More regulatory outsourcing

Yesterday, the CRTC expanded the role of the Commissioner for Complaints for Telecommunications Services (CCTS) to include TV services. As the CRTC said in its press release: “Canadians to benefit from single point of contact for complaints about their bundled communication services“.

As a result of the decision, “if a Canadian cannot resolve a complaint with a communications service provider – regardless if it is a television service provider, Internet service provider, wireless service provider or telephone service provider – the CCTS will become the single point of contact for obtaining a resolution.”

You can read about the highlights of the decision in the CRTC press release or stories in mainstream media. I’ll make just a few observations.

The CRTC wants the CCTS to increase its use of “naming and shaming”, embarrassing companies into compliance with their obligations. At paragraphs 72 and 73 of the Decision:

With regard to naming and shaming, the Commission is not convinced that the CCTS’s efforts have been sufficient to evaluate the effectiveness of this tool. … Information about non-compliance with the CCTS participation obligations should be regularly included in the CCTS’s Annual Report. In addition, while the CCTS has published a list of non-compliant providers on its website, the list could be given more prominence.

the Commission expects…the CCTS to publish in a more prominent manner the names of companies that are non-compliant with participation obligations related to promotion, paying fees to the CCTS, implementing CCTS decisions, and participating in the CCTS, as both part of the “name and shame” approach to enforcement and to ensure that consumers have more information when choosing service providers.

Frankly, given the pathetic state of the CRTC’s own website, the Commission is in no position to provide any advice to the CCTS on how to give the list of non-compliant service providers greater prominence.

It seems to me that the idea of an independent arbitrator for communications services makes sense in an environment where the markets are not considered to be competitive. But in fact, the CCTS only has jurisdiction on services that have been de-tariffed and are forborne. So by definition, the markets have been found to be competitive.

It seems paradoxical that the CRTC is adding layers of oversight to markets that, thanks to internet disruption, face greater competitive forces than ever before.

The CCTS is a way of outsourcing some of the functions that were being performed by the CRTC itself. A story in the Canadian Press indicated that hundreds of complaints were received by the Commission in the first two weeks after the launch of the CRTC’s “new era of choice for TV viewers” known as “Skinny Basic”. The CCTS itself says that it received thousands of complaints each year for TV services, and that was before such services were within its scope.

The CCTS will now be fielding complaints that were formerly handled by the CRTC, but using a separate budget funded by the carriers (ultimately showing up in consumer rates). What kind of budget reduction should we expect from the CRTC in recognizing this outsourcing of functions? Its budget is also paid for by fees assessed on service providers which get passed on to consumers.

At the end of the day, consumers have choices. By virtue of its forbearance decisions, the CRTC has determined these markets are competitive.

At what point will we treat competitive communications services like any other consumer product?

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