Institutional links

• SPEECHES BY YEAR

  • 2012
  • 2011
  • 2010
  • 2009
  • 2008
  • 2007

• Media Resources

  • News Releases

• Share this page

  •      
    

Privacy and Security
Completed Access to Information Requests
Proactive Disclosure

Speaking Notes

for Konrad von Finckenstein, Q.C.

Chairman
Canadian Radio-television and Telecommunications Commission

to the Spectrum Roundtable
panel on “The Institutions of Spectrum Management: Time for a Change?”

Ottawa, Ontario

April 22, 2010

(Check against delivery)

---

Thank you, Pamela [Miller].

I’m delighted to be here today to discuss spectrum-management issues. This roundtable is very timely. The convergence of technologies is creating an appetite for spectrum, which will only keep growing as Canada develops a national digital strategy.

Mobile devices are changing the way we communicate and do business by providing “anytime, anywhere” access to the Internet. The deployment of next-generation wireless networks over the next few years will provide voice, data and broadcasting services over the same mobile device. Investments in these networks will result in tremendous opportunities for Canadians.

Spectrum is clearly a limited resource that must be administered efficiently for the public good. But as the theme for our sessions asks: What is the best and most efficient way to manage such a valuable resource?

The responsibilities for spectrum are currently split between Industry Canada, under the Radiocommunication Act, and the Canadian Radio-television and Telecommunications Commission (CRTC), under the Broadcasting Act and Telecommunications Act. The Department of Defence manages spectrum for its own use due to national security considerations.

This framework was appropriate for the needs of the 20th century.

We now have fully integrated companies offering telephone, wireless, broadcasting and Internet services. It no longer makes sense to have a single regulator for wireline service providers, but two different civil regulators for wireless service providers. More to the point, the lack of regulatory coherence is an obstacle to innovation and competition, and makes it difficult to maximize economic and social benefits for Canadians.

Current framework

As things stand today, Industry Canada is in charge of spectrum management. This includes:

• setting national spectrum policy
• international coordination
• allocating spectrum (i.e., allocating use of spectrum by band)
• assigning spectrum for all services, whether by beauty contest, first come, first served or auction (i.e., authorization of use of frequencies by specific users)
• enforcement and field-testing activities
• establishing technical standards
• issuing equipment certification
• conducting dispute resolution, and
• foreign-ownership reviews.

The Commission, on the other hand, follows the policies set by the government to:

• licence radio and television broadcasters, and
• conduct foreign-ownership reviews under the Telecommunications Act and the Broadcasting Act.

This framework creates an unnecessary duplication of effort that can translate into unnecessary costs and delays for the industry.

In theory, Industry Canada must first issue a broadcasting certificate and broadcasters must then come to the Commission for their licences. In practice, the two processes occur at the same time. The CRTC sometimes has to approve an application on the condition that the broadcaster receives a certificate from Industry Canada, which creates confusion and hold-ups.
 
Regarding the second issue, Industry Canada is required by the Radiocommunication Act to conduct ownership reviews for the purpose of assigning spectrum. The CRTC applies the same test, but under the Telecommunications Act and in the context of a company seeking to operate as a telecommunications carrier.

Having two decision-makers can result in contradictory decisions, or at the very least setbacks for the industry. That was the case with Globalive and, earlier, in the merger of Telesat Canada and Loral Skynet. In addition, Canada has not rolled out spectrum as quickly as other countries because of this dual authority.

Combining spectrum and wireline regulation

A number of people have studied Canada’s approach to spectrum management and have made suggestions to improve its efficiency.

In its 2006 report, the Telecommunications Policy Review Panel argued that the spectrum regulation and management functions should be transferred to the CRTC. Hank [Intven] spoke about this a few minutes ago. The Panel’s recommendation was echoed by Ian [Munro] and the Atlantic Institute for Market Studies last October.

This division of responsibilities and powers would be consistent with the approach adopted by most countries. The Telecommunications Policy Review Panel found that elected officials are responsible for spectrum management in only six of 30 OECD [Organisation for Economic Co-Operation and Development] countries.

In the United States, the Federal Communications Commission has been entrusted with most functions associated with spectrum management. In the United Kingdom, these have been transferred to OFCOM. Australians did the same thing, giving those functions to the Australia Communications and Media Authority.

There are good reasons why such an approach has been adopted by so many countries. Essentially, it has been done so the government can focus on broad policy issues while the regulator looks after the day-to-day management of spectrum. This structure also removes any possible perception of political influence from spectrum licensing.

Hank and his colleagues suggested that the CRTC take on entire responsibility for spectrum management. Undoubtedly, this would be the optimum solution and we are certainly not opposed to it. However, it would involve a major rearrangement between government organizations, which is unlikely to have the necessary political support at this time. Under the circumstances, a more pragmatic approach consisting of interim steps is called for, as I will outline in a moment.

It certainly does make sense to group the functions that belong together under one regulatory body, such as those related to the use of spectrum for broadcasting and telecommunications. A single regulator for wireline services and spectrum would result in a more stable, unified and market-based approach. The industry would be able to attract more foreign investment to Canada knowing that it can count on regulatory certainty.

