TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

                      SUBJECT / SUJET:

Proceeding to consider the organization and mandate of the

Commissioner for Complaints for Telecommunications Services /

Instance portant sur l'examen de la structure et du mandat

du Commissaire des plaintes relativement aux services

de télécommunications

HELD AT:                              TENUE À:

Conference Centre                     Centre de conférences

Outaouais Room                        Salle Outaouais

140 Promenade du Portage              140, Promenade du Portage

Gatineau, Quebec                      Gatineau (Québec)

November 14, 2007                     Le 14 novembre 2007

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

               Canadian Radio‑television and

               Telecommunications Commission

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

                 Transcript / Transcription

Proceeding to consider the organization and mandate of the

Commissioner for Complaints for Telecommunications Services /

Instance portant sur l'examen de la structure et du mandat

du Commissaire des plaintes relativement aux services

de télécommunications

BEFORE / DEVANT:

Konrad von Finckenstein           Chairperson / Président

Len Katz                          Commissioner / Conseiller

Michel Morin                      Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Chantal Boulet                    Secretary / Secrétaire

Philippe Kent                     Staff Team Leader /

Chef d'équipe du personnel

Lori Pope                         Legal Counsel /

Anthony McIntyre                  Conseillers juridiques

HELD AT:                          TENUE À:

Conference Centre                 Centre de conférences

Outaouais Room                    Salle Outaouais

140 Promenade du Portage          140, Promenade du Portage

Gatineau, Quebec                  Gatineau (Québec)

November 14, 2007                 Le 14 novembre 2007

- iv -

           TABLE DES MATIÈRES / TABLE OF CONTENTS

                                                 PAGE / PARA

PRESENTATION BY / PRÉSENTATION PAR:

CCTS Members                                        5 /   29

Interim CCTS Commissioner McKendry                21 /  117

CIPPIC                                            147 /  755

Canadian Broadcast Standards Council              185 /  945

Consumers Council of Canada and the               214 / 1091

  National Anti-Povery Organization

Canadian Cable Systems Alliance                   242 / 1213

- v -

              EXHIBITS / PIÈCES JUSTIFICATIVES

No.                                              PAGE / PARA

CRTC-1        Chart representing the              84 /  414

nomination process

                  Gatineau, Quebec / Gatineau, Québec

‑‑‑ Upon commencing on Wednesday, November 14, 2007

    at 0935 / L'audience débute le mercredi 14

    novembre 2007 à 0935

LISTNUM 1 \l 11                THE CHAIRPERSON:  Okay, Madame Boulet.

LISTNUM 1 \l 12                LA SECRÉTAIRE : Bonjour, Monsieur le Président.  Bonjour à tous.

LISTNUM 1 \l 13                Mr. Chairman, did you want to proceed with your remarks before I start with mine?

LISTNUM 1 \l 14                THE CHAIRPERSON:  I am supposed to have opening remarks but I can't find them right now.

LISTNUM 1 \l 15                Basically, this is a hearing of the CCTS, as you know.  By order in council the Minister asked the industry to set it up and the industry has responded and the hearing here is now to verify and see whether what you have put together actually meets the requirements of the Commission.

LISTNUM 1 \l 16                I am assisted today by Len Katz, the Vice‑President Telecom, and Michel Morin, National Commissioner.

LISTNUM 1 \l 17                Really, this hearing will focus on the following matter, whether membership in the consumer industry should be mandatory for all telecommunication service providers, whether the consumer industry's proposed government sector ensures its independence from the telecommunications industry and whether the consumer agency's proposed mandate is appropriate.

LISTNUM 1 \l 18                That is really all I have to say.

LISTNUM 1 \l 19                Madame Boulet, I turn it over to you.

LISTNUM 1 \l 110               LA SECRÉTAIRE : Merci, Monsieur le Président.

LISTNUM 1 \l 111               Bonjour à tous.

LISTNUM 1 \l 112               First, I would ask when you are in the hearing room to please turn off your BlackBerrys and your cell phones.  We would appreciate your cooperation throughout this hearing.

LISTNUM 1 \l 113               Please note that the Commission members may ask questions in either English or French.  You can obtain interpretation receivers from the commissionaire sitting at the entrance of the conference centre.

LISTNUM 1 \l 114               Le service d'interprétation simultanée est disponible durant cette audience.  L'interprétation anglaise se trouve au canal 1, et l'interprétation française au canal 2.

LISTNUM 1 \l 115               We expect the hearing to be completed within the next two days.  We will begin at 9:30 again tomorrow morning and adjourn each afternoon at approximately 4:30.  We will take an hour for lunch and a break in the morning and in the afternoon.

LISTNUM 1 \l 116               All submissions heard at this public hearing will be transcribed and will form part of the public record of this proceeding.

LISTNUM 1 \l 117               Please note that the full transcript of this hearing will be made available on the Commission's website shortly after the conclusion of the hearing.

LISTNUM 1 \l 118               Anyone wishing to purchase a copy of the transcript may speak to the court reporter or the company Mediacopy.

LISTNUM 1 \l 119               Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette consultation dans la salle d'examen qui se trouve dans la Salle Papineau, à l'extérieur de la salle d'audience, à votre droite.

LISTNUM 1 \l 120               Any parties wishing to apply for an award of costs should file a request on or before January 7th, 2008, copying all other parties, and parties should reply by January 14, 2008.  In doing so, parties are encouraged to identify the specific amount of costs for which they wish to apply and to file with the Commission all information necessary for the Commission to fix costs.

LISTNUM 1 \l 121               We will now proceed with the presentations in the order of appearance set out in Schedule A of the letter dated October 26 on the organization and conduct of this consultation.

LISTNUM 1 \l 122               Please note that due to unforeseen circumstances ARCH Disability Law Centre will make their presentation via videoconference at the end of the day today.

LISTNUM 1 \l 123               Copies of the revised order of appearance are available at the back of the room and the information is also posted on our website.

LISTNUM 1 \l 124               Each party will be granted 20 minutes for their presentation.  Questions from the Commission will follow the presentation.

LISTNUM 1 \l 125               Parties are reminded that copies of their oral presentation are being provided for convenience only and do not form part of the public record of this proceeding.

LISTNUM 1 \l 126               I would now invite the representative of the CCTS Members to make their presentation.

LISTNUM 1 \l 127               Please introduce yourself for the record and then you will have 20 minutes for your presentation.

LISTNUM 1 \l 128               I believe, Mr. Bibic, you will be starting the presentation.  Please go ahead.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 129               M. BIBIC : Bonjour, Monsieur le Président, conseillers.

LISTNUM 1 \l 130               Je m'appelle Mirko Bibic, et je suis le chef des Affaires réglementaires chez Bell Canada.

LISTNUM 1 \l 131               Mes collègues et moi représentons les fournisseurs de services de télécommunication membres du CPRST, Commissaire des plaintes relativement aux services de télécommunications.

LISTNUM 1 \l 132               Nous sommes très heureux de pouvoir vous parler du service de règlement des plaintes que nous avons créé ensemble en réponse au décret du 4 avril 2007.

LISTNUM 1 \l 133               Après avoir présenté les membres de notre panel et formulé des observations d'ordre général sur les exigences du décret, je passerai la parole à Dennis Béland de Quebecor Media qui discutera de certains enjeux spécifiques de cette instance.

LISTNUM 1 \l 134               With me this morning, as mentioned, Dennis Béland, Director, Regulatory Affairs, at the extreme right, for Quebecor Media.

LISTNUM 1 \l 135               To my right, I have Bill Abbott, Senior Counsel, Regulatory Affairs for Bell Canada.

LISTNUM 1 \l 136               To my left, Willie Grieve, Vice‑President, Telecom Policy and Regulatory Affairs for TELUS.

LISTNUM 1 \l 137               To Willie's left, Craig McTaggart, Director, Regulatory Affairs, TELUS.

LISTNUM 1 \l 138               And to the extreme left, Jennifer Crowe, Counsel, Regulatory Affairs for MTS Allstream.

LISTNUM 1 \l 139               Our colleague Joe Parent from Vonage Canada had previously been identified as a member of our representative panel but was unfortunately unable to join us today.

LISTNUM 1 \l 140               Seated in the row behind me, we have David McKendry, Interim Commissioner, CCTS.

LISTNUM 1 \l 141               To David's right, we have Peter Paul, a Bell Canada employee seconded to CCTS as its Interim Executive Director until a permanent commissioner is appointed.

LISTNUM 1 \l 142               And to David's left, we have Scott Fletcher of Gowling Lafleur Henderson, Counsel to CCTS.

LISTNUM 1 \l 143               Mr. McKendry is not part of the Members' panel per se but rather is here to speak to the current operations of CCTS and also to share his experience as the former Ombudsman for Long Distance Telecommunications Services.

LISTNUM 1 \l 144               While Mr. McKendry functions independently of the Members in his role as Interim Commissioner, we felt it would be most efficient if he were to make himself available to the Commission for questioning at the same time as this panel.

LISTNUM 1 \l 145               Mr. Paul and Mr. Fletcher are also not formally part of the Members' panel but rather are here to support Mr. McKendry and the rest of us as necessary.

LISTNUM 1 \l 146               Mes collègues et moi, nous présentons devant vous, au nom du collectif des Membres du CPRST.

LISTNUM 1 \l 147               Le nombre d'entreprises membres est récemment passé à 13, car NorthwestTel et Télébec ont récemment accepté de se joindre à Bell Aliant, Bell Canada, Bragg Communications, Cogeco, MTS Allstream, Rogers, SaskTel, TELUS, Vidéotron, Virgin Mobile Canada et Vonage Canada.

LISTNUM 1 \l 148               Nous sommes extrêmement fiers de cette réalisation car nous avons créé le CPRST à partir de rien, en moins de cinq mois, en réponse à la demande que la Gouverneur en conseil a faite à l'industrie de créer un organisme indépendant qui aurait le mandat de régler les plaintes faites par les particuliers et les petites entreprises de détail.  De l'avis des Membres, le CPRST respecte toutes les exigences du décret.

LISTNUM 1 \l 149               Mr. Chairman, I want to spend a moment on the order in council in itself and the kind of body that it requires.

LISTNUM 1 \l 150               Most obviously, the Members note that the primary requirement of the OIC is for the Commission to make a report once per year regarding complaints that it receives from individual and small business retail customers regarding services provided by TSPs until it approves a body established by industry.

LISTNUM 1 \l 151               In the preamble clauses, the Governor in council describes the attributes of an independent industry‑created complaints resolution body that was viewed as an integral component of a deregulated telecom market.

LISTNUM 1 \l 152               The link between the preamble and the operative clause in the OIC is that the Commission is to continue to make reports until such time as a consumer agency has been established by industry and approved by this Commission.

LISTNUM 1 \l 153               The task facing the Commission in this proceeding is to therefore determine whether to approve the CCTS' structure and mandate and consequently not to make any such reports.

LISTNUM 1 \l 154               In the Members' view, the OIC sets out the government's expectation that the industry will establish and fund an independent dispute resolution mechanism.  It did not dictate the specific characteristics of the dispute resolution mechanism nor did it direct the Commission to do so or to micromanage its attributes and operations.

LISTNUM 1 \l 155               Consistent with the Governor in council's view that the Commission should rely on market forces to the maximum extent feasible as the means of achieving the Telecom Policy objectives and that when relying on regulation the Commission should use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary, the Governor in council entrusted the task of defining the features of the dispute resolution mechanism to the industry.

LISTNUM 1 \l 156               Some parties appear to have misconstrued the nature of the proceeding and offer their views as to the ideal design of a comprehensive self‑regulatory body of a kind that could only be created or mandated by statute.  The OIC describes a more focused industry‑established body and that is what we have created.

LISTNUM 1 \l 157               It is important to start from the understanding that the OIC does not establish a statutory body, regulator or policy‑maker.  Rather, it calls for an independent complaints‑resolution body.

LISTNUM 1 \l 158               The Governor in council's reference to deregulated telecom markets is also significant.  It highlights the fact that the services in question are forborne services already determined by the Commission to be subject to competitive forces that are sufficient to protect the interests of users.

LISTNUM 1 \l 159               In the Members' view, the Governor in council conceived of this service as part of a competitive marketplace, not a substitute for it.

