Speech
Crime, Competition and Culture
Notes for an address by
Charles Dalfen
Chairman, Canadian Radio-television
and Telecommunications Commission
to the International Institute of Communications
Canadian Chapter
Ottawa, Ontario
November 27, 2002
(CHECK AGAINST DELIVERY)
I'm very glad to be here to address the IIC, an organization in which
Canadians play such a significant role. This annual exchange of views is an
important event for us in communications, and I'd like to extend my thanks to the
sponsors who make it possible.
From time to time, as Chairman of the CRTC, I make various public
announcements that are not always met with unanimous approval. However, I believe
that the announcement that I have to make tonight will be very widely welcomed.
Today is Hon. Sheila Copps's birthday. Happy birthday, Sheila!
I think I speak for everybody here in offering you our very warmest
congratulations and good wishes, and our gratitude for your great commitment and
service to Canada. It is, of course, an Ottawa tradition that the birthday of the
Minister of Canadian Heritage marks the official beginning of the holiday season.
Crime
For our industry, however, the holiday season brings some hard questions. Many
Canadians will go shopping for home entertainment systems. But how will they go
shopping for the rich variety of broadcast programming that is available to them
in this country?
Will they buy it? Or will they steal it? A lot of them, unfortunately, are
stealing it.
According to some estimates, up to 700,000 Canadians get satellite TV signals
illegally, with 75 to 80% of them using black-market methods. They hack into the
signal of a legitimate satellite service by buying an illegal card from a
black-market operator, or by using illegal do-it-yourself techniques.
The remainder are customers of grey-market operators, who set them up with a
fraudulent U.S. address that allows them to subscribe to an American satellite
service.They pay for this service, but by decoding these signals in Canada they
violate Canadian law. They also deprive the Canadian broadcasting system of the
revenues that it requires to be healthy and productive.
So black market or grey market, this is theft. Signal theft.
We are facing a nationwide epidemic of electronic shoplifting.
Now, many of the people who are doing this do not seem to be aware that
they're doing anything illegal.
What's wrong with it? they ask.
Well, let's review what's wrong with it.
First of all, there is a cultural cost to the country.
Canadian programming is supported by the revenues of the broadcasting system.
Indeed there are also specific formulas that tie programming to revenue. One
is the three to five percent of cable and satellite broadcasting revenue that
goes to the Canadian Television Fund, which provides key financing for
distinctively Canadian productions.
Another formula specifies that almost 40% of the specialty services revenue
must be spent on Canadian programming.
So, if I get my TV shows illegally, the legitimate providers lose my monthly
subscription fees. They also lose me from their audience numbers which support
their advertising rates.
So multiply that viewer by hundreds of thousands and you can see the crippling
effect on Canadian programming that's caused by cheating the system.
What you won't see is the programs that don't get made.
The second thing that's wrong is that there is an economic cost to the
country.
The Coalition Against Satellite Signal Theft has estimated the loss to the
Canadian broadcasting system at 400 million dollars a year. When revenues are
bled away from the licensed cable and satellite providers, jobs are lost all the
way up the distribution and production chain. Administrative jobs, creative jobs,
technical jobs.
Signal theft costs us in the vital area where we most need to prosper.
Third: Signal theft steals the rights of intellectual property holders.
You will be discussing intellectual property issues in the first panel
tomorrow morning.
Tonight I'll confine myself to the issue of stealing it.
Parliament created three pillars of intellectual property rights: the
Copyright Act, the Radiocommunication Act and the Broadcasting Act.
These three proclaim and protect the right of creators, and those authorized
by them, to control the use of their works, and to receive payment for it.
Isn't it this very protection of intellectual property that gives creators the
practical incentive to devote their labours to invention, creativity and
communication?
Signal theft violates that protection.
So what can be done about it?
In April the Supreme Court of Canada delivered a landmark decision in Bell
ExpressVu v. Rex.
It ruled clearly that any unauthorized decoding of encrypted signals in Canada
was a violation of the Radiocommunication Act.
And that's any encrypted signals, whether they originate in Canada or
elsewhere.
