Heritage committee recommendations come under fire from telecom sector

Reaction to the massive report of the House of Commons Standing Committee on Canadian Heritage is mixed at best. People in and around the telecom sector are not in agreement with many of the study's key recommendations.While an earlier report from the House of Commons Standing Committee on Industry, Science and Technology recommended lifting foreign investment restrictions on telcos and broadcast distributors such as cablecos and satellite TV companies (NL, May 6/03), the Heritage committee steadfastly rejected the notion (NL, June 16/03). That frustrates several players in the field. "We're certainly disappointed with their views on foreign ownership," Janet Yale, president/CEO of the Canadian Cable Television Association, tells Network Letter. "We were delighted with the report of the Industry committee and we were hopeful that the Heritage committee would recognize the carriage/content split that we had proposed." The Industry committee wanted Industry Canada minister Allan Rock to respond to its recommendations by mid-September. But some observers believe it could take until next year, and a new Prime Minister, to usher in changes to the foreign investment regime. At least one telecom insider wonders if that wasn't in the cards all along. "I'm not sure how quickly the issue of foreign ownership was going to be dealt with by the government in the first place. If it was going to be dealt with immediately then this would certainly cause someone to delay," Willie Grieve, VP of public policy & regulatory affairs at Telus Corp., opines to NL. "If the government was considering looking at this through some sort of direct study by, perhaps a task force or a full Parliamentary committee, or something like that, then I think they have two different viewpoints to consider with the two reports." Both committees agreed that a department of communications should be re-established. That would combine the telecom jurisdiction currently held by Industry Canada and the broadcasting sector, which is under Canadian Heritage's command. The CRTC, under this scenario, would report to only one minister. The president of the Canadian Association of Film Distributors and Exporters heartily endorses that recommendation. "I think it's a very good idea," Richard Paradis says. "I think we never should have separated them." He blames political infighting for the lack of a coordinated ministry. The Heritage committee wants to see a major overhaul of the CRTC's structure. Among other things, it wants to reduce the number of commissioners from 13 to nine and raises the possibility that the regional commissioner positions could be eliminated. That gets a mixed review from Telus' Willie Grieve. "I don't think we'd have any concern with it being smaller. It would probably make for easier decision making by the commission itself if it had a smaller group of commissioners," the regulatory lawyer states. "I know sometimes they have to run around and try to get hold of all the commissioners to get them to sign off on things. So having to run around to fewer commissioners is probably helpful from an administrative point of view." Telus is a champion of provincial voices on the CRTC. The western telco is currently appealing a commission ruling, claiming that local distinctions were ignored (NL, Feb. 10/03). "Our view is that there should be regional commissioners and that the regional commissioners should be making sure that the differences in the operating environment of various companies across the country are fully taken into account by the commission. And as you know, we have a petition to Cabinet right now where one of our concerns is the CRTC using what we call a one-size-fits-all approach for three of the costs parameters used in Phase II and that we think this prejudices Telus," Grieve says. "We think regional commissioners should be strengthened or at least the role and responsibilities of them clarified. Having said that, I know that there are some people who have expressed a view that having the regional commissioners actually live in the regions themselves during their term makes it very difficult for them to fully participate in decision-making and they're bouncing back and forth across the country. So there's a possibility you could have commissioners appointed from the regions but living in Ottawa so they're fully part of the machinery of the commission during their term." The CCTA had made its own recommendations about streamlining the CRTC (NL, Feb. 26/02). Yale welcomes the suggested review of the commission's mandate but worries the Heritage committee's 872-page study contains too many recommendations. "When you're putting out a report like that, if you want people to be inspired to act, it seems to me that it's important to have a few key themes and a series of recommendations around those themes so people have a sense of what are the priorities coming out of this, what are the key issues and challenges around which these recommendations have been built, what problems are we trying to address," she says. "At the end of the day, 97 is too many to get a clear sense of what matters." The Heritage committee report also suggests that commissioners and senior CRTC staff should remain at arm's-length from regulated industries for two years. The current prohibition is one year. A long-time critic of government patronage appointments likes the proposal but is skeptical about how it will work. "We believe that it should be increased to two years for senior public officials and five years for ministers," Duff Conacher, coordinator of Democracy Watch, tells NL. But the citizens' advocate looks at the legislation currently before Parliament and spots several inconsistencies. "MPs have shown strong support for ethics rules for everyone except themselves," he says. "It's good to see they're aware that there's a problem with the revolving door. But the government hasn't done anything effective to halt it and a big part of the problem is, even if they extended the rules to two years, guess who enforces it? Senior officials. And they just don't enforce it. So having a stronger rule with no enforcement is meaningless." For its part, the CRTC is remaining low profile. The vice-chair of telecommunications for the commission predicts it will take some time for his colleagues to finish reading the thick Heritage committee report."I don't expect we're going to have a formal public reaction to it. There may be discussions," David Colville explains to NL. "It also remains to be seen, frankly, what's going to happen with this document. But we're certainly going through and studying it and taking a look at the various recommendations as they relate to the commission and I don't know whether Charles has in mind a particular plan of action or not."

Heritage committee recommendations come under fire from telecom sector

News | July 2, 2003

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