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SECTION II: Analysis of Performance by Strategic Outcome

Summary Table for 2007-2008

Reason for Existence

The CRTC was established to sustain and promote Canadian culture and achieve key social and economic objectives. The Commission does this by regulating and supervising Canadian broadcasting and telecommunications in the public interest. In doing this, the CRTC is governed by the Broadcasting Act of 1991 and the Telecommunications Act of 1993.

The Broadcasting Act seeks to ensure, among other things, that all Canadians have access to a wide variety of high-quality Canadian programming.

The Telecommunications Act seeks to make affordable, high-quality telecommunications services accessible to all Canadians and ensure, among other things, increased reliance on market forces for the provision of telecommunications services and that regulation, where required, is efficient and effective.

Since 1928, when the Government of Canada created the first Royal Commission on Broadcasting, the government has sought to develop policies to keep pace with changing technology.

The CRTC is an independent public authority, reporting to Parliament through the Minister of Canadian Heritage.

Financial Resources


Planned Spending Total Authorities Actual Spending
$45.8M $56.5M $55.6M

Human Resources


Planned Actual Difference
440 FTEs 414 FTEs 26 FTEs

Program Activities by Strategic Outcome


Expected Results Performance Status 2007-2008 Contributes to the Following Priority
Planned
Spending
Actual
Spending
Strategic Outcome: Broadcasting and Telecommunications industries that contribute to Canada's cultural, economic and social prosperity.
Regulation and supervision of the Canadian broadcasting industry Canadian content and programming that reflects Canadians

Healthy broadcasting industry

  $23.5M $29M Priorities No. 1, 2 and 3
Regulation and monitoring of the telecommunications industry State-of-the-art technology at reasonable prices

Competitive environment

  $22.3M $26.6M Priorities No. 2 and 3
TOTAL $45.8M $55.6M

Status of Performance: CRTC Priorities 2007-2008


Name Type Performance Status
1. Cultural Prosperity
Linguistic Duality

- Obligations pursuant to section 41 of the Official Languages Act; three-year action plan posted on the CRTC's website.

Ongoing Help foster the recognition and use of both English and French in Canada.
- Continue to support initiatives that encourage linguistic duality and assist the development of the English- and French-language minority communities. Ongoing Ensure and support the development of linguistic minority communities.
Cultural Diversity

- Publish the Canadian Association of Broadcasters' (CAB) proposed Equitable Portrayal Code for comments in early fall 2007.

Ongoing Established industry standards for the portrayal of ethno-cultural and Aboriginal groups and persons with disabilities. (Call for comments issued 27 July 2007, approved Code announced in Public Notice CRTC 2008-23, 17 March 2008)
- Publish CAB cultural-diversity best practices as approved by the CRTC. Expect CAB first annual report in June 2007. Require commercial radio broadcasters to adhere to the best practices. Ongoing Best practices will improve broadcasters' efforts to reflect diversity in their programming by building on successful measures already put forward by other broadcasters. (Adopted by CRTC in Public Notice CRTC 2007-122, 2 November 2007)
Implementation of the Commercial Radio Policy, 2006 Final adoption will be completed in 2008-2009. Proposed amendments to implement the 2006 Commercial Radio and Digital Radio Policies were announced in Public Notice CRTC 2007-79, 12 July 2007.
Amend the Radio Regulations, 1986

- Convene a roundtable with the chief executive officers of the major radio groups to discuss the industry's proposed plan and implementation schedules for digital-radio broadcasting and related issues.

 

Was not convened. In May 2007, Industry Canada reviewed the use of the L-band for digital radio and advised that no broadcasting certificates would be issued.

New service model that will likely use IBOC technology, and which may be adopted in Canada, is currently under development.

- Continue to address market-entry issues. Meet with the CAB and other broadcasting groups in 2007 to discuss issues related to the confidentiality of financial information concerning stations in smaller radio markets. Address possible approaches to the issuance of calls for applications for new radio licences. Ongoing Continued to address the licensing of new entrants on a case-by-case basis with a view to enhancing competition in the marketplace and ensuring that local markets can absorb additional radio undertakings.

Met with the CAB's small-market radio committee and, beginning in 2008, agreed to publish annually the aggregate regional financial results of the small-market radio undertakings.

Implemented the revised policy set out in Public Notice 2006-159, dated 15 December 2006, concerning the issuance of calls for radio applications and a new process for applications to serve small markets that was designed to introduce greater certainty into the call process.

Review of certain aspects of the regulatory framework for over-the-air television

- Complete the CRTC's review of its approach to closed captioning and issue conclusions in spring 2007. Implement policy through updated regulations and licence-renewal proceedings.

- The CRTC intends to review its drama-incentive program annually and expects to evaluate the success of the program in the context of the licence renewals for major television licensees scheduled for 2008-2009.

Ongoing  

Regulatory framework announced in Public Notice 2007-53, 17 May 2007.

Updated regulations to implement the over-the-air regulatory framework announced in Public Notice 2007-98, 31 August 2007.

New policy with respect to closed captioning issued in Public Notice 2007-54, 17 May 2007.

