Canada’s major communications firms presented a unified front during recent parliamentary hearings into whether Ottawa should lift foreign-ownership restrictions in the telecom sector.

Rogers Communications Inc, BCE Inc and Telus Corp, told parliamentarians that if they insisted on meddling in the sector, it must be done in a "symmetrical" fashion. As well, the argument that opening ownership rules to promote competition, enhance services, and create jobs, was met with scepticism.

"New rules cannot advantage foreign investors to the detriment of Canadian companies," said Michael Hennessy, senior vice-president of regulatory at Telus Corp. "Fairness requires equal treatment."

The move to open up the market was given impetus by a 2006 policy report warning that Canada's telecommunications sector should be liberalized to avoid competitive stagnation and its economic consequences. A second panel two years ago endorsed the 2006 study, suggesting a gradual lifting of foreign-ownership restrictions in two phases over five years.

The first phase would remove barriers for new entrants and smaller players with less than 10% market share. This would allow non-Canadian investors to fund firms that, over time, could grow in size to rival incumbents. The second phase would then lift restrictions on incumbents.

Telus, Bell and Rogers are highly critical of this approach, saying it would disadvantage the three dominant telecoms. "Make it symmetrical," said Mirko Bibic, Bell's chief of regulatory. "We should all have access to foreign capital."

CRTC wants single statute for broadcasting, telecom

Konrad von Finckenstein, chair of the CRTC, told the House of Commons Standing Committee on Industry, Science and Technology that Canada needs a single piece of legislation to cover telecom, broadcasting and radio communications.

“The legislative and regulatory structure we administer still preserves the old distinctions of broadcasting and telecommunications, in other words, the distinctions between content and carriage,” von Finckenstein said.

Liberals (tentatively) support digital music services levy

The Liberal Party voted in favour of a non-binding motion to create a levy on digital music devices. However, the party claimed that the vote did not reflect overall Liberal support for the policy, saying instead that they are still consulting on the issue.  At present the party is considering a variety of options that could inform any future official party policy for compensating creators.

700 MHz spectrum auction in the slow lane

Expected delays in the transition to digital television, as well as foreign ownership concerns, are likely to hold up an auction for choice spectrum in the 700 MHz band. This year Industry Canada will almost certainly launch consultations for auctions in the 2500 MHz and 700 MHz bands, which are needed to offer more space for mobile technologies. However, the 700 MHz band is currently used for analog television signals and can’t be put up for auction until the transition to digital television. As it stands, broadcasters have already informed the CRTC that they will almost certainly miss the August 31, 20011, deadline, which likely pushes the spectrum auction into 2012.

A novel view: ISPs as broadcast distributors

Canada’s biggest cultural groups are arguing before the Federal Court of Appeal that ISPs are in fact distributors, and as such should fall under the Broadcasting Act. The heavy hitters include the Canadian Film and Television Production Association (CFTPA), the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Directors Guild of Canada (DGC), and the Writers Guild of Canada (WGC).

The group’s memorandum of fact, prepared by law firm McCarthy Tétrault, argues that distribution technology is irrelevant, and that when audio and audiovisual content is transmitted through the internet, from a host server to an ISP and then an end-user, “all of the elements of ‘broadcasting’ have occurred.”

Countering this view are the big ISP’s – among them Bell Canada, Cogeco Cable Inc, MTS Allstream Inc, Rogers Communications Inc, Telus Corp, and Videotron Ltd. – who argue that they are network providers, nothing more. Given that all they are doing is providing access to the internet, without generating any content, the ISPs argue that there should then be no reason to fall under the Act.

Cultural groups support Public Mobile in Federal Court challenge

The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Friends of Canadian Broadcasting, and the Communications, Energy and Paperworkers Union of Canada (CEP) have served a joint motion to intervene in support of Public Mobile’s Federal Court challenge of the government’s decision on Globalive Communications Corp. They are arguing that the law must be applied fairly, in a manner that is consistent with the Telecommunications Act. This is in lieu of Public Mobile’s  January filing of an application for judicial review of the cabinet-level decision that allowed Globalive to operate in Canada, despite a previous CRTC ruling that found the company was in fact controlled by Egypt's Orascom Telecom Holding SAE.

Bell challenges the CRTC’s broadcast financials

Bell Canada has argued that the CRTC, in its annual release of financial figures, provided misleading financial information that favours the broadcasting industry. In a letter to CRTC chairman Konrad von Finckenstein, Kevin Crull, Bell Canada’s president of residential services, said the type of aggregated data reported by the CRTC would lead observers to conclude, incorrectly “that the cable companies’ broadcasting distribution revenues are twice as large and their operating income is three times as large as is actually the case.” Bell also took issue with the fact that it was impossible to discern the revenue that major broadcasters are bringing in from specialty services, as well as the fact that the CRTC was reporting profit before interest and taxes.

CRTC’s von Finckenstein stops at 49%

CRTC chairman Konrad von Finckenstein urged a parliamentary committee that foreign control in Canada’s telecommunications’ industry should be limited to 49%, from about 47% now, while urging the government to simplify ownership rules.