When broadcasting assets change hands, the CRTC assesses the transaction, at least in part on the basis of  “how it will benefit the communication system from a social, economic and cultural perspective.”

In the case of the current hearing that is probing the proposed acquisition of Astral Media by Bell, the CRTC is testing:

• the concentration of ownership in the French- and English-language television and radio sectors
• [compliance with] the Commission’s various policies, including the diversity of voices, the common ownership policy for radio and television, and vertical integration
• the value of the transaction, and
• the proposed tangible benefits package as well as the intangible benefits.

The latter three bullets come together in that “tangible benefits” item. As I wrote in July, tangible benefits are effectively a euphemism for a “tax” on the value of the transaction, used to fund a public benefit, in effect tangibly confirming how the transaction delivers “benefits to the system.”

We can find references to this system operating for at least the past 35 years. Nearly 20 years ago, the CRTC wrote:

Tangible benefits generally fall into three broad categories: operating expenditures, such as in the areas of additional staff or programming improvements; capital expenditures for technical improvements; and grants and contributions to Canadian talent or program development funds.

In many transactions, the majority of funds have been dedicated to “grants and contributions to Canadian talent or program development funds.”

I think this has been a policy failure. Don’t get me wrong. I strongly support the idea of funding Canadian talent and Canadian program development. I trust that the federal government supports this as well – otherwise, such a program has no business being part of the CRTC’s license transfer approval process.

My issue is that if we, as a nation, truly believes this is an important sector to fund, then its funding should not be dependent on merger and acquisition deal flow.

Why not make the tangible benefits cost an explicit tax, with cash payable to the Receiver General and have Canada Revenue Agency perform the audit function on the valuation of the deal? Recent megadeals in Canada’s broadcast sector have seen tangible benefits packages in the hundreds of millions of dollars – breathtaking levels of funds changing hands.

Are we actually administering the funding programs with consistency, transparency and accountability?

Should the Canadian creative community be subjected to feast or famine funding formulae?

The CRTC twitterfeed made the bold announcement about an investigation under the Do Not Call List (“DNCL”) rules:

#CRTC investigates the Conservative Party of Canada’s internal do-not-call-list practices. #DNCL crtc.gc.ca/eng/archive/20…

— CRTCeng (@CRTCeng) September 6, 2012

Uh oh! At first, one might sense that going after the Conservative Party of Canada (“CPC”) would serve to balance the $5000 fine levied two weeks ago against the Guelph Liberal Association.

Such high profile cases can help draw attention to the rules, perhaps serving as a way to encourage greater compliance with the Unsolicited Telecommunications Rules. It is reminiscent of the CRTC reaching settlements with Canada’s three largest wireless carriers (TELUS, Bell and Rogers) under the rules back in 2010 and 2011.

After all, the latest report from the CRTC says that nearly 11 million lines are registered on the National Do Not Call List and the Commission receives about 15,000 complaints per month.

The letter from the CRTC observes that complaints have been filed against the Party for 4 years now. It might be expected that at least some complaints have been somewhat politically partisan in nature. The CRTC’s present concern is described as follows:

In response to our Request for Information letter dated 18 June 2012, you advised that the practice of the CPC has been to maintain two IDNCLs, one for calls made for solicitation purposes and the other for calls made for non-solicitation purposes such as outreach to, or identification of, Canadians. In our view, the facts of our recent investigation revealed that confusion is created by the following two practices by the CPC:

• this maintenance of two IDNCLs, and
• the lack of clarity in scripts authorized by you for calling purposes.

The letter from the CRTC goes on to say

… these practices do not meet the requisites of subsection 41.7(4) of the Act, which refers to the maintenance of a single internal do not call list to ensure that no further unsolicited telecommunications, whether made for the purpose of solicitation or not, are received by the call recipient

Reading this, you might think that the CRTC has landed the big fish – the governing political party – as a showcase for future prosecutions under the Do Not Call List rules. Even better, the release of the letter was on the same day that the CRTC released its three year work plan, which highlights DNCL enforcement under one of its 3 key pillars: “Protect”, enhancing the interests of Canadians by promoting compliance.

But the Conservative Party case is not so clear cut.

One of the problems is that the language of Section 41.7(4) does not really refer to a “single internal do not call list.” The Act says:

Every person or organization that, by virtue of subsection (1), is exempt from the application of an order made by the Commission that imposes a prohibition or requirement under section 41 shall maintain their own do not call list and shall ensure that no telecommunication is made on their behalf to any person who has requested that they receive no telecommunication made on behalf of that person or organization.

Does the singular expression “call list” mean “single internal call list” and preclude the possibility of two lists?

