Speech

to the GRIC - Government Relations Institute of Canada
Rideau Club Lunch

Ottawa, Ontario
November 6, 1998

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Thank you.

Four main points to my talk today.

1. The new vision of the CRTC and how this set the foundation for change.
2. The major decisions that have been made that have established competition in telecommunications and broadcasting.
3. CISC — an example the CRTC’s new vision at work.
4. The convergence of broadcasting and telecommunications — or dealing with the unknown and unexpected.

The principles for change at the CRTC are similar to those driving change in industry, government and most institutions in our society. However, while these drivers are similar, our responsibilities as a regulator are broader in scope than the responsibilities for example of the business community. As a result, we need to do two things at once.

We need to respond to:

• new technologies
• global market realities
• changing consumer demands and sophistication.

At the same time, we need to maintain national goals, including:

• economic benefits
• social benefits
• cultural benefits.

Our national communications goals were well expressed in a recent speech by Prime Minister Jean Chrétien. "Connecting Canadians is about global leadership. It’s about making Canada a magnet for investment, research and development. It’s about being able to say that every lane of the information highway leads to Canada."

The goal is to make Canada the most connected country in the world by the year 2000.

The CRTC’s role is to be one of the enablers of this process.

As new global forces and technologies began to change everyone’s world, the CRTC recognized that it had to do three things to respond to change and the need to deliver broad benefits to Canada.

First, the Commission had to provide the framework to allow three new processes to evolve in Canada in telecommunications and broadcasting:

• competition — between incumbents and new players in industry sectors that were formerly monopolies or open to only a few players;
• convergence between industries;
• emergence of new mediums.

Second, the CRTC had to transform itself from:

• an industry protectionist…to promoter
• from constraint…to competition
• from detailed regulation…to broad parameters
• from judicial process…to a more collaborative and consultative process.

Third, in complex times like these, it had to act as

• a bridge between stakeholders, that is:

• between industry and government
• consumers and industry
• consumers and government

• an advisor to other areas of government.

Within this broad framework for change, the CRTC also had to keep in mind its unique public responsibilities in relation to competition.

The Commission’s mandate is defined by two acts:

• Telecommunications Act
• Broadcasting Act.

These acts give the CRTC the responsibility to ensure that telecommunications and broadcasting:

• deliver affordable connectivity to Canadians.
• maintain an economically strong communications industry.
• provide a foundation for delivering a broad range of social, educational, cultural, and other benefits.

Concurrent to these responsibilities, the Commission has to conduct itself in light of two very important and overriding philosophical premises.

First, competition and deregulation are not synonymous. In moving from a monopolistic environment to a market-driven one, you cannot simply take away all regulation.

• You need regulation to take you through a series of rebalancing steps until at least some competitors gain enough market share to sustain them in a free market environment.

Second, competition is not an end in itself.

• The global economy is a reality.
• But national interests still exist.
• Businesses, government, consumers and all others who work and reside here have a stake in looking after Canada’s interests.
• Competition must serve a greater purpose in all respects than the situation that existed before.

Since 1992, we have taken a number of decisive steps to put in place the fundamental building blocks for implementing competition, convergence and the emergence of new media. These include:

• long distance competition
• local competition
• service to rural and remote areas
• international competition
• a review of new media.

The first four building blocks are either complete or well on their way. The fifth, the review of new media is in progress. I will say more about that in a few moments.

The CRTC has also been instigating change in a number of areas in broadcasting to put in place the fundamental building blocks for implementing competition, convergence and the emergence of new media. These include:

• introduction of new media (MMDS, DTH, and LMCS)
• changes in broadcasting distribution regulation that would put all distributors of broadcasting services in Canada on an equal footing.
• continued emphasis on how to promote greater participation for Canadians who produce content on Canadian and international markets.

In addition to changing the basic building blocks that regulate telecommunications and broadcasting, the CRTC has also made a fundamental change in the process it uses to develop and implement regulation.

At the heart of this process is the concept of cooperation.

• cooperation between regulators, government, industry, consumers and others
• no one has all the answers
• every action affects many different stakeholders.

Canadians are world leaders in creating forums for voice stakeholder opinions.

• history of public hearings
• unlike the states, we have central decision-making and culture of compromise rather than litigation and confrontation.

• Number portability

• CRTC is thinking over ways to extend this concept of an industry-Commission working group to other change processes.

Another example of how the Commission provides delivers value is through its ability to help other government bodies make decisions related to telecommunications and broadcasting.

Example:

• WTO negotiations

With the fundamental building blocks (for competition, convergence and the emergence of new technologies) in place and new processes like CISC underway, Canada is in a good position to address the future issues.

Much still has to be done and learned to keep Canada competitive in the information-driven world of tomorrow.

Progress is underway along a number of fronts:

• Bell Ontario and Telus market trials are testing new forms of multimedia content and new delivery technologies.
• The government has asked the Commission to look into the benefits of licensing additional national networks.
• New policies on radio are being developed to ensure that this medium continues to respond to the challenges ahead.
• Continued emphasis on Canadian content is required to ensure that Canadian content producers thrive as domestic producers and as exporters in an environment where the distribution channels are proliferating very rapidly.
• That all Canadians benefit as much as possible from the new media—which includes the internet

• By benefit, I mean that consumers are not only enriched but protected from abuse
• industry flourishes
• and Canada’s social and cultural institutions are enriched.

Three objectives:

• To ask: How does new media affect regulation of traditional broadcasting undertakings of Radio, TV, and cable?
• To ask: To what extent does new media constitute services already defined by the Broadcasting and Telecommunications Acts?
• To seek: other information through a public forum and make recommendations to government on other broader regulatory issues.

• individual creativity and innovation
• cooperation among our major institutions in setting goals and recognizing common values and synergies
• flexibility to adapt to rapid change.