LISTNUM 1 \l 160               The CCTS is a valuable new avenue of recourse for consumers and small businesses with respect to unresolved complaints.  Funded entirely by the industry and operated without charge to complainants, it has been designed to be independent, impartial, accessible and an efficient alternative to the courts for individuals and small business customers.

LISTNUM 1 \l 161               It is emphatically not a substitute for the courts nor for the operation of market forces which will continue to protect users.

LISTNUM 1 \l 162               Under the mechanism designed by the Members, if attempts to resolve a complaint through a direct communication between a complainant and a TSP have proven unsuccessful, then the CCTS is available to facilitate resolution of the complaint.

LISTNUM 1 \l 163               If the Commissioner is not successful in bringing the parties to an agreed upon outcome, then the Commissioner has been empowered, first, to recommend a solution to the complaint.

LISTNUM 1 \l 164               If the parties are unable to agree regarding the recommendation, the Members have also given the Commissioner the ability to render a decision that is binding on the TSP in question if the complainant accepts it.

LISTNUM 1 \l 165               TSP Members agree as a condition of membership to abide by such decisions from which they have no right of appeal and which are made public.

LISTNUM 1 \l 166               Je demanderais maintenant à Dennis Béland de parler de certains enjeux précis qui, de l'avis du Conseil, lui serviront à déterminer si la structure et le mandat du CPRST respectent les exigences du décret.

LISTNUM 1 \l 167               Dennis.

LISTNUM 1 \l 168               M. BÉLAND : Merci, Mirko.

LISTNUM 1 \l 169               Dans une lettre datée du 17 octobre 2007, le personnel du Conseil a demandé aux parties de structurer leurs soumissions selon certaines voies.  C'est ce que je vais faire, en offrant la position des Membres sur plusieurs des enjeux que le personnel a mentionnés.

LISTNUM 1 \l 170               D'abord, les Membres.

LISTNUM 1 \l 171               Comme les Membres l'ont indiqué dans leurs commentaires écrits du 1er octobre 2007, nous ne croyons pas qu'il faille imposer l'adhésion au CPRST.  Même si nous voyons des avantages à ce que la totalité ou la quasi‑totalité des FST en fasse partie, les Membres croient que dans un marché concurrentiel, la décision de se joindre au CPRST devrait revenir à chaque FST.

LISTNUM 1 \l 172               Les Membres ont estimé qu'il était intéressant pour eux d'adhérer au CPRST et de donner à leurs clients particuliers et petites entreprises de détail l'accès au service de règlement des plaintes qu'il fourni.  Certains FST peuvent avoir leur raison de ne pas devenir membre, et les Membres considèrent que cette différence dans les offres des fournisseurs est une des marques d'un marché concurrentiel.

LISTNUM 1 \l 173               Les Membres font observer qu'ils sont 13 des plus grands FST au Canada, et que, ensemble, ils desservent la vaste majorité des clients de résidence et des petites entreprises de détail au pays.  Par conséquent, les intérêts de la plupart des clients sont déjà protégés sans qu'il soit nécessaire d'imposer l'adhésion au CPRST.

LISTNUM 1 \l 174               Le financement.

LISTNUM 1 \l 175               Concernant la structure de financement, les Membres ont pris soin de créer un modèle qui pourrait accommoder un nombre indéterminé de FST de toute taille.

LISTNUM 1 \l 176               Les Membres comprennent que les groupes qui représentent les petits FST se préoccupent du fait que les frais d'adhésion non‑récurrents proposés seraient trop élevés pour de très petits fournisseurs de services.

LISTNUM 1 \l 177               Les Membres ont l'intention de consulter ces groupes en vue d'établir des catégories à frais moins élevés pour encourage l'adhésion des petits fournisseurs.

LISTNUM 1 \l 178               Les Membres fourniront les détails de cette nouvelle structure de frais dans leur réplique écrite du 23 novembre 2007, mais ils envisagent de ramener les frais non‑récurrents les moins élevés à $1 000.

LISTNUM 1 \l 179               Next, governance structure.  The working group that put together the CCTS made the CCTS's independence from the industry their guiding principle.

LISTNUM 1 \l 180               In their comments to the Commission, some parties have alleged that the CCTS lacks the independence required by the Order in Council.  These comments, however, are focused almost entirely upon the composition of the CCTS's board of directors and not on the CCTS's complaints resolution procedures.

LISTNUM 1 \l 181               In the members' view, those comments are misguided.  The raison d'être of the CCTS is the resolution of complaints, which will be performed by a commissioner who is completely independent of the industry and of any other groups or interests.  It is useful to recall that the directors are barred from having any involvement in or any exposure whatsoever to the resolution of individual complaints.

LISTNUM 1 \l 182               Industry directors constitute a minority on the board and can thus be outvoted by the independent directors on most matters that come before the board.

LISTNUM 1 \l 183               Further, detailed oversight of a number of matters has been delegated to a committee comprised solely of the independent directors.  I want to emphasize that the provisional board plays no role in the selection of the initial independent directors.

LISTNUM 1 \l 184               The CCTS's by‑laws provide that the three initial independent directors are to be recruited by an independent ad hoc nominating committee operating at arm's length from the provisional board.  The ad hoc nominating committee is comprised of three highly respected Canadians with no ties to the telecommunications industry:  Denis Desautels, Al Hatton and David Zussman.

LISTNUM 1 \l 185               More information about this committee and its work can be found in a letter filed by the members yesterday.

LISTNUM 1 \l 186               The provisional board must appoint the three candidates whom the nominating committee recommends.  It has no discretion in the matter.  Thereafter, the group of independent directors will be self‑perpetuating.  The provisional board will step down as soon as possible after the CCTS is approved and its permanent board is in place.

LISTNUM 1 \l 187               To ensure accountability in relation to funding, the members have, in a completely transparent way, reserved certain protections for those entities that fund the CCTS with respect to the narrow range of fundamental corporal and financial matters.  As an independent organization that the members by definition cannot control, yet must fund, it is entirely reasonable for the CCTS's governance structure to contain such protections.

LISTNUM 1 \l 188               The measures contained in the CCTS's constating documents that ensure financial and management discipline on the part of the CCTS are not inconsistent with the independence of the commissioner in all matters related to complaint resolution.

LISTNUM 1 \l 189               Mandate.  Turning to the CCTS's mandate, considerable effort was devoted by the members to define the services that are in and out of scope.  In setting out the CCTS's mandate, the members focused on the Order in Council's request for a complaint resolution mechanism in relation to forborne retail telecommunications services.  Until the Commission forbears, it should continue to handle the adjudication of complaints relating to regulated services and conditions of service.

LISTNUM 1 \l 190               Similarly, only retail services are in scope, and complaints by TSPs against other TSPs should not be entertained.

LISTNUM 1 \l 191               Third, the service in question must be a telecommunications service.

LISTNUM 1 \l 192               Finally, complaints relating to the sale or provision of equipment are not in the scope.

LISTNUM 1 \l 193               Le Conseil a déjà demandé aux Membres et aux autres parties s'ils étaient d'avis que le CPRST devrait traiter les plaintes liées aux services réglementés et aux règles sur les télécommunications non sollicitées.

LISTNUM 1 \l 194               Pour ce qui touche le traitement par le CPRST des plaintes liées aux services réglementés, au‑delà du risque évident de chevauchement des compétences, les Membres considèrent qu'en élargissant le mandat du CPRST, on dépasserait les intentions du décret.

LISTNUM 1 \l 195               Quant aux plaintes liées aux règles sur les télécommunications non sollicitées ou le télémarketing, les Membres font observer qu'aucune partie n'a appuyé l'idée que le CPRST fasse enquête sur ce type de plainte.

LISTNUM 1 \l 196               Franchement, les Membres ne comprennent pas comment les plaintes concernant le télémarketing pourraient être traitées par une agence du secteur des télécommunications, ni pourquoi elles devraient l'être.  Ce sont des secteurs entièrement différents, et les entreprises qui verseraient des frais ne seraient pas du tout les mêmes.  Une agence hybride serait très difficile à concevoir, surtout à cette étape de l'évolution du CPRST.

LISTNUM 1 \l 197               Je termine ici, et je passerai la parole à Mirko pour la conclusion.

LISTNUM 1 \l 198               MR. BIBIC:  Thank you, Dennis.

LISTNUM 1 \l 199               The members would like to conclude by reiterating their view that the issue before the Commission in this proceeding is whether the CCTS meets the requirements of the Order in Council.  We believe it does, and that the Commission should approve its structure and mandate.

LISTNUM 1 \l 1100              It is our view that modifications should only be required to the extent aspects of the CCTS do not conform with the requirements of the OIC.  The members took great care to design the CCTS to meet the Governor in Council's explicit expectations and conducted consultations with stakeholders along the way to make sure they had the complete picture.

LISTNUM 1 \l 1101              Mr. Chairman, Commissioners, it is frankly remarkable that 13 of the country's largest TSPs have been able to come together so quickly and amicably to create something powerful for their customers.  As I mentioned at the start, the members are proud of the hard work put in by our employees and team members in creating the CCTS in a very short time frame and doing so openly, in consultation with many TSPs and other stakeholders.

LISTNUM 1 \l 1102              The benefits of this approach have been obvious.  We now have up to 13 members.

LISTNUM 1 \l 1103              Consultations resulted in accommodating several suggestions from consumer groups and the CRTC was kept apprised of developments each step of the way.

LISTNUM 1 \l 1104              The members urge the Commission to let the CCTS continue to develop as a voluntary body without responsibility for complaints related to regulated services or telemarketing.  In the members' view, that model is the one that is most consistent with the requirement and the policy direction requiring the Commission to rely on market forces to the maximum extent feasible.

LISTNUM 1 \l 1105              Thank you for this opportunity to present our position.

LISTNUM 1 \l 1106              Before we move to answering questions, I would like to ask CCTS's interim Commissioner, David McKendry, to provide a very brief report on how the CCTS's first three months of operations have gone.

LISTNUM 1 \l 1107              MR. LAWFORD:  Mr. Chairman, I would like to object.  It is John Lawford from the Consumer Groups.

LISTNUM 1 \l 1108              We just note that the interim Commissioner is not a party to this proceeding, and we had no advance notice that he would be making a statement here today.

LISTNUM 1 \l 1109              You can certainly ask him questions, if you wish, and you can certainly let him make a statement if you wish, but that is our objection.

LISTNUM 1 \l 1110              THE CHAIRPERSON:  I asked for Mr. McKendry to be here because I want to hear from him firsthand how the CCTS operation is running so far and what his experience has been.

LISTNUM 1 \l 1111              As you know, he was Commissioner and long distance ombudsman, so it is very relevant experience, and I think it will benefit all parties to understand.  That is what he is here for, to tell us what his experience has been so far.

LISTNUM 1 \l 1112              We have something provisionally operational.  I want to know how it functions.  This would be to your benefit to hear this.  You will hear his answers and questions too, and to the extent that you want, you can obviously use it in your comments to us.

LISTNUM 1 \l 1113              MR. LAWFORD:  I will just note that the questions that the panel could ask Mr. McKendry could be exactly what he has in his statement here, and in effect he gets to restate twice.

LISTNUM 1 \l 1114              Again, we weren't advised that he was going to be making a statement.  That is my only objection.  Thank you.

LISTNUM 1 \l 1115              THE CHAIRPERSON:  I hear you.  I think it will be to the benefit of everybody that we hear from Mr. McKendry before we question him.

LISTNUM 1 \l 1116              Mr. McKendry, would you please go ahead?

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 1117              INTERIM CCTS COMMISSIONER McKENDRY:  Good morning, Mr. Chairman and Commissioners.  I have the pleasure to be here today as the CCTS interim Commissioner, a position that I have held since July 23rd, 2007.

LISTNUM 1 \l 1118              I will hold this position until the first permanent Commissioner is appointed by the full independent board when it takes office.

LISTNUM 1 \l 1119              In addition to being a former CRTC Commissioner, I also previously held the position of ombudsman for telecommunications services.  This industry self‑regulatory position was voluntarily created by new entrant long distance companies to address the slamming problem experienced in the early days of long distance competition.

