Regular readers know that I am not a fan of the ever changing rules for the Canadian wireless sector. I have called it a Calvinball approach on more than one occasion. Policy makers just seem to be making it up as we go, reacting instead of leading.

In April, Minister Moore said, “I wish we had moved on this file, on the roaming fees, much sooner, because it actually may have had a material impact on the scene right now in Canada’s wireless world.”

The fact is that all of these issues have been considered numerous times in public consultations associated with the wireless framework. The Minister’s regret is a powerful statement – one that may come under consideration in the litigation over the collapse of Mobilicity.

Agree with the need for intervention or not, legislative changes on roaming fees may be another example of half measures that might have benefited from a more complete review, had the enabling legislation not been buried in the middle of a budget implementation bill. For example, the roaming rates established by the legislation did not contemplate new entrant subscribers making out-of-country long distance calls. How would that impact overall consumer wireless rates?

But, as described in an article in the Globe and Mail on Monday, it isn’t just the wireless telecom world that sees on-the-fly policy making. Broadcasting regulation is now also being subjected to political interference.

In a speech delivered last Monday, the Prime Minister said his government was helping Canadians by letting them pay only for the channels they want, and stated he would oppose any “tax” on services such as Netflix and YouTube. Those are popular positions, which is presumably why an election-ready Harper is taking them without first letting the CRTC finish its work. But they are also self-contradictory, and based on ignorance of the TV business.

Next week, the CRTC will open the oral hearing phase of its review of wholesale mobile wireless services proceeding, perhaps exploring what other improvements can be made to the competitive wireless sector. Will tweets from observers of next week’s CRTC process trigger more regulatory interference from the government side of the Ottawa River?

As we prepare to celebrate our nation’s sesquicentennial, how do we envision Canada’s communications marketplace in 2017?

What is our vision?

What are the measurable objectives that we can set to ensure that we get there? What are the strategies that we need to put in place in order to achieve those objectives? What tactics are consistent with those strategies?

That should sound familiar. A year ago I wrote “Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.”

We are years overdue for an overall telecom policy review. Increasingly, we are seeing an overlap between telecom and broadcasting issues coming before the regulator. Teksavvy’s requests in the CRTC TalkTV process and a CRTC decision under the Digital Media Exemption Order this past Monday demonstrate the need to re-examine separate laws to govern these increasingly overlapping communications industries.

Indeed, the Netflix challenge of the CRTC’s authority gives rise to another reason for the government to create an expert panel, charged with exploring the role of broadcast and telecom regulation in a complex digital era. Moving forward on such a panel would provide an opportunity for the new media jurisdictional crisis to subside and allow issues associated with digital media regulation to be explored by a panel of those able to consider the matter with calm consideration. Naming such a panel now would simultaneously provide an appropriate political cover for a government that could not want such headlines when it is facing an election next year. Above all, we are long overdue for such a comprehensive review. The report would undoubtedly be delivered post-election.

This evening marks the start of Rosh Hashana, the Jewish New Year, as we mark the start of the year 5775. It is a time for reflection, for reviewing what we did wrong over the past year and seeking guidance for doing better in the year ahead.

My office will be closed later this afternoon and on Thursday and Friday to mark the holiday.

Apparently, Netflix has decided to challenge the CRTC’s authority to regulate new media by refusing to comply with a Commission order on Friday to file commercially sensitive financial information.

As a result, we find ourselves in a battle that can have no winners: not Netflix, not the CRTC, not the government and certainly not Canadian consumers or creators.

Let’s review how we got here.

Netflix appeared voluntarily in front of the CRTC’s Talk TV consultation, having been invited by the Commission to present its perspectives. Google appeared at the beginning of the hearing on the same basis, a little over two weeks ago. Its lawyer was subjected to a somewhat hostile welcome, making many of us question whether Netflix would even show up last Friday.

Still, Netflix knew that the CRTC would be seeking details of their operation in Canada and apparently started a conversation with Commission counsel in advance of its testimony.

21002 MS WRIGHT: So we don’t publicly disclose subscriber data outside of the U.S. However, we have reached out to counsel at the CRTC to discuss how we can best make that available to you on a confidential basis.

