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IN THIS ISSUE
Privacy Protection on the Way – Bill C-6 Finally Passes!
Keeping Police Powers in Check
Protecting Consumers Online: Standards for ECommerce
Telecommunications Regulation: What’s Up?
Internet “Have” and “Have-nots” in Canada split along Social Class Lines!
After 1½ years of Parliamentary review and delay, Bill C-6, the Protection of Personal Information and Electronic Documents Act, was passed on April 4, 2000. It will be made law as of January 1, 2001 and will initially apply to banks, telephone companies, airlines, and other federally regulated industries, as well as to the trade of personal information across borders. As of January 1, 2004, the Bill will apply to all industries, except those already covered by similar provincial legislation such as already exists in Quebec.
This is a tremendous step forward in consumer protection, and one for which PIAC worked hard. Canadians outside of Quebec will now have legal rights to control over their personal information in the private sector, rights that should have been established in law long ago, before consumer data mining developed into the huge business that it now is. Finally, consumers will be able to complain about the unauthorized collection, use or disclosure of their personal information by private sector companies, and to obtain redress where they have suffered as a result of the privacy invasion.
Bill C-6 requires that companies obtain the individual’s consent to any collection, use or disclosure of that individual’s personal information, except in specific instances such as emergencies, criminal investigations, scholarly research, or for artistic, literary or journalistic purposes. Consent may be obtained via negative option (onus on consumer to refuse consent) where the information in question is not sensitive. However, companies cannot require, as a condition of sale or service, that consumers provide personal information (such as SIN) unless that information is actually necessary to provide the good or service requested. The Bill also requires that organizations give individuals access to their information upon request, and that consumers have the ability to correct inaccurate information about them held by the company.
Individuals can make complaints under this Act to the federal Privacy Commissioner, who has the power to investigate, report on, and publicize infractions of the law. Whistleblowers are specifically protected. Unresolved complaints can be taken by the complainant or the Privacy Commissioner to the Federal Court for a binding order. The Court can order the organization to correct its practices, to publish notices of such correction, and/or to pay damages to the complainant.
For more information on the new law, see Industry Canada’s “primer” and “backgrounder” on the privacy provisions of Bill C-6, available online at http://www.strategis.ic.gc.ca/virtual_hosts/e-com/english/privacy/632d1.html#doc
At the same time that Bill C-6 was being passed, the federal government was moving forward new legislation to combat money laundering. Bill C-22, the Proceeds of Crime (Money Laundering) Act, is part of an international effort to crack down on organized crime. It establishes a regime under which banks, insurance companies, accountants, lawyers and others must report regularly to a new federal agency (the “Financial Transactions and Reports Analysis Centre of Canada”) on any “suspicious transactions” occurring in the course of their business. The law creates stiff penalties for failure to report, ensuring that companies subject to the Bill will err on the side of reporting more than necessary. As well, it requires secrecy in reporting, so that criminals do not get wind of any investigation. The new Agency collects and analyses the information from these reports, in order to better detect money laundering activities. It then provides the police with information on suspicious activities.
While recognizing that consumer privacy must be compromised in order to achieve law enforcement goals, PIAC expressed concerns about the extent of covert information collection and analysis regarding innocent individuals under this regime, and urged that the Privacy Commissioner be given effective oversight powers to ensure that individual privacy is not unduly infringed in the course of the new Agency’s operations. Our suggestions were welcomed and acted upon.
With the rise of electronic commerce and the expectation that more consumers will be shopping online, PIAC and others have been working to develop standards for governments and businesses to use when developing laws and self-regulatory schemes for consumer protection in this new medium.
Together with a number of other consumer advocates, government officials, and business representatives, we have developed a set of principles, entitled “Principles of Consumer Protection for Electronic Commerce: A Canadian Framework” (available online at http://strategis.ic.gc.ca/oca). In brief, they require that:
We are now working to expand and operationalize these principles through, perhaps, a “seal of seals” program, under which the proliferating array of private sector trustmarks and seals would be themselves assessed against our criteria for effective consumer protection.
One of the most well known private sector seal programs is that of the Better Business Bureau. PIAC recently completed a detailed analysis of BBBOnline’s draft Code of Online Business Practices, comparing it to a number of other standards and voluntary codes in use. That report is available from PIAC’s website.
RATES FOR BASIC SERVICE: THE SAGA CONTINUES
The thorny issue of how to ensure, in a competitive environment, that all Canadians have access to affordable, high quality telecommunications service continues to vex regulators and governments. Without appropriate regulatory intervention and/or government subsidies, competition threatens to result in reduced service and significantly higher rates in rural and remote areas, as well as higher rates for residential customers generally.
