two Acts out there – and yes, we have to execute against the objectives of each of the individual Acts, which are very distinct and different.
But at the same time the industry is changing dramatically, so we have to be responsive to that and understand – when someone comes in with an application or for a specific policy determination – what that means to the broader context of the industry it’s playing in, (such as) the way that phone companies are playing in the broadcasting industry and the broadcasting industry is playing in the telecom industry. With that said, we asked, what to do we do to deal with this issue?
That’s when the chairman came up with the idea of creating the "middle pod" as he calls it, to recognize the convergence of the industries and understanding what the technical issues are, the technologies that are evolving, as well as the economics of the businesses that are changing as well.
The whole nature of how advertising dollars are generated is changing as well – and advertising dollars are a major engine to the broadcasting sector. So that whole center pod will look at the evolution of the broadcasting and telecommunications industries, from an economic perspective, from a technological perspective as well, and provide guidance.
GOB: I tested a cell phone during the Olympics and was able to watch it on the cell phone as I was going up on the ski lift. That certainly merges broadcasting and the telecom.
LK: The scary part is while you’ve got the capabilities on a ski lift, you’ve also got that driving a car as well and someone has to start looking at what the implications are of watching TV or looking at your stock quotes while driving. You can have a speaker phone and talk on the phone while you’re driving and now you can be looking at a screen as well… Technology’s fascinating now.
But to continue on with the restructuring, we created that middle pod and I spent the first 60 days of my tenure in this new environment looking at how we actually execute against the broadcasting sector as well, and realized that what we need to do is to re-engineer, review the process by which we execute when applications come in. We’ve too many hands touching the files, taking a long time to process them, so we’ve gone about streamlining the process.
GOB: This is the Public Notice I’ve written about?
LK: The Public Notice is something we did to reinforce the fact that we believe we have an obligation to be responsive to the industry. Those service standards were out a couple years ago, but I don’t think we were executing as effectively as we should be against them. So, we reissued them. But notwithstanding that, and those process timelines, we are currently in the final stages of a re-engineering program that will change how we actually execute.
Historically, when an application came in, we at the CRTC tried to look at it from multiple perspectives and help the industry applicant come up with as complete and as comprehensive an application as possible. (But) the onus really falls on the applicant to make the compelling case, not for staff to try and help that case as well.
So, there was always a lag between when the application came in and when it was actually presented as a public notice because we were trying to fill the application with as comprehensive and as complete an understanding for everyone.
I think it’s not our role to do that. Our role is to take an application, and assess it on its merits, and if there are some deficiencies we can clear them up during the process. This will all start on April 1st, and will progress throughout the year.
GOB: So the onus will be on the applicants to be much better prepared than they have been in the past? The initial application really has to be better…
LK: And we have to tell them exactly what it is that we expect the application to contain. Then it’ll be up to them to be responsive to the requirements. And then it will be evaluated and assessed on its merits.
The way we were structured when I came in resulted in a number of people having to look at an application before it was comprehensive and complete and ready for release to the public under public notice. That phase will be drastically reduced.
GOB: So in terms of number of days, what are you looking at in a decrease?
LK: The expectation is within 30 days of an application coming in it will be presented.
GOB: What was it before?
LK: It was all over the place. In some cases, it didn’t need an awful lot of time, it could get done in two or three weeks. In other cases it could have taken months and months. And it was a function of an attempt by staff to try and help the process and by working the process to the best interest of the applicant.
The staff’s role is to help the applicant, don’t get me wrong, we’ll do whatever we can to help them, but we’re not going to delay the public process or compromise the public interest issues. So, if the applicants don’t have a comprehensive argument, then (decisions will) be based on the merits that they put forward.
GOB: Beyond what you’ve just talked about here, what other changes will the industry notice with the overall reorganization?
LK: They’ll see much more consultation with the industry. Again, that middle pod, as we call it, will be working closely with industry, consulting, understanding what the road map is and where the industry is going so that we can get a better appreciation in advance of applications coming in, understanding the context in which they’re coming in. Our goal, in lay terms, is to understand the forest when we start planting trees.
GOB: Is there retraining of staff required, given the changes?
LK: The staff are well-trained. There’s nothing wrong with the ability of the staff to understand the issues of the day. They are well- experienced people from all walks of life, a lot of them come from industry, telecom or broadcasting, or they come as a second career in some cases. The issue is a re-engineering, a process engineering that needed to be done, and I think with the new senior management team that’s been brought in, two new vice-chairs (Arpin and telecom vice-chair Richard French), the chairman who’s made those decisions… we’ve got a comprehensive new senior management team, and that leadership is something that will allow the staff to really blossom and become more effective and more efficient.
