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Canada needs to reinvent CRTC, outgoing head says by Gordon Pitts

Jan 22, 2012

Source: Globe and Mail

After five stormy years as Canada’s chief communications watchdog, Konrad von Finckenstein is departing with a warning to his successor: Internet and wireless technology has disarmed federal regulators of their weapons to protect cultural identity.

National culture and viewpoint have traditionally been defended by controlling access to content – primarily flowing from the U.S. entertainment machine. But that power is rendered toothless as programming becomes freely available to anyone with a computer or mobile device, Mr. von Finckenstein says.

“We have now moved into an era where the consumer is in control, and where thanks to the Internet and mobile devices, you cannot control access any more,” he said in one of his last interviews as chairman of the Canadian Radio-television and Telecommunications Commission. His term ends this week.

That means there must be a thorough reappraisal of the regulatory framework, asking whether the same degree of regulation is needed, and, if so, what tools are available to deal with the new media landscape, he said.

The highest-profile threat is so-called over-the-top broadcasting, in which movies and TV programs are streamed through the Internet, bypassing standard cable or satellite delivery that falls under Canadian content and ownership rules. The CRTC chair says the over-the-top onslaught is just one symptom of the wider obsolescence of traditional regulatory gate-keeping.

The new-media challenge strikes at some of the basic pillars of national identity preservation, including content quotas, subsidization of local production, foreign ownership restrictions and the role of the Canadian Broadcasting Corp. as the national broadcaster.

Despite the free-market spirit in Ottawa, Mr. von Finckenstein expects that under his as-yet-unnamed successor, the CRTC’s role as cultural defender will continue. “I haven’t heard any Canadian politician express anything else. But the way we used to do it is seen as restrictive and clearly consumers don’t like it, and it will have to change.”

The warning reflects a dominant theme for Mr. von Finckenstein during his tenure – that the regulatory system for CRTC-regulated broadcasting and telecom is antiquated and requires legislative renewal and institutional reorganization to keep up with new technology.

The renewal process has been delayed, he said, by factors such as a long-running minority government – now changed to a Conservative majority – and the classic inertia of the status quo.

“We still have two Acts [for broadcasting and telecom] that are 20 years old, which in communications is a lifetime. And we still have this funny thing where [the CRTC] is responsible for wire-line [phones] and Industry Canada for wireless. Surely when you use a cellphone to call somebody or you use my office phone, it is the same thing. You are making a phone call.”

Mr. von Finckenstein, 66, is winding up four decades as a federal regulator, a career that took him from Justice department lawyer to heading the Competition Bureau, to the federal court and the CRTC. He is a commanding, often controversial figure who has ruffled feathers among telecom and media moguls.

He said he brought a different management style to the CRTC, in being careful to maintain distance with regulated companies. “I was not as accessible and available to them as some of my predecessors. They wished I was more open, but I said, ‘I find it difficult to converse with you when I know next week, you will appear before me in a hearing.’ ”

But with so much left to do in reforming the regulatory landscape, why was he not reappointed? Mr. von Finckenstein agrees he would have liked to help with regulatory renewal, but steps carefully around the issue of his exit, saying simply that he did not re-apply.

Even if he had been approached, he adds, he would have questioned whether he wanted it. “I like a challenge but you get stale, and five years is a long time in one industry.”

He says he feels right about leaving at this point because, “as of today, all the big issues have been dealt with – there is no hot potato that I have left to a successor.”

No hot potato perhaps, but some simmering issues that his successor can’t afford to put on the back burner.

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THREE CONTROVERSIES

There is a widely held outside view that a highly controlling Conservative government clashed with the independent-minded CRTC chair. Mr. von Finckenstein dismisses talk of irreconcilable differences, saying that it was largely a press fabrication.

On Sun TV’s arrival:

The CRTC sent back the channel’s original application for a licence, lodged under carriage rules that were no longer in effect, Mr. von Finckenstein says. It then approved a later application, properly filed.

That triggered speculation that the government had made its displeasure known to the CRTC chair, but he says “the media made this one up. I’d gladly swear on any Bible you bring that no one has ever talked to me of Sun TV.”

On Globalive:

He agrees there were policy differences – on whether, for example, wireless newcomer Globalive, with its Egyptian backing, was Canadian enough to do business under domestic ownership rules. The CRTC said no and the cabinet then overruled it.

On usage-billing:

Similarly, then-industry minister Tony Clement announced – via Twitter, no less – that the government was sending back the CRTC’s decision to allow usage-based billing of Internet providers, a move that seemed to favour the big telecom players. “We reversed ourselves and came up with a better decision,” the chairman says. “[Mr. Clement] was right, although I didn’t particularly think the way he conveyed his views was appropriate – but that’s his choice.”

As a regulator, he insists he is comfortable receiving policy direction from an elected government and having a safety valve for appealing CRTC decisions to cabinet. “That is actually not a bad system and it only works, of course, if there is mutual respect and government uses its power sparingly.”

© Globe and Mail