Today, the Globe and Mail’s James Bradshaw reports that Bell Media President Kevin Crull issued orders last Thursday to staff banning CTV media outlets from including CRTC Chair Jean Pierre Blais in coverage of the recent TalkTV decisions. Interviews with Blais that had been planned for CTV show Power and Politics were cancelled at the last minute and footage of Blais was dropped from coverage at Bell’s thirty TV stations across the country.
Senior news editors and junior journalists feared for their job and mostly went along, although CTV National News anchor Lisa Laflamme and senior journalist, Robert Fife, refused to bend. The fact that this story has broke is an index of rancour in the ranks of journalists and news execs within the Bell media empire. That we know about this at all is due to some of these journalists and news executives deciding to go public with their concerns about the heavy-handed editorial meddling they are experiencing, and probably not just on this occasion.
Indeed, such concerns appear to be part of a recurring pattern. I gave a glimpse of such problems in my Bell Memos post back in late 2013, where I laid out a chain of emails originating with Bell Media President Kevin Crull calling on news executives and editors at Bell TV and radio outlets across the land to cover a report that cast Canada’s three biggest wireless companies – Bell, Rogers and Telus – in a positive light compared to what most studies on the subject conclude.
Soon after I released the Bell Memos post, I was approached by a journalist at Business News Network (BNN) with claims that the Crull emails I cited was not an isolated instance. They chimed well with their own experience at BNN, I was told. Senior editors and news managers at the BCE-owned TV channel have also adopted editorial policies and interviewing practices that give special treatment to BCE executives who appear on BNN shows such as Business Day and Streetwise, according to my source.
A redacted copy of my correspondence with BNN Insider and the memos, emails and stories they provided can be found here.
Among the content is a memo from Bell CEO George Cope calling on Bell staff to contact CRTC chair J. P. Blais – replete with his email address — to register their dismay with the CRTC’s decision in October 2012 to reject Bell’s first attempt to take-over Astral Media. The idea that all Bell employees would share such a view is presumptuous to say the least, while also sending out a signal that if they aren’t already of this view, then perhaps they should be.
The materials also outline a series of events where BNN programs have been stage-managed through “pre-interview editorial meetings” that allowed BCE executives to broadcast the company’s views on matters of public policy and corporate interests in the best light possible. As examples, BNN insider pointed to interviews of BCE executives in relation to:
- BCE’s response to the CRTC’s decision on October 18th 2012 to kill the first version of BCE’s attempt to acquire Astral Media,
- US telecoms giant, Verizon’s, possible entry into mobile phone market in 2013,
- the Canadian Government’s wireless policy designed to help foster a viable fourth national wireless competitor across the country,
- the 2014 700 MHZ spectrum auction.
As BNN insider told me, “In all my years as a journalist I’d never witnessed such editorial interference or ‘bullying’ tactics. I was shocked.” They also asked me to “keep my name off-the-record as this could jeopardize my career prospects”.
BNN Adopts Pre-Interview Meetings for Interviews with BCE Executives
According to BNN insider, the pre-interview editorial meetings just mentioned are unique only to its coverage of BCE. According to these procedures, when BCE execs are to appear on BNN programs their interviews are often preceded by special ‘pre-meetings’ “with the ‘interviewee’ on what to ask and how to ask it”. Pre-meetings are arranged by senior news managers and editors and often include program hosts as well as journalists who will be talking to the guest from BCE and asking questions on air.
Pre-meetings are also sometimes used to discuss who might make a good ‘guest’ with an opposing point of view to create the semblance of balance and objectivity. However, BNN insider states that the editors’ intent seems to be more of an attempt to stage manage opposing points of view and to ensure that BCE execs appearing on BNN are not broad-sided by their critics, rather than a bona fide effort to ensure the widest range of expression possible.
Sometimes these meetings can actually be useful, as when BCE’s resident experts give tutorials to journalists on complex technical and policy issues surrounding mobile phones and spectrum auctions, for instance. Crucially, however, even in these matters it is BCE’s experts framing the technical issues not independent ones.
The upshot, however, is that such practices look more like stage-managing the news than independent journalism.
In tandem with the Crull memos sent out across CTV1 and CTV2 and to local TV and radio stations across Canada – both today in relation to the CRTC’s Talk TV decisions and back in the late summer of 2013 at the height of the “Wireless Wars” – suggests that editorial meddling within Bell Media is extensive and routine. Such practices do not bode well for the state of the news at Canada’s largest communications and media company. They undermine the editorial autonomy of the news and compromise journalists’ work, while tarnishing the credibility of news organizations more generally in the public’s eye.
A Timeline and Synopsis of Key Events
The meetings, memos, emails and so forth given to me begin on October 19th, 2012, the day after the CRTC issued its landmark ruling that flatly rejected Bell’s take-over bid for Astral Media. They continue until the end of August 2013 when the “Wireless Wars” were at a high boil, with BCE executives appearing on BNN several times to make the case against allowing the US telecoms giant Verizon to enter the Canadian cell phone market, and against the Harper Government’s wireless policy.
