Worthwhile Canadian Initiatives by Timothy Denton CRTC Commissioner March 30, 2009 This presentation does not reflect the official position of the CRTC

A Taxonomy of Laws No Licence Required Government Licence Required Telecommun- ications Act Radiocom- munication Act Infrastructure Printing Broadcasting Act Applications, Content, Speech

Canadian framework 2 main statutes: Telecommunications Act & Broadcasting Act There are three baskets: fall out of one, you fall into another, until you reach the normal market economy. Broadcasting Act: music and full-motion video, and its distribution, is generally considered “broadcasting” (e.g. radio, television, cable communications, video programming services) Recent technological advances have vastly expanded the potential range of “broadcasting” regulation without any change in the legislation Broadcasting is subject to extensive and intrusive content regulation Telecommunications Act : n on-broadcasting telecommunications services (e.g. retail and wholesale Internet access) Some price regulation occurs in markets where we have not yet forborne ,(at s.34) including, regulation of some of the terms of access to underlying networks No regulation of content. Unjust discrimination and undue preference are the key concepts. (s.27(2)) Competition Act : sets the general rules for the rest of the economy.

2 main statutes: Telecommunications Act & Broadcasting Act

There are three baskets: fall out of one, you fall into another, until you reach the normal market economy.

Broadcasting Act: music and full-motion video, and its distribution, is generally considered “broadcasting” (e.g. radio, television, cable communications, video programming services)

Recent technological advances have vastly expanded the potential range of “broadcasting” regulation without any change in the legislation

Broadcasting is subject to extensive and intrusive content regulation

Telecommunications Act : n on-broadcasting telecommunications services (e.g. retail and wholesale Internet access)

Some price regulation occurs in markets where we have not yet forborne ,(at s.34) including, regulation of some of the terms of access to underlying networks

No regulation of content. Unjust discrimination and undue preference are the key concepts. (s.27(2))

Competition Act : sets the general rules for the rest of the economy.

Canada/U.S. comparison The Internet: In 1999 the CRTC found that the provision of audio and/or video services over the Internet was subject to the Broadcasting Act . The CRTC then issued an order exempting these services from the requirements of the Act ( The new media exemption orders ). The underlying technology is relevant in determining whether services are subject to one act or another. 1) is it broadcasting? 2) If not then, is it telecommunications? Canadian approach: the underlying transmission medium does not determine the regulatory category There is no “information services” category CRTC decisions can be appealed to the executive or judicial branches of the government . The Cabinet may revise telecom decisions; it may refer broadcasting decisions back to the Commission to review them. More judicial deference to the regulator in Canada

The Internet:

In 1999 the CRTC found that the provision of audio and/or video services over the Internet was subject to the Broadcasting Act . The CRTC then issued an order exempting these services from the requirements of the Act ( The new media exemption orders ).

The underlying technology is relevant in determining whether services are subject to one act or another. 1) is it broadcasting? 2) If not then, is it telecommunications?

Canadian approach:

the underlying transmission medium does not determine the regulatory category

There is no “information services” category

CRTC decisions can be appealed to the executive or judicial branches of the government .

The Cabinet may revise telecom decisions; it may refer broadcasting decisions back to the Commission to review them.

More judicial deference to the regulator in Canada

Access to infrastructure – U.S. Telecommunications Act of 1996 Government established obligation for incumbents to provide access to unbundled network elements (UNEs) at cost-based rates Recognized that replicating existing incumbent networks would be so inefficient that it would be unlikely to ever occur strong emphasis on entry through use of UNEs and resale FCC adopted supportive regulations 2004 appeal Incumbents persuaded federal appellate court that lack of access to certain network elements did not impair competitors If competitors could deploy facilities in some locations, it was reasonable to infer they could profitably deploy their own facilities everywhere If some competitors could serve some customers without access to certain UNEs, then all could compete without access to these UNEs Solicitor General did not challenge the appellate court’s decision in the Supreme Court. The premise of the US Telecom Act of 1996-leased facilities- was undercut. Abolished by telcos

Telecommunications Act of 1996

Government established obligation for incumbents to provide access to unbundled network elements (UNEs) at cost-based rates

Recognized that replicating existing incumbent networks would be so inefficient that it would be unlikely to ever occur

strong emphasis on entry through use of UNEs and resale

FCC adopted supportive regulations

2004 appeal

Incumbents persuaded federal appellate court that lack of access to certain network elements did not impair competitors

If competitors could deploy facilities in some locations, it was reasonable to infer they could profitably deploy their own facilities everywhere

If some competitors could serve some customers without access to certain UNEs, then all could compete without access to these UNEs

Solicitor General did not challenge the appellate court’s decision in the Supreme Court. The premise of the US Telecom Act of 1996-leased facilities- was undercut.

