WhatsApp / iOS by Álvaro Ibáñez (CC BY 2.0) https://flic.kr/p/ksmHKt

WhatsApp / iOS by Álvaro Ibáñez (CC BY 2.0) https://flic.kr/p/ksmHKt

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Bains’ Other Wireless Affordability Problem: The Broadcast Panel Plan for WhatsApp, Skype and Other Internet Services to Pay Canadian Broadband Taxes

Navdeep Bains, the Minister of Innovation, Science and Industry today promoted the government’s plans for wireless affordability. The effort was largely an attempt to reiterate its wireless affordability platform, which targeted a 25 per cent reduction in consumer wireless bills by emphasizing more competition through MVNOs and spectrum set-asides. The renewed emphasis on the policy comes as an updated Wall Report finds that prices have been declining in some baskets (the long-overdue emergence of unlimited-ish plans a key factor), but not in the core middle tier of plans where prices remain high. The government states “Canadians have been paying more overall compared to consumers in other G7 countries and Australia” and noted that the government will track pricing on a quarterly basis starting from January 2020. Coming on the heels of threats from incumbent telecom companies such as Telus, it was good for the government to re-assert its policy objectives for the sector.

Yet despite the Bains’ policy plans, there is a new issue that he has thus far failed to address. Much of the focus of the Broadcast and Telecommunications Legislative Review Panel report has been on its call for a massive overhaul of Canadian communications law with increased consumer costs, violation of net neutrality, CRTC intervention into discoverability, and USMCA violations. The goal of these reforms is to enhance support for the creation of Canadian content.

There has been less attention paid to a series of additional recommendations focused on the telecommunications sector. There are some useful recommendations, but there is also an expansive regulatory vision for the CRTC on communications, sweeping up thousands of services around the world even without a presence in Canada. Those services would be required to register with the CRTC and pay a broadband tax to fund access in Canada. The vision starts with a recommendation to expand the scope of regulation:

Recommendation 16: We recommend that the definitions in the Telecommunications Act be amended to replace “telecommunications service” with “electronic communications service,” which means a service provided by means of telecommunications facilities and, without limitation, includes:

  • the provision in whole or in part of telecommunications facilities and any related equipment by sale, lease, or otherwise;
  • connectivity service, a service whose principal feature is the conveyance of intelligence by means of telecommunications facilities; and
  • interpersonal communications service, a service that enables direct interpersonal and interactive exchange of information via telecommunications facilities between a finite number of persons. The persons initiating or participating in the communication determine its recipients.

Having expanded telecommunications service to electronic communications service, the panel then recommends that the CRTC have jurisdiction over all services, whether located in Canada or outside the country:

Recommendation 19: We recommend that the Telecommunications Act be amended to establish explicit jurisdiction over all persons and entities providing, or offering to provide, electronic communications services in Canada, even if they do not have a place of business in Canada.

The combination of the two recommendations means that Internet services such as WhatsApp, Skype, Viber, FaceTime, Zoom, and hundreds of others would all be captured by Canadian regulation and subject to the jurisdiction of the CRTC. The BTLR recommends that all these providers be required to register with the Commission and pay levies into a fund to support Canadian broadband. Recommendation 25 states:

We recommend that the Telecommunications Act be amended to enable the CRTC to draw from an expanded range of market participants – all providers of electronic communications services – in designating required contributors to funds to ensure access to advanced telecommunications.

Bains and the government should not underestimate the implications of this recommendation to the affordability of communications services. Both Bains and the CRTC have emphasized the importance of low-cost data only plans to expand affordable access for Canadians. The vision is that a low-cost data only plan allows consumers to rely on Internet-based messaging services for their communications requirements. Many of those services are available for free to consumers.

Yet despite the enormous benefits of free communications services that expand affordable access, the BTLR wants to increase the costs of providing those services to Canadians with new regulatory requirements and mandated payments to fund broadband in Canada. Leaving aside how Canadian-based services would react to a U.S. requirement to fund broadband there, the possibility of increasing those costs to Canadians is enormously troubling and runs directly counter to Bains’ emphasis on consumer affordability for communications services.

2 Comments

  1. I wonder how many policy objectives the government will issue to “help” the CRTC decide which news organizations are trusted and which ones are untrustworthy. After all we know this government would never act improperly to help a friendly company that was having legal troubles.

    I want to know how the CRTC will collect these fees and levies if the foreign companies refuse to pay them. A Canadian court may order the companies to pay, but to actually collect the money the CRTC will have to get a court order in the foreign country, and I doubt that would happen.

  2. Pingback: News of the Week; March 11, 2020 – Communications Law at Allard Hall

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