October 19th, 2012 — Cope’s Memo to Bell Media Editors and Journalists: the CRTC Got it Wrong in Bell Astral 1.0
The morning after the CRTC’s landmark decision rejecting BCE’s bid to take-over Astral, BCE CEO George Cope emailed a memo to Bell Media staff relaying his anger with the decision as well as the company’s determination to do whatever it took to overturn it. Assuming that everyone within Bell Media was reading from the same hymn sheet, Cope called on those who felt so inclined to email CRTC chair J.P. Blais to let him know their views, with Mr. Blais’ email provided in order to make the task all staff were being called upon to do all that much easier.
The assumption in Cope’s email that journalists, editors and media workers across Bell Media are at one with the company’s views on the CRTC’s decision (or any issue for that matter) clashes with the principle that journalists and editors must use their own professional judgments to reach their own conclusions rather than assuming that they share a commitment to BCE’s corporate interests and views on matters of public policy.
October 19th, 2012 – Cope Goes on Business Day to Further Tell Everybody Why the CRTC Got it Wrong in Bell Astral 1.0
Later that day, Cope appeared on the BNN program “Business Day”. However, before he did, senior editors at BNN convened an hour-long “pre-show” meeting to help set the stage.
The senior editors at the meeting decided to sideline the usual hosts of the program in favour of two BNN journalists who had been working the Bell – Astral file: Paul Bagnell and Andrew McCreath. True, Bagnell had been covering the Bell – Astral merger and so had good knowledge of the circumstances surrounding the deal. However, even if that was the bona fide reason for this decision, the usual hosts were told not to recap the interview or to ask their own questions, but also to let the audience know that others with opposing views had been invited to appear but had apparently turned down the offer. It was an unusual move, and it was one that left some shaking their heads and unhappy.
That things were getting uncomfortable inside BNN on October 19th became more apparent as news that Cope was coming on to “Business Day” to discuss the CRTC’s Bell Astral decision began to spread among those working on other BNN programs. As the emails show, journalists began to consider their own stories for the day, but while they did the assignment editor made it clear that one thing they would not be covering was BCE. Indeed, while fielding queries about a third story that was needed to fill out the Streetwise segment for the day, the Assignment Editor stated bluntly, whatever the journalist had in mind, it would “Definitely not [be] BCE”. The company line on that story had already been set elsewhere and they were not about to cross it.
A key point in this exchange is that the two of the journalists involved are not full-time BNN journalists at all. Instead, they parlay their roles as business reporters at the Globe and Mail (where BCE also holds a 15% ownership stake as well and Bell Media President Kevin Crull is a board of director) into the Streetwise segment they, at least at the time, had been hosting at BNN — another indication that the media world in Canada is a small place, indeed, with BCE casting a long shadow over it.
We’ve Gotta Democracy Problem
In sum, today’s report from the Globe and Mail’s James Bradshaw reveals another piece in what is a pattern. Given the examples I have presented, this pattern is one that has also been persistent across time. That they straddle much of the time frame since Bell re-entered the media business – and journalism – after re-acquiring CTV in 2011 should give pause for concern about the wisdom of allowing such extensive consolidation to begin with.
That these events have come out at all is in some ways a relief and a modest victory insofar that they imply that journalists are so upset with the state of affairs that they are blowing the whistle. They are an index that things are not well within BCE’s telecoms, media and internet empire and amongst its journalist rank and file.
Ultimately, given it’s dominance across the length and breadth of the mediascape in Canada, this is an indicator that we have a media problem of major significance. It is also a reminder why allowing such vertically-integrated media giants was a bad idea to begin with. The room for conflicts of interest is just too great and the hubris and will-to-power of those at the top seemingly impossible to keep on a short leash.
Moreover, this is not just a media problem but a democracy problem. In essence, one of Canada’s largest telecoms and media giants appears to be using its media outlets to advance its interests and to meddle deep in government policy while torquing news coverage of such matters.
Yesterday the CRTC announced the second phase of its Talk TV decisions (Blais Speech; Decision). The Commission’s efforts are being cast as a significant overhaul of the regulatory framework for TV in Canada, but are they?
Out with the Old (Maybe)
Cast against the anachronism of film and TV quotas forged in the 1920s when Canada was still a member of the British Empire and the CBC just coming into being a decade after that, followed by the Broadcasting Act of 1968, and a long chain of events ever since, Blais’ message was clear: the regulatory edifice built up over the past century must be cleared away. The 21st century is the “Age of Abundance”, and with people increasingly using broadband internet and mobile devices to access content from around the world, the time for change is now.