LISTNUM 1 \l 1120              I was also the founding consumer representative on the former Cable Television Standards Council, a self‑regulatory body created by the cable television industry to deal with consumer complaints.  As an aside, Mr. Chairman, when this three‑person council was created several years ago, the founding industry member was Elizabeth Duncan, who is now one of your colleagues at the Commission.

LISTNUM 1 \l 1121              I am here today to answer any questions the Commission may have about CCTS's current operations.  In that regard, I am pleased to report the launch of CCTS has been very successful.  We have handled well over 1,000 contacts since July 23rd.  Virtually all of the complaints that we have dealt with have been resolved.  Eighteen complaints have now reached the investigation stage and will require recommendations on my part.  However, I expect that some of these complaints will be resolved amicably prior to my needing to issue a recommendation.

LISTNUM 1 \l 1122              No complaints have reached the binding decision stage yet, which is not surprising, considering the short time that CCTS has been in operation.  Based on my experience, I expect that industry members will prefer to resolve complaints before they reach the final binding stage.  In fact, in my time as the long distance ombudsman, I never had to issue a single formal decision.

LISTNUM 1 \l 1123              Of course, the scope of CCTS's mandate is broader, but I find that a phone call with the parties involved goes a long way towards resolving complaints.

LISTNUM 1 \l 1124              CCTS staff tell me that we have been receiving very positive feedback in the service.  Our staff is trained to answer most inquiries that individual and small business customers may have with regards to their dispute resolution rights.  Consumers are happy to be able to talk to a live person when they call, and if CCTS cannot deal with their complaint, CCTS staff generally try to refer the complainant to another agency or tribunal that might be able to help.

LISTNUM 1 \l 1125              Accessibility of our procedures is of great concern to me and CCTS's members.  I have read with interest the submissions of ARCH and the Canadian Association of the Deaf.  We have already taken steps such as ensuring that our website is WC3 compliant, but there is more to do and I intend to consult with ARCH and the Canadian Association of the Deaf and other groups to ensure the accessibility of CCTS to all who may need it.

LISTNUM 1 \l 1126              I look forward to your questions about the CCTS's operations and my experience as interim Commissioner.  Let me now turn it back to Mr. Bibic.

LISTNUM 1 \l 1127              MR. BIBIC:  Mr. Chairman, we are available for questions.

LISTNUM 1 \l 1128              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1129              Mr. Bibic, I see you filed yesterday an extra letter of clarification regarding the constating documents.  Can you walk us through those changes?  What are those quantificational changes that you filed yesterday?

LISTNUM 1 \l 1130              MR. BIBIC:  Certainly.  I will turn it over to Craig McTaggart to walk you through that letter, Mr. Chairman.

LISTNUM 1 \l 1131              MR. McTAGGART:  It is my pleasure, Mr. Chairman.

LISTNUM 1 \l 1132              This letter explains certain changes, in fact all of the changes that have been made to the constating documents of the CCTS since the original versions were filed with the Commission on the 23rd of July.  I will just go through them one by one.  They are quite minor changes.

LISTNUM 1 \l 1133              The first one is a change to the French name of the corporation.  As the letter says, it was brought to our attention early on and, indeed, Commission staff were perhaps the most helpful with regards to this point.  We decided that it would be in the best interest of the company to change the name in French, and we did that quite promptly and received supplementary letters patent on August 3.

LISTNUM 1 \l 1134              The second change was to correct an error in the by‑law that I think parties will recognize was inconsistent with the rest of the materials filed on the 23rd of July.  In the section of the by‑law relating to the eligibility of government employees or, more accurately, those who have recently be government employees to serve as independent directors, the three‑year, what we call cooling off period was incorrectly indicated to apply to recent government employees.  There is no three‑year cooling off period for those who have recently served as a government employee that would otherwise make them ineligible to serve as an independent director.

LISTNUM 1 \l 1135              The next change relates to the timing of the constituting of the full board of directors.  Parties will understand that in the by‑law, the members made specific provision for the ending of the life of the provisional board and the constituting of the full independent board within 90 days of the start of the CCTS.  When the public notice was issued, we felt that it would be prudent to stop the process of populating the board, given the uncertainty with respect to its final form.  So, a technical amendment was required to the by‑law to simply move that 90 day time period to 90 days out from the Commission's decision in the proceeding, instead of 90 days from the start of the CCTS.

LISTNUM 1 \l 1136              The next changes relate to the membership agreement.  So, a separate document.  The first one described as modification to forborne revenue reporting mechanism is really kind of an internal funding matter of the members, but, again, the membership provided a particular mechanism by which the cost sharing mechanism process would work.  It did not prove possible to implement the mechanism that we originally planned.  We had to come up with an alternative.  That alternative was agreed to by all the members and certain changes with required to the membership agreement.

LISTNUM 1 \l 1137              I can go into those in detail later if there is interest, but I don't expect that I need to right now.

LISTNUM 1 \l 1138              The next change is described as clarification regarding single start‑up cost fee for affiliates, simply clarifying that corporations that are affiliates of each other need not pay a separate start‑up cost fee every time one joins.  Again, this change was consented to by the members.

LISTNUM 1 \l 1139              The next clarification relates to the effective date of new membership.  This simply clarifies that a member becomes a member of the CCTS upon executing the membership agreement, clarifying a clause that was originally in the membership agreement.  It made it unclear whether membership was effective immediately or on the first day of the following quarter.  That actually applies to the funding obligation, not the membership currency.  So, again, just a bit of an internal clarification matter for the members.

LISTNUM 1 \l 1140              The final point, and this is a change that was just made last week because the potential inconsistency in the documents only came to our attention last week.  This is the one entitled "Clarification regarding publication of decisions rendered by Commissioner."  Despite the documents having been reviewed by many people over the course of several months, one of our members pointed out that by operation of section 15.3 of the procedural code, decisions of two types would be made public.

LISTNUM 1 \l 1141              It has been the intention of the members since early summer when, on the recommendation from the consumer groups who we met with in June, we made provision for final decisions of the Commissioner to be made public.  In the procedural code, it is provided that recommendations of the Commissioner that are accepted by the parties become decisions.  That was put in place more with an eye to enforcement of the decision against the member than with respect to publication.  Frankly, we didn't think about how that might operate to suggest that accepted recommendations will become public as well.

LISTNUM 1 \l 1142              That was not the intention of the members and that is inconsistent with the materials that the members have provided to date.

LISTNUM 1 \l 1143              So, this last change merely indicates by way of a change to section 15.3 of the procedural code that only decisions that are rendered by the Commissioner following an unsuccessful recommendation stage, only those decisions would be made public, not decisions that only became decisions by operation of the procedural code, but really were accepted recommendations.

LISTNUM 1 \l 1144              THE CHAIRPERSON:  Run that by me again.

LISTNUM 1 \l 1145              MR. McTAGGART:  Remember that at the recommendation stage the Commissioner is still trying to facilitate a solution among the parties that they can both agree to.  If either party rejects that recommendation, then the matter moves to the final binding decision stage.  But if both of the parties accept it, that resolves the matter; that ends the matter, but by operation of the procedural code, that accepted recommendation becomes a decision.

LISTNUM 1 \l 1146              As I say, that was done mainly so that it could be enforced against the member like any other decision.  It wasn't done with the purpose of making that accepted recommendation public.  The intention was only that the final rendered formal decisions of the Commissioner would be made public.

LISTNUM 1 \l 1147              THE CHAIRPERSON:  In short, only the decisions that are imposed by the Commissioner will be made public?

LISTNUM 1 \l 1148              MR. McTAGGART:  That is right, and that is exactly the change that was made in that last clause.

LISTNUM 1 \l 1149              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1150              First of all, Mr. Bibic and other members of the panel, I am delighted that we have a CCTS and it is up and running.

LISTNUM 1 \l 1151              As you know, at the telecom summit, I challenged industry to put it up and have it operational before the first forbearance order would become effective, and you managed to meet that challenge and put it up and in operation.

LISTNUM 1 \l 1152              I am delighted to hear from Mr. McKendry that it seems to be working rather well.

LISTNUM 1 \l 1153              That being said, obviously we have to now look in detail whether this temporary creature meets all the requirements of the Order in Council and is the best way to resolve these issues.

LISTNUM 1 \l 1154              I am going to ask you some questions on governments and remedies; my colleague, Len Katz, on membership and operation; and Michel Morin on mandate and delegation.  They don't fall that neatly into categories and there will be certain overlap, et cetera.

LISTNUM 1 \l 1155              Let's start off with membership.  Len.

LISTNUM 1 \l 1156              COMMISSIONER KATZ:  Thank you, Mr. Chairman.

LISTNUM 1 \l 1157              Can I take the panel to their page 8 on membership, and perhaps ask them, in the second sentence it says:

"While we can certainly see the advantages to all or substantially all TSPs being members..."  (As read)

LISTNUM 1 \l 1158              Can you cite for us what some of those advantages that you have alluded to here would be?

LISTNUM 1 \l 1159              MR. BÉLAND:  Yes.  The principal advantage I guess would be a financial one, spreading the costs.  Some of the costs of the Commissioner are fixed.  Most are probably variable, but to the extent that there are some fixed costs and you have more members, you clearly spread those costs.

LISTNUM 1 \l 1160              COMMISSIONER KATZ:  Are there any other ones?

LISTNUM 1 \l 1161              MR. BÉLAND:  Perhaps related to visibility as well, but that is principally what we had in mind, is that sure, we would all be happy if more and more telecommunication service providers joined the organization, but once again, we are not of a view that that needs to be mandated.

LISTNUM 1 \l 1162              MR. BIBIC:  From our perspective, I would harken back to my opening comments, which is it is the design of an agency of sorts; it is a powerful avenue for consumers to resolve their complaints and, at the end of the day, I am sure I will be speaking on behalf of all members here, that customer service is top priority for all TSPs, so this is another avenue to resolve complaints.

LISTNUM 1 \l 1163              From Bell Canada's part and Bell Aliant, we don't like to see bad press about customer service and when we can't address customer concerns on a bilateral relationship and this can provide an avenue to do that, I think that's a positive as well.

LISTNUM 1 \l 1164              COMMISSIONER KATZ:  But to the extent that it is an avenue for customers, for some customers where the company has joined the CCTS; it is not an avenue for other customers who do not have availability of the CCTS because their underlying carrier has not joined.

LISTNUM 1 \l 1165              MR. BIBIC:  And I think over time I could see the possibility that certain TSPs would seek to differentiate their global service offerings by virtue of the fact that they are a member and some others aren't.

LISTNUM 1 \l 1166              It is a bit difficult to answer that particular question from where we sit, Mr. Katz, because I mean you are asking us about mandatory membership when we voluntarily signed up to this thing and are quite willing to fund it and to proceed with it.

LISTNUM 1 \l 1167              None of the members here are members that have refused to sign on so kind of difficult to answer the question from the perspective of those who have chosen not to.

LISTNUM 1 \l 1168              THE CHAIRPERSON:  Surely you can answer a conceptual question:  Why should the consumer suffer just because one of his TSPs has decided not to become a member of CCTS?  I mean, what's the rationale?

LISTNUM 1 \l 1169              You said in your opening this should be part of a competitive marketplace.  So we have a competitive market making sure that the consumer doesn't suffer.  We have CCTS.  Why should it then depend on the voluntary joining of ‑‑ I mean, you can answer that question, notwithstanding that you have decided to join.

LISTNUM 1 \l 1170              MR. BIBIC:  I suppose I could, Mr. Chairman.  From my perspective ‑‑ right now I am going to speak for Bell Canada and Bell Aliant.

LISTNUM 1 \l 1171              From my perspective I don't feel very strongly about voluntary versus mandatory.  I don't think it's necessary, but one way or the other I don't feel strongly.  We are in, and if you choose to make membership mandatory I think we are getting into questions of jurisdiction and elegance of regulatory solutions of which I do have use, actually.

LISTNUM 1 \l 1172              Perhaps, Willie, you do too.

LISTNUM 1 \l 1173              MR. GRIEVE:  Yes, we are in the same position.  We don't really have any objection to it being made mandatory.  We just have a problem with how it would actually be enforced ‑‑ enforced being, you know, jurisdiction and enforcement of making such a membership mandatory would be our major concern.

