Telecom Overseers Push for More Power to “Police Industry”

by Jordan Richardson on November 25, 2010

The CRTC and Industry Canada are pushing for more power to “police” the telecommunications industry. They claim that they lack the gusto to impose strict fines and really penalize those companies in the industry that break regulatory rules and refuse to comply with license terms.

With more convergence between media companies and distribution, the CRTC says it’s losing its grip on effectively enforcing regulations. Industry Canada is also struggling to try to support the rules in the context of a sea of new competitors, many of which are complaining about various elements of foul play and unfairness. Industry Minister Tony Clement announced a pending department review of some policies on Monday.

Canada’s telecommunications industry really does find itself in an interesting spot right now. The new competitors are testing the boundaries of what is, in essence, an architecture designed to support an oligopoly. Couple this foundation with a rapidly-changing industry and you’ve got a recipe for confusion that demands attention. Adding more spectrum auctions and augmenting foreign ownership regulations are only the tip of the iceberg, especially as these carriers begin to solidify.

With this solidifying process comes expansion from the incumbents and with that expansion comes a host of new regulatory challenges. “We don’t have the tools to deal with it,” CRTC chairman Konrad von Finckenstein said at a telecom policy conference in Ottawa.

Hearings with respect to the convergence factor are set to take place next May and it is expected that the CRTC will look at its options at that time.

As for Industry Canada, they remain dissatisfied with their current options. They can essentially pull licenses should a company break the terms, but those options are looking less and less attractive over the long haul. Helen McDonald, an assistant deputy minister at Industry Canada, thinks that pulling the license is “drastic.”

“You don’t want to strand Canadians relying on their services. Give me something in between,” she says.

The companies, however, don’t seem to fond of the idea of the regulators getting more power. “You’re left with the bureaucracy being both the prosecutor and the jury,” says Michael Hennessy, Telus’s senior vice-president for regulatory and government affairs. According to Hennessy, financial penalties aren’t necessary. Solving the disputes faster, though, now that’s an idea.

In order for Industry Canada to lay the smack down in terms of financial levies, the Radiocommunication Act would need to be changed. The Telecommunications Act and the Broadcasting Act would likewise need adjustments if the CRTC were to be granted the power to impose fines.

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