Speech
Notes for an address
by Konrad von Finckenstein, Q.C.
Chairman, Canadian Radio-television
and Telecommunications Commission
to the 38th Annual Conference of the International
Institute of Communications
London, England
October 23, 2007
(CHECK AGAINST DELIVERY)
Good morning and thank you very much, Arne [Wessberg, IIC President]. I'm grateful to the Institute for inviting me.
This is my first time at the IIC Conference as Chairman of the Canadian Radio-television and Telecommunications Commission (CRTC). So as a newcomer, I am delighted to be here with such a distinguished group of colleagues in communications.
Given that communications has become the nervous system of the entire planet, an international gathering like this one is the best possible forum for a productive exchange of ideas.
The theme of the Conference includes the words “Navigating Uncharted Waters.” So I'm glad to be able to tell you that in Canada we have begun to prepare some charts. Our Commission has launched a major two-year study of the impact of New Media on our broadcasting and telecommunications systems, and I would like to speak to you about that today.
Role of the CRTC
But first I would like to fill in some background about our role as the regulator in the Canadian system.
The CRTC wears two hats. We regulate both telecommunications and broadcasting. Parliament has laid out this double mandate in two separate pieces of legislation: the Telecommunications Act and the Broadcasting Act, each with its own objectives.
So necessarily there are significant differences in the way we handle our regulatory responsibilities in these two sectors. One big difference lies in the role of market forces. Canada has done very well through its free economy, and I believe that market forces will continue to be the most productive source of innovations that benefit all of us.
Telecommunications
About a year ago, the government directed us to give the maximum possible weight to market forces in our regulatory work in telecommunications. We are to let those forces work. We are to regulate only when they fail to achieve the objectives set out in the Telecommunications Act.
We want the industry to have the freedom to maximize efficiency through healthy competition. In Canada, the telecommunications market has traditionally been dominated by a few large incumbent carriers. In recent years we have sought to encourage the development of competitive service providers.
As real competition continues to develop, we seek opportunities to deregulate to the benefit of both industry and consumers.
We have begun to deregulate business phone services in some markets. In residential telephone service we have deregulated 65 per cent of the market so far. We are receiving more and more applications for deregulation and we expect the trend to continue.
These are major changes in a complex system, and we are currently conducting a review process on our telecom regulations so that we can bring them into line with the government's directive for a more market-driven approach.
Broadcasting
The picture is significantly different in broadcasting, where Parliament has given us a special responsibility. We must place a high priority on the social and cultural contributions that broadcasting can make to the Canadian sense of identity.
We must encourage the development of a flourishing industry that is distinctively Canadian. This implies:
- the predominance of Canadian content, and
- full access by Canadians to the system, as participants in the industry and as audiences.
To maintain a distinctive identity is not easy when you are living in the shadow of the United States. They are the world's most prolific and successful producer of popular entertainment, as well as vast quantities of news and information.
To some degree, most countries in the world live in that cultural shadow. But in Canada it is inescapable. The United States is right next door. We share with our American friends much of our way of life. And we share with them the English language – which is the mother tongue of 60 per cent of our population and is widely understood as a second language.
So our broadcasting system has a key role to play in preserving and nourishing what it is to be Canadian.
It operates in English and French, our two official languages, as well as many others spoken and understood in our country, including the languages of Canada's Aboriginal peoples.
The Broadcasting Act requires that our system carry a predominance of Canadian content – that is, content about Canadians and created by Canadians. The diversity of our population must be reflected in both programming content and opportunities for participation in the industry.
And the system must do all this on the basis of a Canadian population that is only 10 per cent of the American.
Obviously, the free flow of economic forces alone cannot magically realize the aims of this social and cultural agenda. So it is our job as the regulator to see that the privilege of holding a broadcasting licence carries with it the responsibility of helping to maintain a system that is distinctively Canadian. That is a fundamental requirement.
But we are also determined to achieve in broadcasting, just as in telecom, a significant reduction in the regulatory burden on the industry. We are aiming for lighter and smarter regulation.
This year, we commissioned a team of outside experts to examine all of our broadcasting regulations. Each regulation was scrutinized as to its original purpose, its relevance to present and future needs, and the appropriate action to take on it: should it be retained, improved or streamlined, or simply eliminated?
The consultants also made proposals to maximize the influence of market forces in broadcasting, while still promoting the fundamental priorities of Canadian content and of full access to the system as set down in the Broadcasting Act.
