Senate hearing to review online privacy, e-commerce, competition and content

The Canadian telecom industry will get another chance to lobby for changes in long distance contribution and foreign ownership limits as part of a Senate sub-committee inquiry into communications and competition. Announced April 19 at the Canadian Telecommunications Policy Forum in Ottawa, Senator Marie-P. Poulin said the year-long proceeding will be conducted in three phases, beginning with a review of issues related to Internet privacy and security, and how quickly Canadian businesses are embracing e-commerce. "We must address concerns ordinary Canadians have about the potential abuse of personal, online information, and reports that Canadian businesses are slow to embrace e-commerce," said Poulin, who chairs the Subcommittee on Communications of the Standing Senate Committee on Transport and Communications The scope of the proceeding is broad, and will undoubtedly attract much attention both within and outside government. Depending what the sub-committee recommends, its final report could spur Ottawa to introduce substantive changes in how legislation and regulations are used to promote public policy objectives, such as universal service and Canadian content development. The second phase of the review will study convergence as it applies to the telephone, wireless, satellite and broadcasting sectors. The sustainability of long distance competition and universality of service will be dealt with during this stage. "Although long-distance rates to consumers have dropped dramatically, there is a general concern that policies giving a competitive edge to the former monopolies may result in a return to a monopolistic situation," the Senate sub-committee states in its terms of reference for the review. The financial crisis in Canada's LD market has been worsening for years. Dealing with the problem, however, has proven far more complicated than identifying it, with federal regulators and industry executives unable to agree on either its cause or potential remedies. The Senate sub-committee will attempt to do both. It will also examine whether cross-subsidization is the most effective public policy approach to ensure LD service is available in small and isolated communities at reasonable rates. And if such subsidies are allowed, how can "cream-skimming" of larger communities be prevented?" the sub-committee asks. Telecom executives say they look forward to appearing before a government inquiry to air their grievances over contribution. A Canadian telecom lawyer now working in London UK says Canada's preoccupation with universality is not justified, and that contribution subsidies should be eliminated. "While the public policy concern (of providing universal access) is justified, it seems to me that we've distorted the whole system of contribution payments, and therefore the economics of providing long distance telephone service in a way to address what is really a very minor and peripheral concern," says Michael Ryan, a former executive with Unitel Communications who now works at the Coudert Brothers law firm. As general counsel at Unitel, Ryan participated in regulatory proceedings that opened Canada's LD sector to competition. Six years later, he says the LD market has evolved from a monopoly to a competitive sector that doesn't make money. "There's still a crisis in the long distance business over the profitability of the competitors," he told Network Letter. "It's not a situation that's been replicated in other countries that have introduced long distance contribution. The question we have to ask is why Canada is facing this particular problem. Is it the actions of the competitors themselves (i.e. through aggressive pricing) or is there something structurally wrong with the Canadian market or the regulatory framework that makes it impossible for competitors to become profitable." Reviewing ownership limits Another motherhood issue up for discussion is Canada's foreign ownership limits for broadcast and telecom licencees. Among the Senate sub-committee's questions: Why does Canada need foreign owner ship restrictions that are more restrictive than those of its major trading partners? Does Canada need cross-sector ownership restrictions to prevent excessive horizontal concentration? Are foreign ownership and cross-sector ownership restrictions effective given the trends toward convergence? Should Canada change from regulating the nationality of the ownership of communications companies to regulating the behaviour of communications companies, regardless of nationality. The final phase of the review will look at how convergence is affecting Canadian content, along with the role of federal regulatory agencies and the impact on consumers. Senator Poulin will be joined on the committee by deputy chair Mira Spivak and senators Sheila Finestone, Janis Johnson and Michael Kirby. Poulin was a VP at the CBC and later served as the first chair of the Canadian Artists and Producers Professional Re-lations Tribunal. She also served as deputy secretary to the cabinet. Johnson is a former national director of the Progressive Conservative Party. Kirby was a senior advisor to Pierre Trudeau while Finestone succeeded the former PM as MP for Mount Royal.

Senate hearing to review online privacy, e-commerce, competition and content

News | 04/25/2000 4:00 am EDT

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