CRTC urged to speed up approval process for communications mergers

While the U.S. Federal Communication Commission has revamped its approval process to try to deal with applications within six months, the CRTC's review process continues to be so lengthy that businesses involved in mergers can be hurt, according to one prominent communications lawyer. The CRTC will be dealing with several major mergers in the next year: BCE Inc and CTV Inc; and Groupe Vidéotron ltée (if Rogers Communications Inc, Quebecor Inc or the Caisse de Depot et Placement are able to make a deal). At the same time, the commission is a facing an almost unmanageable workload over the next year, with plans to review 452 applications for digital specialty services, revamp its service system, examine the future of French, as well as acting on its mandate to regulate telecommunications. Some industry observers wonder if the CRTC should hold as many public hearings, and whether the intervention system, especially aspects dealing with letters of support, couldn't be streamlined to make the process faster. Kathryn Robinson, a senior partner in the Toronto law firm of Goodman, Phillips & Vineberg, represents broadcasters, cable companies, and other regulated interests before the CRTC. She told the New Developments in Communications Law and Policy conference, held in Ottawa earlier this month, that the commission should deal with simple requests for merger approvals in about 100 days. Robinson said the regulatory system was designed in an era of monopolies, when converging technologies did not put pressure on media companies to act swiftly in take-over deals. Even on the fastest regulatory track on a major transaction, it takes about eight months from the time an application is filed to the time a CRTC decision is announced, she notes. Typically, it takes one year between the filing of an application and a decision. Robinson said companies being purchased "suffer major disadvantages" because of the delays caused by the regulation system. "They are unable to do long-term planning because the purchaser is unable to give direction to them. Most skilled employees become targets for poachers from competitors. Management is less inclined to take risks. The focus is on preserving assets and avoiding risk," she said. "The public interest and the interests of licensees are not served by a process that takes that length of time." Robinson said it's not unreasonable for the CRTC to expect an application within 30 days after a deal is announced. The deficiency process, she maintained, is not necessary before the application notice is published in the Canada Gazette, adding that the onus should be on applicants to know if their filing is complete before they submit it. Robinson advocated a system in which letters of support, which are usually solicited by applicants, would be filed at the same time as an application. "It's time-consuming and distracting to have these filed after gazetting and when interventions are coming in," she told conference delegates. Advance notice of a hearing should be 50 days, she suggested, and decisions should be announced a month after the hearing. Later, the commission could hand down its written reasons for a decision, after consultation of non-panel CRTC members, legal discussions for panel members who dissent, and circulation of drafts. Typically, the CRTC announces its decisions at the same time that it publishes its reasons. It's usually a four-moth wait between the end of a hearing and a decision. Janet Yale, an industry lawyer and former senior CRTC official who is now president of the Canadian Cable Television Association, contended the reason for any kind of regulation is disappearing because of the increase in competition and consumer choice. She said many public hearings are unnecessary, and the CRTC could make many of its decisions after receiving written submissions. (The CRTC already has a public notices process, which deals in written submissions only. They are used mostly for non-contentious licence renewals and amendments. The CRTC also uses them to obtain submissions on topics that don't necessarily require in-person discussions.) "Where the policy is clear, it doesn't seem to me that we need a public hearing (such as in the Category 2 digital applications)," said Yale. "We can use a paper process. But we need to be clear on the public policy issues so we don't have to deal with these on a case by case basis." Jean Pierre Blais, the CRTC's general counsel (broadcasting), admits the commission has "to re-examine how we're doing things regarding ownership transactions. We have been asked to do more with less. We have to do less with less." He noted that the FCC recently came out with a new service standard that set a deadline of 180 days, and asked if the new system sacrificed public process for speed. Robinson said she thinks "public process is an integral part of what the industry and the (FCC) is involved in. However, I think the timeliness that imposes the overall result—is less in the public interest than it otherwise would be." But, in Canada, regulators and companies have to co-operate to cut down the length of time deals are in limbo, she added. "Applicants have a role to play to assist the public with their applications. In a world that is changing this quickly, six months is a lifetime. We can't afford the luxury of time anymore. We don't have the nimbleness to respond because we haven't imposed the discipline on ourselves."

CRTC urged to speed up approval process for communications mergers

Broadcast | April 27, 2000

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