Mark Goldberg


www.mhgoldberg.com





The Canadian Telecom Summit

Fox Group Dispatch

Parting is such sweet sorrow

On the same day that Ajit Pai was named chair of the FCC, Minister Melanie Joly unceremoniously announced that applications were being taken for the position of Chair of the CRTC. The reign of JP Blais as CRTC CEO and Chair is finally coming to an end, and that is cause for Canadians of all feathers to chirp in celebration. As I indicated in my opening remarks at The 2017 Canadian Telecom Summit earlier this week, “these have been a challenging 5 years, marked by turmoil and uncertainty within the Commission and an unusual (and frankly, unnecessary) level of acrimony.”

Among his Commission’s most significant policy failures was an inadequate response to the challenge of connecting low-income Canadians. In the midst of the so-called #TalkBroadband hearing, looking at the Basic Service Obligation, Blais interrupted the proceeding on April 18, 2016 and said “Every day that goes by without a more robust Canadian broadband strategy means a Canadian who is socially and economically vulnerable continues to be profoundly disadvantaged.”

Nearly 4 years earlier, I had written to Chairman Blais, asking to meet to discuss ways to accelerate getting connectivity and computers into low income households with kids. He replied saying, “Happy to meet at a mutually convenient moment. My office will make arrangements.” That was December 17, 2012. Over the course of the next four years, his office couldn’t find a spare moment to even try to schedule a meeting. No calls, no replies to my repeated attempts to follow up. Every day that went by meant those socially and economically vulnerable Canadians continued to be disadvantaged.

I had indicated to him that what was needed was leadership, not money. Unfortunately, that leadership was not forthcoming.

I don’t really know what I did to cross him, but there is no question that I fell off his Christmas card list early in his term. I am apparently in good company.

Former FCC Chair Reed Hundt was said to have told his staff: Read the law; Study the economics; Do the right thing.

Blais’ Wireless Code raised prices for all. All the economics pointed to prices going up. We know that at least one of the CRTC Commissioners had expressed concern during the hearing about raising prices. All the CRTC needed to do was study the economics and do the right thing. Instead, the economics were ignored. As reported in the Globe and Mail,

“No one benefited from three-year contracts being phased out,” David Watt, senior vice-president of regulatory affairs at Rogers, said at a conference in June. “That made many consumers pay more for their wireless service.”

Remarkably, the Blais era will be remembered for the paradoxical increase in regulation as markets got more competitive. In his address to the Canadian Chapter of the International Institute of Communications last November, he expressed “shock” that Rogers and Shaw were shutting down Shomi:

Far be it for me to criticize the decisions taken by seasoned business people, but I can’t help but be surprised when major players throw in the towel on a platform that is the future of content—just two years after it launched. I have to wonder if they are too used to receiving rents from subscribers every month in a protected ecosystem, rather than rolling up their sleeves in order to build a business without regulatory intervention and protection.

He conveniently forgot that, in fact, the regulator had intervened in how Shomi would operate, not content to allow “rolling up their sleeves in order to build the business”. His intervention was an attack on Canadian investors trying to experiment with their own business model to address “the future of content”.

Most recently, the CRTC again decided that it had to intervene in the marketplace with its differential pricing decision, “together with the Internet traffic management practices framework, the Mobile TV decision, and the decision regarding Videotron’s Unlimited Music program, effectively comprise the Commission’s policy framework for net neutrality.” Remarkably, the CRTC intervened in how competitive retail internet can be packaged and sold. Chairman Blais said: “Rather than offering its subscribers selected content at different data usage prices, Internet service providers should be offering more data at lower prices. That way, subscribers can choose for themselves what content they want to consume.” Such heavy handed regulation removed the choice that so many of Videotron’s customers elected to consume. The CRTC recommended that service providers consult with government bureaucrats to review marketing strategies for pre-approval, with the threat of fines for failure to get pre-clearance.

to promote compliance with the Act and with the evaluation criteria in this decision, and to encourage ISPs to seek a determination in advance of offering a differential pricing practice as appropriate, the Commission, in dealing with a complaint about a differential pricing practice and in accordance with its powers under section 72.003 of the Act, may consider imposing an administrative monetary penalty if the practice in question is found to be in violation

Contrast Canada’s heavy handed internet regulation with the lighter touch approach in the US that the FCC Chair predicts “will unleash the massive investments that the digital world demands”

On at least five occasions, the Chair demonstrated a remarkably thin skin, especially for someone heading up an organization that most Canadians feel they have a right, if not a duty, to criticize:

