Ottawa’s new, consumer friendly CRTC: How we got here

It was a rare, even unprecedented event. On a chilly day in Ottawa in February last year, Prime Minister Stephen Harper's Twitter page posted a message about the CRTC. The PM was “very concerned” about the regulator's controversial decision on wholesale usage-based billing, the message said. He had asked for a review of it and its “impact on consumers.” That CRTC decision, issued with much less fanfare in 2010, by early 2011 started to inspire hundreds of newspaper articles and mass indignation from hundreds of thousands of Canadian Internet users. With that tweet, the decision was dead in the water and would be revised before long, though its impact may still live on. Experts say CRTC Chair Jean-Pierre Blais’ focus on the interests of consumers can be traced back to the public controversy over the wholesale usage-based billing decision. Michael Geist, the Canada research chair in Internet and e-commerce law at the University of Ottawa, said during a panel discussion at the Canadian ISP Summit this week that Blais' mandate from the Conservative government—however and whenever that was delivered—represents a “sea change” since a 2006 government policy directive for the CRTC to rely on market forces to the maximum extent feasible. Geist said the change is most evident in Blais, who, since assuming the chair's position on June 18, has highlighted the commission's role in standing up for consumers and the public interest. Blais' consumer friendly approach has been pointed out in his appointment of a new chief consumer officer at the CRTC, as well as his reference to the public interest in the commission's decision last month to deny BCE Inc.'s proposed $3.38-billion acquisition of Astral Media Inc. “It's quite clear that the mandate that's been given to the new chair, to Blais, is in many respects a real sea change on the commission's perspectives,” Geist said. “In many ways it was UBB that I think was the big wake-up call for the government.” Geist referred to remarks by Treasury Board President Tony Clement last week at an International Association of Business Communicators conference, where Clement, who served as industry minister throughout the public outcry over the usage-based billing decision, said the government had “heard more feedback on UBB than on any issue” since 2006. “I believe that you can draw a direct link between the UBB controversy, or the UBB issue, and the switch that we've seen at the government,” Geist said. Christian Tacit, a lawyer with Tacit Law who represents the Canadian Network Operators Consortium (CNOC), a coalition of small ISPs, said he believes the government “got a real scare” from the public reaction to the usage-based billing decision, causing it to reconsider how the CRTC should follow the policy directive to rely on market forces and how to balance the directive with consumer interests. “After they got really scared over UBB, they realized they needed to have a more consumer focused approach,” Tacit said. “Certainly, for Minister Clement, that was his immediate instinct,” he added, referring to Clement’s personal use of Twitter in early 2011 to voice his displeasure with the decision. Independent telecom consultant Jean-Francois Mezei, who first filed a cabinet petition in January 2011 to overturn the decision, agreed that the government realized it had a public relations problem over usage-based billing. Aggressive media coverage “scared” the government and gave opposition parties fodder to criticize the Tories' leadership over the CRTC, he said. The government, he said, was probably concerned that an unpopular CRTC could affect voter attitudes. “Everything’s about votes at the end of the day,” Mezei said. “They saw, with UBB, what the public can do, and they didn’t want to repeat it.” Mezei said he believes the government gave Blais “a clear direction” to take a pro-consumer approach and foster competition as chair of the CRTC. The approach should mean the government receives “kudos” for popular CRTC decisions instead of backlash for unpopular ones, he said. “The government told Blais, ‘Make the people happy,’” Mezei said. Tim Powers, a Conservative consultant with government relations firm Summa Strategies, said in a phone interview that the CRTC's interpretation of its mandate under the 2006 policy direction has shifted in recent years. He agreed that the usage-based billing decision was “a chapter in the story of government thinking” on these issues, though it was not the defining moment. “Geist is right, but I’d start the clock earlier,” Powers said of the commission’s change in approach. He pointed to an earlier, also controversial CRTC decision issued in March 2010 to establish a value for signal regime for over-the-air broadcasters. That one, he said, “moved” government thinking. In September 2009, the Tory cabinet had issued a directive to the commission to “hold hearings on the implications and the advisability of implementing a compensation for the value of local television signal regime” and to report back to cabinet on the issue. The directive included a request to consider “the comments of the general public on the impact of such a measure on consumers.” The CRTC came back with a decision supporting value for signal. Powers said over-the-air broadcasters that favoured value-for-signal, and broadcast distributors that opposed it, tried to “out-consumer each other” in their communications during the debate and consultations. “That, I think, was a recognition from all involved that they were hearing, not just from the CRTC but from government and from the public, that if you’re going to have these debates and they’re significant, then think about the consumer first,” Powers said. He said he believes the Conservatives tried to instil in government agencies an emphasis on consumer interests even prior to that, and that “it probably did take a couple of years to seep in.” Geist acknowledged that some changes in the government's approach to the telecom and media sectors were noticed earlier, in 2008, when then-industry minister Maxime Bernier, who issued the 2006 policy directive, was replaced by Jim Prentice. He said Bernier's “hands-off, no set-aside approach” to that year's spectrum auction caused the government to replace him with Prentice, “who would follow through with the true set-asides” to encourage competition and new entrant wireless carriers. In line with Powers' thinking, Industry Minister Christian Paradis said in July that the government has “always” had consumer interests in mind. "Our Government's policy has always been to encourage competition, foster reliance on market forces and ensure consumer choice," he said in a statement announcing that the government would not overturn aspects of the CRTC’s May 2011 “obligation to serve” decision. Geist said consumer groups such as the Public Interest Advocacy Centre (PIAC) will gain additional clout at CRTC hearings in the years ahead as the commission focuses on consumer interests. That clout may come at the expense of cultural groups often involved in discussions over how companies should allocate benefits spending to support the Canadian broadcasting system, he said. Tacit said the cultural groups may continue to have sway with the commission during hearings about broadcasting, and that consumer interest groups will take on a more prominent role in telecom proceedings. For his part, Blais, in an Oct. 29 speech in Ottawa, said the CRTC's focus on consumers is not new. The CRTC has always considered consumer interests, he said. What's new, Blais said, is that he has called on his staff and commission colleagues “to renew their focus on consumers.” “Can we convince everyone to trust us?” he asked. “No, not everyone. But we can do better, and we will do better to earn their trust every day, in every action and in every decision.” nkyonka@thewirereport.ca

Ottawa’s new, consumer friendly CRTC: How we got here

News | 11/09/2012 9:50 pm EST

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