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Section II: Analysis of Program Activities by Strategic Outcome

Strategic Outcome

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

Program Activity 1.1: Canadian Broadcasting

2010-11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
17.5	18.3	20.0

2010-11 Human Resources (FTEs)

Planned	Actual	Difference
133	140	7

Program Activity Description: Canadian broadcasting system

Expected Results	Performance Indicators	Targets	Performance Status
The Canadian broadcasting system consists of a variety of voices that represent Canada’s linguistic and cultural diversity.	Percentage of radio selections that must be Canadian.	35%	Radio and conventional television broadcasters are meeting these targets.
	Percentage of conventional television content that must be Canadian.	55%
	The levels of diversity of voices for radio and television stations.	An entity may control no more than: 45% of the national television audience share three radio stations operating in the same language, with a maximum of two stations in either frequency band (in large markets), and two AM and two FM in the same language (in smaller markets).	All entities that control radio and television stations in Canada are currently under the targets.
Canadians continue to have access to the broadcasting system through traditional and new platforms.	Conventional television stations in mandated areas planned the transition from analog to digital transmission.	100%	All conventional television stations in mandated areas prepared to make the switch from analog to digital transmission.

Performance Summary and Analysis of Program Activity

Eligible satellite and cable services
In December 2010, the CRTC called for comments on proposed amendments to the Broadcasting Distribution Regulations, which affect Canada’s cable and satellite television providers. These amendments reflect determinations made by the CRTC in proceedings related to the regulatory frameworks for broadcasting distributors and community television, as well as the transition to digital television. Public comments have been received and this project is 90-percent complete. The new regulations will come into effect on September 1, 2011 and provide Canadians with a greater choice of programming.

Accessibility policy
When issuing and renewing television licences in 2010–2011, the CRTC imposed conditions of licence to improve the quantity and quality of closed captioning for persons who are deaf and hard of hearing, and to require described video and audio description to make programming accessible to persons with visual impairments.

When issuing and renewing licences for broadcasting distributors, the CRTC imposed requirements to ensure subscribers can easily access described video and customer information and support.

Reviews of community television and community and campus radio
On August 26, 2010, the CRTC unveiled a new community television policy that will come into effect on September 1, 2014. Under the new policy, the CRTC will require that community members be involved in the creation of at least half of a community channel’s programming. Original programming ideas must come from members of the community, who must also be involved in some aspect of the production. At least half of a channel’s programming expenditures will have to be devoted to this type of programming, to community outreach initiatives and to the training and development of volunteers.

On July 22, 2010, the Commission announced a new policy to strengthen the community and campus radio sector. The Community Radio Fund of Canada (CRFC) will receive more than $700,000 in additional annual funding to support the implementation of this new policy. The CRFC will distribute that additional money among the more than 140 communities and campus radio stations.

Local Programming Improvement Fund (LPIF)
At the conclusion of its first full year of operations in November 2010, the LPIF had provided more than $100 million in support to conventional television stations for the production of local programming in communities across Canada. Independently administered, the LPIF was created to help maintain or increase local programming for Canadians who live in non-metropolitan communities. The CRTC will review the LPIF’s terms and conditions in 2011–2012.

Licence applications
The CRTC conducted 20 public hearings to consider applications for new radio licences, ownership transactions, television licence renewals, and various other broadcasting matters. This represented an increase of 43 percent from the 14 hearings held the previous year.

Group-based licensing policy
Under the CRTC’s new group-based licensing policy for English-language television services, large private ownership groups will provide a significant level of funding for the production of Canadian programming. These entities will have the flexibility to shift resources between their conventional and specialty television services, which will maximize their ability to broadcast high-quality Canadian programming.

Loud television commercial
International standards and technical equipment that enables broadcasters and broadcasting distributors to measure and control the loudness of commercials have been developed in recent years. In February 2011, the CRTC sought comments on whether these measures could be adopted for the Canadian broadcasting system.

Mediation
In January 2009, the CRTC introduced revised procedures for staff-assisted mediation, final-offer arbitration and expedited hearings. During 2010–2011, the Broadcasting Alternative Dispute Resolution team was involved in four formal and fifteen informal disputes. On the Telecommunications side, the Dispute Resolution team was involved in 25 informal disputes, in addition to the competitive disputes resolved through the formal process.

Statistical and financial summaries
All sectors of the broadcasting industry experienced growth in 2010. Pay and specialty television revenues increased by 11.1 percent, conventional TV stations by 9.9 percent, broadcasting distribution by 8.9 percent and commercial radio stations by 2.9 percent.