Licence renewals have been rescheduled to 2009-2010. The issue of a fee for the distribution of over-the-air television signals was included in the review of regulatory frameworks for broadcasting undertakings and discretionary programming services for consideration at a public hearing in April 2008. (Notice of Public Hearing 2007-10-4).

Review of discretionary television services framework

- Issue a public notice to initiate the formal phase of this review.

Ongoing The process was announced in Notice of Public Hearing 2007-10, 5 July 2007, and began on April 8, 2008.
Review of the broadcasting distribution regulations

- Issue a public notice to initiate the formal phase of this review.

Ongoing The process was announced in Notice of Public Hearing 2007-10, 5 July 2007, and began on April 8, 2008.
2. Economic Prosperity
Adapting to an evolving environment

- Annual Broadcasting and Telecommunications Monitoring Report

Ongoing Issued in July 2007.
Streamlining procedures in telecommunications and broadcasting
- Complete process on proposed exemption of third-language Category 2 specialty undertakings.

- Significant measures, which should be announced in 2007-2008, have been identified to streamline and expedite the review process of applications processed at public hearings. It is also expected that a public notice will be issued seeking comments on proposed service standards in this area.

Ongoing Amended exemption order respecting cable broadcasting distribution undertakings (BDUs) that serve between 2,000 and 6,000 subscribers to permit exempted cable BDUs to offer community-channel programming. (Public Notice 2007-125, 14 November 2007).

Eliminated remaining winback rules for cable BDUs as a means of further encouraging competition. (Public Notice 2007-111, 5 October 2007).

Expanded policy on previews to provide distributors with greater flexibility to promote Canadian and non-Canadian programming services. (Public Notice 2007-74, 5 July 2007).

The Commission has pledged to issue decisions on major ownership transactions scheduled at public hearings within 35 days of adjournment of the hearings.

Further measures and service standards will be announced in 2008-2009.

Telecommunications streamlining processes and procedures Ongoing Significant progress has been made in streamlining telecommunications processes and procedures. These initiatives now identify clear steps, timelines and criteria that can be consistently relied on by telecommunications carriers and customers.

The Commission issued Telecom Circular CRTC 2007-16, 11 June 2007, which provided an overview of the types of applications, their processes and the service standards for Parts II and IV applications.

Policy Direction

- A directive from the Governor in Council (P.C. 2006-1534, 14 December 2006) requires that the CRTC achieve its policy objectives by relying on market forces to the maximum extent feasible. When there is still a need, regulation will be administered in a manner that is symmetrical and competitively neutral, and interferes as little as possible with the operation of market forces.

Ongoing  

Following consultation with stakeholders, the CRTC developed a three-year action plan (Telecom Decision CRTC 2007-51, 11 July 2007).

The Commission will implement the action plan according to schedule.

Local forbearance implementation

- Increased competition and choice for the Canadian consumer through the deregulation of local telephone service.

Ongoing By March 31, 2008, the CRTC had received 89 applications requesting forbearance from the regulation of residential local exchange services. CRTC has granted residential local forbearance in 394 exchanges, and business local forbearance in 130 exchanges.
Industry self-regulation

- The Governor in Council's directive P.C. 2007-533, 4 April 2007, states that an industry-established consumer agency, independent from the telecommunications industry and with a mandate to resolve complaints from individual and small-business retail customers, should be an integral component of a deregulated telecommunications market.

Completed In Telecom Decision CRTC 2007-130, 20 December 2007, the CRTC granted conditional approval to the structure and mandate of a new telecommunications consumer agency-the Commissioner for Complaints for Telecommunications Services Inc. The agency has been operational since July 2007.
Wireless-number portability

- Wireless-number portability allows consumers to keep the same telephone number when changing between cellular service providers or between traditional wire-line and cellular services.

Ongoing Since the launch of wireless-number portability, the CRTC Interconnection Steering Committee's Business Process Working Group has been updating and developing processes and procedures to improve number-porting processes.
Numbering

- As telephone numbers are placed in service, there is a constant need to monitor the remaining supply of numbers and implement relief methods before an area code runs out of numbers.

Ongoing  

The Commission issued several public notices in 2007 to address numbering issues in Canada:

- relief planning in area code 418, Telecom Public Notice CRTC 2007-8, 28 May 2007

- relief planning in area code 613, Telecom Public Notice CRTC 2007-18, 12 October 2007

- relief planning in area code 250, Telecom Decision CRTC 2007-38, 7 June 2008

- relief planning in area codes 403 and 780, Telecom Decision CRTC 2007-42, 14 June 2007, and

- relief planning in area code 418, Telecom Decision CRTC 2007-71, 13 August 2007.

Deferral accounts

- The expansion of broadband services to rural and remote communities will give more Canadians access to the Internet. The initiative will also improve accessibility to telecommunications services for persons with disabilities.

Completed  

In 2007, the CRTC completed a public proceeding to review proposals submitted by several incumbent local exchange carriers (ILECs) to dispose of the funds remaining in their deferral accounts.