The reorganization is a stimulus and what it does is remove so many of the hands touching the files, so there is a one stop and shop, there’s a person I can go to at this TV. For example, I know I can go to Nick Ketchum (director, English-language radio and TV policy) and ask "the file is somewhere in your organization, what is the problem with it?" As opposed to in the past where there were five or six people all handling TV files simply because it wasn’t a one-stop shop.
There was a French language shop, an English language shop, so we tried to set up a one-stop shop. That being said, I should also tell you that a lot of the basic principles of the old organization have remained. The need to understand the distinct society and diversity of the country, the distinct French and English language all remain. There are distinct French and English language experts handling radio and TV. The need for social benefits and understanding of diverse society and Canadians and multicultural are all there as well. We haven’t reduced the emphasis on that.
GOB: I sort of centered my discussion on TV and telecom, but radio is a part of this as well.
LK: Absolutely, there’s a new leader in radio. Robert Ramsey has taken over the leadership of the entire radio sector and has the mandate for not just the policy associated with radio but also applications, which was not the case in the past where the radio applications came into one organization and the radio policy group was in a separate organization. So even though they worked in one structure, the responsibilities were very different as well.
Now Robert Ramsey can look at an application and say these applications seem to be leading us down the path where we need to revisit a framework or a policy because the landscape has been changing, and in concert with that middle pod, they’ve been looking at the Acts in general, and they’ll be able to make some recommendations to the Commission, to start to re-look at some things sooner than they otherwise would’ve in the past.
GOB: Focused on the word pod, these days, eh?
LK: We’ve run out of words: sectors, divisions, departments, so we call it pods.
GOB: The Acts themselves, the broadcast and telecommunications Act, both of them are mature pieces of legislation. Is it difficult to apply their basic tenets to what’s happening today in the market?
LK: Clearly the objectives of both Acts, and their major tenets, are different. They were drafted for two different purposes, and obviously there’s two different ministers. We’ll work with whatever Acts Parliament passes, and if they choose to change the Acts, one or both of them, we’ll establish the principles that are necessary to execute against them.
Could they work better? There are some areas obviously that have changed since those Acts were passed, so yeah, they could work better. But notwithstanding that, we think they work equally well in today’s environment. What we needed to do was to change how we manage internally and how we create leadership and accountability. One of the things that I stress with that is the need for more accountability and responsibility – we can’t hold someone responsible if they are not accountable.
So the way we structure the organization is we have people that are accountable to head radio and TV broadcasting, to the extent that they’re now accountable for those sectors, they’re now responsible for making sure that they’re timely, they’re positive in terms of responses to the industry and the process is efficient as well.
GOB: What do you think are the most popular misconceptions about the Commission in the industry? I’m not talking about the consumers because they all have their own sometimes silly ideas about what CRTC should or shouldn’t be. But you come from the industry yourself and now you’ve been here for a while, what are the most popular misconceptions that you’ve found?
LK: When I first came in, the thing that was most interesting – and I’ll go back to my days when I was in industry at both Rogers and Bell, as a government lobbyist so to speak and as a policy advisor as well – when you had one story to tell in the industry you would refine your story and tell government officials, CRTC officials, why certain policies are in the best interests of the public, obviously with the intent of representing your own company.
So what I was trying to do was to get a fair competitive advantage, is what I called it. When I was working for Rogers and I came to the CRTC all I wanted was a fair competitive advantage… When you come on this side of the table, you suddenly understand that every interested party, has a view that if you put yourself in their shoes, was really the correct position for those companies to take. The reality is, the role of the regulator, the role of government, both industry-countered, and the CRTC, is to balance those competing views.
The role of government, and the CRTC, is to try and establish what’s right for the nation, what’s right for Canadians, all regions of the country as well, and that becomes a balance. And when you create a balance there’s a perception that there may in fact winners and losers. What you want to try to create is a win-win scenario as opposed to either a win-lose scenario or a lose-lose scenario.
There are different stakeholders, but whether they’re residential customers or business customers our first guiding principle is what’s right for Canadians. The next step is how do you foster innovation and productivity for the industry and obviously that is tied to shareholder values as well, because corporations will only invest if they can see a return to their shareholders.
So you’ve got the consumers, business and residential, and you’ve got the industries, and the new players in the business as well, and the people putting the money in, bankers and investors as well, and to try to find the balance between all three, that is the challenge and the piece that industry I don’t think understands. They probably understand it, but they don’t want it to be the deciding factor, because what they want is what’s right for them.
