Everyone commits an offence who, without lawful excuse and with intent to harass a person, repeatedly communicates, or causes repeated communications to be made, with them by a means of telecommunication.

It is therefore possible that we could see this provision re-surface without bringing back the surveillance provisions that raised concern across the country.

More notably, the government recently dropped lawful access from its national cyber-security strategy. The 2010 Cyber-Security Strategy telegraphed the intent to bring forward lawful access legislation with a commitment to introduce a bill:

• Requiring Internet service providers to maintain intercept capable systems, so that law enforcement agencies can execute judicially authorized interceptions;
• Requiring Internet service providers to provide police with basic customer identification data, as this information is essential to combatting online crimes that occur in real time, such as child sexual abuse
  

Yet earlier this month, the government released its Action Plan 2010-2015 for the Cyber-Security Strategy.  It removed all references related to lawful access including the commitment to legislation involving Internet service providers. Given that the document originates with Public Safety - the most ardent supporter of lawful access within the government - the removal of surveillance language provides a strong signal that it is not part of the legislative plan for the foreseeable future.

I wrote yesterday about the parade of failed broadcaster business models hoping to hit the jackpot with mandatory carriage, but it was an exchange between Commissioner Molnar and Sun News that best illustrates the disconnect:

Molnar: I just want you to tell me right now why you think it is fair and equitable that every Canadian cable subscriber should pay for you today.

Teneycke: Well, I think the simplest answer is I think it's the law in the sense that the Broadcast Act itself which is why we're here, it's why the CRTC exists, it's why the CBC exists and sort of the foundational core of all the rules around broadcasting and to have the privilege to have access to Canadians' homes and who is going to be distributing and who isn't.

Wrong answer. Despite some suggestions that the Broadcasting Act obligates the CRTC to order mandatory distribution for some channels, the provision in the law is very general. It merely states that the Commission may "require any licensee who is authorized to carry on a distribution undertaking to carry, on such terms and conditions as the Commission deems appropriate, programming services specified by the Commission."

It is therefore the CRTC that interprets the law and it falls to the applicants to demonstrate why their proposals fall within that interpretation. As Blais emphasized at the start of the hearing, the CRTC has set a very high threshold, providing yet another signal that broadcasters should not be relying on regulatory mandates:

Given its exceptional nature, the CRTC has set the bar very high for obtaining a mandatory distribution order on digital basic service pursuant to section 9(1)h). The CRTC’s policy requires that a service seeking such an order must clearly demonstrate its exceptional nature and that it achieves important public policy objectives under the Act.

Each applicant must therefore demonstrate, with supporting evidence, that its service:

• meets a real and exceptional need within the broadcasting system
• contributes in an exceptional manner to Canadian expression
• contributes in an exceptional manner to all the objectives of the digital basic service and specifically contributes to one or more objectives of the Act, and
• makes exceptional commitments to original, first-run Canadian programming in terms of exhibition and expenditures.

All four of these requirements must be met. Broadcasters have largely emphasized the fourth criteria, citing their commitment to Canadian content. Yet the CRTC requires far more. In a world of almost unlimited choice available through the broadcasting system and from unregulated Internet-distributed voices, it is worth asking whether any service can meet the standard of contributing in an exceptional manner to Canadian expression. The very definition of exceptional is to be the exception, uncommon or extraordinary. Given the ready availability of programming alternatives, few broadcasters will ever meet this standard.

The Sun News response was reminiscent of Bell's attitude in the Bell-Astral hearing, where the Commission was focused on the public interest and Bell paid scant attention to the issue. The Commission rejected the Bell deal and I suspect it will similarly reject the new proposals it has heard thus far (the big question will be about Starlight, the proposed Canadian movie channel that is better suited as an Internet-based Netflix competitor).

Indeed, the entire process feels dated as if a decade of disruptive technologies from YouTube to Netflix never happened. As I noted yesterday, the CRTC can and should use the high standard it has set within the law to put an end to the steady procession of poorly developed broadcast proposals that depend upon regulatory mandates for their very survival.