In Telecom Decisions 2007-50 and 2008-1, the CRTC approved initiatives to expand broadband services and improve accessibility to telecommunications services for persons with disabilities. The Commission also determined that any funds remaining in the deferral accounts would be rebated to residential subscribers.

Price-cap framework

- Price-cap regulation fixes the maximum prices that can be charged by service providers to customers for regulated telecommunications services.

Completed In Telecom Decision CRTC 2007-60, 30 July 2007, as amended by Telecom Decision CRTC 2007-60-1, 10 August 2007, the CRTC established the current price-cap regime, which applies to the ILECs and Tlbec Limited Partnership.
Framework for wholesale services

- Public Notice CRTC 2006-14 was issued to consider a revised definition for "wholesale services"-the classifications and pricing principles for essential and non-essential services made available by ILECs, cable companies and competitive local exchange carriers to other competitors at regulated rates-and "essential services."

Completed Following an extensive proceeding, the Commission issued Telecom Decision 2008-17. The decision revised the definition of an essential service and created six categories of wholesale services.
Review of certain Phase II costing issues

- The ILECs and cable companies produce regulatory economic studies based on Phase II costing principles to estimate individual service costs. These studies allow the CRTC to establish cost-based prices for regulated wholesale services and provide assurance that regulated retail services are priced above costs.

Completed Following an extensive proceeding, the CRTC issued Telecom Decision CRTC 2008-14, 21 February 2008. The decision modified certain costing inclusions and methodologies used in regulatory economic studies.
Expedited proceedings and dispute-resolution in broadcasting

- The CRTC intends to place greater emphasis on informal dispute resolution and the use of expedited hearings for broadcasting-sector disputes.

- All of the existing dispute-resolution support provided by the CRTC will remain available.

Ongoing  

During fiscal 2007-2008, there were 12 dispute-resolution requests: six formal and six informal. CRTC staff explored whether the disputes would be best resolved through an informal dispute resolution process and, if so, staff proceeded accordingly.

None of the 12 broadcasting disputes proved amenable to dispute resolution using the CRTC's expedited hearing process. One expedited hearing was conducted under the Telecommunications Act.

3. Social Prosperity
Accessibility initiatives in broadcasting

- In Review of certain aspects of the regulatory framework for over-the-air television, (Broadcasting Notice of Public Hearing CRTC 2006-5, 12 June 2006) the CRTC called for comments on ways to improve the accessibility of television programming for persons who are deaf or hard of hearing. The CRTC intends to issue its determinations on these matters in spring 2007.

 

Ongoing

New closed-captioning policy issued on May 17, 2007.
- Since 2001, the CRTC has imposed conditions of licence on Canadian broadcasters requiring them to provide a certain amount of programming with described video. The CRTC intends to review the obligations of Canadian broadcasters in upcoming licence renewals. Ongoing The process is ongoing, although the majority of renewals for over-the-air and discretionary specialty programming services are scheduled for 2009-2010.
- Complete a review of broadcasting distribution undertakings' fulfillment of their obligations to pass through the described-video programming provided by broadcasters in spring 2007, and determine any further steps at that time. Completed The review has been completed and determinations were announced on September 12, 2007. (Broadcasting Public Notice CRTC 2007-101).
National Do Not Call List

- The establishment of the Unsolicited Telecommunications Rules framework and the National Do Not Call List will enable Canadians to reduce the number of telemarketing calls they receive, minimize inconvenience and nuisance caused by these calls, and increase their privacy.

Ongoing  

During the past year, the CRTC released three decisions related to unsolicited telecommunications, each following a public proceeding:

- The CRTC set out its determinations on the operation and administration of the National Do Not Call List (Telecom Decision 2007-47, 3 July 2007).

- The CRTC established a comprehensive framework for unsolicited telemarketing calls and other unsolicited telecommunications received by consumers (Telecom Decision 2007-48, 3 July 2007).

- Telecom Decision 2008-6, 28 January 2008, established the Commission's investigative powers with regard to complaints under the Unsolicited Telecommunications Rules.

Digital and high-definition broadcasting

- In 2007-2008, the CRTC will conduct a proceeding to implement changes to its regulations arising from Public Notice 2006-74 and from previous public notices dealing with the digital/HD transition. The CRTC also intends to initiate a further proceeding that will finalize the details of the framework to apply to the distribution of HD services.

Ongoing  

The remaining details of the framework for the distribution of HD services will be finalized as part of the process to review the Broadcasting Distribution Regulations. This review was announced in Notice of Public Hearing 2007-10, 5 July 2007 and will begin on April 8, 2008.

Changes to the regulations arising from Public Notice 2006-74 and from previous public notices dealing with the digital/HD transition will be included in the new Broadcasting Distribution Regulations resulting from this review.


Summary of Departmental Performance

Broadcasting and Telecommunications Accomplishments

The following highlights the CRTC's key accomplishments for 2007-2008 in regulating and supervising the Canadian broadcasting industry and regulating and monitoring the telecommunication industry.

Broadcasting

Linguistic duality

Within the limits of its mandate under the Broadcasting and Telecommunications Acts, the CRTC supports initiatives that encourage linguistic duality, foster the recognition and use of both English and French in Canada and support and assist the development of the English and French linguistic minority communities.

