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Convergence Policy - Backgrounder
The Policy Statement for Convergence is an important step in
fulfilling the Government's commitment to ensure that Canadians
can participate fully in the information society. It culminates a long
process of public consultations and studies. The goal has been to
create the conditions needed for fair and sustainable competition,
expanded consumer choice, and continued support for Canadian culture.
Process
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October 1994, Government issues an Order in Council related to
convergence and requests the Canadian Radio-television and
Telecommunications Commission (CRTC) to hold hearings and report
back on issues associated with its implementation.
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CRTC Report, "Competition and Culture on Canada's
Information Highway: Managing the Challenges of
Transition" released May 19, 1995. More than 1,000 written
submissions and 78 oral presentations made. Report supports
Government policy and suggests implementation principles.
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Information Highway Advisory Council (IHAC) reviews and comments on
CRTC report. IHAC's "Connection, Community, Content: The
Challenge of the Information Highway", released Sept. 27,
1995. IHAC's working group report on Canadian content and
culture, "Ensuring a Strong Canadian Presence on the
Information Highway", released October 2, 1995. V
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Government's overall action plan for Information Highway,
"Building the Information Society: Moving Canada into the
21st Century" released by Industry Minister Manley on May 23,
1996.
Highlights
The Policy Statement is intended to guide the CRTC as it establishes
rules and regulations for broadcasting and telecommunications in the
convergence era. It will also provide greater clarity and confidence
for broadcasting and telecommunications firms as they enter each
other's traditional areas of activity. For consumers, the policy
framework will help bring about more choices and the assurance that
Canadian content remains prominent on their screens.
While new technologies allow telecommunications and broadcasting
companies to offer similar services, the distinction between
telecommunications, broadcasting, and their services will remain, and
will be guided by distinct regulatory systems. For example, when a
telecommunications company provides broadcasting services, those
services will fall under the Broadcasting Act and its regulations;
when a cable company provides telecommunications services, they will
fall under the Telecommunications Act and its regulations.
The Policy Statement falls into three broad
categories: facilities, content and competition. Following is a
list of major benefits in each area:
Facilities
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Canadians will have access to competitive communications services.
In small markets, economic conditions may make the sharing of
facilities desirable to achieve this objective.
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When cablecos provide telecommunications services, they will have
to make their facilities available for lease, resale and sharing by
third parties, as is currently the requirement for telcos.
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It will not be mandatory for cable television services to make
their facilities available to others for broadcasting purposes.
Competition will be better achieved through the creation of
alternative broadcasting distribution networks.
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Consumers will be free to use the telephone and cable wires inside
their homes to obtain services from any combination of suppliers
they choose.
Content
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Canadians will continue to own and control their broadcasting
system.
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Broadcasting distribution undertakings will contribute to the
production of Canadian programming.
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With due regard for differences in technologies, all broadcasting
distribution undertakings, including new types of services, will be
subject to essentially the same rules governing contributions to
Canadian programming.
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All broadcasting distribution undertakings will provide an
affordable and attractive basic package of services, including a
predominant Canadian choice.
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Navigational systems, that is, the menus from which people will
select programs, must facilitate access to Canadian programming,
including French-language services.
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New broadcasting services will also be expected to respect industry
guidelines on violence, sexual stereotyping, intolerance, or, in
the case of children, programming and advertising not intended for
them.
Competition
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All telecommunications carriers that meet the Canadian broadcasting
ownership and control requirements will be eligible to hold
broadcasting licences.
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Most rules governing foreign investment in telecommunications and
broadcasting have been harmonized. However, it is not government
policy to ensure ongoing harmonization of ownership rules for
broadcasters and Canadian carriers in the future.
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If a broadcasting undertaking or a telecommunications undertaking
wishes to provide a broadcasting programming service, the
programming licence must be held by a structurally separate
company.
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The Bell Canada Act will be amended to enable Bell Canada to be
eligible to hold broadcasting licences.
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The Direction to the CRTC which limits the ability of provincial
crown corporations to enter broadcasting will be modified to allow
them to hold broadcasting licences, while requiring an arm's
length relationship and programming independence from governments.
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BC Tel and Québec-Téléphone were
"grandfathered" under the Canadian ownership requirements
of the Telecommunications Act in 1993. Given this special
treatment, the Government will amend the Direction to the CRTC
dealing with Canadian ownership requirements for broadcasting
companies to allow these two companies to apply and to hold
broadcasting distribution licences. This would be done through
separate broadcasting distribution subsidiaries. The licensees
would have all-Canadian boards of directors and would have to
ensure that Canadians control all programming decisions.
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To ensure that competition will be fair and sustainable, neither
cablecos nor telcos should have a head start over the other in
entering each other's core market. At the same time,
competition should not be unduly delayed.
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Telecos will be able to offer cable services once the rules for
competition in local telephone services, including tariffs to
enable cable companies and others to launch competitive local
telephone services have been implemented. This may be done on a
market-by-market basis.
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To ensure fair and sustainable competition, regulation should
prevent cross-subsidization and other forms of anti-competitive
behaviour.
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