No one wanted to acknowledge they could try competing in the marketplace for subscribers or could launch an unregulated over-the-top Internet-based service. Instead, the preferred model is to have the CRTC require millions of Canadians to pay for their service through mandatory distribution. All of this leads to a broadcast catch-22.  If consumers want your service, there is seemingly no need for mandatory distribution since there is the prospect for marketplace success.  If consumers don't want your service, forcing them to pay for it is rightly viewed as unfair (no matter what the Broadcasting Act might say about encouraging Canadian content).

The CRTC should use this hearing to put an end to this bad version of Regulatory Dragon's Den (with consumers' money at stake). For the new proposals, it should affirm that broadcasters need to convince consumers, not commissioners, that they have something worth buying. For broadcasters seeking renewal of mandatory carriage, it should send a message that the gravy train is over by rejecting price increases and limiting any renewal to three more years with notice that no further extensions will be granted. If the service is a necessary public service, the government should support it. If not, the market should decide. Either way, by the time Blais' term concludes in 2017, the CRTC should be out of the business of being the last hope for uncompetitive broadcast business models.

That may sound unremarkable, but to an industry that has often focused on creating rather than competing, it represents a potential sea change.  

For example, most of the funding for the record amount of Canadian English-language television programming came from taxpayers and broadcasters, not the original producers of the content. According to Profile 2012, an annual report on the state of the industry, only ten per cent came from private funding such as production companies and private investors. Canadian distributors covered 18 per cent of the total costs, with foreign distributors kicking in an additional nine per cent.  

That still represents less than half of the total financing costs for Canadian English-language television programming. Federal and provincial tax credits provided the largest chunk of funding, covering 29 per cent of the cost, while broadcaster licence fees constituted another 25 per cent. The Canada Media Fund, which is jointly funded by the taxpayers and cable and satellite providers, covered the remaining ten per cent.

The notion of competing in the market should take centre stage this week as the CRTC conducts its hearing on whether Canadians who subscribe to cable and satellite television packages should be required to pay for channels such as Sun News Network and Starlight, a proposed all-Canadian movie channel. The regulatory process has been likened to winning the lottery, since channels selected for mandatory carriage are guaranteed millions in revenue regardless of whether Canadians watch or even want the channel.

The best approach would be to scrap the mandatory carriage rules altogether.  Instead, the Commission could require cable and satellite companies to offer all licensed channels to their customers. That would enable consumers to decide what they want to pay for and assuage broadcaster concerns that some distributors may withhold access to their programming altogether. 

That shift in approach would represent a significant change in Canadian broadcast policy, effectively establishing a framework that requires the industry to compete for subscribers. As CRTC Chair Blais would say, just like any other sector. 

Mr. Speaker, with respect to (a), the fine of $495,000 to Pecon Software Ltd., the Canadian Radio-television and Telecommunications Commission, CRTC, issued a notice of violation on October 2, 2012. In order to comply with international service requirements, the CRTC filed the documents with the Indian government’s Ministry of Law and Justice, the central authority for extrajudicial service of documents. The CRTC cannot proceed with these matters legally until Pecon Software Ltd. has been legally served. According to the Convention for Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, the Indian central authority is required to provide the CRTC with an affidavit attesting to the fact that they have legally served the documents to Pecon Software Ltd. The documents were received by the central authority in India on October 5, 2012.

The CRTC is now working with the Canadian High Commission in India to facilitate communications with the ministry and ensure the service of documents. Once the Indian ministry has attested to the fact that the documents have been served, Pecon Software Ltd. will have 30 days to pay the penalty or file representations with the CRTC.

In other words, more than six months after the CRTC filed the necessary documents in India, it is still not clear whether the company has even been served with them. That isn't the CRTC's fault, but it does illustrate the challenge of enforcing the do-not-call list against foreign telemarketers which may involve more bark than bite.

In the years that followed, the government continued to support measures for greater competition - backing the Wind Mobile entry despite concerns about foreign financing ("The policy of our government is to encourage choice and competition in wireless and Internet markets. Ours was the government that set aside spectrum during the 2008 auction to allow new entrants to compete. New entrants mean more competition, lower prices and better quality services for Canadians.") and later relaxing foreign ownership restrictions for the smaller players in the telecommunications market ("the goals remain steadfastly the same: increased innovation, increased competition, better service and better prices for consumers").  More recently, it announced the next spectrum auction rules with caps on spectrum ownership designed to limit the ability of the incumbents to control all the newly issued spectrum.

