Government calls for modernization of telecom policy and regulatory framework

The telecommunications review called for by the federal government in the February 23 budget is likely to leave no stone unturned in trying to determine the best possible framework for the industry going forward. The government, under the direction of Industry Canada, will convene a three-person, "wise men" panel to recommend before the end of this year the best way to move to a "modern telecommunications framework" that benefits both the industry and consumers. The review is likely to pit BCE Inc., owner of the country’s largest telephone company and loudest proponent of a broad review, against TELUS Corp. and MTS Allstream Inc., the number two and three ILECs, respectively. Bell Canada has for more than a year repeatedly called on the federal government to initiate a broad review of the telecommunications sector, saying there needs to be a more forward-looking framework. TELUS, MTS Allstream, and other smaller telcos say there doesn’t need to be sweeping changes, and that only minor changes are needed. "We’ve been urging the government to do this and obviously we’re pleased that they have decided to do it," BCE executive VP Lawson Hunter tells Network Letter, adding that he’s also satisfied with the process and the timeline suggested by the government in its budget. Highlighting other blue-ribbon panels in the recent past such as the one that studied national securities legislation, and another chaired by Clifford Lincoln on access to foreign-owned, third-language TV channels, he doesn’t see any reason why this panel won’t be able to meet the deadline set out by the government in the budget. The Lincoln-led panel, which also had Gowlings lawyer Roger Tasse, and Anthony Cianciotta, president of Capri Release Inc. on it, is a prime example of how quickly things can get done when there is a will. The panel examined the impact of greater access to non-Canadian third-language public TV channels. The panel was announced on Aug. 17, 2004 and issued recommendations the following month. Due to political pressure and keeping in mind the recommendations, the CRTC moved quickly to change its policy regarding access to foreign-owned, third-language TV channels before the end of last year. (For more information on this panel and its recommendations, please refer to the Dec. 20/04 issue of NL affiliate publication Canadian Communications Reports.) Hunter concedes that the Lincoln panel had a narrower focus, but maintains the job can be concluded on time. "It’s obviously a matter of commitment and focus, (but) I think it should be able to be done within that time frame," he says. But, with the scope of the process as yet undetermined, it’s unclear how far and what aspects of the telecommunications regulatory regime will come under scrutiny from the panel of "eminent Canadians." The review could take a narrow view and only focus on the regulatory and legislative elements of the telecommunications sector, but it could also take a broader view of the information and communications technologies (ICT) sector. TELUS doesn’t support any major legislative changes to the Telecommunications Act. "Our position is that a major overhaul of the Telecom Act isn’t necessary, that there is no need for a mandated review leading to major legislative change," Janet Yale, executive VP of government and regulatory affairs, told NL in an interview earlier this year. "We believe the act is flexible, and very able to adapt to new technologies and the public policy implications of those technologies." For TELUS, there are two aspects of the regulatory framework that are of utmost importance and need to be clarified by the end of this year: price caps and the test for local forbearance. "We believe these two areas really need to be addressed on a priority basis. Because, now we see the entry of the cable industry into Internet telephony, or cable telephony and it’s really difficult for us to figure out our business strategy in terms of competing with them when we don’t have clarity about what those rules are," Yale stated. Hammering out the details of the panel’s scope will be difficult because of the various competing interests. The Canadian Cable Telecommunications Association (CCTA) has indicated that any policy review has to be as broad as possible, addressing the competitive environment in the converging broadcasting, Internet and telecommunications sectors. The CCTA also noted that making sure competition takes hold prior to deregulation of the local market should be central to the review. Hunter says BCE’s view is that this should not be a purely regulatory review. "…It needs to be a bit broader than that, that it needs to certainly look at the role of the ICT sector and how it can be used, promoted, whatever, to increase productivity in the Canadian economy, should be part of what happens here," he says. (See box for additional components of Bell’s view.) While it isn’t explicitly mentioned in the budget document, sources in the cultural sector tell Network Letter that senior policy advisors in Industry minister David Emerson’s office have indicated foreign ownership restrictions in telecom will be part of the review. Reports have surfaced that foreign ownership could be on the table for discussion, but only as a second stage following the initial review. Calls to minister Emerson’s office for comment were not returned by press time. Hunter agrees that it would make more sense to look at foreign ownership after figuring out the regulatory framework issue. "It would be a difficult issue for them to take on without looking at the whole content side. So I would think it would be better to stage this and do this (review) first, and then put (foreign ownership) as a second stage. Inevitably that may happen, I just think it would not be a good idea to get bogged down out of the gate with the foreign ownership issue," he says.

Government calls for modernization of telecom policy and regulatory framework

News | March 2, 2005

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