During 2007-2008, one of the Commission's initiatives was the creation of an official-language minority community (OLMC) discussion group. This group enables the CRTC to understand the possible ramifications of its activities on the development of OLMCs, identify means for maximizing OLMC participation in CRTC public processes and take into account the needs and priorities of these communities in its decisions.

The group is composed of representatives from organizations across the country and met twice in 2007-2008. OLMCs can remain updated on the group's meetings-as well as other CRTC activities related to OLMCs-through a new, dedicated website.

Closed captioning

In Review of certain aspects of the regulatory framework for over-the-air television (Broadcasting Notice of Public Hearing CRTC 2006-5, 12 June 2006) the CRTC called for comments on ways to improve the accessibility of television programming for persons who are deaf or hard of hearing, and more specifically on the following areas:

  • the appropriateness of adopting a requirement for the captioning of 100% of all television programming,
  • the feasibility of captioning in languages other than English or French and the obligations that should be applied to services that broadcast in third languages, and
  • proposals to address ongoing concerns about captioning quality, including the appropriateness of industry standards.

On May 17, 2007, the Commission announced a new policy with respect to closed captioning that applies to all television licensees. The policy's key determinations include:

  • a requirement that all English- and French-language broadcasters caption 100% of their programs-with the exception of advertising and promos-over the broadcast day
  • a recommendation that broadcasters-particularly those who broadcast in third languages that use the Western alphabet-make third-language programming more accessible and caption this programming whenever possible, and
  • a call to the broadcasting industry to establish working groups for the development and implementation of measures to improve the quality of captioning in Canada, including the development of universal standards in English and French.

New digital specialty described-video programming service

In Broadcasting Decision 2007-246, the Commission approved an application by the National Broadcast Reading Service (NBRS) to provide The Accessible Channel, a specialty service that will offer a 24-hour, 100% open-format, described-video service. The channel will provide news, information, drama, entertainment and other programming to blind and visually impaired Canadians.

Recognizing the limited supply of described programming, the pass-through problems experienced by many broadcasting distribution undertakings (BDUs) and user problems with accessing digital video, the Commission considered that the programming proposed by NBRS would offer an immediate and fully accessible means by which the objective set out in section 3(1)(p) of the Broadcasting Act could be fulfilled and would, thus, be of exceptional importance to fulfilling the objectives of the Act. Accordingly, the Commission granted mandatory distribution status to the service under section 9(1)(h) of the Broadcasting Act.

Regulatory framework for over-the-air television

On May 17, 2007, the Commission announced measures to enable the over-the-air (OTA) television sector to further the objectives set out in the Broadcasting Act, while ensuring that the sector is able to operate effectively in a rapidly changing and increasingly competitive communications environment.

The Commission's key determinations, as set out in Public Notice 2007-53, include:

  • an increase in the number of advertising minutes that OTA television stations may broadcast from the 12-minute per-hour limit on traditional advertising to 14 minutes per hour in peak-viewing periods effective September 1, 2007, to 15 minutes per hour for all viewing periods effective September 1, 2008, and, effective September 1, 2009, to no limit,
  • a requirement that television licensees broadcast only digital OTA signals after August 31, 2011, although exceptions may be made in northern and remote communities where analog transmissions will not cause interference, and
  • an examination, at the time of licence renewal, of licensees' Canadian programming expenditure plans and exhibition commitments.

A major issue of the television policy proceeding was the possibility of permitting OTA television stations to charge broadcasting distribution undertakings a fee for the distribution of their signals. In its determinations, the Commission stated that it would not adopt a fee-for-carriage because it was not convinced that a case had been made for such a fundamental change to the revenue structure of the broadcasting system at this time.

As requested by various parties, the Commission will reconsider this issue within the broad context of the Review of the regulatory frameworks for broadcasting distribution undertakings and discretionary programming services (see Broadcasting Notice of Public Hearing 2007-10-3, 5 November 2007).

The Commission expects to announce its decision in the fall of 2008.

Implementation of the Commercial Radio Policy

In the 2006 Commercial Radio Policy (Broadcasting Public Notice 2006-158), the Commission concluded that radio broadcasters should broadcast selections by emerging Canadian artists and promote these artists in their applications for new licences, licence renewals and transfers of ownership or control of radio stations. The applications would be assessed on a case-by-case basis, providing broadcasters with the flexibility to tailor their commitments with respect to emerging artists to the musical formats that they offer. The Commission might then decide to impose these as conditions of licence following the public process.

After the release of the 2006 Commercial Radio Policy, the Commission revised its application forms to include questions concerning the airing of the music of emerging artists. The new forms invite applicants to propose a definition of an emerging artist that would be appropriate for their musical format. Discussions with individual applicants about the promotion and airplay of emerging artists ensued at some public hearings, usually in relation to applications for new licences, but occasionally also in the context of transfers of ownership and licence renewals. However, the lack of a commonly accepted definition or definitions limited the discussions. In no case have commitments been imposed as conditions of licence.