Some Significant Steps Forward
At the top of the list of things to be discarded are Canadian content quotas during daytime hours. In prime-time, half the hours must still be filled with Cancon while quotas for pay and specialty cable channels have been harmonized downwards to 35% versus their current range from 15-85%. Genre protection for specialty TV channels will be eliminated and licensing requirements for discretionary channels with less than 200,000 subscribers have been dropped.
These moves open room for new services to emerge and could make it easier for people to pick and pay for TV channels they want — depending on the next instalment of the CRTC’s “Talk TV” decision next week.
Another cornerstone of the CRTC’s new approach to TV is to go from protection to promotion, and from a focus on quantity to quality, it says. The CRTC wants to encourage the production of fewer but bigger budget, higher quality TV programs that it hopes can attract Canadian and global audiences. While such efforts have been in the works since the late 1990s, the greater sense of urgency attached to this goal and changes in the means to get there are new.
To such ends, two new pilot projects were announced to fund big budget productions. The Commission also encouraged the government to change the Canadian Media Fund so that financial support can be funnelled to fewer but larger production companies and without the requirement for them to have a licensing agreement in place with a broadcaster (read: Bell, Shaw, Rogers, Quebecor, or the CBC) — in essence cutting out the middleman and giving independent producers direct access to CMF financial support. There is also a push for more international co-productions, and to get the fruits of such efforts into as many foreign markets and as many distribution platforms as possible, from Netflix, to Apple, Amazon, and so on.
The CRTC also adopted measures that aim to help staunch the problems that have beset journalism in the past several years. To this end, TV news services will be required to dedicate at least 16 hours a day to original programming, maintain news bureaus in a least three regions outside their main live broadcast studio and to have the “ability to report on international events”. Given the fact that news budgets have been slashed across the country for years, one can hope that such measures may help to stem the tide.
Beware of Vested Interests Wrapping Themselves in the Flag and the Public Interest
In a world in which the forces of the status quo loom large, these changes will rattle some. Anticipating resistance from some well-established quarters, Blais took aim at those who would fight to turn-back the clock:
If you hear criticisms of our decisions ask yourself this question: Are the arguments advanced by these critics those of the public interest or are they rather those that find their true roots in private entitlement, dressed up to look like they are founded on the broader public interest? This town is full of lobbyists whose job it is to spin their client’s private interests into something else, to wrap themselves up, as it were, in the flag, and to puff about Parliament Hill with an air of shock and dismay.
Three Steps Backwards
If we stop the discussion here, then yesterday’s ruling appears to take on the industry and its’ phalanx of lobbyists in order to yank Canadian TV into the 21st century. However, other measures give cause pause for concern.
A Cull of Independent TV Production Companies is Needed
First among these is the CRTC’s view that too many independent television production companies exist, many of which are set up for one-off projects and then wound down. Pointing to an estimate that there are 900 such companies, the CRTC argues that
. . . This project-by-project system hinders growth and does not support the long-term health of the industry . . . . The current situation is no longer tenable. The production industry must move towards building sustainable, better capitalized production companies capable of monetizing the exploitation of their content over a longer period, in partnership with broadcasting services that have incentives to invest in content promotion.
Yet, stand back and questions immediately emerge. The idea that there are 900 firms appears inflated alongside the Canadian Media Production Association’s estimate that 350-400 such companies exist and that a quarter of them have been created for specific projects and wound down immediately afterwards. Moreover, about 20% of those firms account for 80% of the industry’s revenue.
The existence of a vast pool of precarious, short-term production outfits is the norm in the film and TV business, not just in Canada but LA, New York, Wellington, London, Mumbai, almost everywhere (see Tinic and Gasher). This has long been the case, not just in film and TV, but the publishing industry since the 16th century and across the cultural industries from the last half of the 20th century (see Miege and Thompson).
Finally, the CRTC’s notion that too many creators exist stands at odds with the idea that it is supposed to be fostering more diversity, not less. Moreover, it also sounds a lot like the tired old ‘national champion’ strategy which has created the highly concentrated telecoms and media industry and high levels of vertical integration that currently exist and which are the source of so many of the problems being faced today to begin with.
Tearing up the “Terms of Trade Agreements”
Yesterday’s decision discards the ‘terms of trade agreements’ between producers and the large vertically-integrated media companies – Bell, Shaw, Rogers, Quebecor – that were put in place in 2011 and 2012 after years of protracted negotiations. Consolidation has reduced the number of sources that producers can go to for financing, rights deals and distribution – the real levers of power in the ‘cultural industries’. The terms of trade agreements tried to offset this reality by creating standard terms of trade and a ‘use-it-or-lose-it” clause that required broadcasters to use the rights they acquired within a year or turn them back to the producer; international and merchandising rights were reserved for producers.
Disputes over such issues, especially for mobile and internet rights, continue. They were a cornerstone of license renewals in 2011 and 2012 and a key reason why many of the producer interests reluctantly signed off on Shaw’s acquisition of Global in 2010 and Bell’s take-over of CTV and Astral Media in 2011 and 2013, respectively. Discarding the ‘terms of trade’ deal is another victory for the vertically-integrated giants and a big loss for independent producers, as head of the CMPA, Michael Hennessy, intimated earlier today on Twitter.
