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ROUND-TABLE DISCUSSION – CRTC
FEES & COST RECOVERY

Held on August 10, 1999
at 9:00 a.m., in the Salon Réal Therrien

 

1.  Opening Statement by CRTC Vice-Chairman David Colville
     - Introduction of participants

2.  Review of Agenda

3.  a.  Presentation of the CRTC Financial Report by Céline Leblanc

Céline Leblanc presented the issues related to CRTC budgets and resource utilization for the fiscal years 1997/1998, 1998/1999 and 1999/2000. She also outlined some of the streamlining initiatives being explored and /or implemented by the CRTC such as forbearance, alternative dispute resolution, electronic filings, and enhanced web search engine.

    b.  Presentation by Jim Stefanik on CRTC budget and resource plans for the next three years (i.e. fiscal year 2000/2001 onwards).

Jim Stefanik discussed existing budget levels for fiscal year 2000/2001, new resource requirements and funding strategy.

Both of these presentations provided highlights of an information package that was distributed to the round-table participants. This package included: i) the Government’s Cost Recovery and Charging Policy; ii) CRTC Financial Report - Budget & Resource Utilization (fiscal years 1997/1998 to 1999/2000); iii) CRTC Streamlining initiatives; iv) CRTC Budget, Resource Requirements & Funding Strategy fiscal year 2000/2001 onwards.

4.  Round-table discussion

A summary of the significant issues that were raised and discussed as part of this round-table consultation is noted as follows:

CRTC Telecommunications Fees

• Some participants indicated that CRTC telecommunications fees have risen over the past several years. CRTC staff acknowledged this fact and explained that increases have been primarily attributed to new regulatory responsibilities (e.g. Independents Telcos, New statutory responsibilities, etc.).

• Overall, participants acknowledged that the amount of CRTC fees is not a material cost to their operations. Participants generally indicated that the most significant CRTC related cost to them was in respect to the workload caused by regulatory requirements.

• Some wireless carriers noted that Radiocommunications Act fees paid to Industry Canada are much more significant than CRTC fees.

Costs of Regulation

• Regulatory requirements have and continue to add to the operating costs of telecommunications carriers. Several participants indicated that over the past several years, they have had to devote more resources and staff to address the Commission’s regulatory requirements. Areas where the industry must devote regulatory resources includes: filing tariffs, on-going reporting requirements, liaison with carrier operations, local competition policy and interconnection issues.

• While several of the participants acknowledged streamlining and improved service delivery initiatives undertaken by the CRTC in the past several years, it was indicated that further improvements are possible.

CRTC Service Delivery – Potential Areas of Improvement

Areas which some participants addressed as requiring further improvement primarily had to deal with the "lightening" of the regulatory burden. Specific areas where service improvements were suggested are noted as follows:

Timeliness of Service Delivery
CRTC Decisions

• The majority of participants indicated that improvements are required in terms of the timeliness of certain types of CRTC decisions. It was indicated that CRTC decisions have a direct impact on telecommunications carriers financial plans and results. The industry must know the results of the Commission’s decisions on a timely basis, even if it is not a favourable decision, so that they can continue to effectively plan their operations. Any new resources that the CRTC obtains next fiscal year should, in part, be directed to this priority issue.

• David Colville indicated that the Commission would look into this issue and consider options such as providing a tentative date as to when a decision could be expected. A further improvement to the process could entail having a mechanism in the CRTC that would flag any application that is outstanding over a set number of days.

• Another way the CRTC has improved its decision process (including timeliness) and minimized the regulatory burden on the industry was discussed. It was indicated that CRTC is using more show-cause processes/decisions (e.g. Internet forbearance) where deemed appropriate. Thus, instead of having several proceedings dealing with the same issue for several companies, a generic proceeding applicable to all companies is sometimes used.

Interrogatory Process

• A few participants expressed concern with respect to the interrogatory process. It was indicated that the level of detail requested is imposing significant resource demands on the industry. Several suggestions were made with respect to interrogatories including the need to screen the type and number of interrogatories asked for a given process.

• Some participants suggested that decisions could be based on less information and that it appears that CRTC staff in developing the interrogatory questions, are trying to cover 100% of the potential issues that could be raised by Commissioners. It was a perception of some participants that not all information filed was essential in rendering a decision, especially detailed and massive costing information which is a resource consuming activity for the industry.

• One participant indicated that the CRTC should balance the requests for additional information on any given file, against the industry’s desire for more timely decisions and the industry’s costs associated with the preparation of this material. One other industry participant agreed with this statement indicating that there should be some risk management considerations in the rendering of decisions and that the Commission should not maintain an operating principle of "bullet proofing" all its decisions.

• David Colville indicated that Commissioner’s generally do not see the initial questions asked to broadcasting or telecommunications companies. The issue raised by participants will be noted and further explored by CRTC staff. It was acknowledged that while there may be a perception that not all information is required, Commission decisions must be based on sound, comprehensive information.

Reporting Requirements

• Several participants indicated that the CRTC should examine the reporting requirements that are imposed on the industry. It was suggested that several reports which industry members must file with the Commission on a regular basis may no longer be relevant and thus should be eliminated to lessen the regulatory burden. These reports impose resource commitments on behalf of the industry. It was noted by some participants that the impact of this reporting requirement is more significant for some of the smaller independent companies who have more limited resources. Some examples were provided of reports that should be considered for elimination.