Access to infrastructure – Canada CRTC established a framework for incumbent wholesale services over time and on an incremental basis 1992: CRTC mandated interconnection for voice toll competition 1997: CRTC mandated interconnection for local competition and defined “essential services” Emphasis was on facilities-based entry 2005: CRTC mandated access to digital access, intra-exchange and metropolitan inter-exchange facilities Increased use of leased facilities 2008: the wholesale services framework was reviewed and revised, including the definition of an essential service ( Telecom Decision CRTC 2008-17) Mandated access to many non-essential services to be phased-out over 3 to 5 years. Large carriers insisted that a leased-facilities strategy would inhibit the development of next-generation networks. By and large the Commission did not agree with this contention.

CRTC established a framework for incumbent wholesale services over time and on an incremental basis

1992: CRTC mandated interconnection for voice toll competition

1997: CRTC mandated interconnection for local competition and defined “essential services”

Emphasis was on facilities-based entry

2005: CRTC mandated access to digital access, intra-exchange and metropolitan inter-exchange facilities

Increased use of leased facilities

2008: the wholesale services framework was reviewed and revised, including the definition of an essential service ( Telecom Decision CRTC 2008-17)

Mandated access to many non-essential services to be phased-out over 3 to 5 years.

Large carriers insisted that a leased-facilities strategy would inhibit the development of next-generation networks.

By and large the Commission did not agree with this contention.

Access to infrastructure – Canada Government established policy framework for 2008 auction of 2 GHz spectrum licences Provisions to facilitate entry of new wireless service providers: frequency blocks set aside mandated roaming antenna tower and site sharing Observations : The large incumbents are appealing the CRTC’s essential facilities decision to Cabinet. The largest leased access provider, MTS- Allstream , is also contesting it for not going far enough in allowing access to wholesale ethernet . A leased access strategy is still being contested.

Government established policy framework for 2008 auction of 2 GHz spectrum licences

Provisions to facilitate entry of new wireless service providers:

frequency blocks set aside

mandated roaming

antenna tower and site sharing

Observations :

The large incumbents are appealing the CRTC’s essential facilities decision to Cabinet. The largest leased access provider, MTS- Allstream , is also contesting it for not going far enough in allowing access to wholesale ethernet .

A leased access strategy is still being contested.

broadcasting in new media In October 2008, the CRTC launched a proceeding on Canadian “broadcasting in new media”. Proceeding is being conducted under the Broadcasting Act It asks a fundamental question: Given the evolution and growing importance of broadcasting in new media, are the CRTC’s exemption orders for new media broadcasting and mobile television services still appropriate? Services that distribute broadcasting content over the Internet were exempted in 1999 ( Public Notice CRTC 1999-197 ) Services that distribute television services over mobile devices were exempted in 2007 ( Broadcasting Public Notice CRTC 2007-13 ) If you exempt, it means you believe you have jurisdiction but choose not to exercise it.

In October 2008, the CRTC launched a proceeding on Canadian “broadcasting in new media”.

Proceeding is being conducted under the Broadcasting Act

It asks a fundamental question:

Given the evolution and growing importance of broadcasting in new media, are the CRTC’s exemption orders for new media broadcasting and mobile television services still appropriate?

Services that distribute broadcasting content over the Internet were exempted in 1999 ( Public Notice CRTC 1999-197 )

Services that distribute television services over mobile devices were exempted in 2007 ( Broadcasting Public Notice CRTC 2007-13 )

If you exempt, it means you believe you have jurisdiction but choose not to exercise it.

broadcasting in new media The CRTC held a public hearing in February / March 2009, during which it focused on six main areas : Measurement Can the quantity and consumption of broadcasting content in new media be effectively measured? Is it possible to identify Canadian content within these metrics? Impact How are traditional broadcasters adapting to the challenges and opportunities provided by new media? How are their business models evolving? Contribution Are stakeholders in the new media environment contributing to the creation and presentation of Canadian programming? The Broadcasting Act states that each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming.

The CRTC held a public hearing in February / March 2009, during which it focused on six main areas :

Measurement

Can the quantity and consumption of broadcasting content in new media be effectively measured?

Is it possible to identify Canadian content within these metrics?

Impact

How are traditional broadcasters adapting to the challenges and opportunities provided by new media?

How are their business models evolving?

Contribution

Are stakeholders in the new media environment contributing to the creation and presentation of Canadian programming?

The Broadcasting Act states that each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming.

broadcasting in new media Support Does any type of content require support for its broadcast in the new media environment? Typically, initiatives that support production focus on the creation and presentation of professionally produced programming. Visibility and promotion Are measures needed to support the promotion and visibility of Canadian broadcasting content in new media? Exemption orders Are the exemption orders the Commission issued in 1999 and 2007 still appropriate? The inquiry’s terms of reference did not focus on the boundaries between regulated and unregulated speech . They were framed in relation to the issues affecting broadcasters and Broadcasting Act objectives.

Support

Does any type of content require support for its broadcast in the new media environment?

Typically, initiatives that support production focus on the creation and presentation of professionally produced programming.

Visibility and promotion

Are measures needed to support the promotion and visibility of Canadian broadcasting content in new media?