Vertical Integration and “Tied TV”
The CRTC also treads lightly when it comes to TV services delivered over the internet and mobile, such as Bell’s CraveTV and Shomi, a joint venture by Rogers and Shaw. Unlike Netflix, or HBO, CBS’s “all access”, and other services in the US, these services are not available to everyone in Canada over the internet but tied to a subscription to one of Bell or its partners’ (i.e. Telus and Eastlink) TV services in the case of Crave TV or to Rogers and Shaw’s internet or TV subscribers in the case of Shomi. They are defensive measures designed to protect Bell, Rogers and Shaw’s existing business models and the established TV “system” generally.
If the CRTC really wanted to disrupt the status quo then these attempts to leverage old ways of doing things into the emerging areas of distributing TV over the internet and mobile services would have been a primary target for action.
Instead of tackling the issue head-on, however, the ruling seems to skirt the issues by creating a new category — “exempt hybrid video-on-demand” model – intended to encourage companies to offer TV services to everyone over the internet without being required to subscribe to any of the companies’ other TV or internet services. In return, they could offer exclusive content and be relieved of obligations to fund and showcase Canadian content, as Figure 1 below shows. This is the same treatment that all stand-alone OTT services get under the Digital Media Exemption Order, but with the idea that such services could be distributed across the companies’ closed cable networks and the ‘open internet’ as well.
A Bell statement concluded that the decision will not change the way it offers CraveTV; Rogers has remained mum.
The ruling, however, puts the Public Interest Advocacy Centre and Consumers Association of Canada’s recent challenge against Crave TV and Shomi on the grounds that the services play fast and loose with the broadcasting and telecoms acts, as well as the CRTC’s Digital Media Exemption Order, on hold (see here). PIAC-CAC responded to the decision by saying that they
are skeptical today’s decision will have the effect of motivating Bell, and Rogers and Shaw, to make their content available online to every Canadian as a true ‘over-the-top’ service. . . . What today’s decision does not do is declare that Bell, Rogers and Shaw are such ‘hybrids,’ and therefore it appears that the commission will allow the closed, tied model to continue.
Plus Ça Change?
Reducing content quotas and eliminating genre protection are important departures from the past, while taking steps to foster better quality program production may produce fruit. The push to rationalize the TV production sector around fewer and more highly capitalized companies, tearing up the terms of trade agreement, and letting Bell, Rogers and Shaw’s ‘tied TV’ offerings off the hook, however, all appear to reinforce the power of well-established players who have pushed so hard to hold back the tides of change that the CRTC claims to be promoting.
The final day of the CRTC’s hearing into the future of television saw a heated clash between CRTC chair Jean-Pierre Blais and online video distributor Netflix. It was a moment with few precedents, and one ripe with a myriad of fascinating questions (Netflix presentation here; CPAC coverage here).
The clash ignited when Blais’s request to Netflix’s Director of Global Public Policy, Corie Wright, to file information with the commission about the number of subscribers it has in Canada, its revenues in Canada and other information the company does not routinely disclose was met by much hesitance on Netflix’s part. As Wright repeatedly returned to concerns about confidentiality, Blais testily questioned whether Netflix did not trust the CRTC’s ability to deal fairly with companies’ request for confidentiality.
The problem, however, is that while Netflix demanded guarantees of confidentiality, it is the CRTC’s prerogative to determine whether such requests outweigh the public interest in disclosure. And in this regard, Blais refused to concede that prerogative while Netflix was equally intent on assuring confidentiality for information that it never gives out to anyone, no matter who asks.
While that may cut it when it comes to researchers and journalists, it won’t do in the context of a CRTC hearing that is, after all, a quasi-judicial proceeding with stringent legal standards about evidence. The point was made on the opening day of the “Talk TV” hearing as well when a similarly frustrated Blais encountered PR puffery from Google that hardly constituted robust evidence that could be used to shed light on anything other the company’s own interests and story that it’d like to tell the world.
This is not novel and is, indeed, well-established practice. Indeed, for all those who play in the regulatory arena, there is little more frustrating than the extensive use of the infamous hashtag (#) in instances that the CRTC has granted companies confidentiality over those who have sought disclosure. Indeed, for many, the problem is that the CRTC has been too generous in granting confidentiality over disclosure. So, to have Netflix say that it was seeking to pre-empt the question by having guarantees of confidentiality from the get go was beyond the pale, and Blais treated it as such.
So, where do these trade-offs between confidentiality and disclosure come from? Three places.
First, from the general tradition of regulated industries where the interest of the public in the matters at hand are always weighed against business demands – typically expansive – to keep their affairs private.
