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Speech by Konrad von Finckenstein, Q.C., Chairman, Canadian Radio-television and Telecommunications Commission


To the 2009 Canadian Telecom Summit

Toronto, Ontario
June 16, 2009

CHECK AGAINST DELIVERY

 

Thank you for your introduction and this opportunity to join you for the Canadian Telecom Summit.

Last year I spoke to you about a series of issues including the National Do Not Call List, accessibility, net neutrality, dispute resolution, administrative monetary penalties, and convergence. I even went so far as to suggest that we needed a single Act to bring together the broadcasting and telecommunications legislation.

Today, I have an opportunity to review with you what we have achieved in the past year.  We had another very full year at the CRTC. I’m happy to say that we have moved the yardsticks ahead on several of those issues. 

After looking back at the past year at the CRTC, I will then look forward to what is coming up in the year ahead.

The past year in review

Wireless 911 services
One of our most important initiatives over the past year has involved 911 emergency services. With respect to wireless devices, emergency responders have had difficulty at times locating a person calling 911. The current 911 services can only narrow down the location of the caller to a sector served by the nearest cellphone tower.

We asked wireless service providers to work with provincial and municipal representatives to find a technical solution. I am pleased that the industry responded to our challenge and came forward with a solution that involves using GPS or other wireless location technology. 

These enhanced features will improve the safety and security of Canadians. Emergency responders will be able to determine the location of a person using a cellphone to call 911 with much greater accuracy – generally within a radius of 10 to 300 metres from where the call originated.

Although we have directed wireless service providers to upgrade their 911 services by February 1, 2010, we look forward to seeing the enhanced features introduced in some markets much sooner.

I will return to the topic of 911 services in a few minutes when I discuss upcoming issues, and our search for solutions for nomadic Voice over Internet Protocol services.

National DNCL
The past year also saw the establishment of the National Do Not Call List (DNCL) – a service that Canadians had been awaiting with interest. Since its launch last September, Canadians have registered almost 7 million numbers on the National DNCL. Over a third of adult Canadians have registered their residential land lines, and 12% have registered a cellphone number.1 Over 6,100 telemarketers have also registered with the National DNCL operator.

Not only have Canadians registered, they have noticed the benefits. An independent survey found that 80% of those who have registered say they now receive fewer telemarketing calls.2

Consumers who continue to receive telemarketing calls after they have registered on the National DNCL can bring these possible violations to our attention. In fact, Canadians have taken an active interest in reporting such violations and we have been receiving an average of 620 complaints every day. When we investigate these complaints, we find that about two-thirds of them are valid.

Following an investigation, our enforcement and compliance team can issue warning letters to telemarketers that have broken the rules. These letters require corrective measures, and instruct the telemarketers to tell us what measures they intend to take. 

We have resolved many of these cases through this kind of exchange.  Other cases are ongoing. If necessary, we have the authority to impose administrative monetary penalties of up to $15,000 for each violation of the rules. Trust me: where the case is sufficiently grave and well documented, we will not hesitate to impose these penalties.

I would like to take this opportunity to deflate an urban myth that has emerged about misuse of the list. There have been allegations that telemarketers based outside of Canada are purchasing subscriptions to the National DNCL only to call the numbers on the list. We have looked into these claims and at this time we do not have any evidence to substantiate them. 

We all realize that telemarketing calls from abroad are a significant concern. While we enjoy good working relationships with the United States, and while we exchange information, the legislation does not provide for mutual enforcement. This is a significant shortcoming.


Accessibility
Let me turn next to the accessibility of communications services to persons with disabilities. As today’s communications technology evolves, we have more tools than ever before to participate in society. However, those tools are only useful if they are accessible to us.

The communications system must respond to the needs of all Canadians, including the more than four million Canadians that have a disability. Moreover, if we look ahead a few short years, it is evident that the communications needs of baby boomers will also change as they age.