The issue is that companies are able to file information confidentially with the CRTC, but there is a public interest test in Canada that allows third parties to ask the Commission to place information on the public record that has been filed confidentially. Netflix counsel was aware of that problem and sought guarantees that its commercially sensitive information would not be disclosed.

The start of Canada’s crisis in authority began with this breakdown:

21009 THE CHAIRPERSON: The CRTC protects confidential information every day.
21010 MS WRIGHT: I understand.
21011 THE CHAIRPERSON: We have lots of confidential information, like many government departments. You coming here and suggesting that we don’t treat information confidentially is actually a bit offensive.

One only needs to look at the filing of information this past summer in the wireless wholesale proceeding to see an example of where the CRTC has not accepted company claims for confidentiality.

The Commission is therefore not persuaded that disclosure of the requested information would likely result in significant specific direct harm to any party. The Commission also considers that there is a strong public interest in disclosure of this information.

So, Netflix was rightfully concerned about groups seeking public disclosure of their information. At one point (line 21104 of the transcripts), the CRTC chair said “Confidentiality will be granted to the information” but, as Netflix counsel knew, that was not sufficient, leading her to say:

21125 MS WRIGHT: Subject to the terms that we discussed before, Mr. Chairman; if you can guarantee the confidentiality, we will be happy to —
21126 THE CHAIRPERSON: I have never used the word “guarantee”. I have said that we are ordering you to provide it, and I am doing so again with the question that the Vice-Chair just asked, and it will be granted confidentiality.

One can imagine a long list of intervenors, such as the creative community unions and others who sought to tax streaming video, who would have argued for the public interest in these details. The Chair could not guarantee preserving the confidential status, despite his attempted assurances earlier that “The CRTC protects confidential information every day.” But other parties in the proceeding would be given their opportunity to argue for its disclosure.

The public interest in this data is significant. After all, the CRTC vice-chair exclaimed during the exchange:

21271 COMMISSIONER PENTEFOUNTAS: That’s a heck of an answer for someone that takes perhaps hundreds of millions of dollars out of the Canadian economy, Ms Wright. So if you can help us, we’d appreciate it.

That is hundreds of millions of reasons for the public to want to know what Netflix is doing in Canada.

But now we have an outright challenge of the CRTC’s authority. The CRTC threatened Netflix in a manner that seems unlikely to be carried through:

21038 You operate under an exemption order that requires you to provide information. Failure to provide information puts at risk your exemption order. So the Commission is ordering you to provide the number of subscribers that you have currently in Canada by 5:00 p.m., Ottawa time, Monday.

So, Netflix has decided to test the Chair of the CRTC, saying “the orders are not applicable to Netflix under Canadian broadcasting law.”

What happens if the CRTC decides that Netflix is in violation of the Exemption Order? If Netflix is no longer exempt, it is ineligible for a broadcast license since it is not owned and controlled by Canadians. Does anyone expect the CRTC to order the blocking of a service that is being received by quarter of Canadian households?

Do we think the government will support any disruption to Netflix operating in Canada, when a quarter of all households are estimated to be subscribing?

Still, should we not expect respect for orders issued by a legitimate tribunal? This wasn’t about taxing over-the-top media. This didn’t need to be about testing whether the CRTC has the authority to regulate Netflix or YouTube.

Will the Government support the CRTC or support a foreign company “that takes perhaps hundreds of millions of dollars out of the Canadian economy” flouting a number of legal orders? How should the CRTC and government respond to this challenge to Canadian governmental authority?

Consumers lose either way, whether the CRTC’s authority is weakened or Netflix decides that operating in Canada is no longer worthwhile. If Netflix chooses not to invest in Canadian production because of our hostile environment, Canada’s creative community loses.

There were certainly options that could have provided the CRTC with the information it needed while safeguarding sensitive financial information.

It is unfortunate that cooler heads did not prevail last Friday morning.

I couldn’t let the WIND Mobile news pass without making a few observations.

It appears that this initial phase of the financial restructuring does not result in a change of control, so regulatory approvals would not be required. The company press release notes “The next stage of the transaction requires regulatory approval, which the parties are seeking forthwith.” Company Cair and CEO Tony Lacavera said:

With stable, long-term ownership and secure financing, WIND Mobile is moving into an exciting new phase. WIND Mobile is now poised to continue to bring True Mobile Freedom to Canadians for many years to come.

That raises the question of what will be involved in the next stage.