In 2010, the broadcasting industry contributed more than $2.9 billion to the creation of Canadian programming.

Lessons Learned

The broadcasting industry faces a growing challenge. The business models of conventional television stations involved in the production and presentation of Canadian content are under strain. Broadcasters claim they are having a difficult time meeting their regulatory obligations in the face of the pressures created by the current global economic context. Other factors include the wide array of choices available to consumers—such as specialty, pay and online television services—that are causing a fragmentation among audiences. Some of these services are regulated by the CRTC, while others are exempt.

Strategic Outcome

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

Program Activity 1.2: Canadian Telecommunications

2010-11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
14.1	18.1	19.1

2010-11 Human Resources (FTEs)

Planned	Actual	Difference
130	134	4

Program Activity Description: Telecommunications services

Expected Results	Performance Indicators	Targets	Performance Status
Canadians have access to reliable, high-quality telephone and other telecommunications services at just and reasonable rates, while service providers have incentives to operate more efficiently and be more innovative2.	The percentage of Canadians who have access to wireline and wireless services.	99%	99% of Canadians currently have access to wireline or wireless services
	The percentage of Canadians who have access to the advanced wireless network that supports smartphones and other innovative features and services.	97%	97% of Canadians have access to advanced wireless networks.

Performance Summary and Analysis of Program Activity

• Telecommunications revenue increased by 1.8 percent—from $41 billion in 2009 to $41.7 billion in 2010.
• For the year ending March 31, 2011, the CRTC continued to share the responsibility for Canadian ownership reviews of wireless service providers with Industry Canada.
• The CRTC worked with Industry Canada to review issues such as data collection and the application and interpretation of the legal and de facto control test.
• More than three quarters—77 percent—of Canada’s 13.4 million households have Internet subscriptions.
• Adoption of wireless services continues to grow. The number of wireless subscribers increased by 8.5 percent to 25.8 million.

Internet Traffic Management Practices
Canadians use the Internet for a wider variety of communications purposes than ever before. As a result, the CRTC must strike an appropriate balance between Canadians’ freedom to use the Internet with the legitimate interests of ISPs to manage network traffic consistent with legislation. In 2010–2011, the CRTC reviewed the practices of ISPs in response to complaints.

Review of the Commissioner for Complaints for Telecommunications Services (CCTS)
In December 2010 and January 2011, the CRTC issued its determinations with respect to the CCTS’s structure, mandate and membership requirement. The CRTC concluded, among other things, that all telecommunications service providers that offer services within the scope of the CCTS’s mandate must be members of the CCTS for a period of five years. The CRTC also established a new procedure for the development and approval of mandatory industry codes of conduct and standards, and required the CCTS to include additional information in future annual reports to enhance its accountability and transparency.

National Do Not Call List (DNCL)
The CRTC’s goal is to promote compliance with the Unsolicited Telecommunications Rules in order to protect the privacy of Canadians. As of March 31, 2011, the Commission has issued 31 administrative monetary penalties worth a combined total of $1,995,000, of which $1,820,375 has been collected.A third-party survey indicatedthat eight in ten Canadians registered on the National DNCL now receive fewer telemarketing calls. 

The CRTC has taken action against a number of telemarketers by issuing citations and notices of violation, among other enforcement activities. A list of violators can be found at: http://crtc.gc.ca/eng/telemarketing.htm

To address the challenges posed by calls coming from international telemarketers, the CRTC is pursuing several activities—such as outreach programs—to educate both telemarketers and consumers. The CRTC is also establishing ties with regulators in countries where some of the rogue telemarketers originate.

Accessibility policy
The CRTC oversaw the implementation of its requirement that local telephone companies provide a new Internet protocol message relay service for persons with hearing or speech impairments.

As of July 2010, the Commission required telephone companies to improve customer information and support for persons with disabilities by promoting information on their disability-specific services and products in an accessible manner and incorporating links to the special needs/disabilities sections of their websites.

In December 2010, the CRTC commissioned an assessment to study the availability of accessible wireless handsets in the Canadian marketplace.

Telecommunications regulations review
A focused and modernized regulatory framework enables telecommunications service providers to operate under fewer and more current regulations, and helps the industry function in a competitive environment. In 2010–2011, the CRTC continued to review economic, non-economic, and social regulatory measures in light of Governor-in-Council’s Policy Direction³. Some of the measures the CRTC reviewed included the obligation to serve, the basic service objective, the local-service subsidy regime, the local competition regime in the territories of small incumbent telephone companies, and voice mail services.

