ARCHIVED - Canadian Radio-television and Telecommunications Commission - Report

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Minister's Message

The Department of Canadian Heritage and its portfolio organizations play an important role in our cultural, social and economic lives. Together, they promote the creation of an environment where all Canadians can enjoy cultural experiences, celebrate their heritage, and take part in building stronger communities. As a Canadian Heritage portfolio organization, the Canadian Radio-television and Telecommunications Commission (CRTC) contributes to these objectives by overseeing a dynamic communications industry.

Canadians are active participants in the global digital economy. They are subscribing to wireless and broadband Internet services in growing numbers, and consuming more digital media—including Canadian television programs and music—than ever before. The technological innovations of the last few years have given us an unprecedented opportunity to share our culture and heritage.

During the past year, the CRTC conducted three major activities that contributed to Canada’s vibrant communications landscape. First, it supported the rollout of broadband Internet services to hundreds of communities, ensuring that even more Canadians will be able to enjoy the economic, social and cultural benefits that the Internet affords. Second, it established regulatory policies that give Canadians more opportunities to become involved in their community television and radio stations. Finally, the CRTC acted to protect the privacy of Canadians registered on the National Do Not Call List.

As Minister of Canadian Heritage and Official Languages, I am pleased to present the CRTC’s 2010–2011 Departmental Performance Report. I invite you to take a look at it for an overview of the activities that the CRTC has undertaken over the past year to fulfill its mandate and contribute to the vitality of Canadian society.

Chairman's Message

I am pleased to present the Canadian Radio-television and Telecommunications Commission’s (CRTC’s) Departmental Performance Report for 2010–2011. The last year was particularly busy as we undertook a number of major activities. Four of them, in particular, demonstrate how the CRTC has upheld consumer interests within a regulatory framework that encourages competition and innovation.

First, after several court challenges, the CRTC ordered Canada’s largest telephone companies to rebate more than $310 million to their home telephone customers who reside in urban areas. We also directed these companies to deploy broadband Internet to 287 rural and remote areas—parts of the country in which this service is not yet available. The funds for these initiatives were drawn from the companies’ deferral accounts, which had been created at the CRTC’s request as a way of favouring competition in the home telephone market.

Second, the CRTC took steps to give Canadian consumers a wider choice of Internet service providers (ISPs). We established a framework under which independent ISPs can offer their retail customers connections at the same speeds as those available to the customers of large telephone companies. We also required cable companies to ensure independent ISPs can connect to their networks just as easily as to those of the large telephone companies.

Third, the CRTC reviewed two major ownership transactions that combined were worth more than $4.7 billion. In approving Shaw Communications’ acquisition of Canwest Global Communications and BCE’s acquisition of CTVglobemedia, we required the purchasers to allocate more than $425 million over seven years to initiatives that will improve the Canadian broadcasting system. In light of increased consolidation in the broadcasting industry, we subsequently launched a proceeding to ensure vertically integrated companies do not engage in anti-competitive behaviour.

Finally, the CRTC made significant progress in protecting Canadians’ privacy by enforcing the telemarketing rules and the National Do Not Call List. Through these activities, we collected more than $1.8 million in penalties on behalf of the Receiver General for Canada and more than $740,000 in payments to post-secondary institutions. We also prepared ourselves to enforce Canada’s new anti-spam legislation by hiring staff and creating a specialized computer laboratory.

The emerging digital economy has put increased pressure on the CRTC’s ability to oversee a highly regulated communications system. The technology, business models and corporate structures that have long underpinned the industry are experiencing fundamental change. In the coming year, we will continue to engage stakeholders, government partners and the public to ensure that Canadians are able to participate in the digital economy to the fullest extent possible.

Section I: Organizational Overview

Raison d’être

Responsibilities

The CRTC exists under the authority of the Canadian Radio-television and Telecommunications Commission Act of 1985. The CRTC’s mandate is governed by the Broadcasting Act of 1991 and the Telecommunications Act of 1993.

The Broadcasting Act seeks to ensure that Canadians have access to a wide variety of high-quality Canadian programming. The Telecommunications Act seeks to ensure that Canadians have access to reliable, high-quality telephone and telecommunications services at affordable prices.

The CRTC fulfills its responsibilities through a number of interrelated activities such as:

• consulting and informing Canadians through its website and public processes
• issuing, renewing and amending licences for broadcasting services
• making determinations on mergers, acquisitions and changes of ownership
• approving tariffs and certain agreements for the telecommunications industry
• monitoring and removing obstacles to competition
• resolving competitive disputes
• researching, developing and implementing regulatory policies
• monitoring, assessing and reviewing the programming and financial obligations of broadcasting undertakings, and
• administering the National Do Not Call List and enforcing the telemarketing rules.

In fulfilling its mandate, the CRTC is guided by four principles: timeliness, transparency, fairness and predictability.