LISTNUM 1 \l 1174              And even if you pass the jurisdictional test how do you find 81 wireless ISPs in Alberta?  How do you make it compulsory for people like every single carrier across the country ‑‑ not carrier ‑‑ every single TSP and how do you enforce it on TSPs?

LISTNUM 1 \l 1175              I know the Commission has asked these questions but even if you could find every one I'm not sure how you would enforce it.  I was thinking this morning, for example, Shaw has decided not to join.  I mean, you couldn't really disconnect Shaw for not joining.

LISTNUM 1 \l 1176              COMMISSIONER KATZ:  I mean, it begs the question if someone has joined, the service provider has joined and the underlying network provider from whom they buy services has voluntarily opted out and a complaint comes in, I'm not sure how that small business ‑‑ that consumer can get adequate relief from the CCTS, given that they will look at it ‑‑ they will look at the service provider and say, "Well, you bought services from somebody else.  Unfortunately, that party is not a member here so we can't investigate it" and the small business guy is just out.

LISTNUM 1 \l 1177              MR. BIBIC:  Yes, it's a competitive market and they have the option of switching providers or other industry bodies like this and other industries, even in industries under the jurisdiction of the CRTC which are voluntary.

LISTNUM 1 \l 1178              At the end of the day; again, for Bell Canada and Bell Aliant, and others can subscribe to my view if they wish, but our principle concern is with enforcement of mandatory membership.  The principle of making membership mandatory doesn't concern us all that much.  It's how you go about enforcing it.

LISTNUM 1 \l 1179              Under the Telecom Act, as it is constructed today, the Commission has to take the very inelegant regulatory solution of indirectly making Canadian carriers responsible for the behaviour of those which are not subject to their direct jurisdiction.

LISTNUM 1 \l 1180              And the last thing we would want from a policy and practical perspective from our end, Bell Canada and Bell Aliant, is being forced to investigate whether or not the multitude of TSPs that are out there, and wireless ISPs and basic local phone service providers, are members and what to do if they are not.

LISTNUM 1 \l 1181              Would it be encumbent on us to then file applications with the CRTC to disconnect, for example ‑‑ just as an example ‑‑ some of these carriers or providers who aren't members because they are not members?

LISTNUM 1 \l 1182              I mean, those are the kinds of things that I would be very reluctant to engage into.  But the concept doesn't disturb us.

LISTNUM 1 \l 1183              THE CHAIRPERSON:  I am unclear now.  In your opening statement you say it is voluntary.  Now, I hear you, Mr. Grieve, saying you are indifferent as to whether it is made mandatory or not.

LISTNUM 1 \l 1184              Do the founding members have a position or not?

LISTNUM 1 \l 1185              MR. BIBIC:  We can all agree that voluntary is the best way to go and when we ‑‑ when you start asking questions about mandatory membership I spoke on behalf of Bell Canada and Bell Aliant and TELUS spoke on ‑‑ Willie spoke on TELUS' behalf.

LISTNUM 1 \l 1186              THE CHAIRPERSON:  Well, can I hear from Quebecor and MTS?

LISTNUM 1 \l 1187              MR. B_LAND:  Yes, I think if we step back just a moment, you know, and I will maybe address the thought process by which Videotron joined this organization.

LISTNUM 1 \l 1188              The major ILECs came to us at a certain point with a proposition for the creation of the Commissioner for Complaints.  We didn't consider that we had any obligation to join this organization.

LISTNUM 1 \l 1189              We looked at the proposal.  We were interested in particular about whether it would provide in our view concrete value to our customers, and we saw that in the proposal.  It's a very tightly‑focussed organization on the resolution of complaints.  We saw that as being valuable to our customers and we saw that also as being valuable to ourselves because we will be able to say to our customers that they have that backup.

LISTNUM 1 \l 1190              We also looked at issues of financial accountability.  We wanted to make sure that the structure was one which would have appropriate financial controls.  We wanted to focus ‑‑ we looked very closely at the scope of the organization to ensure that it is truly a complaints resolution organization rather than some sort of new regulatory body that would be replacing the CRTC.

LISTNUM 1 \l 1191              So all that put together, our decision to adhere was actually relatively easy and we adhered with enthusiasm.

LISTNUM 1 \l 1192              That being said, if other people in our own market or in other markets of Canada choose not to adhere for their own particular reasons ‑‑ perhaps they have doubts about the ultimate effectiveness of the organization ‑‑ we don't see that refusal on their part to adhere as being necessarily inconsistent with the broader context in which we are operating here.

LISTNUM 1 \l 1193              We are operating in a broader context of competition.  We are dealing with services where the Commission has foreborne from regulation because competition can serve the interests of consumers.  We are dealing with an order in council; with a government who has issued numerous directives in recent years, clearly focussed on a belief in the power of market forces, on regulatory intervention that is limited and proportional to the objectives.

LISTNUM 1 \l 1194              Ultimately, we believe once again that consumers will see value in this organization.  Service providers that adhere to this organization will benefit from that and will gain value themselves.  But in a broader context of a philosophy where market forces protect the interest of consumers, we don't see any inconsistency with saying that service providers have a choice as to whether to join the organization.

LISTNUM 1 \l 1195              COMMISSIONER KATZ:  Well, let me take this in two stages.

LISTNUM 1 \l 1196              Sorry, go ahead.

LISTNUM 1 \l 1197              MS CROWE:  MTS Allstream is, you know, of a similar opinion.  We voluntarily agreed to join the CCTS because we see a value to our customers in doing so and having an effective and a cooperative means of dealing with customer complaints as forebearance is rolled out.

LISTNUM 1 \l 1198              But saying that, I think it's important to realize that we have voluntarily agreed to things that we, you know, might have more problems with if they were mandated or if it was mandated by the Commission to join the CCTS.  There are things that we have voluntarily agreed to in a cooperative ‑‑ to be cooperative and to create an effective CCTS.

LISTNUM 1 \l 1199              For instance, right now the Commissioner can award monetary awards of up to $1,000 for loss, damage or inconvenience but it's questionable whether the CRTC would have the authority to require membership in an organization that could impose that.  There is also no appeal right for TSPs right now from a final decision of the CCTS and that's something we would certainly, you know, think about again if it were a mandated organization.

LISTNUM 1 \l 1200              I just also add that one of our members who isn't here today, SaskTel ‑‑ I can't speak for SaskTel but they are very much of the opinion that membership should be voluntary.  I believe they just filed a letter to that effect and, you know, feel that there are other avenues for their customers besides the CCTS.

LISTNUM 1 \l 1201              COMMISSIONER KATZ:  Can I take this in two trenches?  One is the notion that some people who aren't members today and haven't signed up, and I heard what you had to say.  The other is what I call the "opt out provision" for the members themselves.

LISTNUM 1 \l 1202              Do you as a membership group feel that you absolutely need an opt out provision so that it is voluntary and if you are not happy you can leave, or are you comfortable with the fact that you are all there and you have no problem with membership being mandated for you?

LISTNUM 1 \l 1203              MR. BIBIC:  On the issue of opt out, and we have all entered this in good faith to do the right thing by the consumer and to meet the requirements of the OIC, so as I sit as here today we certainly have no plans to exit, but we all need to recognize that the world evolves.  And I don't know how it will evolve but it could be that down the road, some period of time down the road, the body is no longer necessary or a particular member is dissatisfied with the way the agency is being run, and if a group like this is still necessary I wouldn't foreclose the possibility of any member or group of members wishing to start another more effective one.

LISTNUM 1 \l 1204              So there are a number of reasons why parties may want to opt out but, again, that is not in our contemplation as we sit here today before you.

LISTNUM 1 \l 1205              COMMISSIONER KATZ:  If you were would you foresee an application to the CRTC suggesting a change in the composition of the CCTS, or would each member just be free to come and go as they will?

LISTNUM 1 \l 1206              MR. BIBIC:  Well, the way I see it is if membership remains voluntary and a number of members opt out down the road and the Commission still feels that the state of the market is such that an agency like this is required, then I think it is certainly open to the Commission to re‑evaluate the issue of voluntary versus mandatory.  So I think that's how I would see it unfold if membership today were voluntary.

LISTNUM 1 \l 1207              If the Commission were to impose mandatory membership today and circumstances were to change in the future, such that parties felt that it should no longer be mandatory, then in that world I would envision a member or group of members choosing to file an application with the CRTC saying:  Look, the world has changed and this is no longer necessary, or membership is no longer ‑‑ it's no longer necessary to have membership mandatory.

LISTNUM 1 \l 1208              So, it depends where we start from, but I think either way we all need to recognize that the world will undoubtedly evolve and we will all adjust accordingly.

LISTNUM 1 \l 1209              COMMISSIONER KATZ:  I guess, you indicated early on what the views of the members are and what you are trying to represent.  One of the things the CRTC's role is to look at for the small business and consumers as well.  And obviously the direction, or the order asked us to oversee the creation of this as well and that was post the policy direction where the government basically indicated they wanted to see competition sped up as well.

LISTNUM 1 \l 1210              So, I don't see them in disarray at all.  Maybe what I am hearing, and maybe I am confusing it too, but is the membership saying or the members saying that the reason that you believe it has to be voluntary is because of the way the policy direction has been framed and utilizing the least intrusive avenue?

LISTNUM 1 \l 1211              MR. BIBIC:  We don't think mandatory membership would be necessarily in conflict with the policy direction, but we also believe that voluntary membership is more in keeping with the principles in the policy direction.  That's how I would answer that.

LISTNUM 1 \l 1212              But again, I mean, the biggest concern some of the members have is really with how you make mandatory membership operational.

LISTNUM 1 \l 1213              MR. GRIEVE:  There's one other point that was raised by Shaw in its submission, that was, mandatory membership brings with it mandatory funding.

LISTNUM 1 \l 1214              And in Shaw's view there's a problem, a jurisdictional problem with that in the sense that the Commission doesn't have the authority to order someone to make a contribution except to funding a particular body, except for the contribution mechanism provisions of the Act.

LISTNUM 1 \l 1215              So, you know, I think it's sort of ‑‑ you might mandate membership in an already existing body, but then you'd fall short or you may fall short on the funding requirements.

LISTNUM 1 \l 1216              COMMISSIONER KATZ:  I am not sure I got an answer to my question.

LISTNUM 1 \l 1217              How would the membership deal with, or how would, I guess, Mr. McKendry in his acting position deal with a complaint that was directed from a service provider who was actually buying facilities from a third party who wasn't a member?

LISTNUM 1 \l 1218              MR. BÉLAND:  Yeah.  I wanted to come back to that point in fact because I didn't want it to stay out there without a response.

LISTNUM 1 \l 1219              The Commissioner of Complaints' tasks are focused resolutely on the retail contractual relationship between a service provider and the retail customer.  Whatever suppliers or inputs the service provider may have behind that are not at all the affair of the Commissioner.

LISTNUM 1 \l 1220              You've given one example of maybe one telecommunications service provider using telecommunications services of another provider in an underlying sort of capacity.  Probably everyone at this table uses those sorts of arrangements in some way or another.

LISTNUM 1 \l 1221              You could even extend it though to equipment.  Videotron, we may one day find that we purchase lousy modems and they're causing complaints.  No one, I don't think, would suggest that our modem supplier should somehow be pulled into this process as a party to resolving those complaints.

LISTNUM 1 \l 1222              So, the view of the members is that when the Commissioner is faced with a particular complaint related to a particular retail service, the Commissioner looks at the engagements effectively that the service provider has taken in the service contract with that customer and evaluates whether the service provider has adhered to those engagements.

LISTNUM 1 \l 1223              If the service provider has made bad choices in terms of buying faulty T‑1s from another telecommunications service provider or buying faulty modems from an equipment supplier or, for that matter, if Bell Canada has failed to port a number, a telephone number to Videotron on time, that's really Videotron's problem.  In the context of a retail/consumer complaint, it's our responsibility to deal with our suppliers in the background.

LISTNUM 1 \l 1224              So, I don't think the concerns about underlying providers need at all drive the notion of a mandatory membership.

LISTNUM 1 \l 1225              COMMISSIONER KATZ:  Thank you.  Those are all my questions, Mr. Chairman.