In my view, the Court's decision makes it clear that signal theft undermines
the broadcasting system and frustrates its goals, and is not to be tolerated.
Two weeks ago, we got the welcome news from Winnipeg that for the first time
since the Supreme Court issued its decision, a company in Canada had been shut
down by the RCMP on charges of selling satellite decryption equipment.
A week ago they raided a company in Montreal for the same alleged violations.
And we are confident others will follow.
There have also been some encouraging initiatives from within the television
industry.
Four major players have launched a 100-million-dollar lawsuit against dealers
in three provinces for allegedly selling decrypting equipment.
The Coalition Against Satellite Signal Theft has launched a public-awareness
campaign warning that the practice is illegal.
We at the CRTC have asked major distributors to detail the steps they've taken
to ensure that all the viewers who receive their signals are in fact paying for
them.
We also call on direct-to-home services to ensure that the distributors of the
satellite equipment needed to access these services keep tight control over their
inventory so that it does not fall into the hands of violators.
We will take whatever actions we can and we'll continue to do our part in
raising awareness.
What is needed now is a concerted effort by all players in the industry, all
enforcement agencies and all branches of government to see that the law is
enforced and intellectual property protected.
To this end, I will be asking key industry players in the distribution
business to meet with me at CRTC headquarters, in the coming weeks to review the
situation and explore potential courses of action.
Competition
The second panel tomorrow also tackles a very timely and important subject:
"Challenges and Opportunities Facing Infrastructure Providers."
For us, a key challenge and opportunity is competition.
We're proud of the Commission's role in introducing competition into all areas
of communications - a process that began in the late seventies.
In telecommunications, Canada is a world leader in providing widespread
services of high quality at comparatively low prices.
In fact, our telecom rates and our Internet access rates are among the lowest
in the world.
2.1 million Canadians are broadband subscribers.
This is the second-highest penetration in the world, and it grows directly out
of the competitive frameworks that we as Canadians have put in place, which
favour a rapid cycle of innovation.
In the wireless market we have vigorous competition and the lowest prices in
the world.
But in wireline, the competitive situation is very different.
Competition in local telephone service, and particularly residential,
continues to be minimal.
Our preliminary figures show competitors' share of lines as just under 4%,
although we were taken to task by one incumbent who insisted it was just over 4%.
But whether it's 4% or 5% or 10%, it is still far below the level necessary
for the public to reap the benefits of competition; and too low to alleviate a
growing concern about the re-emergence of the dreaded monster of monopolization.
We had hoped that alternative technologies and providers might make their way
into the local residential market - using coaxial cable, either circuit-switched
or Internet Protocol; wireless or other technologies, to challenge wireline for
the customer's primary phone.
There has, in fact, been some headway made by competitive providers such as
Call-Net and EastLink in certain parts of the country.
There is also an incipient trend, especially among young people, to use
wireless as their only phone.
But however encouraging these inroads may be, they remain very limited, even
though alternative technologies have been around for a while.
In fact, 25 years ago, in a 1977 decision defining the terms under which the
cable companies could attach their lines to telephone utility poles, we stated
the following:
"Although the two transmission technologies - coaxial cable
and copper pair - provide distinct services into the home at present, new
services may develop which could be provided by either technology. In such
cases, neither technology should be burdened with artificial barriers
preventing their development in a fair and reasonable manner."
So what has happened since?
The one service that is now being provided via both technologies in a fully
competitive manner is high-speed Internet access.
With that exception, however, coaxial cable is still used predominantly to
distribute broadcasting services, and the copper pair to carry telephone
messages.
In the local business market, competitors' shares are somewhat higher.
But there too, the present situation clearly does not amount to vigorous
sustainable facilities-based competition that has been, and continues to be, a
goal of our policies.
Just as clearly, however, regulatory policy is only one element in the
evolution of a truly competitive industry.
Telecommunications carriers operate within an economic environment, and the
current environment is a difficult one.
Many participants in the sector have failed, while others have restructured.
In order to succeed, competitors will require sound business judgment and
effective strategies.
