Government taking good first steps, but new legislation required: Intven

Hank Intven, a former member of the Telecommunications Policy Review Panel, testified before the Standing Committee on Industry, Science and Technology this week regarding its study of the deregulation of the telecommunications market. He both supports recent moves from the government, but also criticizes it for not yet introducing new telecommunications legislation. Below is an edited excerpt from his opening remarks.The government has taken some significant first steps to implement the panel’s recommendations. In particular the government has issued a policy direction to the CRTC as it authorized to do under Section 8 of the Telecommunications Act requiring the commission to interpret the rather broad and sometimes conflicting objectives of that act in a more market oriented way. In addition, the government’s orders in council on VoIP and forbearance are consistent with the panel’s recommendations to rely more on market forces where those will achieve Canada’s telecom policy goals and to reduce regulatory intervention that interferes with the achievement of those goals.We believe that it’s high time for Canada to modernize its telecom legislation to meet the requirements of 21st century telecommunications. Most of our trading partners have done this long ago. While we did enact a new telecom act in 1993, and I was privileged to be the chief external legal advisor on that legislation, I can share with you what our instructions were: we were asked to update but not to change the basic regulatory framework established for Canadian telephone and telegraph companies in the 1906 Railway Act. We were asked only to draft a few specific new initiatives such as those introducing foreign ownership restrictions and overruling a federal court case in order to establish the forbearance power. While there have been some amendments to the legislation over the years, there have not been changes to the fundamental legislative approach to economic regulation of the telecom industry since 1906, just over 100 years ago. The powers granted to the various regulators of telecom services over the years have been grated broad powers to do whatever they considered appropriate to achieve two very vague goals: to ensure ‘rates are just and reasonable’ and ‘that there is no unjust discrimination’ in the provision of telecom services. These two broad objectives have been interpreted heroically by the CRTC to regulate the telephone and now the telecommunications industry. They form the basis of a complex web of economic regulation which can change depending on the views of current CRTC commissioners without government or Parliament having any role in the matter. For example, the same two broad objectives have been used over the years to justify both monopoly and competitive provision of telecommunications. The law never changed. This is why the panel recommended that new telecom legislation be introduced to establish a clearer regulatory framework. Whatever one thinks of the recent government orders to vary CRTC decisions, I don’t think anyone in a modern industrialized democracy believes that the political arms of government should regularly interfere with the decision making process of an independent professional telecom regulator. Many observers believe that it was timely and appropriate for the government to change the policy direction of the commission in both the VoIP and local forbearance. However over the longer term, government and Parliament should develop clearer policy direction which should then be regulated by an independent professional regulator and that should be done in legislation.

Government taking good first steps, but new legislation required: Intven

News | February 16, 2007

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