We recently held a comprehensive proceeding on this issue that included a public hearing. The proceeding was unique in that it considered accessibility in light of both the Broadcasting Act and the Telecommunications Act. I am sure we will see more of these converged hearings in the future.

We have listened to input and advice on issues ranging from: captioning and described video; consumer service and support; access to wireless services; emergency services; and relay services involving the interposition of a live operator.

We expect to issue our decision on accessibility later this month. It will address reasonable accommodations that can be implemented to reduce barriers to the access of telecom and broadcasting services, while taking into account the economic reality.


Consumers
Let me turn next to the Commissioner for Complaints for Telecommunications Services – the CCTS. You will recall that the telecom industry established this independent agency to respond to consumer complaints, and the CRTC approved its mandate and structure.  Membership in this agency is mandatory for all service providers with annual revenues in excess of $10 million. 

Shortly after we granted our conditional approval in December 2007, the industry petitioned us to review and vary our decision on the agency’s membership requirements. After considering the applications, we decided to maintain the threshold we had set for membership, but we agreed to review this requirement after three years.

Since its launch, the CCTS membership has grown to represent practically all of the retail telecommunications market. During its first year of operation, the CCTS received over 2,000 complaints, 61% of which were successfully resolved between the consumer and the telecom service provider further to the agency’s initial involvement. The majority of the complaints concerned billing errors, compliance with contract terms and commitments, and service delivery.

We really like the CCTS model, which is based on a self-regulatory code that was subject to initial approval by the Commission. We are working with the CCTS on an ongoing basis to ensure that consumer issues are resolved in an efficient manner. As I mentioned a moment ago, at the end of 2010, we will begin a review the CCTS, including its mandate, structure and membership requirements. We will also consider whether there are other telecommunications regulatory functions that could be put under the CCTS umbrella. 


Action plans to review existing regulations
In 2006, the government issued a Policy Direction requiring that we rely as much as possible on market forces to achieve the policy objectives of the Telecommunications Act. We immediately began a review of all our telecom regulations and consulted with our stakeholders to help set our priorities. We then established our action plans and began work on the regulatory measures we had identified for review.

Over the past year, among other measures we have:

  • streamlined the tariff approval process
  • eliminated the retail quality of service rate adjustment plan and streamlined reporting requirements
  • reviewed our price floor test, and
  • eliminated and modified certain monitoring and reporting requirements.

We have also reviewed disconnection and deposit policies, and will be issuing our decision shortly.


Improved dispute settlement
Lastly, before leaving the topic of what the Commission accomplished last year, let me say a few words about the progress we have made in our capacity for dispute resolution.  As competition becomes more intense in a converged environment where there is less regulation, our role in resolving disputes will grow.

We consider it important to have well-designed, predictable and timely dispute settlement mechanisms for broadcasting and telecommunications matters that come under our purview. In January, we issued an information bulletin that set out the procedural steps and time limitations relating to requests for dispute resolution.

Mediation continues to be available through the Commission’s Broadcasting and Telecom Mediation groups. We have also created a distinct group within our Policy Development and Research sector to deal with final offer arbitration and expedited hearings. On a given file, there is no horizontal communication between staff conducting mediation and staff conducting final offer arbitration or an expedited hearing.

The existence of these dispute settlement mechanisms has induced some parties to settle their differences early in the process. For example, on June 1 we were scheduled to begin an expedited hearing between Shaw Cablesystems and Telus related to access to Telus’ support structures. Before the proceedings could begin, we were advised that they were no longer required since the parties had reached a settlement by themselves.

We encourage parties to resolve their differences through private third-party mediation or bilateral negotiations or other means without our participation, and to only come to us for arbitration as a last resort.


The year ahead


VoIP 911
A few moments ago, I told you about our decision relating to wireless 911 services. Nomadic Voice over Internet Protocol (VoIP) phones present an entirely different set of issues in terms of 911 services.