LISTNUM 1 \l 1226              THE CHAIRMAN:  Mr. Bibic, you said your biggest concern was whether the Commission has  the ability to make membership mandatory?

LISTNUM 1 \l 1227              MR. BIBIC:  Well, there's a question about jurisdiction, but the biggest concern is actually how we make it operational.

LISTNUM 1 \l 1228              So, if the Commission were to say, yes, membership is mandatory, how does one do that for providers who are not subject to the direct jurisdiction of the CRTC under the Telecom Act?

LISTNUM 1 \l 1229              The way one can do that is the way it's done in other contexts, which is to say, well, you know, those carriers who are subject to our jurisdiction have to amend their terms of conditions of whichever service it is that they provide to those who we don't regulate, then we get into a situation of enforcement.

LISTNUM 1 \l 1230              So, take one of Telus' ‑‑ one of the ISPs out in Alberta, they're small and tiny who may not be subject to your direction jurisdiction, although they probably would be, but take another reseller, for example.

LISTNUM 1 \l 1231              THE CHAIRMAN:  Yes.

LISTNUM 1 \l 1232              MR. BIBIC:  What happens if the reseller doesn't join?  Who does what to whom in the context of forcing mandatory membership?  Is it up to us to enforce, is it up to us to disconnect, is it up to us to file an application with you to say we will disconnect, or is it up to the Commission to police and enforce?

LISTNUM 1 \l 1233              I mean, that's an issue that does definitely concern us.

LISTNUM 1 \l 1234              THE CHAIRMAN:  Yes, and we specifically asked you to comment on that and I am trying to find out ‑‑ you say you don't like the idea, but didn't we ask you specifically to say whether it is doable and how and what would be the most efficacious way of doing it?

LISTNUM 1 \l 1235              MR. BIBIC:  Okay.  Well, let's take it into two chunks.  I'll turn it over to Mr. Grieve to talk about whether or not you can do it and perhaps I can go back at whether or not it's a good way of doing it.

LISTNUM 1 \l 1236              THE CHAIRMAN:  Okay.

LISTNUM 1 \l 1237              MR. GRIEVE:  The Commission asked about three sections of the Act, the connection of facilities section, section 40, whether that would be a jurisdictional basis for imposing mandatory membership in the CCTS.

LISTNUM 1 \l 1238              And we've looked at that section a number of times, of course, over the years and it really does deal with, on the plain reading, interconnection and connection of facilities and you would expect that any conditions that were made would have something to do with compensation or something related to the interconnection or connection itself.

LISTNUM 1 \l 1239              I will come back to section 40 in a moment though.

LISTNUM 1 \l 1240              So, I don't think you could find it there.  And 32(g) under general powers it says:

"The Commission may, for the purposes of this part, in the absence of any applicable provision in this part, determine any matter and make any order relating to rates, tariffs or telecommunication services."  (As read)

LISTNUM 1 \l 1241              MR. GRIEVE:  And it seems to me that's really conditions of service, the definitions of the service, quality of service, those kinds of things in addition to the rates.  So, I don't believe this section would contemplate something like that.

LISTNUM 1 \l 1242              The one that comes closest for you I think is section 24, conditions of service, and the Commission has used section 24 in the past.  It says:

"The offering and provision of any telecommunication service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission."  (As read)

LISTNUM 1 \l 1243              MR. GRIEVE:  I think the key word here is, "...the offering of any telecommunication service...", the actual going into the business because that's really what you're talking about here is imposing something that would be akin to a licence condition, you can't do business unless you're part of this thing.

LISTNUM 1 \l 1244              And so, you know, what the Commission has done in the past to enforce that in the day when everyone ‑‑ well, when the ILECs had tariffs and everyone would connect using tariffs was, it would put in conditions of an interconnection tariff based on section 24 or they put as a condition of forbearance based on section 34, using section 24, things like compliance with confidentiality terms, alternate billing formats, competitor access to MDUs, unsolicited communications, cable company ‑‑ in the fact the cable company obligation to provide TPIA service at a discount finds itself in section 24 and the no bypass rule in section 34 ‑‑ that came out of section 34, section 24 was used for that.

LISTNUM 1 \l 1245              And then section 24 has been used to assign all of those responsibilities to resellers as a term and condition of those resellers using the tariff services of the carrier.

LISTNUM 1 \l 1246              Now, you know, like a lot of these ‑‑ or all of these really have to do with the actual terms and conditions of services, things that you do as part of the term and condition of service.  Of course, section 24 has never been judicially considered, so I can't turn you to any case law on it.

LISTNUM 1 \l 1247              You know, you might be able to go after compulsory membership under section 24.  I don't know where you would put the condition for carriers that are forborne across all of their services.  You would probably have to put it as a condition imposed on interconnection tariffs and, of course, some carriers have asked that interconnection tariffs not be required, so then you'd have to find another way of imposing the condition and I'm not sure how you would do that other than a specific rule‑making under the Act, and I'm not aware that the Commission has actually employed its specific rule‑making function for any purpose.

LISTNUM 1 \l 1248              So, now we're down to ‑‑ let's say you do it and now we're into the enforcement question.

LISTNUM 1 \l 1249              THE CHAIRMAN:  Can you speak closer to the mike, please.

LISTNUM 1 \l 1250              MR. GRIEVE:  Sorry.

LISTNUM 1 \l 1251              THE CHAIRMAN:  Just pull it up a bit.

LISTNUM 1 \l 1252              MR. GRIEVE:  Yeah.  So, assuming we get past section 24, then you're really into the enforcement question and Mr. Bibic has indicated that one of the difficulties that he says Bell Canada has expressed about using section 24 to impose a lot of service conditions on resellers is that it puts ‑‑ and by the way, TELUS has expressed the same concerns over the years ‑‑ it puts in this case the ILEC or at least the carrier in the position of having to police its tariffs because we are responsible to make sure people are complying with those tariffs.

LISTNUM 1 \l 1253              Then it is a question of what is the remedy.  We have talked about this internally many times.  So what if we find out that a reseller isn't complying with these things?  The Commission is never going to let us disconnect a competitor.  Why would they do that?  They would try to find some other way to do it.

LISTNUM 1 \l 1254              So, I just think it gets very messy, Mr. Chairman, and I am not sure that you need to get that messy, at least at the outset.

LISTNUM 1 \l 1255              Mr. Bibic said a moment ago that he thought that we could let it go on a voluntary basis for a time, and see how it works out.  If it becomes a problem, if there is a real need and people are opting out or people aren't joining who should be joining and it becomes a problem, then in that particular situation, you might look for a way to make it mandatory.  The cleanest way, obviously, would be a legislative change to do that or to allow that kind of an order to be made.

LISTNUM 1 \l 1256              But I think at this point the membership is sitting back saying we are not sure about the jurisdiction.  Even if you had the jurisdiction to do it, which you might, then how do you actually enforce it, how do you enforce payment of the membership fees which, as I mentioned before, is an issue raised by Shaw.  How do we do all of these things in a way that is even reasonably efficient, and I think it just gets very messy.

LISTNUM 1 \l 1257              Once again, we are saying give it a try.

LISTNUM 1 \l 1258              THE CHAIRPERSON:  Do you have anything to add, Mr. Bibic?

LISTNUM 1 \l 1259              MR. BIBIC:  No.  Mr. Grieve answered the operational ‑‑

LISTNUM 1 \l 1260              THE CHAIRPERSON:  I hear what you are saying about jurisdiction has never been exercised this way.  That doesn't mean it can't.

LISTNUM 1 \l 1261              On the assumption that I disagree with you, I don't see why one consumer should have more rights than another just because his TSP decides to join or not.

LISTNUM 1 \l 1262              Assume for argument's sake that if challenged, we are successful in maintaining it, we can do it, what would be a practical way of doing it so as to not impose upon you ‑‑ because enforcement, as you suggested, will be indirect ‑‑ an undue burden or make your operations more difficult than they have to be?  What would be the cleanest way of doing it?

LISTNUM 1 \l 1263              MR. GRIEVE:  I am not sure there is anything the Commission could do to make it cleaner for us.

LISTNUM 1 \l 1264              If we find ourselves in a situation where we are the ones required to enforce a rule against a reseller, a rule of mandatory membership, I am not sure there is anything the Commission can do in a mandatory order that would make it easier on us.

LISTNUM 1 \l 1265              If the Commission said all ISPs registered with the Commission, assuming that all ISPs are registered, because in fact we can probably be assured that there are ISPs and Canadian carriers out there that don't even know that they need to register, so assuming we could say all registered ISPs must be members, somebody has to take the next step, somebody has to go out and contact every one of those ISPs.

LISTNUM 1 \l 1266              So, let's say they were all contacted, the Commission made some sort of an effort there, first of all, is it the CCTS that goes and contacts them?  Then the CCTS has to find out if they refuse to join or if they fail to join, has to figure out what is the remedy now for this?  Do we disconnect them?  What if it is an ISP not even connected to the public internet through a Canadian facility?  What if they are connecting through an American facility along the border say in Vancouver or something like that, but they are operating in Canada?

LISTNUM 1 \l 1267              There are so many things that we would have to find out in order to go and even come back to the Commission with a proposed remedy.  As I said, I don't know that there is anything the Commission could do in an order unless Mr. Bibic can think of anything that would make life any easier for the CCTS and its members to enforce that.

LISTNUM 1 \l 1268              THE CHAIRPERSON:  You went into all sorts of other points from an operational point, but I started off from the very simple point that if we say it is mandatory and there is somebody who does not join and, as I say, we tie it to section 24, et cetera, I think we need to think it through.  Mr. Bibic says give it a try and see if in six months it doesn't work, maybe then you have to do it.  Well, the issue will be the same then as now, whether we make it mandatory up front or whether we make it in six months.  I think it behooves us to think through how could this be done, et cetera.

LISTNUM 1 \l 1269              That is why we posed the question to you.  I must say I am somewhat disappointed that I have just got an answer that it should be voluntary, not some concrete suggestions of how it could be done.  Then it is obviously for us to say in light of this, is it worthwhile or not?

LISTNUM 1 \l 1270              But to decide it on the abstract is not having a good grasp of the practical implications.  It makes it more difficult for us.  Maybe you can think about it and as a follow up give us some suggestions on that point.

LISTNUM 1 \l 1271              MS CROWE:  One thing that could be done, and I still think much of the effectiveness of the current structure of the CCTS could be impacted negatively if it were mandated, but one thing that could be done is there would be a communications plan when the CCTS is fully launched, whatever form it is in.  So, presumably customers would be aware when they contacted the CCTS and the CCTS found that the TSP they were complaining about was not a member, presumably that member could be identified at that point, just in terms of identifying TSPs that were non‑compliant, and then the Commission could decide how to handle it at that point.

LISTNUM 1 \l 1272              That is one thought.

LISTNUM 1 \l 1273              MR. BIBIC:  Mr. Chairman, we will give it some more thought.  We hear you.

LISTNUM 1 \l 1274              I have to say, though, that using Canadian carriers as indirect conduits to regulation of carriers who aren't subject to your direct jurisdiction isn't an issue that is just applicable to this.  It is an issue we have had difficulties with before.

LISTNUM 1 \l 1275              I know this answer is not going to give you comfort, but certainly legislative change would be nice.  But at the end of the day, I think if you could develop a solution, we will try to get more precise, but that just was reasonable and exercised good judgment.

LISTNUM 1 \l 1276              So, if the problem is Shaw, that is easy to identify.  They are big.  We can deal with that.  But if it is a question of investigating and policing and scouring the country for every little TSP that may or may not have joined and figuring out what to do with them, I think now we are getting into a whole bunch of practical difficulties and costs which, I would submit from my perspective, probably outweighs the benefit.

LISTNUM 1 \l 1277              THE CHAIRPERSON:  That is not the question I posed to you.

LISTNUM 1 \l 1278              This whole process is complaints driven.  So, Mr. McKendry gets the complaint from somebody and you find out it is somebody who has not joined, what do we do at that point in time?  Not scouring the country, as you put it, and finding unregistered ISPs.  What would we do in that instance?  How do we, in effect, get that person to sign up so that the dispute can be resolved by Mr. McKendry?  That is the dynamics that I am looking at.