The Commission considered that a common definition of emerging Canadian artists is required and initiated a process to adopt definitions of emerging artists that is appropriate for French- and English-language talent and informed by industry and stakeholder input (Broadcasting Public Notice 2008-16, 27 February 2008).

To assist interveners in their consideration of this matter, the Commission also published a report-Emerging Canadian Artists on Commercial Radio-which details the actual broadcasting of emerging artists' music according to nine definitions of the term that are based on music industry charts.

The Commission expects to complete this process in the fall of 2008.

Review of the regulatory frameworks for broadcasting distribution undertakings and discretionary programming services

The CRTC officially announced this proceeding on July 5, 2007, and established three objectives for the comprehensive reviews:

  • develop forward-looking regulatory frameworks that are strategic, straightforward, flexible and equitable,
  • ensure a strong Canadian presence in the broadcasting system in the form of distinct and diverse Canadian programming and services, and
  • recognize the increasing autonomy of audiences and consumers, providing them with the greatest possible choice of services at affordable prices.

The Commission set out the substantive issues to be addressed in written submissions. To further assist in the process, it also placed on the record an independent study of CRTC broadcasting rules and regulations that was conducted by Laurence Dunbar and Christian Leblanc. The Dunbar-Leblanc Report set out an examination of the rules and regulations in light of their original purpose and made recommendations on continued relevancy, streamlined alternatives or elimination. Other studies were also placed on the public file.

The Commission subsequently expanded the scope of the proceeding to include consideration of a fee-for-carriage for over-the-air television signals and issues related to distant signals. In this context, the original written portion of the proceeding was extended from November 5, 2007, to February 22, 2008, and the public hearing originally scheduled to commence on January 28, 2008, was rescheduled to start on April 8, 2008. Three weeks have been set aside for this oral phase.

The Commission received 250 submissions from individuals, consumer groups, broadcasters, distributors and industry associations (in addition to 1,120 from letters in comment). Sixty-seven parties are scheduled to appear at the public hearing. The CRTC expects to announce its new frameworks in the fall of 2008.

New activities

The CRTC added the following major proceedings to its work plan in 2007-2008:

Canadian Television Fund

The CRTC created a task force on the Canadian Television Fund (CTF) in the last quarter of 2006-2007 to examine issues related to the funding of Canadian programming and the governance of the Fund. The task force recommended certain measures to improve the funding of Canadian programs, increase the CTF's effectiveness and efficiency and enhance the participation of broadcasting distribution undertakings in the CTF.

A written proceeding followed the publication of the task force's report. The Commission invited comments on the task force's recommendations and proposed implementation schedule (Broadcasting Public Notice 2007-70). An oral hearing phase began on February 4, 2008.

The Commission expects to release its report in the spring of 2008.

Diversity of voices

On April 13, 2007, the CRTC launched a public proceeding to conduct a comprehensive review of its policies with respect to diversity of voices. The overall objective of this review was to ensure that the broadcasting system provides Canadians with the greatest possible diversity of voices including editorial voices; and that the CRTC's policies in this regard take into consideration the increasing integration of all elements of the system (Broadcasting Notice of Public Hearing 2008-4).

At the same time, to ensure journalistic independence in broadcasting entities belonging to companies that own both electronic and print media, the Commission invited comments on a code prepared by the Canadian Broadcast Standards Council (CBSC), to which CBSC member broadcasters must adhere. (Broadcasting Public Notice CRTC 2007-41)

The CRTC held its public hearing on diversity of voices during the week of September 17, 2007, and announced its new approach to media ownership on January 15, 2008 (Broadcasting Public Notice 2008-4). The highlights of the new diversity of voices policies can be summarized as follows:

  • The Commission is satisfied that the broadcasting system currently provides Canadians with a range of news and information programming. For this reason, it reaffirmed its existing policies governing the number of conventional television and radio stations a person may control in the same market.
  • To maintain a plurality of editorial voices, the Commission has established a new policy restricting cross-media ownership. As a result, a person or entity will only be permitted to control two of the following types of media that serve the same market: a local radio station, a local television station or a local newspaper.
  • The Commission recognized that the trend toward greater consolidation in the broadcasting industry has raised concerns that a large ownership group could achieve a dominant position through acquisitions, which could bring about a reduction in the diversity of local, regional and national content. To address these concerns, the Commission decided to:
    • impose limits on the ownership of broadcasting licences to ensure that one party does not control more than 45% of the total television audience share as a result of a transaction, and
    • not approve transactions between companies that distribute television services (such as cable or satellite companies) that would enable one person to effectively control the delivery of programming in a single market.

In addition, the Commission has conditionally approved the CBSC's proposed Journalistic Independence Code. The Commission directed the CBSC to include a minimum number of journalists on the panels that study complaints and formalize the process used to select panel members. The principles set out in the Code will ensure a diversity of professional editorial voices and will eventually apply to all broadcasters who own newspapers in a single market. (Broadcasting Public Notice 2008-5)

Major ownership transactions and accelerated service delivery

In 2007-2008, the Commission held five public hearings 2007-2008 to consider major ownership transactions in the broadcasting industry: CTVglobemedia Inc.'s purchase of CHUM, Astral Media Radio G.P.'s acquisition of Standard Radio Inc. television and radio stations, Rogers Media Inc.'s acquisition of Citytv stations, CanWest Mediworks Inc.'s acquisition of Alliance Atlantis broadcasting companies and the purchase of BCE by Ontario Teachers' Pension Plan.