On behalf of Action Réseau Consommateur, the Consumers’ Association of Canada, and the National Anti-Poverty Organization, PIAC continues to press hard for an effective solution which minimizes the burden on consumers. We are active in a number of CRTC proceedings bearing on this issue, providing suggestions for replacement of the current “toll contribution” mechanism with a more sustainable subsidy scheme, and for a fair spreading of the burden among industry, business customers, and residential consumers.
$100 MILLION IN RATE INCREASES PREVENTED!
In a recent proceeding, we successfully prevented the telephone companies from raising the basic residential price cap by app.5% in order to reflect a reduction in the “direct connection” charge they apply to long distance service providers accessing their local facilities. The CRTC agreed with us that such “rate rebalancing” was neither necessary nor appropriate. The overall impact of this rate change amounts to $146m. in Bell Canada territory alone, of which $100 m. would have been applied to the residential price cap (potential rate increases) if Bell had had its way. Other telcos wanted similar price cap adjustments.
DIRECTORY SERVICE CHARGES CONFIRMED
Our appeal of the CRTC decision to permit Bell Canada to charge for directory assistance (at 75¢ per call) even when the operator can’t find the number was denied, but by the slimmest margin – we had a number of Commissioners on our side. We are currently considering an appeal of this ruling to the Minister of Industry.
QUALITY OF TELEPHONE SERVICE: NEW INDICATORS BEING CONSIDERED
One of the results of competition in telecommunications has been that companies focus their attention on high-end customers. This can mean that the quality of basic service, especially that provided to captive, lower-end customers, suffers. On behalf of ARC/CAC/NAPO, PIAC recently made submissions to the CRTC urging adoption of more effective service quality indicators for business office response time, customer complaints response time, and directory assistance.
CRTC PROCESS OF “NEGOTIATED RULE-MAKING”: ENSURING THAT THE PUBLIC INTEREST IS REPRESENTED
For the last few years, the CRTC has relied extensively on a network of industry working groups (the “CISC process”) to develop detailed rules for the implementation of local competition in telecommunications. On behalf of ARC/CAC/NAPO, PIAC was an active member of the group that developed rules for the transfer of customers between local phone companies – with the goal of minimizing disruption of customer service and ensuring that all such transfers are properly authorized.
Our experience made it clear that this process, while public and open in theory, is in practice inaccessible by groups without large resources behind them. Unlike traditional processes, negotiated rule-making through cooperative working groups requires a tremendous amount of time and money, which consumer groups simply do not have at their disposal. PIAC therefore urged the CRTC to ensure that the traditional regulatory process involving public notices and the opportunity for public comment continue to apply to all issues or consensus recommendations arising out of the CISC process, especially on matters of interest to consumers.
A new study, The Dual Digital Divide: the Information Highway in Canada produced by PIAC in collaboration with Ekos Research Associates, clearly documents that while there has been growth with the Internet in Canada over the past three years, at the same time access to, and the use of, the Internet and other new technologies is now highly polarized along social class and generational lines.
The study, based on quantitative and qualitative research of Canadian households and social trends, found that from 1997 through 1999, higher income households were three times more likely than lower income households to have access to the Internet from home. By 1999, about two thirds of upper income households had access as opposed to one in four low income households. The report also found that in addition to a digital divide between those connected and not connected, another divide exists between identifiable non-user groups. One group clearly desires access but faces major cost and literacy barriers. The second group of non-users have little interest or perceive no need for Internet access. The report identifies these two aspects of the digital divide (users and non-users; and segmented non-user groups) as a “Dual Digital Divide”.
These findings have major implications for industry and policy makers. In spite of expectations or assertions that all Canadians will be connected, the reality is that a large number of Canadians are likely to remain unconnected. As well, the study found that both Internet users and non-users desired a choice in the means they use to access information and services. These circumstances will require organizations to ensure that information and services are provided in both electronic and other formats (e.g., paper, in-person, mail, etc.). Moreover, to avoid creating a two-tiered information society (first and second class citizens) information must be of similar high quality regardless of how it is made available and accessed. Other report findings: it will be necessary for governments to devote more resources for the creation of diverse socially and culturally relevant information, both in electronic and other formats; federal government departments will have an ongoing role to provide support for community access and networking services to ensure that Canadians have some form of access available, and to help develop relevant community-based information and communication resources. The report will be available to the public during May.