Budget bill gives CRTC sharper teeth

New legislation proposed by the federal government will expand the powers of the CRTC, giving it the ability to fine offenders, share information with the Competition Bureau and exert control over companies that operate telecom services but do not own network infrastructure. Amendments to the Telecommunications Act and the Broadcasting Act, under which the CRTC operates, are included in the government’s latest omnibus budget bill, introduced Oct. 23. Among the long-promised changes is the addition of monetary penalties to the commission's regulatory arsenal. In the proposed legislation, a company that violates CRTC rules could face a penalty of up to $10 million for a first offence and $15 million for every subsequent offence. The penalties for an individual are $25,000 for the first violation and $50,000 for every subsequent offence. Lynne Fancy, who works in spectrum policy at Industry Canada, told the standing committee on industry, science and technology on Thursday that the administrative monetary penalties (AMPs) are in line with fines imposed by other government bodies on anti-competitive behaviour. “The AMPs allow the compliance continuum to be better filled out,” she said. “Currently we use a lot of education, persuasion, to encourage people to meet the rules. On the other end, we can revoke a licence, which is a very heavy hammer to do. The AMP regime provides a tool in the middle that helps to encourage compliance.” Denis Carmel, director of media relations at the CRTC, said in a phone interview that the new powers are a “disincentive” for those that would violate the regulator’s rules. “It's a lot easier if somebody crosses a line you impose an AMP and it clearly helps you maintain discipline in the system,” he said. “You don't need to use it, but the fact that you have it brings these parties into a better state of compliance. Our objective is not to impose penalties but to bring compliance.” The amount of any fine will be determined by the “nature and scope of the violation,” the history of the offender, the benefit that the violation gave them, and the person or company’s ability to pay, according to the proposed legislation. “It’s part of an evolution of the CRTC’s role,” John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said in a phone interview. “If you're going to make them into a policy regulator with codes of conduct, you have to give them some fining power. You have to give them some investigating power.” The commission has moved away from price regulation to a more competition-based regulatory framework, Lawford said, adding that the evolution has left it lacking in some areas of enforcement. Lawford said that the CRTC currently has no power to enforce the provisions of its wireless code because it lacks the power to fine offenders, whereas it does have the ability to fine those who violate anti-spam legislation or the national do-not-call list. “At the moment, the wireless code is the big fat problem,” he said. “Right now, what stick do they have to whack people with when they don't have rate regulation? Nothing.” The bill would also enshrine the CRTC’s authority to impose conditions on companies that resell telecom services provided by the incumbents and do not have any network infrastructure of their own. The commission currently has no direct power to compel such companies to provide 911 service or provide access to the disabled, and the legislation would broaden its power to impose conditions to include anyone offering a telecommunications service. “The amendment extends this power so consumers will be able to benefit from the same safeguards regardless of which type of service provider they choose,” Industry Canada’s Adam Scott, director of business and regulatory analysis, told the parliamentary committee hearing on Thursday. Carmel said the power to impose conditions as well as fines on companies, such as VOIP providers that don’t own their own networks, would be “very useful.” “It's very easy with new technology to provide phone services in a cheap way,” he said. “If you're able to circumvent the obligations, obviously it's going to be cheaper. If you provide 911 service, it's going to be more expensive. But the paramountcy of the safety of Canadians is very important to us.” Officials from the Competition Bureau complained during the CRTC hearing on wholesale wireless services in September that its hands are tied when it comes to telecom regulation because the CRTC is not allowed to share commercially sensitive information from telecom companies. “While the CRTC can currently release confidential information to the minister of industry or the chief statistician, it cannot share such information with the commissioner of competition,” Scott said a last week's committee hearing. “At the same time, the CRTC is addressing issues that are increasingly linked to competition and the competitiveness of telecommunications market. These amendments will allow the CRTC to share information with the commissioner of competition so that he can make more informed intervention.” The budget implementation legislation that includes the changes to the power of the CRTC is currently before committee and will return to the House of Commons for third reading before a vote on its passage. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Budget bill gives CRTC sharper teeth

News | November 10, 2014

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Budget bill gives CRTC sharper teeth

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