Speech
Broadcasting and Telecommunications: Priorities and Processes
Notes for an address
by Charles Dalfen
Chairman, Canadian Radio-television
and Telecommunications Commission
to the International Institute of Communications, Canadian Chapter
Third Annual Conference
Ottawa, Ontario
December 2nd, 2003
(CHECK AGAINST DELIVERY)
Thank you, Michael [MacMillan].
It is a pleasure to be here tonight at the third Annual Conference of the
Canadian Chapter of the IIC. The Conference brings together a broad range of
leaders from across the communications sector. Here we have an excellent
opportunity each year to exchange views on subjects that matter to us all.
I want to begin by saying what too often goes without saying - and therefore
does not get said enough.
And that is how successful we have been -- as a country and as a society -- in
providing Canadians with telecommunications and broadcasting systems and services
that consistently rank with the best in the world -- in terms of coverage,
quality, price and diversity.
I believe that the telecom and broadcasting industries, with CRTC regulation
and supervision, are making great progress towards realizing the policy
objectives set out in the Telecommunications Act and the Broadcasting
Act.
Let's look first at telecom. We have just released our annual monitoring
report on the status of competition, and on the deployment and accessibility of
advanced telecommunications infrastructure and services. This report has been
particularly well received and I would like to thank our very able CRTC telecom
staff who laboured long and hard to bring it forth.
The report points to many positive signs. Telecom services continue to play an
important role in the Canadian economy and in the daily lives of Canadians,
regardless of their socio-economic status. The industry's share of real gross
domestic product continued to increase, reaching 2.7% at the end of 2002 from
2.5% a year earlier.
By the end of last year, for the first time, there were more Canadian
households with Internet subscriptions than those without. Also for the first
time, there were more households with high-speed Internet than with dial-up
access.
The wireless share of total telecom revenues continues to grow; at the end of
2002 it stood at 23%. Competition is vigorous in that sector, with no dominant
player.
Competition is also vigorous in long distance. New technologies such as
Ethernet and IP are taking hold in the data services market.
However, in the local wireline market, which is the largest segment of the
industry, there is still no substantial, and certainly no sustainable,
facilities-based competition. The Monitoring Report shows that at the end of last
year, competition was largely confined to urban markets. In some of the larger
cities, competitors generally had between 10 and 20% of local business lines.
However, in local residential lines, competitors' market shares were generally in
the low single digits - except for Halifax and Charlottetown, where Eastlink held
shares in low double digits.
Overall, incumbents still held over 95% of lines and revenues, and we continue
to be concerned about the barriers that impede entry into that market.
A number of our actions and decisions over the past 12 months show how
determined we are to lower those barriers.
For example:We made it clear that affiliates of an incumbent phone company
should be subject to the same rules as apply to the incumbent itself.
We widened the scope of our moratorium on applications for promotions by
incumbents, pending our examination of the rules governing promotions.
We recognized that competitors often lack access to the evidence that would
support their complaints of regulatory non-compliance by incumbents. So we
invoked our power to designate inspectors to verify compliance.
To enable all consumers to have a choice of local service providers, we set
down principles and guidelines to ensure that all local telephone companies can
have access to the premises of multi-dwelling units.
We removed another barrier to local wireline competition by deciding that
consumers who want to subscribe to an incumbent's high-speed Internet service
should not be required to buy their basic local service from the incumbent.
We proposed changes to strengthen the price floor safeguards that promote fair
competition between incumbents and new entrants to the local wireline market.
Decisions like these are shaped in the light of the current competitive
environment. Certainly we must take into account emerging industry trends in
communications and information technology and in consumer behaviour - but our
decisions must continue to be grounded in the present-day realities of the
marketplace.
In broadcasting, Canadians enjoy one of the most extensive and diverse radio,
television and broadcasting distribution systems in the world.
Public, private and community sources provide over 600 television services in
English and French, and in Aboriginal languages, as well as more than 30
third-language services. In radio there are over 800 services available,
including more than 20 in third languages.
Broadcasting distribution undertakings now reach over 9.5 million subscribers
- that's 80% of Canadian households. Digital, cable and DTH services are now
virtually universally available, and 3.6 million households are currently
receiving digital services.
Cable and DTH systems compete against each other across the country. MDS and
new telco-provided DSL-based video services add to the competitive mix.
Our broadcasting system has been such a key part of our national life for so
long that it's easy to take it for granted. But we mustn't.
The landscape in which we operate is changing daily, and many of the most
significant issues we now have to deal with in broadcasting are related to the
emergence of new technologies. Canadian broadcasters have begun the transition to
digital, which offers a higher quality of image and sound, along with
interactivity and other new features. New equipment such as personal video
recorders will change the way we receive programming, and challenge the business
models that support the system. And the Internet is an expanding universe whose
impact on broadcasting is not yet clear.
There are and will continue to be issues to resolve in which technological,
economic and cultural factors will all be intertwined.
A good example was our decision in July on the question of the impact of
direct-to-home satellite broadcasting on local and regional small-market
stations.
We appreciated the hard work put in by the parties in developing their
proposals. In fact, we adopted most of them. But at the end of the day we
considered it important to make a decision that would not only assist
small-market independently owned stations, but would also ensure that the monies
directed to the new fund to help them develop local programming were not diverted
from the Canadian Television Fund, which plays such a key part in the production
of Canadian programming across the country.
Another issue we've been addressing is managing the transition from the analog
to the digital world. A few weeks ago we announced the regulatory framework for
the distribution of over-the-air television signals. While we consider digital to
be an eventual replacement technology for analog, broadcasting distribution
undertakings will carry both analog and digital signals during the transition.
