BTLR on telecom: a Q&A with Janet Yale

In a phone interview with Broadcasting and Telecommunications Legislative Review panel chair Janet Yale, The Wire Report delved into the panel’s recommendations on the future of Canada’s telecom sector. The panel’s 198-page report on how to modernize Canada’s broadcast and telecom acts was released on Jan. 29. Let’s start with recommendations 16 and 17, where you bring applications like Skype and WhatsApp under the Telecommunications Act. What were you trying to achieve with that? The thought we were trying to achieve is to modernize the legislation to recognize that the way in which people communicate has changed, and that with the arrival of broadband connectivity you can communicate the old fashioned way, with point-to-point telephone service, but there are also service providers that make connections possible riding over the top of the internet. And that is becoming a very common way in which people choose to communicate, so the idea was that the legislation should reflect the reality of how people are connecting and having conversations. So recommendation 16 is very similar to the EU approach, which is instead of calling it telecommunication services which is a generic term now, if you will, to talk about electronic communication services, to reflect the fact that it’s not just point-to-point over a wire anymore. It can be facilities, it can be interconnectivity or it can be interpersonal services that ride over the top of an underlying telecommunications network. Is this simply establishing the different ways communication occurs, or are you moving towards regulating these over-the-top services? The fact is if you exclude the way people communicate then you can’t address anything, so the idea that we tried to do with our definitions both in telecommunications and broadcasting was to make definitions that reflect the reality in which people connect to each other. And then you deal with whether or not… I mean 97 per cent of retail rates are deregulated, it’s not about deregulation, nobody is talking about rate regulation in telecommunications at the retail level. And these services are often free, right, they operate over the top, they’re supported through different financial models, so the idea was to reflect the reality of how people communicate in the definition and then go on to say there should be a class based approach to deal with conditions of service. So if the main way people communicate is over WhatsApp and they don’t have a phone line -- then what happens if there’s an emergency? Do these same providers have a duty to protect the confidentiality of customer information that the traditional players do? People want to know that their private information is kept private and confidential. I don’t call that regulation, I call that conditions of service that are designed to ensure that fundamental issues that have traditionally applied, not about retail rate regulation or terms and conditions of service broadly, but basic consumer protections around emergencies, around the privacy of their information, can be in place no matter who you end up choosing as your provider of electronic communications service. So the idea was that these would be included and they would have these minimal customer protection measures in place. That’s all it is... the whole premise of that section of the report is where markets are working, that’s not a cause for concern. What we tried to address in other parts of the report is systemic barriers to competition which are traditionally not the issue of the over-the-top providers.. And what we also recognized is that over time we wanted to ensure that these over the top providers could from a competition perspective not be hindered if they needed interconnection and numbering resources. We have recommendations that talk about making it easier for new entrants, including potential over the top providers, to have the advantages that go with being an electronic communications providers in terms of interconnection and numbering resources as their business models evolve and if in fact they end up needing things like that over time. So the idea was to include them so that they would get help if they needed it and so that basic consumer protection standards would be in place, that’s it. When we talk about basic consumer standards, is that something you see the CRTC becoming more and more involved in, instead of the Privacy Commissioner? Generally speaking, we recognize that privacy is something that is dealt with in separate legislation, on the other hand, to the extent that these are providers under the auspices of the Telecommunications Act we thought it was important to have as an objective in the Telecommunications Act, an objective relating to security and reliability of telecommunications networks and electronic communications services. In other words, people should feel safe and secure in whatever way they choose their connectivity. That objective should contribute to the protection of the privacy and confidentiality of user information, in other words, that all these providers should have terms of service that include a commitment to do that. People are concerned about their safety and security online and the way in which their user information is protected and so we didn't think it was unreasonable to have that as an objective in the telecom act, to make it clear that that is something, whether or not those breaches are then addressed by the Office of the Privacy Commissioner, we’re not trying to suggest the CRTC becomes a substitute for that. You talk a lot about competition through the telecommunications section of the report. What guided your recommendations? I think our views are rooted in the premise that our job is legislative reform and creating a legislative framework and a regulatory roadmap that would give the government and the CRTC the ability to address circumstances and challenges of today as well as the unknown challenges of the future. We really divided those issues into three areas that deal with the user on the one hand, competition and overall prosperity and the role that the telecommunications ecosystem plays in driving Canadian competitiveness, both domestically and internationally. So the first section deals with the notion that every Canadian needs connectivity as almost a right of digital citizenship today and where it’s uneconomic for the private sector to invest in broadband infrastructure the government should step in and provide the resources to ensure we close that connectivity gap by no later than 2030 and make