Second, the CRTC took up the issue in 2007 in a proceeding about just this issue where the Commission observes the following:
. . . [The CRTC] conducts its public processes in an open and transparent manner. In some instances, parties submit information in the course of proceedings for which they request confidentiality. . . . [O]ther parties to the proceeding may request public disclosure of the information. If such a request is granted, the information is put on the public record. If it is determined that the harm outweighs the public interest in disclosure, the request is denied and the information remains confidential.
Basically, Netflix was trying to force the CRTC into a corner today over this issue, and Blais was not having any of it.
Lastly, the CRTC’s Digital Media Exemption Order under which Netflix and other OTT providers operate in Canada albeit exempt from the normal requirements of the Broadcasting Act, makes it clear that such companies are required to submit information regarding their “activities in broadcasting in digital media, and such other information that is required by the Commission in order to monitor the development of broadcasting in digital media”.
Some may not like these requirements, but for the time being they are the rules of the game and having decided to play by the rules of the game since its entry into Canada in 2010, today’s hearing was not the right place for Netflix to challenge them.
We must remember that, since its first New Media Order in 1999, the CRTC has always claimed regulatory authority over television and other broadcasts delivered over the internet but has exempted them from the requirements of the Broadcast Act. It did so on grounds of technological neutrality, fostering creativity and innovation and that doing so would not prove disastrous to the Canadian “broadcast system”. In short, it is not whether the CRTC can regulate the internet broadcasting, as Michael Geist noted the other day, but will it? The answer has unambiguously been yes, the CRTC can regulate internet broadcasting, but will not for the time being. That was the answer in 1999, in 2009 and in its last statement on the matter, the Digital Media Exemption Order (2012).
Three final points. First, Netflix cannot cherry pick the elements of Canadian media and telecoms policy that serve it while cocking a snook at those elements it would rather not deal with. Netflix has been the beneficiary of the CRTC’s robust network neutrality rules, rules that apply both to wiredline telecoms and mobile wireless telecoms providers. This has been a huge benefit to Netflix, and partly on account of such measures its ability to locate its content caching equipment at Canadian telecoms and ISP providers such as Bell, Rogers, Telus and Shaw are a far cry easier in Canada than in the US. The forthcoming CRTC Mobile TV proceeding will help to determine the utility of these rules.
As Netflix does battle in the US at the FCC hearings now taking place over the future of network neutrality in that country, it would do well to recall the comparably better conditions it has in Canada. As Netflix itself noted today, Canada is its best international market and I would suggest that the combination of the CRTC’s network neutrality and light touch Digital Media Exemption Order help explain this state of affairs. As such, when the Commission asks for information and to trust that it will make the proper decision in weighing the company’s claims for confidentiality with the benefits of public disclosure, Netflix would do well to play ball.
Third, Netflix also needs to recognize that, faced with a wall of claims from incumbents for two week’s running that unregulated OTT services threaten the Canadian “television system” altogether, robust evidence could help put such self-serving claims in perspective and is just what the CRTC needs. Indeed, Netflix should meet the CRTC’s deadline for its orders for information of this Monday to help in just this regard, otherwise the CRTC will be left with much self-serving bluster about falling skies and doom and gloom.
Finally, it’s time to recognize that while I don’t personally think that Netflix should be subject to all of the requirements of the Broadcasting Act, this is no longer the days when technophiles could see the Internet as an unregulable space. Those days were always an illusion and, regardless, are over. There is a discussion to be had, and that discussion is already underway in many other countries around the world, as Netflix knows full well.
Outside Canada, the European Union’s Audiovisual Media Services Directive brought online video providers under its sway in 2010. The Dutch and France have also reportedly required it to torque its algorithms to give priority to local content and to contribute to the creation and circulation of television content from both countries and Europe as a whole.
Whether we agree with that or not, it’s now the discussion to be had, rather than ducked with gestures towards the internet as some kind of nirvana that exists outside the normal laws of the land. Neither Netflix, Google nor any other ‘digital media giant’ can escape this reality by invoking the internet as an world beyond regulation when they please while calling for network neutrality when that suits. What we all need to realize, is that an open media requires smart regulation not no regulation.
Arm’s Length or Strong Arming the CRTC?: Minister Moore’s “Mandate Letter” to CRTC Head Jean-Pierre Blais
Early in December a journalist from the Huffington Post, Althia Raj, contacted me about a letter that she had turned up through an access to information request. Sent by then Heritage Minister James Moore to the, at the time, new chair of the CRTC, Jean-Pierre Blais, on his first day on the job (June 18, 2012) the letter lays out what is expected of the incoming chair in a surprising amount of detail, despite the fact that the CRTC is suppose to be independent from the government-of-the-day.
In this so called “mandate letter”, Moore lays out a number of “issues of mutual interest” that he hopes he and Blais “can work together on”, while remaining mindful of the fact that whatever cooperation does occur must “maintain an appropriate level of distance between our two organizations”.