Despite these measures, the policies have had only limited success. Prices have declined only modestly and the vision of robust competition from a strong fourth carrier remains a distant hope (though the situation may be better in Quebec with a stronger fourth carrier and more aggressive provincial regulation). Moreover, there is a sense that the new entrants may throw in the towel, cashing out to the incumbents and leaving Canada with higher prices and further reduced competition.

The responses to the recent consultation on spectrum transfer makes it clear that half-measures will no longer work.  Past efforts have included set-asides without fully addressing roaming and tower sharing; foreign investment without fully opening the market, or new spectrum with caps that do not allow for a robust competitor. The response to spectrum transfer issue suggests that the government should either go all-in or it should be prepared to declare that its policies have failed.

The incumbents are unsurprisingly opposed to further government policy measures. For example, Bell is most vociferous in its opposition as it is reluctant to even respond to Industry Canada's questions. It is opposed to a policy aimed at creating four competitors and believes that the government should encourage spectrum transfers for their most optimal use (never mind the hoarding and non-use of spectrum by the incumbents). Further, Bell is against any caps or other measures designed to foster greater competition.  Rogers is also opposed to a competitive assessment and spectrum concentration analysis. However, should the government implement such measures, it argues that it should only apply to future spectrum (thereby grandfathering its deal with Shaw).

On the new entrant side, the message is plain: either fix the competitive environment or we want out. The most obvious call for spectrum transfers comes from Mobilicity, which says the government must help to find ways to raise capital for future spectrum auctions or it should refrain from implementing any new rules on spectrum transfers. Wind Mobile and Public Mobile are more nuanced, focusing on the need for stronger policy measures to facilitate competition but making it plain that failure to do could lead to future spectrum transfers. Wind Mobile essentially says there should be no new restrictions on transfers until the government has addressed the competitive conditions in the Canadian marketplace. It points to four:

• the forthcoming spectrum auction rules will not allow non-incumbents to gain sufficient spectrum to support LTE
• non-usage of spectrum, such as in the case of Shaw, should be revoked and made available to the new entrants
• active regulation is needed to address high domestic roaming charges
• increased regulation is needed to deal with tower co-location

Public Mobile emphasizes some of the same issues, including the problems with the forthcoming 700 MHz spectrum auction (insufficient for a non-incumbent to develop an LTE network), the need for retaining set-asides in the AWS spectrum, and ensuring that all future spectrum auctions account for spectrum advantages held by the incumbents.

So where does that leave the Canadian government?

Following the incumbents' advice is a non-starter. For the past 5 1/2 years, the government has made it clear that it believes the Canadian wireless market is uncompetitive, resulting in high prices for consumers and businesses.  Given the ongoing competition concerns, doing nothing is not an option. That said, neither is maintaining the current approach of half-measures. It is time for the government to go all-in with all the policy levers aimed at fostering increased competition. That will require:

• complete removal of foreign investment restrictions
• stringent restrictions on transferring set-aside spectrum to incumbents
• future set-asides and limits in spectrum holdings by single entities (as is being discussed in the U.S.)
• enforcing use-it-or-lose-it rules on spectrum so that unused spectrum is reallocated
• enforceable measures on domestic roaming and tower sharing so that new entrants have a viable path to competitiveness
• increased CRTC regulation of consumer wireless issues
• encouraging the Competition Bureau to play a more active role in sector
  

The CWTA and the incumbents will scream, but the public will strongly support the measures. Industry Minister Christian Paradis said in March that the government "has worked hard to increase competition in the Canadian wireless sector." Unless Paradis is prepared to take further policy steps, the efforts of the past few years may soon be wiped out.

My family lives in a rural subdivision north of Stouffville and east of Newmarket, ON.  We do not have access to broadband internet service except through the expensive satellite service to which you alluded in your article.  I have lobbied my representatives at all three government levels in hopes that they might be able to help provide service here........all to no avail.  At least my federal MP promised that the government was on the "cusp" of providing high speed internet service to our area.  I emailed back for a clarification of the term "cusp" and so far have not received a reply.  That was three years ago.