sure that everyone has broadband connectivity. Do you feel satisfied that the already announced broadband funding packages are going to be enough to fill those gaps? No. We acknowledge in the report that there are multiple pieces to the puzzle of closing the broadband gap. The CRTC broadband fund is an important way to incentivize the private sector to invest in broadband connectivity where it isn’t available, and over and above that the government has committed funds through ISED itself and there are other investment bank programs, there are a number of programs both federally and provincially that are trying to address the issue. It isn’t a one solution or a one piece of the puzzle issue with the broadband fund. It’s a very important component but I think we recognise that that’s not going to do it, and certainly in the most remote areas of Canada people have talked about lower orbit satellites as the only way we’re going to get connectivity to the most remote communities, that are primarily indigenous communities. So I think we acknowledge this is something that’s important for the government to commit to and we call on the minister to not only accelerate the investment in broadband for people who don’t have it but to report annually to Parliament on the status of broadband deployment so that from a whole of government perspective there’s accountability towards that goal. So that’s a very big piece of the puzzle and some of it is legislative in nature and some of it isn’t. Then if you think about the other two sections that we looked at, we looked at whether or not there are barriers to competition as a means to provide affordable choices to Canadians, consumers and businesses alike. We identified that we saw some potential barriers to competition and we made recommendations for regulatory reform that could foster more competition and create more affordable choices for Canadians. Now we don’t draw conclusions on that, we’re saying that it’s the CRTCs job to address those issues but we identify 5 or 6 measures, some are process improvement, some are substantive changes that we believe would foster competition in telecommunications markets balancing off against that. So it would be for competitors that are using a mix of leased and owned facilities and making it easier for them to lease the pieces of the network that they need to get access to unbundled network components if they need them and to make it a more efficient process for that to work better. But the third piece that’s equally important is making sure that we’ve addressed barriers to the rollout of advanced infrastructure because we know one of the keys to economic competitiveness and overall economic prosperity is continued investment in advanced network infrastructure, including the rollout of 5G. So we looked seriously at what are some of the barriers or things we could address to make it more efficient and effective for that rollout to take place, and that’s where we got into our passive infrastructure recommendation, that’s where we talked about easier approvals for equipment that are needed to attach to those networks on the spectrum side and so on because we’re very conscious of the fact that these advanced networks will allow transformation of business models across a variety of sectors of the economic, improving productivity and competitiveness of the businesses that rely on this infrastructure to compete both domestically and globally. That’s the high level way of how we viewed this. Let’s go into passive infrastructure, you’ve recommended exclusive arrangements around access be prohibited. The idea was that the principle of non-exclusivity was to ensure that if there is the capacity of those support structures to support more than one competitor that the first competitor in shouldn’t be able to get an exclusive arrangement and deny access to another facilities based provider who needs access to that same infrastructure. You can imagine then, organizations creating exclusivity arrangements that create systemic barriers to others competing. You’ll notice as well that we only talk about it to... the services have to be offered to the public in recommendation 34, so we’re trying to get to the difference between organizations like and or whoever building their own massive networks to transport their traffic to nodes that are closer and closer to population centres but they weren’t offering those connectivity services to the public, they’re creating private networks that they use to provide their services that are not electronic communication services. You’ll notice as well that we draw a distinction between networks that are there for the convenience of businesses that are building them versus the networks that are being built to offer services to the public. It’s an important distinction, people may agree or disagree as to whether that’s fair, but that’s the distinction that we drew. Recommendation 36 deals with the CRTC mandating access to building infrastructure including in-building wire, support structures and rooftops. Is this a recommendation around exclusive deals in MDUs where providers are locked out? The problem we were trying to solve was building owners in areas there’s a need for people to connect, think of autonomous vehicles, 5G where you just need stuff everywhere, some of it may be public property, lamp posts, mail boxes, street furniture, but what if some of it is private buildings or inside private buildings. How does the CRTC have jurisdiction over the access to inside and in-building wire support structures and rooftops within a MDU building and be available to all providers of an electronic communication providers. It doesn’t strictly speaking preclude exclusivity, it's more about giving the CRTC authority to intervene where they’re not letting anybody in. I think it would be a question of whether or not, in the context of advanced infrastructure, exclusivity starts to become anti-competitive in terms of inhibiting the efficient rollout of advanced infrastructure, as opposed to being deals that condo owners make to let one provider wire up a building. I think that’s more a case of 27.2 type discrimination activities as opposed to interfering with valid commercial arrangements, I think there’s a balancing act between the two, and all i’m saying in the context of that third bullet point is that you want the CRTC to be able to say that for efficient and effective network deployment they may have to deal with buildings that are in critical places when building owners would otherwise not allow anyone in, so we were thinking a lot