PIAC pulls out of CRTC’s OTT consult, says fact-finding report will be biased

The Public Interest Advocacy Centre (PIAC) says it's not participating in the CRTC's “fact-finding exercise” on over-the-top programming services because the consultation is not a regulatory proceeding and does not cover its costs. “By excluding the application of the intervenor costs rule to the present process, the Commission is indirectly limiting the 'facts' upon which it will be deciding the very important issue of over-the-top programming by effectively only receiving the 'facts' from deep-pocketed corporate parties,” PIAC counsel John Lawford wrote the CRTC in a letter dated June 17. “ Commission has not initiated a truly public consultation process, as it is denying funding to public interest intervenors. This turn of events is particularly unfortunate from a public perception standpoint.” In a letter to PIAC on June 13, Namir Anani, executive director of policy development and research at the CRTC, clarified that its consultation on over-the-top content services is a “fact-finding exercise” and “not a 'proceeding' for the purposes of the intervenor costs rules.” Anani wrote that the consultation “is purely a fact-finding exercise and no policy or regulatory outcomes will be determined on the basis of this exercise.” The CRTC announced a public consultation last month on online programming services like Netflix and Apple TV. The announcement followed a recommendation to hold a public consultation from the House of Commons heritage committee as well as pressure from a broadcasting industry working group of companies and organizations that include Canadian Media Production Association, the Alliance of Canadian Cinema, Television and Radio Artists, Astral Media, Bell Media Inc., and the Society of Composers, Authors and Music Publishers of Canada. The Telecommunications Act authorizes the CRTC to award costs associated with telecom regulatory proceedings to encourage the participation of groups that “represent subscriber interests.” Under the act, the commission can determine which parties receive cost awards and which companies shall cover them. Normally, telecom companies participating in proceedings cover the legal costs of public interest groups like PIAC. Lawford said in an interview that the group intends to participate in any subsequent regulatory proceeding on over the top services—but added that it is likely to be framed by the fact-finding consultation. He said PIAC is concerned that, if any regulations or fees are placed on services like iTunes or Netflix, it could increase prices for consumers. “You just have to be very careful about how you do it. Maybe they'd need to have more hearings and a phase-in. That's sort of what we're assuming they're going to do here,” he said. But he added that the commission could also be using the consultation as an instrument to buy time. Tamir Israel, a staff lawyer with the Canadian Internet Policy and Public Interest Clinic (CIPPIC), said in an interview that the group will participate in the consultation on over-the-top services but, without a cost award, it cannot hire an outside expert such as an economist. “For example, for the usage-based billing proceeding, we brought in an economist who had done a lot of work on the economic value of the usage-based billing model and network engineers who can attest to the traffic levels,” he said. “It's so we can debunk some of the stuff that's coming from the other side.” Israel added that the CRTC's consultation on over-the-top services comes at a bad time as companies and groups are faced with other legal proceedings and hearings, including commission hearings on vertical integration and usage-based billing. “It's really challenging for organizations like CIPPIC. We have two lawyers, and PIAC has two or three.” In its letter to the commission, PIAC argued that fact-finding exercises are permitted under the Broadcasting Act but not the Telecom Act, and that the public consultation should be treated as a telecom and broadcasting regulatory proceeding to allow for cost awards. PIAC identified three other instances of formal “fact finding” consultations by the CRTC. They were an inquiry on interactive television launched in November 2001; a consultation conducted by the Task Force on the Canadian Television Fund launched in February 2007; and a regulatory decision in 1985 involving Western Approaches Ltd., for which a "fact-finding meeting" was held. All of those consultations were held under the Broadcasting Act, PIAC wrote. The CRTC has designated its consultation on over-the-top services as “broadcasting and telecom.” In 2009, the CRTC launched a review of its practices and procedures for the awarding of costs. During the consultation, incumbent telcos, including Bell Canada Enterprises Inc., Shaw Communications Inc., Rogers Communications Inc., and Telus Communications Co., argued that the costs regime should be tightened so that only groups that demonstrate “significant financial hardship” are eligible for awards. In a decision on the matter last year, the CRTC denied the request to “adopt an attestation of significant financial hardship,” as well as a proposal to “cap allowable rates,” noting that the move would be “unduly restrictive and that it could unduly limit the ability of costs applicants to ensure adequate representation.” sdoyle@thewirereport.ca

PIAC pulls out of CRTC’s OTT consult, says fact-finding report will be biased

Broadcast | June 20, 2011

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