GOB: Exactly, and that’s where we often arrive at the viewpoint that if there’s a decision and everyone is a bit unhappy than it’s probably the right decision.
LK: It’s a balance. The thing you want to avoid is a win-lose.
GOB: What do you see as further changes coming forward?
LK: I think we’ve now gotten the broadcasting side all set up. Last week we actually announced the staff below the three senior leaders of TV, radio and broadcasting, so all the staff below there have been funneled into their organizations as well, there’ll be people here shifting desks in the not too distant future.
My focus now is on taking that middle pod, and creating a structure there. We’re going to have a leader there in the new media, as we call it, a leadership role, we’ll be looking at how new media affects the industry and the regulatory environment we’re in.
GOB: How will you be defining new media?
LK: It’ll be anything and everything that brings communications and technology together. It may in fact be things that are already regulated under one of the Acts, it may be things that are currently exempt, and maybe the exemptions should be reviewed as well. So it’s basically any technology that heretofore we have not looked at.
Obviously, mobile TV is one area we’re looking at right now. I just read in the paper this morning that MTV will launch on March 21st and the story said that they’re going to make their biggest inroads is in iPod technology and (not) with a TV license because of the restrictions that exist in the CRTC with their budget and whether they do or do not impede on MuchMusic or whatever’s out there as well…
That pod, we’ll focus on that, as well as on technology. Where is technology going? Where is all the spectrum going? The fact that we are going to migrate from analog to digital spectrum, how do we deploy? How do we take back the analog spectrum and over what period of time? How does that all migrate? There was a decision earlier this week with regard to digital migration, so that’s another area where there will be a shift as well.
The other part of it, as you’re probably aware now, is there are three associate executive directors that have been created in the organization and will report to me, one in broadcasting, one in that middle sector, and one in telecommunications as well. The first two are unfilled positions, so my goal is, once I’ve established the organization’s structure, now we’ll go ahead and fill those jobs. The middle one is called industry analysis, economics, and technology, so that poor person is going to have a business card that says associate executive director industry analysis, economics, and technology, no room for their name, they have to have a short name.
So what I’m saying is, we’re going to have a team which will work very closely with the senior leadership team in the CRTC. We’ve got a senior leadership team composed of the chairman, two vice-chairs, head of legal, the secretary (myself), and Denis (Carmel, the CRTC’s director of public affairs), who get together quite frequently. It is a phenomenal team that’s gelled very well together. We have a common vision, a common understanding that we’re trying to achieve, and it makes it easy to execute that as well.
GOB: Those two jobs, do you have a deadline for when they’re going to get filled?
LK: No, it’s a matter of getting the right person for the jobs. My goal is now that the broadcasting organization has been put together, we’ll start actively looking for someone to fill the position. To get that done in the next two to three months would be my preference. We’re probably a month behind on that industry analysis, economics, and technology position, so it will probably be closer to summer.
GOB: I’d love to ask you about all the decisions that are upcoming, but I’ve covered off all the questions I have, I don’t know if you think I’ve missed anything.
LK: I don’t think so. Our biggest focus is on trying to provide a cohesive and informed rationalization of all of our decisions so people understand the basis under which the decision was made. The second most important item is to provide certainty to the industry.
Earlier, we discussed a couple of areas where the Commission may not have been as responsive in providing clarity and certainty. One of the issues is when a decision is rendered no one seems to know what is going to come out of the CRTC because of all that has been closely guarded in secrecy. It comes out when we call people up and say it’s going to come out at 4:00 today and it’s now 3:00 and you’d better be able to receive it. I think we need to be much more responsive to the industry, the markets as well.
GOB: That’s a question I get all the time, I had a couple e-mails this week asking when the new pay TV applications decision is going to come out. So is there going to be a set structure with applications now, setting out a deadline where you say "here’s when the decision is going to happen." You did that with the local forbearance decision, where we know that’s coming out in 150 days.
LK: It will be out at the end of March.
GOB: Are there going to similar deadlines like that?
LK: We’re working on those service standards so people can have some certainty. It doesn’t have to be specifically on that day, but it will be coming out in that realm.
We work backwards. When we did the forbearance public notice, we worked backwards and said here are all the due dates as well. The applications come in on a certain date, the interrogatories are brought by a certain date, the hearings will be on a certain date, and we sat back and asked how long will it take staff to adequately evaluate the record and provide a cohesive analysis of it to the Commissioners as well, and we basically came back and said we can do that within 150 days including the translation and everything else.
I think we’ll be in the 160 days range, from what I gather, we’ll be in that ballpark. But the intention is, where we can we will endeavor to put together dates so that the industry is aware of it and we can remove that uncertainty.