about rooftops a lot, for example. You make some recommendations about speeding up the CRTCs processes. It comes as there’s quite a few files that have been dragging on for years. Is that a reflection on that? First of all we wanted to see a reimagined CRTC that was much more proactive in its activity to be strategic and future forward and conduct research, understand where the market is and where it’s going. We recognized that in order to be able to do that it’s going to need more resources. We’re not making a judgment about whether or not they do the best they can with the resources they have, that’s not the issue, the issue is whether or not there are procedural mechanisms that we can put in place that would by definition speed up the process by which these things happen. And so the recommendations we make about fostering competition which are in recommendation 29 and 30 and 31 the ones that are really dealing with trying to address that issue, whether it’s perception or reality, that sometimes access to the infrastructure of facilities based providers takes too long. So in particular if you look at the last bullet point in recommendation 30, is where we suggest that the CRTC reverse the onus in terms of wholesale inputs so that the facilities based provider, coincident with the offer and approval of forbearance for a new retail service make available the unbundled elements that are necessary for competitors to be able to offer that service or successfully demonstrate why it’s unnecessary or inappropriate to do that. So instead of the service competitors having to reply and make the case why it’s required, the facilities based providers would have to provide it or make a case why it’s not required. You talked about a more proactive CRTC. Is your view that too many of the CRTCs decisions are based on the submissions of intervenors rather than research produced by the CRTC, which of course would also take intervenors into account? I think the CRTC does call proceedings on issues of significance, what they don’t have the resources to do - unlike Ofcom in the U.K., and they used to have this back in the early ‘80s when I worked there -i s to have a research branch that is conducting its own research, economic studies looking at precedents in other jurisdiction which they put on the record of proceedings when they launch them. First of all it informs them in the context of what the proceeding should be about as they think forward but more and equally importantly it allows a common evidentiary base on which everyone can comment instead of each side or multiple sides putting in conflicting evidence. They may still do that but at least there’s a common evidentiary base on which people can rely and it allows public interest groups and those with less resources not to try and have to conduct their own research because there is that benefit to all parties of having that common evidentiary base. I think that is something that would allow the CRTC to facilitate the dialogue in public proceedings but also allow it to do strategic research looking ahead, and seeing what’s coming and use it to build the agenda of the proceedings they launch as opposed to the inevitable tendency which is to deal with the licence renewal applications, or whatever that is coming before them that are being driven by the parties or the licence renewal process that’s already in place. I think the agenda can be quite full just with the stuff that happens. It doesn’t mean that the stuff going on isn’t important and obviously it would still have to go on but I think we as a panel thought that was an important gap in the system that should be addressed. Is there anything else in the report you think we should go over? One of the things we thought about was the existing power policy direction which is quite cumbersome because it requires tabling in both houses of parliament for 40 sitting days before a policy direction can be finalized, including consultation with the CRTC, we’ve recommended it simply be a gazette notice to get public comments on the proposed directions so the government in a world of fast paced change is better equipped to provide policy direction to the CRTC on important issues and again this on the level of policy. So that’s number one. Number two, as you may know in telecommunications proceedings, in addition to the legal appeal to the Federal Court of Appeal there’s also the potential for a Cabinet appeal and unlike broadcasting and the context of the telecom act, the Governor in Council can refer back, deny or vary a CRTC decision. So we recommended two changes, one is the power to vary be eliminated so it can either just be a refer back or a denial which is the same as in broadcasting. Secondly that there be a fixed time clock on these appeals with the result that at the end of that time clock, if the Governor in Council has not granted that appeal it’s presumed to be denied. The reason for that is right now every single cabinet appeal has to turn into a memorandum to cabinet, it has to go to the cabinet committee even if the minister thinks it’s not one that they recommend considering, so if you think about that in broadcasting and telecom there can be a lot of unnecessary paperwork and activity. So the idea was that it's only the ones that the minister thinks are worthy of consideration of cabinet that will go forward and the rest can just be presumed to be denied. Were those recommendations prompted by any current process, like the current Governor in Council appeal over the wholesale rates decision? Not anything specific, it’s just all about us seeing… you know, if you’re not happy with the outcome you start a cabinet appeal and then the interventions to ministers that flow from that. The whole point of cabinet appeals is it’s supposed to be used in the rare case where there’s an issue as opposed to becoming a standard part of if you don’t like the outcome see if you can get it changed by Cabinet. I think the idea was to make it harder, and introduce tighter timeframes, and no longer have cabinet able to substitute its views for that of the CRTC by eliminating the power to vary a decision. If you don’t agree, send it back and let the CRTC reconsider it, which is exactly what happens in broadcasting. — With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca and Michael Lee-Murphy at mleemurphy@thewirereport.ca

BTLR on telecom: a Q&A with Janet Yale

Broadcast | February 14, 2020

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BTLR on telecom: a Q&A with Janet Yale

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