LISTNUM 1 \l 1279              MR. BIBIC:  In that case, that gives me more comfort and perhaps we will come back to you with particular practical solutions as to how we can deal with that.

LISTNUM 1 \l 1280              THE CHAIRPERSON:  Mr. Bibic, I look at it this way.  The government clearly wants to see forbearance, tells us to use market principles and only regulate in case of market failure.  We have done that.

LISTNUM 1 \l 1281              But at the same time, they said make sure the consumer is not left out, and they have suggested this in the Order in Council.  You have read it; you have studied it in detail, et cetera.

LISTNUM 1 \l 1282              Clearly, it says consumers, not consumers of ISPs who have joined the CCTS.  It talks about consumers generally.  How do we reconcile those two things?  That is our problem.

LISTNUM 1 \l 1283              In terms of membership, I think that covers it.

LISTNUM 1 \l 1284              Let's go over to governance.  First of all, I see that for the independents, you have one consumer member to be nominated by some consumer groups, and then you have four independents.  What I don't quite understand is with the definition of independents, I see your new letter which suggests that the nomination will be done by the nominating committee of three eminent Canadians, picking the nominees from a list found by a headhunter.

LISTNUM 1 \l 1285              But the qualification for these independents, if I understand it correctly, will, for instance, exclude former Commissioners.  My colleague, Joan Pennyfather, no longer on the committee would not qualify the way I read it.  It seems to me that anybody who has been here for the last three years, or did I get that wrong?

LISTNUM 1 \l 1286              MR. McTAGGART:  Mr. Chairman, that is precisely one of the changes that I read this morning, the second one on that list.  We had to make a correction to the documents regarding the eligibility of people who had previously been government employees.

LISTNUM 1 \l 1287              We eliminated what we call the three‑year cooling off period for those people.  So, that has been changed.  It was not the original intention to exclude them.

LISTNUM 1 \l 1288              THE CHAIRPERSON:  I see.  How did you come to the specific number of four independent and three industry for a total of seven?  Any magic in why it was seven, why it was not nine or why there is just one more independent than there are industry?  I would like you to explain what rationale led you to this decision.

LISTNUM 1 \l 1289              MR. McTAGGART:  Mr. Chairman, the logic there started with the principle that industry directors had to be a minority.  So that was the base line.

LISTNUM 1 \l 1290              Then the concept was that the majority would be comprised of individuals who are independent.  We were inspired in that principle by the board of the Ombudsman for Banking Services and Investments, the OBSI, which uses the very same model of a majority of independents and a minority of individuals put forward by industry.  So, the original concept was four independents, three industry.

LISTNUM 1 \l 1291              Following consultation with consumer groups in June, we agreed to designate one of the four independent director positions as a person who was put forward by consumer groups, and the concept there is that any consumer group that wants to participate in the process of nominating an individual can do so.  The board will recognize them, and it is up to that group to put forward that name.

LISTNUM 1 \l 1292              I will stop there.

LISTNUM 1 \l 1293              THE CHAIRPERSON:  But implicit in this is that a consumer is a different independent than the other three independents.

LISTNUM 1 \l 1294              I mean, the three independents to be nominated by the three wise men and then to become self‑perpetuating cannot be consumers.  I am interested to know why you make that distinction.  I would have thought a consumer is also an independent.

LISTNUM 1 \l 1295              MR. BIBIC:  It is consumer groups, not consumers.  Certainly the three independents will likely be consumers, we hope.

LISTNUM 1 \l 1296              We think that one board seat designated specifically to consumer group advocates is reflective of the role of consumer groups in the regulatory ecosystem, as it were, for telecommunications.  It is reflective of their role.  They would have a board seat.

LISTNUM 1 \l 1297              As for the other three, I think it is best for everyone concerned to have independents in the true sense of the word, independent from industry members and for those who participate quite actively in the ecosystem.

LISTNUM 1 \l 1298              THE CHAIRPERSON:  Given the reality of this country, we have very active consumer groups in Quebec; we have some other groups who are outside Quebec, et cetera.  If they can't agree on a joint one, would you be amenable to have two consumers and, therefore, enlarge the board so that you still get the numerical differentiation, but you allow in effect to have a French and an English consumer group representative?

LISTNUM 1 \l 1299              MR. BIBIC:  There is some of us here, but the entire membership isn't here, so if you would allow me to consult with all the other members, perhaps we can get back to you, Mr. Chairman, on that one.

LISTNUM 1 \l 1300              THE CHAIRPERSON:  The board sort of works, as I understand it, by either simple majority with special resolution, or by extraordinary resolution.  My summary is basically simple majority is for the appointment of auditors, the appointment of secretary and treasurer and other business.  But then special resolution, which is five out of seven, you need the approval of the annual report, election of independent directors, appointment of the share, removal of a TSP, removal of a director.  Then you have those extraordinary resolutions for such things as approval and amendment of the annual budget and business plan, appointment of the CEO, approval and appeal of the amendment of by‑laws, approval and appeal of amendment of any provision of the procedural code, removal of the CEO, amendment of letter patents and approval of industry codes of standard.

LISTNUM 1 \l 1301              It strikes me that that is relatively restrictive.  Extraordinary, you are saying you need two out of three TSPs, and just with a TSP not being there could basically block any one of these, and five out of seven for the special resolutions.

LISTNUM 1 \l 1302              The subject matter, some of them I understand very clearly, are of concern, like the appointment of the CEO, which is obviously key.  There is no question there.

LISTNUM 1 \l 1303              But let's go to a special resolution.  Approval of the annual report.  Why do you require a special resolution for that?  Surely that is a report of the board.  Why do you need to have a special resolution?

LISTNUM 1 \l 1304              MR. BIBIC:  Let's deal with that one first.  I look at it the other way, which it only takes one industry director to approve for it to pass.

LISTNUM 1 \l 1305              With respect to annual reports specifically, the primary concern there, to put it quite bluntly, is that I think the TSPs would be concerned with how information is disclosed in terms of potential misleading disclosures and disclosure of competitively sensitive information.  So, in our view, it is quite an appropriate and limited check on that.

LISTNUM 1 \l 1306              I note there was a party or two, and I can't remember who they were, in their submissions who suggested, quite apart from this, but just suggested that there should also be an exclusion of liability for the Commissioner in terms of statements made by him or her in good faith.  I think this would be one way of addressing that concern.  It is just a very limited check where the TSP board members would say, is anything in here misleading or does it disclose something that is competitively sensitive information.

LISTNUM 1 \l 1307              So it acts in a way as a protection for the TSP and also for the Commissioner in that regard.

LISTNUM 1 \l 1308              THE CHAIRPERSON:  Isn't it essentially Mr. McKendry's report?  I mean, the annual report is the Commissioner's activities, what he has done, et cetera.  You approve it and it then goes out, but it seems to me he will be writing it, he will be stating it, et cetera.

LISTNUM 1 \l 1309              Surely he will be sensitive to the various issues that you mentioned.

LISTNUM 1 \l 1310              MR. BIBIC:  Well, we hope.  We have no intention of writing this report or of censoring the report.  The main concern was really with those two items, Mr. Chairman:  Misleading disclosures and disclosure of competitively sensitive information.  That is what motivated special resolution power for the annual reports, not to dictate what is in that report or what will be said.  It will be the Commissioner's report, with that I agree.

LISTNUM 1 \l 1311              THE CHAIRPERSON:  Or the appointment of a Chair for board meetings, why do you need a special resolution for that?

LISTNUM 1 \l 1312              MR. BIBIC:  For which one?

LISTNUM 1 \l 1313              THE CHAIRPERSON:  When you have a board meeting, I understand somebody has to chair that meeting.  Right?

LISTNUM 1 \l 1314              MR. BIBIC:  Yes.

LISTNUM 1 \l 1315              THE CHAIRPERSON:  The vote has to be a special resolution, i.e. five out of seven have to agree who is going to chair a meeting?

LISTNUM 1 \l 1316              MR. BIBIC:  I think it is the Chair of the Commission itself, Chair of the board of the CCTS itself that requires a special resolution.  That goes back to the same kind of philosophy ‑‑

LISTNUM 1 \l 1317              THE CHAIRPERSON:  So, Chairman of the agency basically.

LISTNUM 1 \l 1318              MR. BIBIC:  Yes.  The philosophy there, Mr. Chairman, is not unlike what you have with the hiring of the Commissioner.

LISTNUM 1 \l 1319              The way I conceive of this is for this to really be effective and to work you need really two things.  At a high level, you need to meet the requirements of the OIC, including independents, and the members also have to have fundamental confidence in the system for this to really be effective.

LISTNUM 1 \l 1320              So, with respect to the Chair, I would have thought that the Chair would want to know that he has the confidence of the board membership at large.  It is as simple as that.  The same thing with the appointment of the Commissioner.  At the end of the day, I would expect that the Commissioner would want to know that all groups that he will have to work with on a day‑to‑day basis have his confidence.

LISTNUM 1 \l 1321              THE CHAIRPERSON:  Aren't you worried that you are building that in the possibility of a deadlock too easily by putting such requirements in?

LISTNUM 1 \l 1322              MR. BIBIC:  For an appointment of a Chair, I wouldn't think so at all, Mr. Chairman.

LISTNUM 1 \l 1323              MR. McTAGGART:  Perhaps I could clarify.  The Chair must be drawn from the independent directors group.

LISTNUM 1 \l 1324              THE CHAIRPERSON:  I appreciate that.

LISTNUM 1 \l 1325              On the extraordinary resolutions, as I say, I can see that you want an extraordinary resolution for amendments of letters patent or the appointment of the CEO, but some of the other ones strike me as ‑‑ approval or amendment of the annual budget or business plan.  Why do you need an extraordinary resolution for that?

LISTNUM 1 \l 1326              MR. BIBIC:  Mr. Chairman, on costs I have to say that cost structures are critical to us.  They absolutely are critical to us.  Financial accountability is critical in every single business, especially for those who are going to fund it, and all we are looking for is a measure of accountability with respect to the cost structure of the organization.

LISTNUM 1 \l 1327              If the costs run rampant, again there is a fundamental risk that there will be a loss of confidence in the system.  In fact, I would have been quite comfortable coming before you and making a case that cost structure requires unanimous approval of the industry.  But in this case, two‑thirds is sufficient.

LISTNUM 1 \l 1328              It would take all TSP directors to veto a budget.

LISTNUM 1 \l 1329              THE CHAIRPERSON:  Mr. Bibic, why in extraordinary was this a special one?  If you made that subject to a special, you would still require the TSPs ‑‑ there is no way that the independents could impose on you costs that you don't want.  But you are going one step further.  You are notching it up one level and bringing it from special resolution to an extraordinary resolution.

LISTNUM 1 \l 1330              MR. BIBIC:  There is three categories of industry directors.  There is an ILEC category, I believe, the cableco category, and the other TSP category.  It is not necessarily the case, and I suspect we will not all be ad idem on all issues.

LISTNUM 1 \l 1331              Funding and cost structures are a big issue for us, Mr. Chairman.  They are a big issue for us internally.  It drives practically every single one of our internal business decisions, and we don't think it is unreasonable at all for reasonable checks and balances on cost structure to be implemented in the regime.

LISTNUM 1 \l 1332              THE CHAIRPERSON:  Can you just answer my specific question?  I buy that; you carry the freight so clearly you won't have a say on that and you don't want to have costs imposed upon you that you feel are unreasonable.  But you have your special resolution.  Already you have that protection.  You notched it up one level here by saying, no, actually two out of the three TSPs have to approve it.  That is why I am trying to figure out why you feel that is so vital.

LISTNUM 1 \l 1333              MR. BIBIC:  It is not two out of three TSPs.  It the two out of three classes of TSPs.  So, the category of other TSPs may not end up paying as much of the cost as the other two categories, in which case they may not be as vigilant with respect to the cost structure on the one hand, or I could conceive of a situation where the other category, the other TSPs, the smaller TSPs are causing most of the complaints and, therefore, have to fund their disproportionate share of the costs, and they may be tremendously concerned with the cost structure, whereas an ILEC who is bigger, larger, may be willing to pay less attention to the issue, could simply pass the cost structure through.

LISTNUM 1 \l 1334              So, we thought that two out of three was reasonable in this context.