The CRTC committed to issuing decisions on these transactions within 35 days of the adjournment of the public hearing. This objective has been met and surpassed.

Appeal of 9(1)h) decision

In Broadcasting Decision 2007-246, the Commission approved in part an application by Avis de Recherche inc. for the Category 2 specialty service known as Avis de Recherche. The application requested that the service be designated for mandatory distribution by all direct-to-home satellite distribution undertakings and all Class 1 and Class 2 broadcasting distribution undertakings, excluding multipoint distribution undertakings, as part of their basic digital services in the province of Quebec.

After the Commission issued this decision, the Governor-in-Council received petitions requesting that the decision be referred back to the Commission for reconsideration, and issued Order in Council P.C. 2007-1604. In requesting a reconsideration of the decision, the Order in Council indicated that Avis de Recherche's conditions of licence should encourage the attainment of the objectives of the broadcasting policy set out in section 3 of the Broadcasting Act.

The Commission announced the process to reconsider the decision in Broadcasting Public Notice 2007-134, 23 November 2007. The CRTC rendered a decision on January 21, 2008 (Broadcasting Decision 2008-12) and confirmed its approval of the mandatory nature of the Avis de Recherche service in the province Quebec. As a result of this process, the Commission also approved an amendment to the broadcasting licence for Avis de Recherche to require the licensee of the service to expend on the acquisition of and/or investment in Canadian programs a minimum of 43% of the gross revenues derived from the operation of this service during the previous broadcast year.

Competitive applications to serve various regions of the country

The Commission holds public hearings on competitive applications for radio or television services when it receives an application that will subsequently trigger a call for applications.

In 2007-2008, the CRTC held public hearings to consider competitive radio applications to serve the following markets: Sydney, Nova Scotia; Montral, Quebec; Kelowna, British Columbia; Owen Sound, Windsor and Peterborough, Ontario; and Chilliwack and Vancouver, British Columbia.

The Commission also held a public hearing to consider two applications for the provision of high-definition over-the-air television services, one of which would offer service in various locations across the country and the other the Greater Toronto area. A decision in this regard is expected in early spring 2008.

Telecommunications

Policy Direction

A directive from the Governor in Council, Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives, P.C. 2006-1534, 14 December 2006, requires that the CRTC achieve its policy objectives by relying on market forces to the maximum extent feasible. When there is still a need to regulate, the directive indicates that regulation should be delivered in a manner that is symmetrical and competitively neutral, and that interferes as little as possible with the operation of market forces.

Following consultation with stakeholders, the CRTC developed a three-year action plan for reviewing various economic regulatory measures in light of the directive (Telecom Decision 2007-51). During the past year, the implementation of this action plan has resulted in streamlined regulatory measures for service bundles, market trials, customer notification for contract renewals and service de-standardization or withdrawal.

In January 2008, the CRTC issued a public notice (Telecom Public Notice 2008-1) calling for comments to identify, prioritize and develop an action plan for the review of various social and other non-economic regulatory measures in light of the Governor-in-Council's directive. The proceeding has concluded and the Commission expects to issue an action plan in April 2008 to review these measures.

Local forbearance implementation

On April 6, 2006, the CRTC issued Telecom Decision 2006-15, which established a framework for assessing applications from the incumbent local exchange carriers for forbearance from the regulation of local exchange services. This decision was modified by the Governor in Council in Order Varying Telecom Decision CRTC 2006-15, P.C. 2007-532, 4 April 2007. The modified framework assesses market forces by the level of competitor presence in an area prior to granting forbearance.

By March 31, 2008, the CRTC had received 89 applications requesting forbearance from the regulation of residential local exchange services in 535 exchanges and from the regulation of business local exchange services in 412 exchanges. As a result of these applications, the CRTC has granted residential local forbearance in 394 exchanges, or 71% of all residential network access services (NAS), and business local forbearance in 130 exchanges, or 64% of all business NAS. The CRTC found that local-exchange services in these exchanges are subject to a level of competition sufficient to protect the interests of users of these services.

Industry self-regulation

On December 20, 2007, the CRTC issued Telecom Decision 2007-130, which granted conditional approval to the structure and mandate of a new telecommunications consumer agency: the Commissioner for Complaints for Telecommunications Services Inc. (CCTS). The CRTC directed all service providers with annual domestic telecommunications service revenues of more than $10 million to become CCTS members. The CCTS has operated since July 23, 2007, and does not charge for its services.

The CCTS is an example of how the telecommunications industry can regulate itself efficiently and effectively. It provides residential and small-business customers with an effective, accessible and consumer-friendly recourse when they are unable to resolve disagreements with their service providers. As a self-regulating body, the CCTS has the authority to develop and approve industry-related codes of conduct and standards. The organization will also identify and report to the CRTC on industry trends and issues and publish an annual report on the nature, number and resolution of complaints received for each member company.