These phones can be used from any location where the adapter can be connected to a high-speed Internet line. When someone makes a 911 call with a nomadic VoIP phone, the call goes to a live operator. Since there is as yet no automated way to determine where the call is coming from, the operator must then ask questions to identify the location. But in an emergency situation, this is often very difficult. This is far from being a foolproof system, and mistakes can lead to tragic consequences.

While some countries have implemented similar live intervention systems, others have decided that 911 services are simply not available on nomadic VoIP. The CRTC, on the other hand, has been actively searching for solutions.

On April 15, we issued a call for comments in which we asked interested parties to respond to the following questions:

  • What are the costs associated with a location determination platform that would link a nomadic VoIP subscriber’s IP address with a civic address?
  • Who should pay for the various costs of implementing nomadic VoIP E911 service?
  • Should small access service providers be exempt from implementing a location determining platform?
  • Are there alternative solutions that would improve this service?

We have asked telecom companies and other interested parties to send us their submissions on these questions by August 7. All parties will then have until November 6 to file comments with the Commission.

In 2010, we hope to resolve one of the remaining challenges for 911 services in Canada on the basis of the responses in this proceeding.


Internet traffic management
We will soon be moving ahead on the important issue of Internet traffic management.  Last November, we denied the request by the Canadian Association of Internet Providers (CAIP) that Bell Canada cease its throttling of the wholesale service known as Gateway Access Service. Our decision was based on the fact that Bell applied the same practices to its own retail customers.

Our examination of Internet traffic management practices was limited by the case CAIP was making against Bell specifically and only applied to wholesale services. But the case did raise important questions that were not addressed by the evidence submitted.

So we have launched a proceeding on the Internet traffic management practices of ISPs, or Internet service providers. We have already received excellent comments and suggestions through our normal process. Appropriately enough for the subject, we also held an online consultation that sparked a lively debate. Comments submitted through the normal process and the online consultation have been placed on the public record.

A public hearing will begin on July 6. Among other things, the CRTC is looking for input on the following issues:

  • What are acceptable Internet traffic management practices and should any be considered as completely unacceptable?
  • Should ISPs disclose their practices?
  • Does the use of Internet technologies for the purpose of Internet traffic management raise privacy concerns?
  • Is there a need for the Commission to specify what practices are acceptable in relation to wireless carriers?

The objective of our proceeding is to establish guidelines around what are acceptable Internet traffic management practices, taking into account the freedom of individuals to use the Internet as they wish and the legitimate interests of ISPs to manage their networks.


Local broadband access proceeding
This leads me to the next issue we expect to address in the coming year: local broadband access.

Both telecom and cable carriers are investing to upgrade their networks and enhance their broadband Internet services. Competitors want to use these networks to offer comparable retail services to their customers.

The Commission had the option of holding separate proceedings for the local broadband access services of incumbent telecom carriers and those of the cable carriers. In the end, we decided to combine them since it has become clear that similar issues concern both proceedings. Competitive neutrality stands out as one of those issues.

Our proceeding was launched on May 8. Unfortunately, because the structural policy review of the conventional broadcasting sector intervened in our schedule, the oral component of the proceeding is scheduled to begin on November 16.

The telecom and cable services in question will be examined through our existing regulatory framework for wholesale services. We will look at the feasibility and configuration of the services. If we come to the conclusion that they should be mandated, we will also determine how they should be classified within the wholesale services framework.

Our proceeding is primarily limited to the delivery of broadband Internet services to residential customers. However, lessons learned from this proceeding might well be transferable and/or applicable to the delivery of services to business.


Spam
Also on our agenda for the coming year will be new responsibilities that arise out of Bill C-27, the Electronic Commerce Protection Act. The Bill is designed to counter spam and related online problems. Spam has become more than a nuisance. It has become the conduit for malicious programs such as spyware, malware, phishing and other problems that undermine confidence in the electronic marketplace.