In addition, the CRTC works diligently to ensure the communications sector is regulated fairly, effectively and efficiently, and in a manner that fosters increased reliance on market forces. It endeavours to keep its regulatory policies current by taking into account emerging technologies and market developments, as well as evolving consumer interests.

As a federal organization, the CRTC reports to Parliament through the Minister of Canadian Heritage and Official Languages. As an organization listed in Schedule 1.1 of the Financial Administration Act, the CRTC’s budget and employees are subject to Government of Canada policies and guidelines, which ensure excellence and accountability to Canadians.

Strategic Outcome(s) and Program Activity Architecture (PAA)

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During 2010–2011, the CRTC was guided by one overarching strategic outcome: Canadians have access to a wide variety of high-quality, Canadian-produced programming, and to reliable, affordable and high-quality telecommunication services. Three program activities facilitated results under this strategic outcome:

• Canadian Broadcasting deals specifically with activities and priorities that pertain to the broadcasting sector
• Canadian Telecommunications deals with activities and priorities that stem from the telecommunications sector, and
• Internal Services includes corporate activities that support the CRTC’s operations.

Organizational Priorities

Priority: Transition from analog to digital television	Type: Ongoing	Program Activity 1.1: Canadian Broadcasting
Status:  Met All Mandated markets (the National Capital Region, provincial capital cities, and markets either served by more than one local station or with populations greater than 300,000) are expected to convert to digital television by August 31, 2011. The CRTC processed more than 150 applications on an expedited basis to ensure that broadcasters convert their transmitters to meet the deadline. The CRTC worked with the Department of Canadian Heritage and Industry Canada to ensure an orderly digital transition, in support of the Government of Canada’s spectrum-management policy and in keeping with international spectrum requirement.

Priority: Convergence	Type: Ongoing	Program Activity 1.1: Canadian Broadcasting
Status:  Met All The CRTC created a cross-sectoral task force to look at the effects of convergence on the regulatory approaches developed by the CRTC in order to achieve the objectives of the Broadcasting Act and the Telecommunications Act . On March 24, 2011, the CRTC hosted a roundtable to discuss trends that affect the Canadian communications industry as well as future regulatory approaches. Attendees included representatives from global broadcasting and telecom companies, domestic and international regulators, consumer groups and academics. This event was an important part of the CRTC’s ongoing evaluation of regulatory approaches for the Canadian communications industry.

Priority: Enhanced 911 emergency services	Type: Ongoing	Program Activity 1.2: Canadian Telecommunications
Status: Met All Canadian wireless service providers recently upgraded their 911 services to enable emergency responders to determine with greater precision the location of 911 calls that originate from cellular phones. Improvements to enhance 911 emergency services for wireless and various Voice over Internet Protocol (VoIP) services have helped improve public safety and provided Canadians with more reliable services.  In 2010–2011, the CRTC reviewed the feasibility of further enhancing 911 services for VoIP subscribers who use this telephone service away from home. The CRTC held a public consultation on this matter and expects to issue a follow-up decision in 2011–2012. A trial of text-to-911 service to improve access to 911 by persons with hearing or speech limitations is currently ongoing. The trial is being conducted with several wireless service providers in a number of regions of the country. The CRTC will continue to monitor technology developments that could improve the safety of Canadians.

Priority: Canada’s anti-spam legislation	Type: New	Program Activity 1.2: Canadian Telecommunications
Status:  Expectations Met In 2010–2011, the CRTC hired personnel to lead its Electronic Commerce Enforcement Team. When Canada’s anti-spam legislation comes into force, this team will perform investigations and manage enforcement activities to counter spam, botnets and malware. The Commission began developing processes and creating a forensic lab to prepare for the legislation’s implementation, which is expected to be in early 2012.

Priority: Television renewals based on ownership groups	Type: Previously committed to	Program Activity 1.1: Canadian Broadcasting
Status:  Met All In 2010–2011, the CRTC implemented a new policy framework for the group-based licensing of private, English-language television services. The policy will ensure large ownership groups make significant contributions to the production of Canadian programming. The CRTC launched a public proceeding and completed 60 percent of the work related to the licence renewals for more than 130 television services affiliated with the private, English-language ownership groups.

Priority: Revisions to wholesale rates and terms	Type: Previously committed to	Program Activity 1.2: Canadian Telecommunications
Status: Met All The CRTC continued its review of regulated wholesale services that are used by competitors to provide their own retail telephone and other telecommunications services. Following a proceeding, the CRTC completed its review of wholesale high-speed Internet access services. The Commission confirmed that incumbent telephone companies must make these services available to competitors at speeds that match those offered to their own retail customers. The CRTC also made it easier for independent Internet service providers to connect to large cable companies’ networks in order to offer services to Canadians. The CRTC also issued its decision following a review of the rates that telephone companies charge other companies for as access to poles, conduits, telephone lines and other support structures that extend to customers’ homes.