Exemption orders

Are the exemption orders the Commission issued in 1999 and 2007 still appropriate?

The inquiry’s terms of reference did not focus on the boundaries between regulated and unregulated speech . They were framed in relation to the issues affecting broadcasters and Broadcasting Act objectives.

Free speech was not discussed Several submissions expressed concern to allow “private”, or “non-professional” web communications to remain outside the Broadcasting Act . Not one expressly raised the issue of government licensing of speech: Broadcasting requires licensing Political balance Religious moderation Other conditions which apply to “broadcasting” which do not apply to printing. A few arts groups said “Apply the Broadcasting Act, we will figure out the details later”. Business said, in general, “keep your hands off”.

Several submissions expressed concern to allow “private”, or “non-professional” web communications to remain outside the Broadcasting Act .

Not one expressly raised the issue of government licensing of speech:

Broadcasting requires licensing

Political balance

Religious moderation

Other conditions which apply to “broadcasting” which do not apply to printing.

A few arts groups said “Apply the Broadcasting Act, we will figure out the details later”.

Business said, in general, “keep your hands off”.

Expand Broadcasting – Shrink Free Expression Printing Broadcasting Act -> Expanded role of government in speech control Applications, Content, Speech Printing Unlicensed by the state Broadcasting Licensed by the state Applications, Content, Speech

To the extent there was a legal debate, it focussed on ISPs ISP Legal Opinion ISPs are passive, acting as a conduit to enable their customers to access the Internet ISPs do not engage in broadcasting activities ISPs do not generate content, or control the content to which they provide access on the Internet ISPs are merely carriers of content generated by others, with no editorial control Therefore, as ISPs cannot be classified as broadcasting undertakings (distributor, programmer or otherwise), the CRTC cannot impose a levy on them under the Broadcasting Act Cultural Group Legal Opinion ISPs are subject to the Broadcasting Act as distributors of broadcasting content ISPs engage in the reception and retransmission of broadcasting content for reception by the public ISPs can be regulated both under the Telecommunications Act for its telecommunications services and the Broadcasting Act for its broadcasting activities Therefore, the CRTC can impose a levy on the broadcasting activities of ISPs under the Broadcasting Act , which states that each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian content

ISP Legal Opinion

ISPs are passive, acting as a conduit to enable their customers to access the Internet

ISPs do not engage in broadcasting activities

ISPs do not generate content, or control the content to which they provide access on the Internet

ISPs are merely carriers of content generated by others, with no editorial control

Therefore, as ISPs cannot be classified as broadcasting undertakings (distributor, programmer or otherwise), the CRTC cannot impose a levy on them under the Broadcasting Act

Cultural Group Legal Opinion

ISPs are subject to the Broadcasting Act as distributors of broadcasting content

ISPs engage in the reception and retransmission of broadcasting content for reception by the public

ISPs can be regulated both under the Telecommunications Act for its telecommunications services and the Broadcasting Act for its broadcasting activities

Therefore, the CRTC can impose a levy on the broadcasting activities of ISPs under the Broadcasting Act , which states that each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian content

Internet traffic management practices In November 2008, the CRTC launched a proceeding on the Internet traffic management practices of ISPs Proceeding arose from the outcome of an earlier process regarding a specific case of throttling by one ISP relating to wholesale Internet access The topics raised in this new proceeding are: “ Traffic management” vs. “Traffic discrimination” Concerns revolve around the idea that ISPs are deciding who should access what Issue needs to be examined in light of the Telecommunications Act Impact of traffic management on Internet users Differing views on whether effects of traffic management practices are positive or negative Issue requires thorough examination of technical and economic approaches adopted by ISPs

In November 2008, the CRTC launched a proceeding on the Internet traffic management practices of ISPs

Proceeding arose from the outcome of an earlier process regarding a specific case of throttling by one ISP relating to wholesale Internet access

The topics raised in this new proceeding are:

“ Traffic management” vs. “Traffic discrimination”

Concerns revolve around the idea that ISPs are deciding who should access what

Issue needs to be examined in light of the Telecommunications Act

Impact of traffic management on Internet users

Differing views on whether effects of traffic management practices are positive or negative

Issue requires thorough examination of technical and economic approaches adopted by ISPs

Internet traffic management practices Best practices in other jurisdictions Traffic management is a global issue; important to consider international developments Calls to increase the transparency of ISP service offerings ISPs do not always disclose traffic management practices to their customers Outcomes The proceeding’s outcomes are expected to be applied in a technologically neutral fashion Not the CRTC’s intention to tell ISPs how they should build their networks

Best practices in other jurisdictions

Traffic management is a global issue; important to consider international developments

Calls to increase the transparency of ISP service offerings

ISPs do not always disclose traffic management practices to their customers

Outcomes

The proceeding’s outcomes are expected to be applied in a technologically neutral fashion

Not the CRTC’s intention to tell ISPs how they should build their networks