The challenge of convergence
So the CRTC is a single organization implementing two separate regulatory regimes under two separate pieces of legislation. But we believe that in the long run some kind of unification is bound to happen.
That will be a rational response to the challenge of convergence. Digital technology has made convergence inevitable. In Canada, telecom companies have been getting into broadcasting distribution. Cable TV distributors have been getting into telephone service. And everybody has been getting into Internet and wireless.
Technology is converging. The infrastructure is converging. The industries are converging. Eventually I'm sure we will see our regulatory regimes converging as well, though the authority to bring this about lies with Parliament and not with us.
I look forward to hearing from my international colleagues about their own experience of convergence.
Added to this challenge of managing convergence is the arrival of New Media.
Like everyone else, we have to understand this new environment.
CRTC New Media background
When the CRTC first looked at New Media in 1999, it offered little competition to traditional broadcasters, and there seemed no need to stimulate its carriage of Canadian content. So it was made exempt from regulation.
Obviously a lot has changed since then.
Real-time streaming is here.
Large numbers of Canadians have access to broadband.
Content aggregators like Joost and Babelgum are offering video services with global ambitions.
User-generated content is spreading – a concept previously unknown.
Different business models are up and running – pay-per-view, subscription, free-with-advertising.
More and more advertising is migrating to New Media.
All kinds of devices can connect – phones, computers, PVRs, iPods, cameras, and more.
The industry can interact with its audience as individuals. Content providers can monetize the long tail of their inventory.
New Media Project Initiative
In light of all these developments, we decided it was time to conduct a thorough study of New Media and its impact on the objectives of our legislated mandates. So we established within the CRTC the Policy Development and Research Sector. We assigned to it, as its highest-priority mission, the creation and management of the New Media Project Initiative.
The purpose of this Initiative is to provide a solid basis for policy development in the new environment.
It is being guided by an advisory committee that brings together senior representatives of the government organizations that are directly concerned with these issues.
Our primary focus is on the emerging regulatory issues regarding content and access.
With respect to content, we have chosen to focus on the streaming of commercial television over the Internet and wireless devices. We are concerned with professional programming only, not with the material generated by users.
With respect to issues of access, we will focus on such items as:
- Internet traffic prioritization, and
- the definition of what telecommunications basic service shall be.
Our study is being carried out in three phases.
First, the research phase, which is now complete. Research took place internationally as well as in Canada, conducted by Commission staff and by outside experts. We consulted with a wide range of stakeholders in the industry and with members of the academic world.
We covered subjects such as:
- the emerging economic and business models,
- the changing needs, behaviour and expectations of the audience, and
- trends in technology and services.
We have now moved on to the validation phase, which is based on discussion and analysis. This includes panels and workshops at industry conferences, exchanges with different government departments, and extensive analysis within the Commission. We're determining the impact of New Media on our regulatory regime in both broadcasting and telecom. We want to build understanding from all points of view – including the consumer's as well as the industry's.
The third phase will hopefully consist of public hearings.
This Initiative is a collaborative effort. We aren't re-inventing the wheel; we are giving ourselves the opportunities to learn from others.
We hope that the process will help us define:
- an approach to New Media,
- a plan of action, and
- a pathway toward any regulatory or legislative changes that may be necessary.
In short, we have to learn what New Media entails, we need to assess the impact of New Media on broadcasting and telecommunications, and most importantly from our point of view, we need to assess their impact on the regulatory system. Will New Media undermine or bypass it, or be merely complementary?
These are all very big questions. We have to address them soon. I don't know what the answers are.
But there is one thing I do know. For us at the CRTC, the guiding principle in our approach to New Media will be exactly the same one that we have followed in our approach to the traditional media: To regulate as effectively as we can to further the two primary goals of the Broadcasting Act –Canadian content and full access to the system for all Canadians.
In my view, this is the defining challenge of our time in broadcasting. There is no more important matter facing the Commission, nor any other matter with such long-term consequences.
At the core of our Initiative are three simple questions:
- First, is it necessary to regulate commercial television delivered over the Internet and through mobile devices?
- Then, if it is necessary, can it be done?
- And finally, if it can be done, how should it be done?
I'm sure all of you are asking similar questions. Our own motivations have a great deal to do with questions of Canadian identity, but we know that we are dealing with issues of worldwide significance.
We look forward to sharing our findings with all of you, and to learning from you as well.
Thank you very much for your attention.
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Date Modified: 2007-10-23
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