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Consumer groups call on Minister Moore to “put consumers first” in the war over cable fees

(PIAC 16/Oct 09) Canadian organizations representing consumers of television service called upon Heritage Minister James Moore today to back up his promise to “put consumers first” in the high profile war about cable fees for local broadcasting. The organizations, representing a broad range of consumer and public interests across Canada, maintain that consumer groups must be able to participate fully in the hearing called by the CRTC at the direction of the Minister.

On September 16, the CRTC requested that Heritage Canada consider funding consumer group participation, as the Broadcasting Act does not provide for the same resources as are available for public interest intervenors under the Telecommunications Act. In a letter to Minister Moore, the organizations have noted that all the commercial and government stakeholders at the hearing are funded by Canadian consumers of television broadcasting, yet no money is available to allow representation of consumers at the hearing that is supposed to decide the impact of new charges on consumers.

“Unless the Minister acts, it will be the same old story at the hearing when it comes to cable rates -taxation without representation” said Michael Janigan, Executive Director and General Counsel of the Public Interest Advocacy Centre, PIAC “The bold government talk must be backed up”.

The groups that are requesting that Minister Moore ask his Department to remedy this situation include, the Consumers Association of Canada (CAC), Union des Consommateurs (UC), the Consumers Council of Canada (CCC), Option Consommateurs (OC), Canada Without Poverty (CWP), Canadian Internet Policy and Public Interest Clinic (CIPPIC),and the Public Interest Advocacy Centre (PIAC). The Consumers Interest Alliance Inc. (CIAI) has sent separate correspondence to the Minister supporting the groups’ request.
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October 16, 2009

The Honourable James Moore
Minister of Canadian Heritage
Les Terrasses de la Chaudiere
Suite 1497
25 Eddy Street
Gatineau, Quebec
K1A 1K5

Dear Minister Moore,

Re: Order in Council 2009-1569
CRTC Broadcasting Notice of Consultation 2009-0214

On 16 September 2009, the Governor in Council issued Order in Council P.C. 2009-1569 (the OIC). The OIC was issued pursuant to section 15 of the Broadcasting Act (the Act), which provides that the Governor in Council may request that the Canadian Radio-Television and Telecommunications Commission (CRTC) hold hearings or make reports on any matter within the CRTC’s jurisdiction under the Act. The CRTC issued a Notice of Consultation CRTC 2009-614 on October 2, 2009 that called for comments concerning the request by the Governor in Council to prepare a report on the implications and advisability of implementing a compensation regime for the value of local television signals.

The organizations that have signed this letter have a longstanding concern with broadcasting issues and their effect on the ordinary user of broadcasting services. For example, the Consumers Association of Canada (CAC), and Union de Consommateurs (UC) have lengthy histories of engagement in such CRTC proceedings affecting their respective constituencies. The Canadian Internet Policy and Public Interest Clinic (CIPPIC) has developed a worldwide reputation for its advocacy on important Internet and Broadband issues. The Public Interest Advocacy Centre (PIAC) has intervened on frequent occasions before the CRTC on broadcasting issues over the past 33 years, particularly with respect to the regulation of the cable and satellite distribution industry. PIAC also participated fully in the CRTC Review of the Regulatory Framework of Broadcasting Distribution Undertakings in 2007, and has subsequently made submissions to various policy makers concerning the related issues associated with basic service, fee for carriage and the transition from analogue to digital over the air broadcasting.

As your office and your department are well aware, the Broadcasting Act does not contain provisions for the funding of non-commercial consumer representation in the public interest in CRTC broadcasting proceedings as exists in telecommunications under current legislation.

In 2003, Bill S-8 was passed by the Senate. That Bill would have provided the CRTC with the ability to award costs to deserving public interest intervenors in broadcasting regulatory proceedings in a similar fashion to those conducted for telecommunications. Unfortunately, the parliamentary session ended before the House of Commons could consider the Bill. Successive Ministers of Canadian Heritage failed to respond to our requests to reintroduce the Bill under the Minister’s aegis. PIAC’s request to you for the same relief of December 5, 2008 (letter attached) was rebuffed.

In the current matter, the direction to the CRTC made through the OIC was accompanied by a media release that announced that the:
“…Government has a record of putting consumers first. When it comes to the broadcasting system, our stance is no different”.

However, the government has initiated a process to consider consumer impact without providing the means for consumer representation about the appropriate regulatory treatment of the potential impact.

The CRTC recognized the problem of conducting such a proceeding without a process to allow consumers to be represented. In a letter from the Secretary- General of the CRTC of September 16, 2009, to Deputy Minister of Heritage Canada, Judith LaRocque, it was noted that:
“To ensure full participation from the consumer groups, the CRTC would appreciate any contributions your department could offer in order to facilitate participation from the consumers in these consultations.”

This request appears to have been ignored. In conversations with your department officials, it was suggested that the lack of a consumer presence could be remedied if the CRTC could come up with some money to commission an independent study. Alternatively, consumer groups could attend at the offices of Heritage Canada officials to voice their concerns. Needless to say, this response falls considerably short of “putting consumers first” promised in your media release.

This proceeding engages some of Canada’s largest companies to resolve television issues for millions of Canadians that fund them with their fees and their viewership that supports advertising revenue. According to the CRTC‘s most recent Broadcasting Monitoring Report, the Broadcasting Distribution Industries (cable and satellite) garnered some $7 billion dollars of customer revenue in 2008, while Television revenues increased to $5.5 billion in the same year.

The Department of Canadian Heritage itself spent $1.45 billion in 2008/2009. We would also note the government’s receipt of Part I and Part II License fees from broadcasting licensees that add hundreds of millions of dollars to government coffers that are part of the costs eventually passed on to Canadian television users. No money is available to represent the interests of the providers of such massive private and government revenues, however.

The purpose of ensuring informed and resourced consumer participation is not simply to give the appearance of fairness. It is to help level the playing field in a process that features retinues of legal counsel, consultants, operational and regulatory staff and public relations teams promoting commercial interests before the Commission. As well, the availability of assistance to responsible consumer representation ensures that the CRTC gets the benefit of the best possible information and opinion from all sides before making a decision.

In our view, the problems made manifest in the current controversy have their origins in the fact that consumers have had little voice or role in the decisions made in broadcasting regulation. The decision of your department to ignore the CRTC request for participant funding will only serve to reinforce the inevitable conclusion that the Order in Council and the subsequent proceeding were simply part of a public relations exercise, not a meaningful attempt to engage the consumer interest. We would request that you instruct your department to respond to the CRTC’s request in a more helpful fashion.

Thank you.

Yours truly,
Michael Janigan

Executive Director/General Counsel
Public Interest Advocacy Centre

Anthony Hémond
Avocat
Union des Consommateurs

Bruce Cran
President
Consumers Association of Canada

Don Mercer
President
Consumers Council of Canada

Michel Arnold
Directeur général
Option Consommateurs

David Fewer
Acting Director
Canadian Internet Policy and Public Interest Clinic

Rob Rainer
Executive Director
Canada Without Poverty

cc: Robert A. Morin, Secretary-General, CRTC

Response may be communicated to:
Michael Janigan, Executive Director and General Counsel
Public Interest Advocacy Centre (PIAC)
ONE Nicholas Street, Suite 1204
Ottawa, ON, K1N 7B7, Canada

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