SaskTel on the defensive as commissioners challenge independence from government

SaskTel’s government ownership could scuttle its bid for a cable TV licence, unless the CRTC determines the telco is free of political influence from the province. Questions regarding SaskTel’s governance structure, and the provincial government’s control of crown corporations, dominated questioning at a Nov. 2 hearing last week in Calgary reviewing the telco’s application for a broadcast distribution licence serving several communities throughout the province (CCR, Sept. 28/00). The application has come under fire from opposition members in the provincial legislature and from incumbent cablecos worried that they will soon be competing against a provincial Goliath that doesn’t pay federal income tax, and – for obvious reasons – is the provincial government’s telecom supplier of choice. Jim Deane, president/CEO of Regina-based Access Communications Co-operative, appeared at the hearing to oppose SaskTel, saying this proceeding "may very well decide the future of the broadcasting distribution industry in Saskatchewan." He claimed SaskTel is not eligible to hold a broadcasting licence because there is no evidence that it operates at arm’s length from government. "We do not believe that SaskTel enjoys the requisite freedom of expression, journalistic and creative and programming independence to satisfy the definition of ‘independent carrier’ which is set out in (a federal government directive)." That directive – enacted three years ago – changed the eligibility requirement for crown corporations wanting a broadcast licence. The Order-in-Council allows SaskTel to become a BDU or even a broadcaster, assuming it is not directly controlled by the government and is independent from political influence. One CRTC commissioner, who’s also an experienced lawyer, went head-to-head with SaskTel president Donald Ching on the issue of control. Barbara Cram, the regional commissioner for Manitoba/Saskatchewan, grilled Ching on everything from the background of each board member, to the appointment process, and the lengths of terms. She also asked if there was anything to prevent a government from "house-cleaning the board of directors if they are unhappy with (its) actions". Ching acknowledged the government does have that power. SaskTel’s case wasn’t helped by an incident last month in which the province’s minister of energy dismissed the entire board, and the president, of the Saskatchewan Research Council. As Cram noted, "...ministers seem to be aware of their ability to do that, at least one member of the cabinet (does), and I think you would agree with me," she directed to Ching. He did. "You can build whatever you want to in statue or in order-in-council or in regulations, or for that matter, in practice," he said. "The fact of the matter is an incumbent government or a new government coming in can change all those parameters. The federal government, for instance, could change the statute under which the CBC operates." Cram also said there is nothing to prevent an MP or cabinet minister from joining SaskTel’s board. Although they no longer do, she said the possibility still exists. Ching argued that while SaskTel is accountable to the province – particularly when it comes to capital spending – the government does not interfere at an operational level. The independence of SaskTel’s board, he added, is guaranteed under the Crown Corporations Act, which binds a board to act in the best interests of the corporation. If the CRTC concludes there is reason for concern, Ching said it could issue a BDU licence conditional on the Saskatchewan government passing legislation that creates a more arms-length relationship between itself and SaskTel. Access Communications’ Deane said such a legislative commitment should come before the CRTC awards a licence. Even better, he said the CRTC should delay awarding SaskTel a BDU licence for another 18 months, once safeguards are in place to ensure it cannot use its monopoly phone revenues to subsidize its cable business. SaskTel argued that steps have already been taken to safeguard against such abuses.

SaskTel on the defensive as commissioners challenge independence from government

News | 11/09/2000 5:00 am EST

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