LISTNUM 1 \l 1335              MR. BÉLAND:  If I might add, Mr. Chair, to be frank, this was an issue of concern to Vidéotron and the other cable carriers that have joined the organization.

LISTNUM 1 \l 1336              The potential of having a situation where one class of TSPs alone could in effect secure passage of all budgetary matters was something of a concern to our particular class of TSPs, to be frank.

LISTNUM 1 \l 1337              THE CHAIRPERSON:  Okay, thank you.  This shows the value of hearings like this.  That there might be different interests between different classes of TSPs, I must confess, hadn't occurred to me.  Now, I see the rationale when you talk about costs.

LISTNUM 1 \l 1338              What about some of the others like approval of repeal or amendment of any provisions of the Procedural Code?  Again, you think that should be subject to an extraordinary resolution.

LISTNUM 1 \l 1339              MR. BIBIC:  In terms of the Procedural Code, Craig will take that one.

LISTNUM 1 \l 1340              MR. McTAGGART:  Mr. Chairman, the rationale there is that the Letters Patent, the by‑laws, the Membership Agreement and the Procedural Code really constitute the fundamental documentation of the organization, the fundamental legal structure.

LISTNUM 1 \l 1341              The Procedural Code defines the scope or the mandate of the agency, what services are in and out, what matters are in and out.  As you have heard some of our Members say already today, that they made a decision to adhere to the CCTS based on a very specific design for the agency, a very specific indication of what is inside and outside of its scope.

LISTNUM 1 \l 1342              So in our view, the Procedural Code is a fundamental corporate document of the organization and therefore, as in any corporation, that kind of document would require a high level of concurrence to amend.

LISTNUM 1 \l 1343              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1344              Any questions on this?

LISTNUM 1 \l 1345              COMMISSIONER KATZ:  No.

LISTNUM 1 \l 1346              THE CHAIRPERSON:  Michel?

LISTNUM 1 \l 1347              CONSEILLER MORIN : Je ne voudrais pas revenir dans les détails, mais d'une manière générale, il y a des organismes de protection ou de réception des plaintes du consommateur, comme en Australie, par exemple, où on a, d'un côté, trois représentants des consommateurs, trois représentants de l'industrie, et puis un autre qui est nommé par les deux parties.

LISTNUM 1 \l 1348              Est‑ce que, pour vous, les propositions que vous faites, qui vous donnent peut‑être pas... vous me direz, peut‑être pas un avantage, mais vous êtes déjà trois, vous avez trois indépendants, et puis un autre représentant des consommateurs.

LISTNUM 1 \l 1349              Si on avait une structure, disons, trois consommateurs, trois représentants de l'industrie, est‑ce que, pour vous, c'est une question de principe ou d'efficacité qui vous amènerait à me refuser ce modèle là, par exemple?

LISTNUM 1 \l 1350              Je vous pose la question d'une manière très générale.  Est‑ce que c'est une question d'efficacité ou de principe?

LISTNUM 1 \l 1351              M. BÉLAND : C'est plutôt une question d'efficacité, Monsieur Morin.  Je vais vous dire qu'on a examiné la structure en Australie, et on a tiré des conclusions, et je vais laisser la parole à monsieur McTaggart, qui connaît plus les détails de l'Australie que moi.

LISTNUM 1 \l 1352              MR. McTAGGART:  Mr. Commissioner, I hope you will indulge me with an answer in English.

LISTNUM 1 \l 1353              The working group that put together the CCTS did look very closely at several other models for corporate structures, the Australian Telecommunications Industry Ombudsman or TIO being one.

LISTNUM 1 \l 1354              We also looked very carefully at very similar organizations closer to home that operate under the same legal system the CCTS does and I will return to those shortly but I will speak to the Australian TIO first.

LISTNUM 1 \l 1355              First, it is important to note that the TIO is a very different kind of body.  The TIO is a statutory body whose powers and mandate and membership are mandated by legislation.

LISTNUM 1 \l 1356              Here, we are creating an industry body in corporate form and also a body that must exist within the Canadian corporate law framework.  So it wasn't as easy as simply importing a different model.

LISTNUM 1 \l 1357              But one thing I want to point out about the TIO model is that in the working group's deliberations, informed of course very much by legal counsel, we came to the view that the TIO model would not satisfy the independence requirement of the order in council.

LISTNUM 1 \l 1358              The TIO's structure involves a traditional corporate board at the highest level that is dominated by the TSP members and then a separate body called a council, which I believe, as you have described, is half industry, half consumer, with an independent chair.

LISTNUM 1 \l 1359              Our analysis was that given the power that was reserved to the corporate board at the top level, that type of structure would not satisfy the independence requirements of the order in council.

LISTNUM 1 \l 1360              So what we tried to do instead was ‑‑ as I say, we looked at successful functioning models closer to home, the Ombudsman for Banking Services and Investments, the OBSI, being the primary one but there are others, the General Life and Health Insurance Ombudsman and the General Insurance Ombudsman.

LISTNUM 1 \l 1361              These are industry bodies in federally regulated industries in Canada that perform a very similar function to what the CCTS does and for that reason we were attracted to the Canada Corporations Act Part II, Corporate Structure, and in particular we designed a single governing body because whenever we tried to work with the Australian TIO body model and tried to create a structure that would be sufficiently independent, we ended up foreseeing two bodies that have very similar membership profiles trying to achieve the same level of representation on each body and it soon became obvious that there was no justification for having two bodies with very similar profiles.

LISTNUM 1 \l 1362              Mr. Bibic mentioned the efficiency reason and that shouldn't be dismissed.  With an organization of our size, it would simply be inefficient to have two separate governing bodies and all of the associated costs and also the difficulty of populating those boards and it shouldn't be underestimated, particularly in today's economy in Canada.

LISTNUM 1 \l 1363              It is not a simple matter to populate a board with qualified independent directors and for that reason we didn't want to create a large board nor two separate bodies that would each require being staffed.

LISTNUM 1 \l 1364              I will end there and let you continue your questions.

LISTNUM 1 \l 1365              CONSEILLER MORIN : Mais vous n'êtes quand même pas en train de me dire que vous ne pourriez pas strictement avoir une structure comme celle de l'Australie?

LISTNUM 1 \l 1366              Est‑ce que c'est ça que vous me dites, que vous ne pourriez pas vraiment avoir une structure qui, sans être exactement le modèle australien, ferait la part entre les consommateurs, d'une part, et l'industrie, d'autre part, sur un pied d'égalité, techniquement là?

LISTNUM 1 \l 1367              M. BIBIC : Techniquement, Monsieur Morin, on serait d'accord qu'il y a un nombre varié... il y a plusieurs façons qu'on aurait pu établir la structure qui rencontrerait l'obligation que la structure soit indépendante.  Il y a un nombre potentiellement illimité de structures.

LISTNUM 1 \l 1368              La question fondamentale en bout de ligne, c'est celle‑ci : Est‑ce que la structure qui a été établie par les membres, est‑ce qu'elle est indépendante, est‑ce que c'est un organisme indépendant?

LISTNUM 1 \l 1369              Nous, on prétend que oui, et si vous êtes d'accord, voilà, vous devriez approuver, selon nous.

LISTNUM 1 \l 1370              CONSEILLER MORIN : Petite question, peut‑être pour le modèle australien encore.

LISTNUM 1 \l 1371              Est‑ce que... en Australie, vous avez évoqué tout à l'heure que ça pourrait conduire à une explosion des coûts, en tout cas, à un certain dérapage.  J'ai compris ça dans vos mots.

LISTNUM 1 \l 1372              En Australie, parce que les consommateurs sont très présents, représentent la moitié, sont en parité, finalement, avec l'industrie, est‑ce qu'il y a eu beaucoup de... est‑ce qu'il y a eu des dérapages, des explosions de coûts en Australie parce que les consommateurs étaient présents au conseil dans un nombre beaucoup plus important que celui que vous proposez?

LISTNUM 1 \l 1373              MR. McTAGGART:  No, Mr. Commissioner, that wasn't what I was intending to suggest earlier.  It is not my understanding that the explicit participation of consumer group representatives has resulted in any cost control problems in the Australian body.

LISTNUM 1 \l 1374              M. BÉLAND : Si je peux faire un commentaire, et j'avoue ne pas être très familier avec le modèle australien, comme j'ai mentionné tantôt.

LISTNUM 1 \l 1375              Vidéotron a été embarqué dans ce processus là après l'élaboration de base du modèle.  Donc, je ne faisais pas partie de l'analyse du modèle australien.

LISTNUM 1 \l 1376              La seule chose que je dirais sans hésitation, c'est qu'il faut regarder tout ce qui est proposé comme un package, dans son ensemble.  Aller voir la composition du conseil indépendamment des règles de votation sur telle et telle et telle question serait, évidemment, dangereux.

LISTNUM 1 \l 1377              Nous, quand le modèle nous a été présenté chez Quebecor Media, chez Vidéotron, on a évalué le package dans son ensemble.  On avait un couple d'exigences de base, et on a trouvé que le modèle satisfaisait à nos exigences.

LISTNUM 1 \l 1378              Une exigence de base, c'était la responsabilité financière.  D'une façon ou d'une autre, ceux qui paient doivent avoir un mot à dire sur le budget de l'organisme.  C'est clair, absolument clair pour nous.

LISTNUM 1 \l 1379              Une autre exigence fondamentale de la part de Vidéotron, c'était le contrôle sur l'évolution du mandat de l'organisme, que ça soit via le Code procédural, via d'autres expansions possibles.

LISTNUM 1 \l 1380              Ce qui est devant nous aujourd'hui, c'est un organisme, encore une fois, focussé de façon résolue sur le règlement de plaintes, dans un contexte contractuel, au détail entre un fournisseur et un client.

LISTNUM 1 \l 1381              Toute possibilité de dépassement de ce mandat là, si ça va dans le sens d'une agence de réglementation plutôt qu'une agence de règlement de plaintes, serait très inquiétante pour nous, et c'est de là que viennent les règles de votation extraordinaires sur certains sujets.

LISTNUM 1 \l 1382              Donc, je pourrais peut‑être commenter la mathématique de la composition du conseil d'administration, mais on ne peut pas l'isoler des règles de votation, puis des sujets qui sont assujettis à des règles de votation spéciales ou extraordinaires.

LISTNUM 1 \l 1383              CONSEILLER MORIN : Mais avec ces règles de votation, avec la nomination des membres au conseil, est‑ce qu'on peut dire que cet organisme est vraiment un organisme indépendant de l'industrie pour traiter des plaintes des consommateurs, parce que c'est l'argument qui va être soulevé par les consommateurs?

LISTNUM 1 \l 1384              Est‑ce que l'industrie n'a pas, finalement, une sorte de droit de veto sur les résolutions, sur le budget, sur le rapport annuel?  C'est un peu ça.

LISTNUM 1 \l 1385              M. BIBIC : Monsieur Morin, en ce qui concerne le traitement des plaintes, il faut souligner que le président ou le commissaire, the Commissioner, opère complètement... d'une façon complètement indépendante des directeurs, of the directors.

LISTNUM 1 \l 1386              Le président ou le commissaire ne doit pas discuter des cas spécifiques avec le conseil d'administration ou aucun de ses membres.  Donc, de cette façon là, on a protégé l'indépendance de l'organisme en ce qui concerne le traitement des plaintes spécifiques.

LISTNUM 1 \l 1387              CONSEILLER MORIN : Je vous donne un exemple sur les plaintes, puis on y reviendra tout à l'heure.

LISTNUM 1 \l 1388              Mais vous savez très bien, comme vous l'avez dit il y a quelques minutes, qu'il peut y avoir une évolution dans le mandat, et caetera, et si je comprends bien, c'est par la voie de résolution extraordinaire que vous pourriez éventuellement confier un mandat plus élargi au commissaire des plaintes, et sur ce mandat extraordinaire, avec le système des deux tiers, bien, vous avez quasiment une sorte de droit de veto.

LISTNUM 1 \l 1389              M. BIBIC : Si je peux répondre sur la question de l'expansion du mandat en anglais pour un moment, ça sera un peu plus facile pour moi.