Under the new legislation, the CRTC has the main enforcement responsibilities for spam. The Bureau of Competition will regulate misleading advertising by way of spam, and the Office of the Privacy Commissioner will regulate invasion of privacy by way of spam. The Bill also proposes to give each of these agencies the ability to share information with our enforcement partners as well as international bodies.

There will also be a private right of action that will allow consumers and businesses to take civil action against anyone who violates the Act. This remedy has been very effective in the United States.

If the Bill is passed in its current form, the CRTC would have enforcement tools that include issuing notices of violation and imposing administrative monetary penalties up to $1 million for individuals and $10 million for businesses. 

The Bill gives us a whole new range of inspection and enforcement tasks. We will have to take the necessary financial and organizational steps to meet these new challenges.   CRTC staff will also be provided with the training they need to carry out these activities as effectively as possible.


New media
Finally, let me conclude with the topic that has shaped much of our activity over the past two years and will no doubt be an important focus for the future:  the place of new media in Canada’s regulatory framework.

New media is a very dynamic environment that is evolving quickly. The Commission believes that market forces should continue to shape that evolution, and we believe that any intervention at this point would only hinder innovation. We have therefore decided to maintain our approach: New media broadcasting undertakings will continue to benefit from an exemption to our licensing requirements. 

At the same time, we have not seen any evidence suggesting that additional funding is required to support the creation of Canadian content for new media platforms. The availability of Canadian content is increasing, stakeholders are actively participating and viable business models are still being developed in this environment.  
 
However, uncertainty remains as to whether Internet service providers should be subject to the Broadcasting Act. This uncertainty is unacceptable in a marketplace where investment decisions often depend on the regulatory framework that will apply. We will soon refer this question to the Federal Court of Appeal, and all stakeholders will have an opportunity to make their views known to the Court.

Clarity on this issue will benefit everyone.


National digital strategy
Regardless of the Federal Court’s ruling on this matter, it has become obvious that Canada requires a new regulatory regime that will address the realities of the convergence of telecom and broadcasting – and the overall phenomenon we call the digital revolution.

During the new media public hearings, Tom Perlmutter of the National Film Board compared the digital revolution to the industrial revolution.

The repercussions of convergence will continue to reverberate for decades to come. The digital revolution ties together issues such as access, broadband infrastructure, broadcasting, competition, copyright legislation, privacy, taxation policy, telecommunications and wireless. This is an alphabetical listing of a few issues.  If we worked at it, we could probably make a list running from A to Z.

The implications are so widespread and so profound that Canadian policy would benefit enormously from expert and disinterested guidance on many of the outstanding issues. Many countries have already developed approaches to address the perceived challenges and expected opportunities of the digital age.

Among those who have developed a comprehensive approach to the digital revolution, we have:

  • Digital Britain
  • Digital France 2012
  • New Zealand’s Digital Strategy 2.0
  • Germany’s iD2010, and
  • Australia’s Digital Economy Future Directions Paper.

Canada urgently needs a national strategy to position itself in the digital age. If we want to maintain a competitive advantage, we need to keep ahead of the issues that will have an enormous impact on our cultural and economic future.

Historically, issues of this magnitude have been considered by a Royal Commission. Perhaps the time has come for Canada to undertake a new study of the opportunities and implications of the digital world.


Conclusion
I’ve covered a lot of ground with you this morning.  We live in exciting times.

Canada will be front and centre for many communications issues this October when we host the 40th Annual Conference of the International Institute of Communications. As Chair of the Canadian Chapter of the IIC, I will certainly be in Montreal for both the Annual Conference as well as the Regulators Forum. 

We have much to learn from other countries. But I also believe we have developed approaches that can serve as benchmarks and best practices for others. I’m looking forward to a wide-ranging discussion on the international perspectives in Montreal. I hope that I will see many of you there as well.

Thank you.


[1] VoxPop survey, Marketing Research and Intelligence Association, March 2009

[2] Idem.

 

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