The subject of Fee for Carriage, cable companies paying for the privilege of carrying local over the air TV stations, is beyond the customary scope of this blog.

But Thursday’s direction to the CRTC from Cabinet coupled with the response by the CRTC, raises an interesting point in respect of funding the participation of consumer voices.

Typically, the main participants in CRTC proceedings are corporate. Broadcasters or service providers have professional regulatory departments or specialized legal counsel are engaged to represent the interests of the company in written submissions or oral testimony.

To a lesser extent, consumers are sometimes engaged and in cases like the internet traffic management proceeding, thousands of individual emails or on-line comments become part of the official record to help inform the staff and Commissioners in making their determinations.

Often in major telecom proceedings, professional advocacy groups such as PIAC or CIPPIC or various national and provincial consumer associations participate. These groups have frequently been able to apply for their costs to be paid by the commercial service providers involved in telecom proceedings, but as the CRTC notes in its letter to the Deputy Minister of Heritage:

As you are aware, in broadcasting matters, unlike in telecommunications matters, the CRTC has no authority to award costs to consumer groups.

The payment of costs by telecom service providers dates back to a time of regulated rates of return, and the Telecom Policy Review Panel expressed concerns about such a formula in a market driven industry framework.

The Panel believes the government should review its approach to the funding of public interest group participation in telecommunications proceedings. The market-driven framework recommended by the Panel raises questions about the appropriateness of the current practice of awarding costs to such groups

Instead, the panel felt that funding for such participation should come from multi-year commitments by government to subsidize such participation, rather than costs awards imposed by the CRTC on individual telecommunications service providers.

Cost awards being sought in the internet traffic management case are getting extra attention. Bell asked for extra time to respond, since more than $430,000 was being sought for participation in that one proceeding, representing 20% more than all of the cost awards for all of the proceedings last year.

In its answer, Barrett Xplore expressed concerns about the levels of awards being sought [ pdf, 57KB]:

Despite the fact that [Barrett Xplore] was required to answer a significant number of interrogatories, that it presented comments and argument and appeared at the public hearing, the company managed to spend considerably less than each of PIAC, ARCH and CIPPIC on its legal fees (in fact Barrett spent less than half of what each of these parties spent on their counsel fees alone…)

The Commission gave parties an extension until September 25 to file their answers to the cost applications. The applicants will have the right of reply by October 5.

Luann Lasalle of Canadian Press has a good article previewing the Globalive ownership hearings taking place this week. I wrote about the upcoming hearings in my blog posting Friday morning.

In the Canadian Press article, I am quoted saying:

What everyone is looking to ensure is that we don’t have foreign control come in through the backdoor because that’s just a situation that isn’t fair.

What is important, I think, is for everybody to have the same understanding of the rules. You need that no matter what game you are playing.

Globalive Holdings chair, Tony Lacavera says that the regulator could make changes to the Toronto-based company’s structure, but that shouldn’t affect its launch.

This evening marks the start of Rosh Hashana, the start of the Jewish calendar year 5770.

It is a period quite different from the partying that characterizes New Year’s Eve – December 31. Instead, a stentorian blast of the shofar [ram’s horn] heralds a time of introspection, examining the deeds of the past year and looking forward to a year of improvement ahead.

It has been my intent in writing the content for this blog to challenge my readers to examine issues from a different perspective. In doing so, if I have insulted or hurt through my words, I am sorry; allow me to express my regret.

I hope that the year ahead is one filled with good health, with inspiration and peace.

The Supreme Court has upheld the CRTC’s authority to determine how to dispose of the Deferral Account, providing a rebate to consumers of portions not approved for broadband expansion. Judge Rosalie Abella, writing on behalf of the nine-member panel, said:

A deferral account would not serve its purpose if the CRTC did not also have the power to order the disposition of the funds contained in it. The CRTC did exactly what it was mandated to do.

Full text of Court ruling here.

The CRTC’s hearings into the compliance with Canadian ownership and control requirements for Globalive open next Wednesday at 9:00 am.

In a letter earlier this week, the Commission identified the key issues to be explored during the hearings as:

• Financing arrangements of the Globalive venture
• The level of Orascom’s economic participation in the Globalive venture
• The relative experience of the shareholders
• Shareholder rights
  • liquidity rights
  • Thresholds for veto rights
• Boards of directors
  • Nomination and appointment
  • Role of Independent Directors and Independent Canadians
• The management and governance of Globalive
• Advisory services agreements as between Globalive and Orascom

I was asked by a reporter if the incumbents are using the regulatory processes as a means to block or impede competitive entry into the market. I replied that I don’t see the regulatory approvals as being on the critical path to launch. It is a parallel process.

As we described when the CRTC set up this process in July, the focus can be expected to be Section 16(3)(c) of the Telecom Act: “the corporation is not otherwise controlled by persons that are not Canadians.”

It seems reasonable to ensure that all carriers are operating under the same rules. There is a cost associated with restrictions on foreign investment. If there are new ownership structures that conform to government rules and can permit greater access to capital from abroad, then all service providers should be able to lower their cost of money.

When it created a set-aside for new entrants to acquire spectrum, the government did not elect to relax restrictions on foreign ownership – which would have been another lever to incent increased competition.

We’ll learn next week about how far the boundaries can be stretched.