Priority: A streamlined regulatory approach	Type: Previously committed to	Program Activities 1.1 and 1.2: Canadian Broadcasting and Telecommunications
Status: Met All The CRTC Rules of Practice and Procedure came into force on April 1, 2011. This change improved the CRTC’s ability to meet the needs of a converging and increasingly competitive market. To prepare for the launch of the new converged rules, the CRTC adapted internal processes and enhanced its website to facilitate and expedite the filing and publication of official documents. The CRTC redesigned its online intervention form to ensure that information submitted by interveners is complete and therefore requires less follow up by staff.

Priority: Evaluations and audit follow-up	Type: Previously committed to	Program Activities 1.1 and 1.2: Canadian Broadcasting and Telecommunications
Status: Met Most The CRTC continues to enhance its effectiveness and efficiency to better serve Canadian citizens and the communications industry. Senior management finalized its response to the recommendations of the internal audit that reviewed the CRTC’s regulatory processes, systems and procedures. The CRTC launched a series of enhancements to its information technology that will continue through 2011–2012. Some of these initiatives have been delayed due to resource constraints and other operational imperatives.

Priority: An improved organization	Type: Previously committed to	Program Activities 1.1, 1.2. 1.3: Canadian Broadcasting, Telecommunications and Internal Services
Status: Met Most The CRTC pursued and expanded upon the initiatives supporting renewal in the federal public service. Initiatives such as talent development and continuity planning were carried out throughout the organization to address anticipated retirements in key positions and ensure sufficient knowledge transfer. The CRTC has harmonized its IT planning process to reduce complexity, promote system integration and optimize service delivery. The CRTC will continue to improve its electronic communication capabilities, implement an integrated case-management system, increase access for Canadians to a broad range of information, and develop an IT risk-management program and governance model. The CRTC is working on a five-year roadmap to identify specific projects that will facilitate its IT and corporate strategic objectives.

Risk Analysis

Digital transition
In the summer of 2010, the CRTC estimated that as many as 857,500 households that rely on over-the-air television could be affected by the transition. The CRTC worked with stakeholders to ensure the transition occurs smoothly. In particular, it has taken steps to inform Canadians of the transition and minimize the loss of service for viewers.

Modern regulatory tools
The Telecommunications Act was drafted at a time when few service providers and technologies existed in the market. The number of providers, and variety of services each offers, has increased as a result of convergence and technological innovation. The Telecommunications Act does not provide CRTC with flexible tools, such as the ability to impose administrative monetary penalties in all areas of its mandate, which are required to enforce compliance with regulations in the new environment.

Enforcement of Canada’s anti-spam legislation
The task of enforcing Canada’s anti-spam legislation not only presents new development opportunities for CRTC staff, but also introduces a new enforcement dynamic to the CRTC. For example, the CRTC will perform investigation and enforcement-related activities that differ significantly from its usual regulatory duties. These activities require a combination of skills related to law enforcement and cyber crime that are not readily available within the CRTC.

Mediation
The CRTC expects that further reliance on market forces in the telecommunications and broadcasting industries will increase the number of competitive disputes. The CRTC will be called upon to resolve these disputes efficiently and effectively.

Summary of Performance

2010-11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
48.1	56.3	54.1

2010-11 Human Resources (FTEs)

Planned	Actual	Difference
425	418	-7

Expenditure Profile

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In 2010-2011 the Commission received permanent funding for the statutory responsibilities associated with the Anti-Spam Legislation and temporary funding for the National Do Not Call List (NDNCL). The increase in total authorities and actual spending in comparison to the previous fiscal year are attributable to the Anti-Spam funding.

The total authorities also include the amount authorized for the operating budget carry-forward and applicable Treasury Board vote transfers.

Strategic Outcome: Canadians have access to a wide variety of high-quality Canadian produced programming and to reliable, affordable and high-quality telecommunication services.

Performance Indicators	Targets	2010-11 Performance
Percentage of Canadian content broadcast across radio and television services.	Between 35% and 55%.	Radio and television services are meeting the targets of 35% and 55% for the broadcast of Canadian content.
Percentage increase in rates for basic telephone service.	Below rate of inflation.	Since 2002, the telephone price index has been consistently below that of the consumer price index.
Percentage of Canadians with access to landline and mobile telephone services.	More than 98%.	99% of Canadians have access to landline and mobile telephone services.

 

($ millions)

Program Activity	2009-10 Actual Spending	2010-11				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Canadian Broadcasting	19.7	17.5	17.5	18.3	20.0	A Vibrant Canadian culture and heritage
Canadian Telecommunications	18.6	14.1	14.1	18.1	19.1	A fair and competitive market place
Internal Services	15.4	16.5	16.5	19.9	15.0
Total	53.7	48.1	48.1	56.3	54.1

Estimates by Vote

For information on our organizational Votes and statutory expenditures, please see the 2010-11 Public Accounts of Canada (Volume II) publication. An electronic version of the Public Accounts is available on the Public Works and Government Services Canada website¹.

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