LISTNUM 1 \l 1390              When it comes to the expansion of the mandate and examination of issues beyond the handling of specific complaints, our view is that the TSPs need a say at the board level because if, for example, some kind of substantive code or expansion of mandate is to be developed by this agency in a kind of self‑regulatory kind of way, clearly it is not going to work, fundamentally not going to work unless there is buy‑in from the industry.  Otherwise, self‑regulation ‑‑ I mean self‑regulation, it is doomed to fail.

LISTNUM 1 \l 1391              And that is why, again, I would have been quite comfortable actually coming here and proposing that that kind of expansion of mandate should have been subject to unanimity.  It is not.  It is subject to two out of three of the industry directors.

LISTNUM 1 \l 1392              We are not foreclosing in any manner, shape or form the potential need down the road of development of, for example, a substantive code and we suspect that to the extent that there is a threat of direct CRTC regulation on a given issue, that that will be high motivation indeed for the members to agree to this.

LISTNUM 1 \l 1393              But there is not going to be any confidence in the system is there isn't buy‑in.  How else can you develop a code or expand the mandate, whatever the issue might be?

LISTNUM 1 \l 1394              THE CHAIRPERSON:  Okay, we will deal with the mandate after the break.  Let's take a 10‑minute break.

LISTNUM 1 \l 1395              But before we do that I just would ask you to take a careful look at the subject matters which are for special and extraordinary resolution because as you will hear from the submissions later on, there are quite a few people who take issue with it and it seems to me one must say that you erred on the side of abundance of caution.

LISTNUM 1 \l 1396              There are a few things that can be moved without ‑‑ what I gather is your principal concern is that you have three different groups of TSPs and you want to make sure that all their interests are represented on the key decisions and that is, I think, perfectly legitimate.  I just wonder whether you have to go as far as you did.

LISTNUM 1 \l 1397              Anyway, let's take a 10‑minute break and then we will continue.  Thank you.

‑‑‑ Recessed at 1116 / Suspension à 1116

‑‑‑ Resumed at 1132 / Reprise à 1132

LISTNUM 1 \l 1398              THE CHAIRPERSON:  Let's just go back one second.

LISTNUM 1 \l 1399              There is another provision in there which ‑‑ when we are talking about the adoption or even the consideration of a new code by the CCTS, the provision is that only a TSP can put that forward.  There is no provision that either we or the Commission could put it forward or another member of the board.

LISTNUM 1 \l 1400              I can understand you not wanting to be overburdened with a lot of extra work and therefore anything that is put forward obviously is subject to a vote and you have it right now as an extraordinary resolution.  But why a member of the board ‑‑ you have four members there, one representing consumer groups; three ‑‑ they are independent people selected by your procedure.  They can't even put something forward.  Isn't that somewhat harsh?

LISTNUM 1 \l 1401              I mean, you can vote it down but it seems to me if somebody says they really do need a code on whatever or we should expand the present code to cover that, isn't that a legitimate exercise of his or her duties as a member of the board?

LISTNUM 1 \l 1402              MR. McTAGGART:  Let me first just make sure we are clear that your understanding ‑‑ and this is drawn from section 86 of the bylaw that only ‑‑ that the development of industry codes of conduct and standards must be initiated by request by the TSP members.

LISTNUM 1 \l 1403              THE CHAIRPERSON:  Right.

LISTNUM 1 \l 1404              MR. McTAGGART:  And subsequently approved by way of extraordinary resolution.

LISTNUM 1 \l 1405              THE CHAIRPERSON:  Thank you for putting it so precisely.

LISTNUM 1 \l 1406              MR. BIBIC:  Well, I hesitated because I wasn't sure if we were talking about the codes or the identification of trends, Mr. Chairman.

LISTNUM 1 \l 1407              I think this is one where we probably also will have to come back to you with a collective members' view.  I could certainly answer on my own company's behalf but I can't ‑‑ I have to say that I don't know what the membership's views would be on your specific proposition.

LISTNUM 1 \l 1408              THE CHAIRPERSON:  There is some issue out there which needs to be addressed and if you four representatives feel very strongly about it, they should be able to share it with their colleagues and get a discussion going.  You can also vote it down because if you keep this present provision all they are going to do is they are going to petition us and we are going to ask you to look into it.

LISTNUM 1 \l 1409              So why are we doing this?  This is supposed to be an industry self‑regulatory issue.  It's something of considerable concern that these folks feel needs to be raised at the board level, I think they have a ‑‑

LISTNUM 1 \l 1410              MR. BIBIC:  Certainly, on behalf of Bell Canada, and I suspect the others would likely agree, that at that stage I can't see anything wrong with another director bringing forward an issue and if the ‑‑ without affecting the voting rights of the industry directors on whether or not the agency proceeds with the development of such a code.

LISTNUM 1 \l 1411              I think there is a distinction between the two and the point you make we have heard loud and clear.

LISTNUM 1 \l 1412              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1413              Then just as a procedural point, we send you a letter to which we attached this chart, which sort of graphically represents the nomination process as we understand it subject to the modification which was in your recent letter that the provisional board of three people, I have no choice but to accept the selection of the three wise men from the head hunter to appointment.

LISTNUM 1 \l 1414              But I gather this represents the way the nomination process works.  If so, I would like to introduce it as CRTC Exhibit 1 so that I can use it in future cross‑examination or examination of other witnesses.

EXHIBIT CRTC‑1:  Chart representing the nomination process

LISTNUM 1 \l 1415              MR. BIBIC:  Yes, Mr. Chairman.  You know, there might be some technical niceties in terms of the corporate language involved, but the members are comfortable that the diagram accurately describes the process.

LISTNUM 1 \l 1416              THE CHAIRPERSON:  All right.

LISTNUM 1 \l 1417              Okay, then let's go on to mandate.

LISTNUM 1 \l 1418              Michel, I think you have some questions.

LISTNUM 1 \l 1419              CONSEILLER MORIN : Monsieur Bibic, vous avez dit dans votre présentation que vous avez consulté plusieurs intervenants pour avoir une vue d'ensemble, et ces intervenants là, je pense bien que ça devait être principalement les consommateurs.

LISTNUM 1 \l 1420              J'aimerais simplement, pour établir la discussion...

LISTNUM 1 \l 1421              Quel genre de consultation vous avez fait?  Est‑ce que c'était une consultation formelle sur des points précis de fonctionnement de mandat avec les consommateurs ou si c'était, comme vous le dites, quelque chose d'ensemble?

LISTNUM 1 \l 1422              M. BIBIC :  C'était... on a consulté... au tout début, il y avait les plus grosses entreprises titulaires qui se sont rassemblées pour commencer le développement de cet organisme.  Il y avait Bell Canada, Bell Aliant, SaskTel, TELUS, évidemment, et on a développé une structure qu'on a ensuite présentée à plusieurs groupes.

LISTNUM 1 \l 1423              On a rencontré les câblos.  Ils ont ensuite... comme vous le savez, il y en a plusieurs d'entre eux qui se sont joints à nous.

LISTNUM 1 \l 1424              On a rencontré d'autres fournisseurs tels que MTS Allstream et Primus et Vonage.

LISTNUM 1 \l 1425              Et on a eu une troisième rencontre avec plusieurs groupes qui représentent les consommateurs.  Il y en avait plusieurs.

LISTNUM 1 \l 1426              Et dans ces rencontres là, on leur a dévoilé la structure que, plus ou moins, vous voyez devant vous aujourd'hui.  On a ajusté quelques aspects de la proposition en fonction des commentaires qu'on a reçus.

LISTNUM 1 \l 1427              Mais c'était, d'après moi, en tout cas ‑‑ j'étais là ‑‑ des consultations assez détaillées sur des éléments de la structure assez précis.  Et voilà!

LISTNUM 1 \l 1428              CONSEILLER MORIN : Est‑ce qu'il y avait, par exemple, un questionnaire précis où des gens devaient cocher pour être bien sûr de l'opinion de chacun ou si c'était une discussion générale?

LISTNUM 1 \l 1429              M. BIBIC : Non, non.  C'était une discussion ouverte et générale sur plusieurs aspects de la proposition.  Il y avait un agenda, et caetera.

LISTNUM 1 \l 1430              CONSEILLER MORIN : Les consommateurs dans leurs mémoires, certains là, sans les citer, il y en a qui prétendent que les entreprises de télécommunication pourraient, par contrat, limiter éventuellement la portée des sujets abordés par le commissaire des plaintes.

LISTNUM 1 \l 1431              Ce que j'aimerais savoir, est‑ce que...  On peut concevoir que les contrats sont différents d'entreprise à entreprise, mais est‑ce que, à partir du moment où les gens font partie du CPRST, est‑ce que, à ce moment là, leur contrat peut être élargi de manière à soustraire des plaintes au Commissaire des plaintes?

LISTNUM 1 \l 1432              Autrement dit, est‑ce que les contrats, à partir d'aujourd'hui, sont gelés dans le sens restrictif du terme?

LISTNUM 1 \l 1433              M. BIBIC : D'après nous, ce serait inapproprié qu'un fournisseur qui s'engage à l'organisme devrait laisser tomber ses droits contractuels.

LISTNUM 1 \l 1434              Malgré ça, les Membres qui se sont joints à l'organisme sont d'accord que durant l'examination du dossier par l'organisme, par le commissaire, qu'il serait acceptable pour que le commissaire suggère une résolution au problème qui dépasse les sections formelles ou les droits formels du contrat en ce qui concerne, par exemple, la limitation monétaire.  Mais ça, ça serait aux fins d'essayer de résoudre le problème.

LISTNUM 1 \l 1435              Si la résolution proposée par le commissaire n'est pas acceptable au consommateur ou au fournisseur et le commissaire se doit d'émettre une décision formelle, à ce point là, on est d'avis que le commissaire devrait et doit respecter les termes contractuels auxquels le fournisseur et le consommateur de sont engagés au début.

LISTNUM 1 \l 1436              Les cours le font.  Les cours respectent les droits contractuels des deux parties.  Le CRTC le fait aussi.  Et d'après nous, il serait approprié que le commissaire le fasse aussi.

LISTNUM 1 \l 1437              CONSEILLER MORIN : D'une manière générale, une des craintes... vous avez dit tout à l'heure que vous avez déjà reçu un certain nombre de plaintes.

LISTNUM 1 \l 1438              Est‑ce que vous avez un plan qui consisterait à faire connaître le CCTS auprès de l'ensemble des consommateurs?  Est‑ce qu'il y a un plan... et avant que vous me parliez de votre plan, j'aimerais vous poser la question suivante.

LISTNUM 1 \l 1439              Est‑ce que la meilleure façon d'informer le consommateur que votre organisme existe ne serait pas de faire en sorte que ce soit sur la facture du client, que sur la facture du client, on puisse retrouver la possibilité de faire une plainte par courriel, par fax, par le site internet ou d'une façon orale ‑‑ on en reparlera tout à l'heure ‑‑ ?

LISTNUM 1 \l 1440              Mais est‑ce que la façon, finalement, de faire cette publicité ou en tout cas d'annoncer la création d'un commissaire des plaintes, ce ne serait pas que, mois après mois, d'une manière récurrente, que le consommateur, quand il lit sa facture de téléphone, il sait qu'il peut s'adresser à un organisme?

LISTNUM 1 \l 1441              M. BIBIC : Je vais répondre à la question en partie, et ensuite, je vais donner la parole à mademoiselle Crowe de MTS.

LISTNUM 1 \l 1442              Mais en ce qui concerne la facturation, les entreprises titulaires qui ont été déréglementées récemment ont dû indiquer sur la facture, au moment de la déréglementation, que l'organisme était, je crois... que l'organisme existe, et c'était un des éléments requis par le conseil en ce qui concerne le plan de communication autour de la question de déréglementation.  Donc, ça été fait à un certain niveau déjà.

LISTNUM 1 \l 1443              Il faut aussi apprécier que c'est très... de notre point de vue, c'est très, très dispendieux d'inclure des messages de cette sorte sur les factures, beaucoup plus dispendieux, je crois, que les gens imaginent, et aussi, on utilise ces espaces là pour d'autres messages promotionnels.  Donc, si c'était une question de le faire mois après mois, ça serait une question très difficile pour nous d'implémenter.

LISTNUM 1 \l 1444              Mais en ce qui concerne le plan en général...  Oui.