As noted by Bloomberg’s report on the transaction, WIND Mobile’s chief executive officer told The Canadian Telecom Summit in June the company needs to acquire more mobile-phone spectrum to take on Canada’s major wireless carriers. “He has also said the company needs $400 million to $500 million to upgrade its network to LTE.”

So it appears that we are only at the first stage of a financial restructuring and refinancing.

It is interesting to see Novus Wireless Communications as a participant in the funding consortium. Novus had acquired G-band spectrum in BC and Alberta in the 2008 AWS spectrum auction, but did not launch service. It later sold those spectrum holdings to TELUS.

The official media release attributes the following quote to Greg Boland, President and Chief Executive Officer of West Face Capital, the lead in the investment group funding this current transaction:

The federal government’s delivery on its promise to create the conditions for viable long-term wireless competition has not gone unnoticed by the investment community.

I agree.

CCEOC Inc. is now accepting applications for the 2015 Canadian Telecom Employer of Choice award. The “Canadian Telecom Employer of Choice” recognition award is the only national program dedicated to identifying, recognizing and promoting the best employers in the Canadian telecommunications industry.

At The 2014 Canadian Telecom Summit, we partnered in the presentation of Canada’s first “Canadian Telecom Employer of Choice” award.

The 2014 awards were presented to Teksavvy Solutions, Terago Networks and Xplornet Communications. Each one of these companies has demonstrated a strong desire to build a great workplace culture and promote a preferred employer brand.

The “Canadian Telecom Employer of Choice” recognition award is the only national program dedicated to identifying, recognizing and promoting the best employers in the Canadian telecommunications industry. “Telecom companies see real value in this award because it’s industry specific. It provides excellent branding opportunities and has a much bigger impact on helping attract, retain and engage the right fit employees,” says Jeff Doran, President of CCEOC Inc.

As the organizers of The Canadian Telecom Summit, we are pleased to participate in the launch announcement for the award for 2015. CCEOC provides a valuable service for Canada’s ICT sector, recognizing and promoting best-in-class Information & Communications Technology employers.

There is no cost for the assessment portion of the program. Participating in the program is as easy as 1-2-3!

• Step 1: Go to the website and fill in an application form
• Step 2: Complete the Company Profile (HR Inventory and Leadership Review), and
• Step 3: Complete the Employee Commitment survey.

Winners will be recognized and presented with an award at The 2015 Canadian Telecom Summit in Toronto taking place June 1 – 3, 2015.

More than 7 years ago, in the early days of my blog, I wrote a piece called “PoIP?” that spoke of the confusion about how to characterize voice over internet protocol from a regulatory perspective.

I wrote:

For all of the talk that VoIP transforms Voice into another computer application, the industry itself hasn’t done a great job promoting new services with all sorts of new capabilities. It might explain why the CRTC thinks that VoIP is the same as POTS and it has therefore been continuing to apply the same regulatory framework to VoIP as it has to POTS. In the eyes of the CRTC, it’s just a different engine purring under the hood.

I was reminded of this in reviewing the Let’s Talk TV discussion between the CRTC and the panel from Quebecor / Videotron. As Perry Hoffman wrote for Cartt.ca: “The Quebec media giant said it needs “greater latitude” to provide consumers the type of content they want, when they want it and on the platform of their choice.”

It is that last point – the platform of their choice – that prompted me to write.

It might be interesting to observe the difference in how video delivery is being treated, compared to how the CRTC has treated voice.

In the Financial Post account of yesterday’s proceeding, CRTC vice-chair Tom Pentefountas is cited asking why Quebecor doesn’t simply give up its broadcasting licenses and exclusively offer on-demand streaming video.

What exactly is that regulatory straitjacket that keeps you from competing with Netflix?

It seems to me that there is confusion about what product consumers are buying. Is video over the internet a product, or is the product video entertainment more generally?

To find regulatory relief, do yesterday’s heavily regulated video delivery companies (“Broadcast Distribution Undertakings” in CRTC-speak) need to exit their old businesses, abandon their embedded investments and offer the same over the top video? What are the characteristics that make over-the-top video distinguishable from over-the-air or BDU-delivered video?

Can we find a more creative framework that encourages regulatory symmetry across platforms, fostering a more competitive marketplace to increase choice and provide greater consumer benefits?