After initially reading the letter, I was struck by how much I agreed with many of its goals:
- more room for consumer participation in CRTC proceedings is needed, Moore tells Blais;
- the Commission needs to “comprehensively address consumer affordability and service complaints”;
- “consumers should have access to more programming choices and affordable choices across all distribution platforms” (radio, television, broadband networks and mobile devices);
- more “competition, investment, innovation and consumer choices” is needed in telecommunications services, and all with a light regulatory touch but with a keen eye on “consumer protection and participation”.
While I like the broad contours of the letter, however, I also think it is unusual, and deeply problematic. Why?
First, because there is no precedent, to my knowledge, of a Minister sending a ‘mandate letter’ to a new head of the CRTC laying out what is expected of them.
Second, a ‘mandate letter’ has no basis in the Broadcasting Act (1991) (sections 7-8, 15, 26-28) or the Telecommunications Act (1993) (sections 8, 9 and 12) – the two main pieces of legislation that apply in such matters. Both laws give Cabinet broad powers to issue policy directions and to review, vary and overturn CRTC rulings (Orders-in-Council), but they do not give the Minister authority to do any of these things, or to send a letter telling an incoming chair of the CRTC what the Minister expects of him or her.
Third, while the Minister tries to straddle the awkward zone between respecting the CRTC’s independence and framing a mandate around ‘mutual interests’, the very existence of the letter casts doubt on the regulator’s autonomy. As a result, it is impossible to know for certain whether the CRTC’s newfound standing as a champion of the Canadian consumer on Blais’ watch is the fruit of consumer friendly decisions that have rankled incumbent interests, or the unintended prize of serving up just what the Minister ordered?
Three high-profile decisions in particular have defined Blais tenure to date but they could just as easily be seen as fulfilling the requirements of the mandate letter:
- the CRTC’s flat out rejection of BCE’s first bid to take-over Astral Media in October 2012;
- the adoption of a National Wireless Code that came into affect in December;
- the recently launched inquiry into wholesale mobile wireless roaming rates at the end of December 2013 after its fact-finding mission found the Big 3 – Rogers, Telus and Bell – to be “charging or proposing to charge significantly higher rates in their wholesale roaming arrangements with other Canadian carriers than in their arrangements with U.S.-based carriers.”
Blais seemed to wince when Raj raised the notion that perhaps he was just following orders rather than marching to his own drum. However, he also worked hard to parry the appearance that the CRTC’s might be being used for partisan ends. He had to because, ultimately, the legitimacy of the regulator depends on being seen and believed to be independent from the government.
I do not think that Blais is doing the Minister’s bidding. However, it is naïve to not see the problem here. It is also naive not to see Blais and Moore as at least rowing in the same direction on the ‘consumer friendly’ approach to telecom and media regulation.
The consumer focus of the Conservative Government is real, and Blais appears to have little trouble with that. There is also no doubt that the Government chose Blais because it sees him as ideologically allied with them, and probably because of the close relationship that he and Moore cultivated when the former was a copyright lawyer at Heritage – Moore’s former home turf.
All of this should have been enough without the Minister firing off a letter that only raises doubts about the CRTC’s autonomy while at the same time being of doubtful legal standing or even effectiveness. Furthermore, the letter reinforces views that the Harper Government keeps bureaucrats on a short-leash, while the fact that the letter only turned up through an access to information request only furthers notions that the government prefers to rule in secret rather than in the light of day.
Curious to know what others thought about this, I canvassed scholars, lawyers and former high-ranking bureaucrats to find out what they thought. None of them has ever seen a ‘mandate letter’ before, but could imagine such a thing, as their replies reproduced below show. Their views about whether such a thing was a good or bad thing are mixed.
David Skinner, Professor, Communication Studies Program, York University.
This sounds intriguing (and problematic). I have never heard of such a thing before. Perhaps obvious suggestions, but have you asked Liora Salter or Konrad von Finckenstein? It would be interesting to know if there is something here and who/what party “invented” it.
Konrad von Finckenstein, former chair of the CRTC (2007-2012), head of the Competition Bureau (1997-2003), Justice of the Federal Court (2003-2007) and now an independent arbitrator of Canadian and international business disputes.
The letter to Blais was indeed unprecedented. Like you I have no problem with the general contours. Strictly speaking it should have taken the form of a direction to the CRTC like the government did on forbearance for instance. Instead they used the more informal letter carefully saying “should” instead of “shall” thereby leaving some leeway to the Commission to differ with the expectations expressed in the letter as it sees fit to do so.
Frankly, I think the letter is useful. It shows a delineation of the government’ s overall policy and will avoid any unintentional conflict between the Minister and CRTC yet leaves the CRTC open to go a different way, if it feels circumstances warrant, and allows it to spell out in detail, in an preemptory defense, why it took the decision. Personally as chairman I would have preferred such a letter to the sudden criticism that resulted when the CRTC took a decision the government did not agree with.
By the way you might want to file an access to information request to see if a similar letter regarding broadcasting was sent by Minister Glover to the chair.