Do all Canadians who ask a political party to stop soliciting for money actually have the intention of asking that party to stop calling for all other purposes?

I may not want to donate to the party, but I don’t mind getting calls to hear about political platforms or get invited to a barbecue. Having multiple databases, or options within a single database, might provide a better opportunity for Canadians to identify their do not call preferences.

In any case, those of us who listened to the parliamentary committee debates on the DNCL heard the MPs express the belief that their political calls would not be stifled by this legislation.

Under the CRTC’s Unsolicited Telecommunications Rules, virtually all references are to Telemarketing type calls, a term defined as: the use of telecommunications facilities to make unsolicited telecommunications for the purpose of solicitation. Was it the intent of Parliamentarians for these rules to be applied for calls that are not for the purpose of solicitation? “Solicitation” is also a defined term, meaning the selling or promoting of a product or service, or the soliciting of money or money’s worth, whether directly or indirectly and whether on behalf of another person. This includes solicitation of donations by or on behalf of charitable organizations.

As I tweeted, the great thing about politicians getting caught in the DNCL web is that our Cabinet and Parliamentarians will get to see the administrative burden they have imposed on businesses for compliance.

Just wait until they get first hand lessons about anti-spam rules.

Three press releases in quick succession from the CRTC might be viewed as a signal that there is a renewed focus on consumer issues at the regulator.

First was the CRTC’s reminder last Thursday that new rules regarding TV commercial “loudness” were coming into effect over the Labour Day holiday weekend (the rules were actually set 4 months ago).

The following day came the announced appointment of the CRTC’s first Chief Consumer Officer, charged with ensuring “that consumer issues are integrated into all aspects of the CRTC’s work and that its decisions are more relevant to Canadian consumers.”

And then yesterday’s Communications Monitoring Report was released with the following statement by the Chair:

This report is used to gauge whether the communications industry is meeting the needs of Canadians as consumers, citizens and creators. The information it contains will help them make more informed decisions in the marketplace and enhance their participation in our public proceedings.

Taken together, these appear to signal that the CRTC is placing a renewed focus on the impact of its work on consumers.

The first major proceeding under new Chair JP Blais will be the Bell-Astral review, with the hearing opening on Monday in Montreal. Among the issues has been the variety of market share numbers getting debated by the parties. The CRTC rules from the “Diversity of voices” proceeding distinguish between less than 35% and more than 45%, with good debate on transactions that fall in between 35% and 45%:

The Commission, as a general rule, will not approve applications for a change in effective control that would result in the control, by one person, of a dominant position in the delivery of television services to Canadians that would impact on the diversity of programming available to television audiences. Specifically,

• as a general rule, the Commission will not approve transactions that would result in the control by one person of more than 45% of the total television audience share – including audiences to both discretionary and OTA services;
• the Commission will carefully examine transactions that would result in the control by one person of between 35% and 45% of the total television audience share – including audiences to both discretionary and OTA services; and
• barring other policy concerns, the Commission will process expeditiously transactions that would result in the control by one person of less than 35% of the total television audience share – including audiences to both discretionary and OTA services.

So what is there to debate? Take the total numbers from the various broadcasters under Bell and divide by the total market, right?

Not really. The opposing parties can’t agree on either the numerator or denominator for that calculation.

According to  press release from Bell, data from the newly released Communications Monitoring Report supports Bell’s view. The coalition opposing Bell read the same CRTC report and issued their own release saying the numbers support their view.

In the oral hearing leading to the Diversity of voices decision, among the key issues upon which the Commission asked parties to focus their comments:

The plurality of commercial editorial voices in local and national markets and the most effective means of ensuring that Canadians are exposed to an appropriate plurality of these voices.

Again, we see a consumer focus. Post merger, do I have access to a plurality of voices?

In examining the various number, I expect the CRTC to ask what are the choices from a Canadian consumer perspective?

An article in the Globe and Mail last week made me question the way many technologies companies recruit employees. The article was entitled “Why are we training our arts grads to be baristas?“, by Lauren Friese, the founder of TalentEgg, and it attempts to make the case in macro-economic terms as to why employers have a civic duty to employ graduates from non-traditional disciplines.

Leveraging the skills of all Canada’s university graduates should be a top priority, regardless of their area of expertise. The reasons are threefold:

First: we’re all investors in higher education. Whether or not you support non-vocational degrees in theory, you’re already supporting them with your pocketbook. If students aren’t getting work that draws on the skills we’ve invested in, our investment is generating a poor return.

Second: Employing graduates stimulates the economy. More than half of Canadian graduates have student debt after graduation. The average postsecondary student debt at graduation exceeds $20,000 in every province (except Quebec). In some Maritime provinces, the average debt is more than $35,000.