• David Colville supported action on this issue. He suggested that all companies compile an inventory of all the reports that they must file with the Commission and suggest which reports they feel should be considered for elimination, or on a reduced reporting period. Mr. Colville indicated that he would also ask Commission staff to do such an inventory, so that the reporting requirements could also be examined internally at the Commission. After both the industry and CRTC have compiled lists of reporting requirements that may no longer serve a useful purpose, it was suggested that either a round-table discussion be held to discuss which reports should be eliminated or that the CRTC meet on a one-to-one basis with industry representatives to discuss this issue.

Filing Requirements

• One of the independent companies noted that the Commission staff often requests similar information for several proceedings (i.e. duplicate filing of information). It was acknowledged that although each proceeding must have a record on its own, often the CRTC will request the same type of information for the various proceedings. It was suggested that the CRTC look at ways of reducing or dealing with this issue of duplicate filing of information. It was indicated that, especially for the small independents with limited resources, this is a resource and time consuming task.

• David Colville indicated that this issue has been noted.

Backlog

It was noted that some industry participants had concern with respect to the backlog of work at the CRTC. This in part has contributed to the delay in some types of CRTC decisions. While the issue of backlog was noted by one larger telecommunications company, it was further highlighted by a smaller independent company who noted that the Commission appears to devote a large amount of time to the large companies, often at the expense of the small companies.

David Colville acknowledged that a backlog of work does exist on certain files and that it is attributed in part to the lack of Commission resources. He indicated that he will bring this issue forward for CRTC consideration and look at how we can catch up on issues important to the independents telcos (such as carrier access tariffs). Peter Vivian indicated that there may be a need to look at the regulatory framework for independents to explore the possibility of a more "light- handed" approach for these companies.

Cost Drivers and Application Fees

One industry participant suggested that the CRTC look at the "cost drivers" of its operations (i.e. who in the industry and what type of issues result in increased costs). A discussion on this issue resulted in the suggestion of an application-based fee.

The general consensus of industry participants was that they would not support an application based fee system. They feel that the current method of assessing fees is sound.

CRTC Resource Requirements

Industry participants were briefed that the CRTC will be requesting approximately $3 million in new resources starting next fiscal year and continuing for a period of three years. It was indicated that of this total, approximately $1.5 million would be directed at the telecommunications activity. CRTC staff indicated that they would approach Treasury Board this Fall and request that these resources be funded from general government revenues as opposed to an increase in fees. It was indicated that the CRTC felt this is an appropriate approach to address a peak in the Commission workload and permit it to deal with the backlog of issues. It was noted that if the Treasury Board does not accept the CRTC’s funding proposal, then this could result in a 8.6% increase in CRTC telecommunications fees next year.

Some industry participants expressed a concern that if the CRTC would be granted additional resources, this would result in an increasing burden on their workload (i.e. more CRTC staff would ask more information from the industry). David Colville indicated that these resources would in fact be directed to service improvements and addressing the backlog in work.

Other participants indicated that they have had to go through cut-backs and did not have the ability to request additional resources. CRTC staff explained that the Commission has and will continue to look at streamlining of Commission operations to re-direct resources to higher priorities, however, there is a need for additional resources to address the issues associated with the introduction of the competitive framework (e.g. competitive disputes). Participants indicated that they had noticed some improvements in CRTC processes.

The issue as to how long these new resources should be available to the CRTC was also discussed. There was a debate as to whether two or three years would be an appropriate period. Some participants indicated that the CRTC should put forth its Vision / Work Plan for the next three years to support its resource request. This should also be accompanied by a periodic "report card" on accomplishments.

Overall, industry participants indicated that they support the CRTC request for new resources, providing these resources are directed to reducing the regulatory burden imposed on them as well as to improve the timeliness of CRTC decisions. Some participants even indicated that they would be willing to pay more, than the amounts anticipated in this meeting, if service delivery could be improved. It is important that the CRTC keep pace with a fast-moving industry operating in a competitive environment. Participants recognized the CRTC’s heavy workload and indicated that there are a number of important issues the Commission must deal with over the next few years (e.g. high cost service areas, contribution, rationalization of inter-connection, price-cap review, access issues) and that it should be appropriately resourced to do this.

While providing general support for the Commission’s resource increase, some industry participants felt that it is important that the CRTC express a commitment to reduce the regulatory burden (e.g. deregulation of specific services) on the industry when the full benefits of the competitive framework is appreciated in 2-3 years time. This should include a commitment to eventually reduce the amount of CRTC resources and to continue with further CRTC streamlining initiatives.

David Colville concluded the consultation by acknowledging the industry’s general support for a temporary increase in the CRTC’s resource levels. He indicated that this was a productive consultation in that a lot of good ideas to improve service delivery and streamline the regulatory process were put forward. David indicated that the CRTC is committed to improving the regulatory process and would encourage participants to forward to the CRTC, any other streamlining initiatives they would like considered. We will make a concerted effort to continue to improve our processes and that by the next round-table consultation, we will be in a position to demonstrate the progress we have made towards this goal.

Participants were informed that minutes of the meeting would be prepared which would highlight the main issues raised as part of the consultation. These minutes will be placed on the public record and will be available of the CRTC’s web site.

The meeting was adjourned at 11:40 a.m.

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