Jon Festinger, Q.C., media, regulatory and corporate lawyer and a faculty member of the Centre for Digital Media in Vancouver. He also teaches law at the UBC Law School and Thompson Rivers University.
Having practiced regulatory law for much of my career […], I can say that I have never heard of a “mandate letter”. More interesting than my opinion is that of Sheridan Scott former counsel to the Commission and past Commissioner of Competition, heading the Competition Bureau of Canada. Sheridan very recently spoke to my class at UBC Law (Video Game Law) on the intersections of policy, politics & Law. She expressed her opinions and surprise on the subject of procedures being followed by cabinet vis-a-vis the Commission, if memory serves. You can find video of Sheridan’s talk here. Her talk starts at 1:03:44.
Sheridan Scott, co-chair of the competition practice at Bennett Jones LLP and Canada’s Commissioner of Competition from 2004 to 2009 and Chief Regulatory Officer of Bell Canada before that.
I also believe that this sort of letter is unprecedented but my reaction to it is generally positive. I have always been in favour of policy directions rather than Cabinet appeals, since they necessarily speak to general rather than case-specific issues. While a letter such is this is not the same as a policy direction, and is not subject to the same procedural safeguards, I would nonetheless see it as providing useful context to a regulator that operates at arm’s length but not in a complete vacuum. I do not think that it in any way forces the CRTC down a specific road: it instead provides some useful considerations to be aware of in carrying out their statutory mandate.
In the telecom side this direction is nothing more or less than the Policy Direction issued several years ago, so nothing new. On the broadcasting side, there is more guidance but the wording is quite general. Obviously there are many ways for the Commission to provide access to more programming choices and affordable choices and this letter does not prejudge or dictate any of these. Nor are these unusual goals to identify: the CRTC itself often indicates that its decisions are aimed at increasing programming choices and affordability. As far as providing consumer access to broadcasting hearings, this is also something the CRTC has tried to do especially under Konrad’s direction, when benefits monies were diverted for this purpose.
If there is one thing I find disappointing about the letter, it is the failure of the government to say anything about the importance of Canadian content. Fostering the development of Canadian content and encouraging its accessibility were clearly amongst the original intentions of the legislators and lie at the heart of the legislation, as the Supreme Court of Canada has recently suggested. This letter can’t change that and indeed it suggests the Commission should be mindful of the original intent.
In sum, while this sort of letter is unusual it does not to my mind constrain the CRTC in any material way and provides additional context for the Commission to consider. In any event, I’m not sure there is much of a remedy if the CRTC fails to take any steps in these directions. The government can’t issue a policy direction to apply to past policy decisions (though it could issue a direction to influence decisions on a forward looking basis) and on the broadcasting side Cabinet appeals are limited to decisions to issue, amend or renew broadcasting licences only. The scope of Cabinet appeals is broader on the telecom side, and I think this type of ministerial communication is definitely preferable to tweeting what the Cabinet is likely to do on appeal, before the CRTC has taken a decision, as we have seen in the past. And in any event, there is already a Policy Direction in place, and the letter does nothing but confirm this.
Anonymous former senior bureaucrat:
I have also heard from several communications law experts. The consensus view is that the letter walks a fine line — likely inappropriate but not illegal. In the so-called “arm’s length” relationship, the length of the arm has never been fixed — but in this interaction it appears to be very short.
With respect to telecoms, the letter references the Policy Direction which is public and in force, so that’s a wash.
For broadcasting, the letter, combined with the Section 15 Order, is certainly relevant to anyone participating in the CRTC’s consultation on the future of television. Unlike the S.15 Order, the letter cannot in any way be considered binding on the Commission or the Chair. However, the letter gives the appearance of constraining the CRTC’s discretion because, ultimately, the government could intervene by way of a formal policy direction if the CRTC’s outcome were contrary to the views expressed by the Minister. So arguably this is setting policy by stealth — without the government having to take on the responsibility and suffer the onerous public and parliamentary process of issuing a formal policy direction as set out in the Broadcasting Act. In this context, the letter’s release under access to information may be way of managing expectations of interested parties — especially those with a vested interest in the status quo.
When the current Broadcasting Act was being debated in Parliament, the main criticism of the proposed Governor-in-Council power to issue policy directions was precisely this outcome — that the mere existence of the power would so change the relationship between the CRTC and the government of the day that the government would be able to get away with telling the CRTC what it wants without having recourse to the process set out in the Act. This outcome, it was feared, would undermine the independence of the regulator much more significantly than any actual use of the power as set out in law. Since the Act was passed in 1991, this letter is the first documented instance of this criticism and concern having been borne out.
Clearly, Moore’s letter to Blais raises fundamental issues about the independence of the CRTC. While views differ over the appropriateness of the letter, nobody thinks the ‘mandate letter’ is business as usual.