This will give Canadians increasing access to digital TV signals, including
high definition signals. We believe that this access will prompt more and more
viewers to upgrade to digital equipment, which will in turn help drive the
transition, with benefits to the Canadian broadcasting system as a whole.
The digital signals will, of course, include foreign services, many of which
are already offered on analog. When distributors wish to add foreign digital
signals to the list of eligible services they may offer their subscribers, we
expect them to develop proposals that will advance the objectives of the
Broadcasting Act, and that will not weaken the underpinnings of our system.
Radio too is going through its own digital revolution. One potential new
entrant has announced its intention to apply for a license for satellite radio
broadcasting, and there may be others.
Any licensing proceeding would undoubtedly consider the impact of satellite
radio on existing licensees, and on the development of terrestrial digital audio
broadcasting in Canada. Here again, we would want to be satisfied that any
licensing proposals were consistent with the aims of the Broadcasting Act.
In order to adequately explore these issues, we have decided to postpone our
scheduled review of commercial radio policy until we have examined the
implications of satellite radio.
Technology, of course, is not an end in itself. From the perspective of the
Broadcasting Act, it is a means of delivering content. At the CRTC, Canadian
content is of course at the heart of our mission. I am now almost two years into
my job, and as you know I have made it a priority to see how we can get more
English-language Canadian drama onto our TV screens that more Canadians will want
to watch.
We will soon be releasing our Broadcasting Monitoring Report for 2002.
Unfortunately it shows no improvement in the numbers for English-language
Canadian drama. Drama and comedy remains by far the most popular category with
Canadian Anglophone television viewers, accounting for 44% of their viewing. But
only 11% of their viewing in that category is to Canadian shows.
We called for comments on what we might do to increase the availability and
popularity of English-language drama, as well as to maintain the strength of
French-language drama. We are currently analyzing responses from the industry and
the public.
Our efforts in fostering local telecom competition and in support of Canadian
dramatic programming are examples of setting priorities as we try to balance and
reconcile the various objectives of the Acts that set out our mandate.
Those objectives provide the bedrock for our decision-making. This is
particularly important in times of transition such as these, times which
inevitably give rise to many issues and complexities.
And where there are complexities, clarity becomes all the more important,
which is why we have committed ourselves to increasing the clarity of our
decision-writing. We are including fuller explanations of the background and the
reasoning that have led us to our determinations, in order to reduce regulatory
uncertainty and thereby benefit the system as a whole.
I'd like to acknowledge the contribution made by the parties that participate
in our broadcasting and telecom proceedings, helping us to see all sides of the
issues before us. As a number of our recent decisions demonstrate once again, we
do hear and consider the positions of the parties very carefully in reaching our
conclusions.
There are always a large number of formal regulatory proceedings in progress.
Indeed at this point, it could be said that our cup runneth over.
In addition to these formal proceedings, however, there is a range of other
processes that we have found to be extremely useful in dealing with different
types of issues.
One is self-regulation, through such important bodies as the Canadian
Broadcast Standards Council and the Cable Television Standards Council.
There are also round-table processes, involving industry leaders. This was the
means I chose in convening the summit of CEOs on the very serious problem of
signal theft. I want to take this opportunity to acknowledge the cooperative
participation of the CEOs in that process, and for their "frank and friendly"
exchanges of views and proposals. I believe that progress has resulted from this
effort, though there remains a lot of work to be done in combating the problem of
signal theft.
Alternative Dispute Resolution has been and continues to be very helpful with
competitive and access issues in both telecom and broadcasting. This process
often leads to the resolution of disputes at an early stage, and to negotiated
arrangements that generally work out best for the parties concerned. Commission
staff is always available to assist in these negotiations.
In the telecom field staff has been working directly with parties to resolve
quality-of-service issues, as well as complaints that various competitors have
with each other.
The CRTC Interconnection Steering Committee continues to play a useful role in
settling implementation issues in the telecom sector with industry and consumer
participation.
I should add that we are also working internally to deal with applications as
expeditiously as possible, and to streamline and consolidate data-gathering
through the use of Web-based software. It is a rough-and-tumble marketplace, of
course, but I know that all players have the will to go as far along the route as
they can to try and resolve their difficulties themselves. This works well for
us. If too many routine disputes are brought to our door, our focus risks being
diluted and our resources risk being spread too thin. It may also give rise to
the dreaded demon of micro-regulation.
We therefore count on parties to prioritize their issues, and to try to limit
the disputes they bring to us to those that can't be resolved either in a timely
manner or by other means.
As I said when I began, we have a lot to be proud of in the powerful and
far-reaching broadcasting and telecommunications systems we have created to bind
our country together.
Inevitably, however, being Canadians, we cannot rest on our laurels, and we
always look for ways to try and make things better.
Tonight I have put forward some suggestions that I hope will have some
resonance.
I look forward to continuing to work with you in facing the challenges ahead
to ensure that Canadians continue to be provided with exciting and innovative
broadcasting and telecom services.
Thank you.
- 30 -
Media Relations:
MediaRelations@crtc.gc.ca,
Tel: (819) 997-9403, Fax: (819) 997-4245
General Inquiries:
Tel: (819) 997-0313, TDD: (819) 994-0423, Fax: (819) 994-0218
Toll-free # 1-877-249-CRTC (2782), eMail:
info@crtc.gc.ca
TDD - Toll-free # 1-877-909-2782
This document is available in alternative format upon request.
Date Modified: 2003-12-12 |