Xplornet Communications has been extremely aggressive in their marketing to sell high speed service in our area with flyers in the mail as well as door-to-door literature drop-offs.  However, due to topography and trees in our area, we are unable to "see" any of their towers, so even their service in unavailable to us.  It seems ironic to hear of their admonishment to the Standing Committee against the government's support to help areas like ours achieve what most Canadians take for granted, i.e., access to high speed internet.

Thank you for your article.  It has created a buzz amongst my neighbours.  We all thought we had just slipped through the cracks.  As a point of interest, I wonder if this Standing Committee actually includes anyone who does not have access to broadband?

A key part of the CWTA mission (in serving as the voice of the incumbent providers) has been to delay, dilute, or defeat efforts to address the competitiveness failures of the Canadian wireless sector.  It is why it implausibly claims that the market is competitive at the same time that its (now former) member Wind Mobile told the CRTC in March:

Canadians are frustrated by the manner in which the control that Bell Mobility, TELUS and Rogers (collectively the “Incumbents”) exercise in the wireless services market is exerted. The Incumbents, having created the deplorable consumer conditions in the marketplace which has forced some Provinces to step in and provide a basic level of consumer protection, are seeking to use this Proceeding as a tool to stop these legislative initiatives.

The delay, dilute or defeat strategy has been evident for years. Before the 2008 spectrum set-aside that opened the door to new competitors, the CWTA argued consistently against a set-aside, claiming that "the Canadian wireless market has been competitive from the outset." Once new competitors entered the market, the CWTA focused on delaying, diluting or defeating consumer wireless protections. It argued against them at the provincial level and recommended delays to the implementation of the forthcoming CRTC code (along with support for three year contracts, no intervention on unlocking phones, and other anti-consumer positions).

The opposition to consumer protections placed the CWTA in direct conflict with the new entrants. In 2011, Mobilicity openly opposed the CWTA, stating:

We are exceptionally disappointed with the CWTA's lack of foresight in continuing to act only in the interests of the Big Three wireless oligopoly. As members of the CWTA, we repeatedly voiced our opposition to its submission to no avail.

When Ontario introduced similar rules, Wind Mobile and Mobilicity both expressed support for the new rules.

As part of the CRTC's consumer wireless code hearing, Wind Mobile's reply in December to the consumer wireless code started with the following:

At the outset, for the sake of clarity, WIND Mobile would like to highlight that our reply comments, which unsurprisingly differ from some of the positions taken by the dominant incumbent wireless service providers (Bell, Rogers, and TELUS ("BRT")), also sometimes differ materially from the positions taken by the Canadian Wireless Telecommunications Association ("CWTA") in this proceeding and most notably in its reply comments filed today. The CWTA has elected to take certain positions over the express objections of WIND Mobile (on the basis that such positions are not "industry positions" but rather those of a BRT-dominated CWTA board). Accordingly, without needing to single out positions taken by the CWTA which align with those of WIND Mobile, WIND Mobile simply states that WIND Mobile does not support the CWTA submission and these reply comments alone set forth our views on these matters.

The company offered the following comments on three-year contracts at the CRTC hearing itself:

the primary thing we want to speak to today in that regard is three-year service contracts. Now, the Big Three have claimed that consumers love them, and that we can't take away such an adored option. This is unfortunately also the position also being advocated by the CWTA. In this regard I have to stress and they knew going in that I would stress that the position that they are advocating is not the position of the industry. It's not the position of WIND Mobile and we're a member of the CWTA and we're in the industry.

Viewed in this light, the only surprising thing about the decision to abandon the CWTA is not why, but rather what took so long. As for next steps, the new entrants should move swiftly to establish the CCWTA - the Canadian Competitive Wireless Telecommunications Association. Such a move would provide a powerful alternative voice to the CWTA and ensure that both the government and the CRTC recognize that there are deep divisions within the industry with many legitimately concerned about the state of competitiveness of the Canadian wireless market.