Wireless-number portability

On March 14, 2007, wireless-number portability was launched across Canada. Wireless number portability enables consumers to keep the same telephone number when changing between cellular service providers or between wire-line and cellular services.

Since the launch of wireless-number portability, the CRTC's Interconnection Steering Committee's Business Process Working Group has updated and developed processes and procedures to facilitate and improve number-porting processes.

Numbering

As telephone numbers are placed in service, there is a constant need to monitor the remaining supply of numbers and implement relief methods before an area code runs out of numbers.

On March 14, 2007, the CRTC issued two public notices (Telecom Public Notices 2007-8 and 2007-18) to establish committees that would make recommendations regarding the various code relief options available for area codes 418 and 613.

Relief planning measures were also put in place for three additional area codes:

  • in British Columbia, 10-digit local dialing was introduced in area code 250 in July 2007 and boundaries in area code 778 will be realigned in September 2008 to provide additional relief for area code 250,
  • in Alberta, a new area-code overlay will be implemented in September 2008 to provide additional relief for area codes 403 and 780, and
  • in Quebec, a new area code overlay will be implemented in October 2008 to provide additional relief for area code 418.

Deferral accounts

In 2007, the CRTC completed a public proceeding to review proposals submitted by several ILECs to dispose of the accumulated funds-totaling approximately $650 million-remaining in their deferral accounts.

In Telecom Decisions 2007-50 and 2008-1 the CRTC approved initiatives to improve accessibility to telecommunications services for persons with disabilities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. The CRTC also approved funding to expand broadband service to more than 350 rural and remote communities in British Columbia, Alberta, Manitoba, Ontario and Quebec. Finally, the CRTC determined that any funds remaining in the deferral accounts would be rebated to residential subscribers living in urban areas in these provinces.

These determinations, with the exception of the initiatives to improve accessibility, are currently the subject of appeals to the Supreme Court of Canada and to the federal cabinet.

Price-cap framework

Price-cap regulation places a ceiling on the prices that an ILEC can charge its customers for various regulated telecommunications services. The price-cap regime includes other rules that govern the local rates charged to residential and business customers. Price-cap regulation ensures that customers continue to have access to fair and reasonable rates, while at the same time providing ILECs with incentives to improve efficiency and introduce network and service innovations.

In 2007 the CRTC established the current price cap regime, which applies to the ILECs and Tlbec Limited Partnership.

Framework for wholesale services

On November 9, 2006, the CRTC issued Telecom Public Notice 2006-14 to consider revised definitions for essential services and wholesale services. The proceeding had been contemplated by the government's Policy Direction, which directed the CRTC to complete a review of its regulatory framework for mandated access to wholesale services.

The proceeding, which included written and oral components, concluded with the release of Telecom Decision 2008-17. In that decision, the CRTC revised the definition of an essential service, which it had first adopted in 1997, and set out a new regulatory framework for wholesale services. The framework delineated six categories of wholesale services and specified the pricing principles to apply to each category. Based on this framework, the CRTC assigned hundreds of individual tariffs to their appropriate categories. As part of this process, the CRTC determined that 121 individual tariffs were non-essential and that it would not regulate them after a specified period.

Review of certain Phase II costing issues

The ILECs and cable companies produce regulatory economic studies based on Phase II costing principles to estimate individual service costs. These studies allow the CRTC to establish cost-based prices for regulated wholesale services and provide assurance that regulated retail services are priced above costs.

On February 21, 2008, following a public proceeding to review certain Phase II practices, the CRTC issued Telecom Decision CRTC 2008-14. In this decision, the Commission determined the appropriate expense inclusions and methodologies for estimating causal expenses, as well as appropriate asset lives, to be used in regulatory economic studies. Further, the CRTC established the framework for the development and use of a common manual with company-specific appendices. Through this review, the CRTC has ensured a consistent application of Phase II costing principles and cost inclusions across the ILECs and cable companies.

Streamlined telecommunications processes

In 2005, the CRTC began to streamline its telecommunications processes and procedures. In response to stakeholders' comments, the CRTC issued three circulars that identified the streamlined process for retail tariff filings and set out new procedures and service standards. This initiative provided the ILECs with greater regulatory certainty by identifying clear steps, timelines and criteria that could be consistently relied upon by customers and telecommunications carriers.

These streamlining initiatives have been successful, as demonstrated by the CRTC's performance reports issued since fiscal year 2005-2006.

In 2007, the CRTC further reduced the regulatory burden on the industry through a series of forbearance decisions. For example, competitive local-exchange carriers no longer need to file interconnection agreements that are based on CRTC-approved model agreements and ILECs no longer need to file tariffs for promotions that meet specified criteria.

Telemarketing-National Do Not Call List

During the past year, the CRTC released three decisions related to unsolicited telecommunications, each following a public proceeding.

In Telecom Decision 2007-47, the CRTC set out its determinations on the operation and administration of the National Do Not Call List (DNCL).