One thing that emerges from these responses is the sense that regulators have been blind-sided by already high-levels of intervention in the CRTC’s affairs. This was notably the case when then Industry Minister Tony Clement announced, by all things, a tweet that the CRTC’s Usage-Based Billing decision in 2010 would be overturned if the Commission did not go back to the drawing board on its own accord. Duly warned, von Finckenstein ordered the CRTC staff back to the drawing board; a more palatable wholesale bandwidth access rate followed the next year.
Rather than continuing to be blind-sided, it’s not surprising that those closest to the fray – von Finckenstein and Scott, notably – think that giving the government even more powers to issue ‘mandate letters’ might offer greater clarity. Indeed, with a mandate letter in hand all might be clear and no one would be sent back to the drawing board by tweets issued in the middle of the night.
That is understandable, but I have my doubts. Anonymous, it appears, who I can assure is no stranger to these matters, is not so sure either.
I worry that grafting more powers on the extensive ones the government already has will only further eliminate whatever independence the Commission still retains.
Regardless of which of these views is correct, one thing is clear: ‘mandate letters’ are not ‘business-as-usual’. Things need to change, but just how remains up for grabs. Until they do, however, the independence so essential to the CRTC’s legitimacy and, the public’s trust in it, will remain on shaky ground, and for good reason.
Cross posted from Carleton University homepage.
Well, this is a bit of a cheat, but Steven Reid at Carleton University did such a great job conveying the central message of a new report that we put out at the Canadian Media Concentration Research Project that I thought I’d just crib the whole thing and re-post it here. Thanks Steve.
Steven’s wordsmithing follows:
Carleton University’s Canadian Media Concentration Research project, directed by Dwayne Winseck of the School of Journalism and Communication, has released a report entitled Mobile Wireless in Canada: Recognizing the Problems and Approaching Solutions. The study outlines the state of wireless competition and concentration in Canada in relation to 57 countries worldwide, covering a period of three decades.
“The deep divide between the wireless industry and the government that has erupted over the latter’s attempt to reduce domestic and international roaming charges and foster more competition is the focus of the study,” said Winseck. “The study challenges the industry’s claim that there is no competition problem in Canada and emphasizes the importance of maverick brands that extend the market to those at the lower end of the income scale – women and others who are otherwise neglected by the well-established wireless players.”
The report supports the assertion that mobile wireless markets in Canada are not competitive. It offers a comprehensive, long-term body of evidence that places trends in Canada in an international context. The study shows that Canada shares a similar condition with almost all countries that were studied: high levels of concentration in mobile wireless markets.
The difference between the wireless situation in Canada and elsewhere is the lack of resolve to do anything about this state of affairs said Winseck. The study concludes that Canada’s situation is not promising, although there are some bright spots on the horizon.
“For the time being, the tendency is to deny reality, even when incontrovertible evidence stares observers in the face,” said Winseck. “This, however, is symptomatic of a bigger problem, namely that in Canada the circles involved in discussing wireless issues are exceedingly small and they like to hear the sound of one another’s voices. Their members do not look kindly on those who might rock the tight oligopoly that has ruled the industry from the get-go.”
The study highlights the importance of emerging maverick brands like T-Mobile in the U.S., Hutchison 3G in the U.K., Hot Mobile and Golan Telecom in Isreal, and Iliad and Free in France.
Maverick brands have many things in common:
- All have faced aggressive incumbents and they tend to disrupt the status quo, pushing down prices, driving massive growth in contract-free wireless plans and unlocking phones.
- They have relied on the state for a fundamental public resource that underpins the entire mobile wireless setup: spectrum.
Incumbents have fought against new wireless companies, challenging governments in an attempt to preserve their domination of the spectrum. In Canada, three companies currently hold 90 per cent of the spectrum: Rogers (41 per cent), Telus (25 per cent) and Bell (24 per cent).
The study shows that compared to the countries included in the study:
- Wireless markets in Canada, regardless of how they are measured, are remarkably concentrated;
- Canadians are first in terms of time the spent on the Internet, GBs of data uploaded and downloaded, smartphone data sent and received etc.;
- Canada is highly ranked when it comes to capital investment in its wireline infrastructure, but lags in wireless investment.
“Whether or not people get the media, wireless and Internet capabilities they need to live, love and thrive in the 21st century depends on making the right choices now,” said Winseck. “Those choices are staring Canadians in the face. How we act, and how our government moves ahead, will set the baseline for how mobile wireless media in this country will evolve for the next two decades – the length of the licences being awarded in the upcoming 700 MHz spectrum auction – and probably for a lot longer than that.”
An executive summary of this study can be found at: http://www.cmcrp.org/2013/11/18/executive-summary-the-cmcr-projects-wireless-report-mobile-wireless-in-canada-recognizing-the-problems-and-approaching-solutions/
The full report can be viewed at: http://www.cmcrp.org/wp-content/uploads/2013/11/Mobile-Wireless-in-Canada2.pdf