In short, an independent regulator like the CRTC could:

• conduct licensing activities in a more open and transparent manner
• provide a single approval process for foreign-ownership reviews
• intervene only where there is a lack of competition or a market failure
• avoid duplication, overlap and inconsistencies, and
• reduce administrative costs.

Proposed transfer of responsibilities

There are relatively few responsibilities that would need to be moved over to the CRTC in order to achieve these benefits. They are:

• the assignment of spectrum for broadcasting and telecom, including the conduct of auctions
• the resolution of disputes involving roaming, tower and site sharing, and
• foreign-ownership reviews.

Everything else should remain with Industry Canada. In particular, setting national spectrum policy and coordinating spectrum use with other nations are core government activities that should stay where they are.

If the transfer of the three powers I have just mentioned is acceptable, the government should retain two additional safety valves.

The first is the ability to issue directions to the CRTC on broad spectrum policy matters. For instance, Cabinet could direct the Commission to set aside spectrum for new entrants in future wireless spectrum auction, just as Industry Canada did for the 2008 advanced wireless spectrum auction.

The second is the ability to set aside decisions related to the telecommunications spectrum or refer them back to the CRTC for reconsideration. This would give it a power equivalent to the one it would have in relation to broadcasting-licensing decisions.

All of this is clearly summarized in the chart that is in your binders and up on the screen.

The CRTC has four fundamental operating principles, namely transparency, fairness, predictability and timeliness. While no one questions the fairness of Industry Canada’s process, making the transfer I have described would certainly lead to increased transparency, fairness, predictability and timeliness in the licensing and administration of spectrum.

Implementation

Assuming there is agreement on what functions should go where, the next question to consider is the administrative implications. How would the government go about reassigning spectrum management responsibilities to the CRTC?

While this decision ultimately resides with the government, we have looked at three possible options:

• The Public Service Rearrangement and Transfer of Duties Act permits horizontal transfers from one portion of the federal public administration to another. It is an open question whether it can be used for transfers from a department to an agency.
• Alternatively, it would be worthwhile to consider section 3(4) of the Radiocommunication Act, which empowers the Minister to delegate his powers to “a person.” While using this method to transfer spectrum authority to the Commission could serve as an interim solution, it would not result in an independent regulator. The Minister would have to set guidelines as to how the CRTC would exercise the powers on his behalf, and our decisions would be considered those of the Minister.
• As a longer-term option, the Radiocommunication Act itself could be amended. Section 5 of the Act grants a number of statutory powers to the Minister related to spectrum, including the power to issue licences, amend the terms and conditions of licences, and plan the allocation and use of spectrum. Essentially, the references to “the Minister” in this section would be replaced with “the CRTC.” Other consequential amendments would also be required to provide the Commission with the powers it would need.

Of course, transferring responsibilities across organizations is a large undertaking, involving people and budgets. The process of amending legislation takes time. Pending the passage of the necessary legislation, pragmatic solutions could be worked out between Industry Canada and the CRTC.

Conclusion

There is no question that spectrum is a valuable commodity for new broadcasting and telecommunications services, such as wireless broadband. But we cannot put Canada at the forefront of the converged world without first getting our house in order. We believe that institutional cohesion is the key that will allow us to achieve this objective.

Other countries have realized this. They have already gone ahead and restructured their spectrum-management responsibilities. The longer we delay, the farther behind the curve we will find ourselves.

But we shouldn’t stop at spectrum. It is becoming increasingly difficult for a regulator to apply different sets of rules to broadcasting and telecommunications in a world where the same company is operating seamlessly in both areas. As I recently stated before the Standing Committee on Industry, Science and Technology, we really need converged legislation to fulfill our mandate in the most cohesive and efficient way possible.

I hope these and other issues will be part of the comprehensive strategy for the national digital economy that Minister Clement spoke about Tuesday night at the Canadian Wireless Telecommunications Association Gala.

Thank you.

- 30 -

 

Follow us on Twitter @crtceng

Media Relations:
   MediaRelations, Tel: 819-997-9403, Fax: 819-997-4245

General Inquiries:
   Tel: 819-997-0313, TDD: 819-994-0423, Fax: 819-994-0218
   Toll-free # 1-877-249-CRTC (2782)
   TDD - Toll-free # 1-877-909-CRTC (2782)
   Ask a question or make a complaint

This document is available in alternative format upon request.

(Check against delivery)

---

Existing division of responsibilities (.pdf of table)

Activity	CRTC spectrum management responsibilities	IC spectrum management responsibilities
National spectrum policy		x
International coordination		x
Allocation of spectrum		x
Assignment of broadcasting spectrum	x
Assignment of telecom spectrum (auctions)	x
Assignment of other spectrum	x	x
Policy direction *		New**
Set aside and refer back*		New**
Enforcement, field testing		x
Technical standards		x
Equipment certification		x
Dispute resolution *	x
Foreign ownership review* (under R.A .)	x
Licensing radio and television broadcasters	x
Foreign ownership review (under T.A. and B.A.)	x

*Limited to broadcasting and telecom –related spectrum activities
** Recommendation to Governor-in-Council