Graduates who can’t find meaningful, paying work soon after school are likely to wind up competing for a job that they are over-qualified for simply to make ends meet, failing to acquire useful experience for entry-level work or a future career. This, in turn, make it harder to pay off debt, which lowers their power to spend and stimulate the economy.

Third: If we can’t employ arts graduates, we lose their skill sets and potential.  It’s foolish to confuse non-vocational with unemployable. Employer surveys routinely emphasize qualities such as effective written and verbal communication, teamwork and problem-solving skills as being the most in demand in their workplace.

These are the skills that the arts and humanities instil like no other. Even the most basic university coursework encourages abstract and critical thinking.

I’m actually not persuaded by the first two of these arguments. But more companies should be looking at whether their recruiting practices are failing to deliver optimal results.

The third reason from the Globe article missed an important factor in recruiting from arts and other disciplines: diversity. One of the most common causes of failure at the management level is the absence of sufficiently diverse points of view. Diversity in the employee base helps to create products and services that are relevant and appeal to a wider range of customers.

About 25 years ago, I was looking for a job change. At the time, one of Canada’s big R&D groups would not talk to me – I didn’t have a degree in engineering or computer science.

Fortunately, Bell Labs had a different perspective. It sought people with a wide range of graduate degrees. We had people working on telecom technology who had degrees in music, geography, psychology. The interview process helped determine whether there was a technical aptitude, such as taking apart old radios. The specific discipline that was studied in university was less important than the existence of a graduate degree – evidence of critical and analytic thinking. If the candidate had any kind of technical aptitude, we figured we could teach them how the phone business worked.

Besides failing to consider arts graduates, many companies are not able to read a military resume.

The book Start-up Nation by Dan Senor explores the entrepreneurial success of Israel in creating high performing technology companies. A great deal of attention is paid to the way Israeli executives understand the value of military experience and the inability of many North Americans to value and leverage such a background.

Al Chase told us that a number of the vets he’s worked with have walked a business interviewer through all their leadership experiences from the battlefield, including case studies in high-stakes decision making and management of large numbers of people and equipment in a war zone, and at the end of it the interviewer has said something along the lines of “That’s very interesting, but have you ever had a real job?”

The book quotes John Lowry, a GM at Harley Davidson and a Colonel in the US Marine Corp:

The military gets you at a young age and teaches you that when you are in charge of something, you are responsible for everything that happens . . . and everything that does not happen. The phrase ‘It was not my fault’ does not exist in the military culture. No college experience disciplines you to think like that . . . with high stakes and intense pressure. When you are under that kind of pressure, at that age, it forces you to think three or four chess moves ahead . . . with everything you do . . . on the battlefield . . . and in business.

… The people you are serving with come from all walks of life; the military is this great purely merit-based institution in our society. Learning how to deal with anybody—wherever they come from—is something that I leverage today in business when dealing with my suppliers and customers.

Besides holding a Harvard MBA, Lowry has a Masters in Liberal Arts from Stanford and a Bachelor of Arts in English from Princeton. He has succeeded well beyond the typical career track for an arts grad.

When recruiting for new employees, are you casting the net broadly enough?

My parents discouraged spending endless hours watching TV. It was considered to be “anti-social” to sit in front of the tube. Ericsson has released a study showing that TV viewing is increasingly being accompanied by use of social media, providing kids worldwide with quantitative evidence and a snappy retort to parents who tell the kids to go out to play with their friends. The report, “TV AND VIDEO: An analysis of evolving consumer habits“, finds that TV viewing increasingly accompanied by use of social media. Among the key findings:

• Social TV is exploding – 62 percent of consumers use social media while watching TV. This has increased by 18 percentage points since 2011.
• Consumers are not cutting their traditional TV subscriptions on a large scale – in fact only 7 percent have canceled their TV packages since 2011.
• HD quality remains key – 41 percent of consumers are willing to pay for HD quality. The importance of high-quality images increases on devices with bigger screens such as TVs and tablets.
• Mobile devices are an important part of the TV experience – 67 percent use tablets, smartphones or laptops in their everyday TV viewing, both for video consumption and to enable a social media experience while watching TV.
• TV anytime and anywhere is finally a mass market service – 60 percent of consumers watch video on-demand on a weekly basis. New, easy-to-use services trigger mobile viewing habits.

The report is based on analysis of viewing habits around the world: the US, UK, China, Taiwan, Germany, Spain and Sweden. These are countries with diverse cultural ties to traditional TV, different internet and mobile broadband competitive industry models. As such, the study provides an interesting snapshot of trends in the evolution of multi-screen viewing.

There are many observations in the report worth exploring in greater depth.