  • The Rogers simsub tweet: The tweet from the Rogers representative was accurate, and given the 140 character limitations of the medium, should not have attracted the response it did – perhaps being at the root of the CRTC’s Super Bowl policy [in at least one media account, the Commission spokesperson noted that “Canadians annoyed about missing the original ads… would often unfairly blame the CRTC.”
  • The Crull affair: The Crull affair was a response to a newspaper article. No proceeding, evidence was sought, no interrogatories. The Statement by the Chair made it impossible for a fair hearing to ever take place – the Chairman himself had prejudged any case.
  • My own criticism of a CRTC commissioned survey: The CRTC refused to consider my critique of the shoddy survey methods, and did not return any of my calls prior to my publication of the criticism. Data released in the 2016 Communications Monitoring Report confirmed that I was correct.
  • ACTRA criticizing the CRTC CIPF decision: And ACTRA took heat for not showing up – as if that means they have lost their freedom to complain.
  • Clarifying the TV license renewals for French language groups through a letter to the editor, indicating that the decision was unable to speak for itself.

Each of these responses are notable in their own right, tied together only by their demonstration of a leader who did not like being criticized. Or, being told “no” as Netflix did in September 2014.

In the middle of a broadcast hearing in late November, Blais took the extremely unusual step of calling out an individual citizen for having expressed his views on Twitter.

  1. As I said earlier, Ms. Parker, we’ve known each other for a while. And, you know, there’s an expression in Australia in sports — and you may not be a fan of sport — but they say, “You play the ball, not the man.” I think that’s also true on the regulatory field. And I am wondering if Mr. Denis McGrath is a member of your leadership team at the Writers Guild.
  2. MS. PARKER: Yes, he is.
  3. THE CHAIPERSON: And does he speak for you when he makes comments?
  4. MS. PARKER: At times.
  5. THE CHAIPERSON: You know, in a post-truth era, I guess it’s normal to have rude comments and hear defamatory statements about public figures. I guess I have to live with that. It’s become the norm, but we’ve known each other for a number of years. And when you say to a regulatory official that they’re not listening, that raises a legal issue.
  6. So for the record, do you think your WCG’s position has been heard in this proceeding so far? Are we listening? We may not agree in the end with your position, but are we at least listening?
  7. MS. PARKER: I would say it’s a very convivial discussion. We would like to talk to you more about, you know, the percentages.
  8. THE CHAIPERSON: Sure.
  9. MS. PARKER: And but yes, I think we’re having a nice little chat.
  10. THE CHAIPERSON: Good. Well, perhaps Mr. McGrath is not helping you as much as he thinks he is.
  11. MS. PARKER: Well, I will say that Denis does speak the truth in some cases, and I would never want him to be told not to have his free voice.

It is a remarkable exchange on the public record, combining the veiled threat of legal action, together with Blais’ warning the Writers Guild that its submissions are being discounted due to the comments by a member.

I have also personally experienced a phone call from the CRTC’s top lawyer, asking me to remove a tweet because I “didn’t have all the facts.” Never mind that my tweet asked a question, it didn’t make a statement. The tweet was looking for the facts. When the CRTC chair had told a newspaper that he had to haggle for lower rates, I asked on Twitter how he did that in a manner to “avoid benefiting from his position”. I thought that was a reasonable question. The CRTC’s General Counsel thought otherwise and I decided to remove the tweet, rather than risk a protracted and costly legal battle against taxpayer-funded lawyers. It is too bad. We may never know how the Chair thinks he was able to get a better deal.

The Blais era will also be remembered for the discord among Commissioners and staff alike. That is a whole other blog post. Indeed, it has filled court dockets.

There are a few institutions about which Canadians love to complain. We have Canada Revenue Agency; we have Canada Post; and, we have the CRTC. If someone agrees to take on a leadership role in any of these organizations, one should be prepared to be targeted for criticism, warranted or not. In order to help the next CRTC Chair avoid the same mistake, let me advise that if you aren’t prepared to let it roll off your back, then maybe you should be looking for a different line of work.

In his first (and only) address to The Canadian Telecom Summit in 2013, Blais quoted Mary Kay cosmetics founder May Kay Ash saying “Everyone has an invisible sign hanging from their neck saying, ‘Make me feel important.’ Never forget this message when working with people.”

His address had an impact on me. ‘Make me feel important’ are the defining words that I associate with the term of CRTC Chair Blais. He likes to say that he sought to put Canadians in the centre of their communications system. But what he really accomplished was inserting himself into that central position.

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