Investors and financial institutions are still very cautious about this
sector, to say the least, and they will have to regain their confidence before
they are again willing to take the necessary risks.
This is so in Canada as in practically every other country.
And yet we cannot wait for all the stars to align in a favourable pattern.
We at the Commission will continue to do what we can to foster competition and
excellence of service in the environment as it is.
We are moving ahead with a number of follow-up proceedings which flow out of
the Price Cap decision.
In several of these cases, we have accepted the Incumbent's evidence of lower
costs and we have reacted quickly to reduce prices on an interim basis.
We are continuing with our Competitor Digital Network Access service
proceeding which will address policy, tariff and technical issues concerning
services and facilities of incumbents that may be made available to competitors.
In addition to dealing with these access issues, the Commission will also
continue to be vigilant in dealing with anti-competitive behavior, whether in
telecom, in cable, or in any other area of our jurisdiction
Culture
I saw a wonderful movie the other day. It's called Bollywood/Hollywood.
And, of course, with a title like that, it could only be a Canadian movie.
It was written and directed by Deepa Mehta, and it's a very Canadian movie.
Unlike some other movies that suppress Canadian identity, it was shot in
Toronto-not-pretending-to-be-Chicago.
It's a romantic musical comedy in which a South Asian sensibility meets a
Western story.
Go see it.
It is not only a terrific movie. It is also a terrific if unintended
commercial for Canadian cultural diversity.
It seems to me that some of the most exciting Canadian productions these days
are those that draw on the new realities of our society. It may be that Canadian
producers are at the leading edge of a new kind of story-telling, one that gets
its energy and appeal from the vibrant mix of cultures we see around us.
These stories resonate not only here in Canada but also around the world.
Another such story is "My Big Fat Greek Wedding".
Although it isn't a Canadian production, it was written by Nia Vardalos from
Winnipeg, telling a story about the community she grew up in.
She also starred in it, supported by several fine Canadian actors.
It's been a runaway success throughout North America, and it is about to
become a series of six half-hour shows for CBS which will begin shooting in
February.
So Canadian diversity is alive and well in film and broadcasting, not only in
Canada, but internationally as well. What these two films demonstrate is that
ethnic diversity is becoming increasingly mainstream. We believe there is an
opportunity here for broadcasters to seize upon this phenomenon to better serve
their audiences.
This is one of the reasons for which we have increased our expectations of all
broadcasters to improve their reflection of Canadian reality.
I note that the demographics of the country continue to change.
It's interesting that in just 40 years, Toronto's visible minority population
has grown from 3% in 1961 to over 50% today.
It's expected that by 2006 one Canadian in six will belong to a visible
minority group.
And it's never been more important for people of all origins to relate to each
other with mutual respect and understanding.
Tomorrow's third panel will discuss "A Model for a New International
Instrument on Cultural Diversity." The issues there will be somewhat different
from the diversity issues I've been talking about. The focus will be more on the
ability of countries to safeguard their cultural industries and expression in the
face of globalization, trade obligations, and the power of dominant cultural
tastes.
The instrument would set out clear ground rules to enable Canada and other
countries to maintain policies that promote their culture while respecting the
rules of the international trading system and ensuring markets for cultural
exports, and in addition, would recognize the legitimate role of governments to
preserve and promote cultural diversity.
But these issues are closely related to those championed by the CRTC and
Canadian broadcasters on the national scale.
Both are founded on the assertion that distinct cultures have a right to be
respected and to be reflected in the mass media.
This conference brings together people of great expertise and experience to
address some of the most important issues that face us today.
I'm honoured that you asked me to come here to start things off.
Thank you.
- 30 -
Contact: Denis Carmel,
Tel.: (819)
997-9403, TDD: (819) 994-0423, Fax: (819) 997-4245
e-Mail:
denis.carmel@crtc.gc.ca
Toll-free #
1-877-249-CRTC (2782)
TDD -
Toll-free # 1-877-909-2782
This document is available in alternative format upon request.
Date Modified: 2002-11-27 |