In Telecom Decision 2007-48, the CRTC established a comprehensive framework for unsolicited telemarketing calls and other unsolicited telecommunications received by consumers. This framework includes rules for the National DNCL as well as rules regarding telemarketing and automatic dialing-answering devices-Unsolicited Telecommunications Rules.

In Telecom Decision 2008-6, the CRTC determined that investigations of alleged violations of the Unsolicited Telecommunications Rules would be delegated to a third party who would charge telemarketers fees for exercising these investigation powers. This decision also stated that the CRTC would retain enforcement powers.

The CRTC issued a request for proposals (RFP) to procure an operator for the National DNCL and another RFP for a complaints investigator delegate. On December 21, 2007, the CRTC awarded a five-year contract to Bell Canada to develop and operate the National DNCL. The CRTC and Bell Canada immediately started work to implement the National DNCL by September 30, 2008. The RFP for the complaints investigator delegate closed on March 25, 2008. The CRTC received no compliant bids and will assess other options for conducting investigations.

The establishment of the Unsolicited Telecommunications Rules framework and the National DNCL will enable Canadians to effectively reduce the number of telemarketing calls they receive, which will increase their privacy and reduce inconvenience and nuisance caused by such calls.

Policy Development and Research

In early 2007, the Commission created the Policy Development and Research (PDR) sector to respond to the rapidly evolving technological, cultural, socio-economic and convergent landscape of the telecommunications and broadcasting industries. The PDR sector is responsible for the development of regulatory policy for conventional and new distribution platforms, including new media, as well as major ownership transactions.

In 2007, to ensure that the Canadian broadcasting and telecommunications policies and regulations were responsive to Canadians' needs, the CRTC continued to:

  • examine closely the Canadian broadcasting and telecommunications marketplace,
  • benchmark with international partners,
  • understand consumer needs, and
  • conduct strategic research in collaboration with the industry, academia and other stakeholders.

In 2007-2008, the CRTC commissioned a wide array of analysis and research to support its decision-making processes with respect to new technologies, market conditions, audiences, competitive environment and ownership issues.

The Commission also published two reports. The first, the Broadcasting Policy Monitoring Report, is part of an ongoing annual assessment of the impact of regulations, policies and decisions on the achievement of the objectives of the Broadcasting Act. The report was issued on July 31, 2007, and is intended to help foster a more open and better-informed public discussion of broadcasting policy in Canada. The latest edition updated performance measurements and trend indicators set out in previous reports.

The Commission's second report, the Telecommunications Monitoring Report, is also intended to foster an open and better-informed public discussion of telecommunications policies and issues. This report provides a window on the telecommunication industry through which the CRTC can assess the extent to which its determinations are achieving the policies and objectives set out in the Telecommunications Act.

New Media Project Initiative

Through the New Media Project Initiative, the Commission continued to analyze the impact of new broadcasting technologies on the achievement of the policy objectives of the Broadcasting Act. The CRTC completed the first and second validation phases of this project in anticipation of publishing a summary of its findings in mid-2008 and of holding a public hearing in early 2009. In both of these phases, the CRTC engaged industry and stakeholders through informal consultation and roundtables, conducted primary and secondary research that included commissioning studies, and validated findings with stakeholders.

Digital Radio Broadcasting roundtable

In June 2007, the CRTC convened a round table with chief executive officers of the major radio groups to discuss the industry's proposed plan and implementation schedules for digital-radio broadcasting and related issues.

Major acquisitions

In 2007-2008, the CRTC completed reviews and issued approvals for five major industry acquisitions: the acquisition of the assets of the radio and television undertakings of Standard Radio Inc. by Astral Media Radio (Toronto) Inc. and 4382072 Canada Inc. the transfer of effective control of Alliance Atlantis Broadcasting Inc.'s broadcasting companies to CanWest MediaWorks Inc., the transfer of effective control of CHUM Limited to CTVglobemedia Inc., the transfer of effective control of CHUM Limited's subsidiaries to Rogers Media Inc., and the transfer of effective control of BCE Inc. and its licensed undertakings to a corporation controlled by Ontario Teachers' Pension Plan Board. These approvals were granted following public hearings.

Reducing reporting burden

In 2007-2008, the CRTC signed a memorandum of understanding with Statistics Canada to streamline the annual collection of data from the telecommunications industry. Under the memorandum, the two organizations' respective annual telecommunications surveys have been harmonized to further reduce the regulatory burden on the industry and make the data-collection process more efficient for both government and industry. Companies will be required to fill out only one annual telecommunications survey and submit their data through a single point of contact: the CRTC's web-based data-collection system. This data will then be shared with Statistics Canada and the necessary safeguards to protect the confidential nature of this information will be respected.

Modernization of Human Resources

The CRTC continues to use the government's initiative to modernize human resources, streamline its recruiting and staffing processes and maximize the flexibility it has under the new legislation to attract, recruit and develop the talent and expertise it needs to meet its business and human resource priorities.

For example, the CRTC successfully completed its first post-secondary recruitment campaign in 2007-2008 and made offers to 19 university graduates. The CRTC also completed collective staffing activities for the CO and IS groups, as well as for administrative assistants to create pools of qualified candidates and streamline staffing activities for these groups.