Enforcement of Canada’s anti-spam legislation
On December 15, 2010, Bill C-28, Canada’s anti-spam legislation received royal assent. Because the CRTC is responsible for ensuring the reliability, safety and proper operation of telecommunications networks in Canada, its mandate will now include aspects of the Internet. The Commission will achieve this goal through the investigation of spam, as well as unauthorized downloading of malware and network re-routing. The CRTC will conduct targeted investigations, promote compliance and enforce the legislation.

Telephone numbering resources
A number of Canadian area codes are running short on new telephone numbers due to the overall growth in the telecommunications market including the growing popularity of cellphones. The CRTC approved proposals to introduce new areas codes in the regions currently served by area codes 204 in Manitoba and 289 and 905 in Southern Ontario. The Commission also established planning committees to develop relief proposals for anticipated number shortages in area codes 416 and 647 in Toronto, and area codes 250, 604 and 778 in British Columbia.

Customer transfer process
The Commission established measures to simplify the processes by which customers change their telecommunications or broadcasting service providers. Under the revised transfer process, customers may cancel services on their own or their new providers may act on their behalf. In both cases, customers may receive competitive offers from their current service providers.

Pricing of wholesale Internet access services
The CRTC initiated a proceeding to re-examine the manner in which Internet service providers will be billed for wholesale access and usage of the incumbents’ networks⁴.

Deferral accounts
The large incumbent telephone companies’ deferral accounts had been created at the CRTC’s request as a way to favour more competition in the home telephone market. After a few years, a large surplus had accumulated in these accounts. Following several court challenges, the CRTC directed the companies to rebate $313.3 million to residential telephone subscribers in urban areas.

The CRTC also approved the use of surplus funds to expand broadband Internet services to 287 rural and remote areas in Alberta, British Columbia, Manitoba, Ontario and Quebec, as well as for several initiatives to improve the accessibility of telecommunications services for Canadians with disabilities.

New media
During 2010–2011, the Commission conducted a public process to establish reporting requirements for new media broadcasting services. The Commission established a regulatory policy that requires certain new media broadcasting services to provide relevant financial information when requested by the Commission.

Further, the Commission established a New Media Reporting Working Group that comprises industry representatives and Commission staff. This group will develop appropriate definitions and metrics for reporting on new media activities.

Lessons Learned

A long planning and implementation process is required to prevent telephone-number shortages. Given the unprecedented demand for telephone numbers, it is necessary to conduct regular forecasts on the supply of available telephone numbers.

New technologies can provide effective ways to increase public participation in the CRTC’s telecommunications-related activities. In 2010–2011, the Commission included online public consultations as part of some of its most significant proceedings.

Strategic Outcome

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

Program Activity 1.3: Internal Services

2010-11 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
16.5	19.9	15.0

2010-11 Human Resources (FTEs)

Planned	Actual	Difference
162	144	(18)

Program Activity Descriptions: Streamlined and converged rules

Expected Results	Performance Indicators	Targets	Performance Status
The CRTC incorporates a new streamlined regulatory framework and reporting process for industry.	Number of streamlined and converged rules.	All rules of procedure converged.	The CRTC completed its review of the CRTC Rules of Procedure (for broadcasting processes) and the CRTC Telecommunications Rules. On April 1, 2011, the CRTC introduced new streamlined and converged Rules of Practice and Procedure for both broadcasting and telecommunication processes. At the request of the industry, the CRTC will undertake a review of nine additional regulatory measures.
The CRTC is an innovative, expert and effective organization.	Percentage of leadership positions filled.	All leadership positions filled.
	Percentage of development plans in place for CRTC workforce.	90%	The CRTC achieved the 90% target through initiatives such as talent development and continuity planning. These initiatives were carried out to address anticipated retirements in key positions and ensure sufficient knowledge transfer.
	Percentage of employees who identify themselves as visible minorities.	25%	The percentage of employees currently at the CRTC who identify themselves as visible minorities is 29%.

Performance Summary and Analysis of Program Activity

Human resources
Leadership-development programs have been rolled out, with training being expanded to include non-EX staff members. Knowledge transfer is facilitated through recurring CRTC orientation programs and other professional development opportunities. Job standardization is being pursued and is expected to be in place by October 2011.

Initiatives such as talent development and continuity planning were carried out to address anticipated retirements in key positions and ensure sufficient knowledge transfer.

Information technology (IT) risk management
The CRTC hired a consultant to prepare observations and recommendations in relation to IT risk management. In addition, the CRTC Information Management /Information Technology Steering Committee re-convened to identify and evaluate planning priorities for 2011–2012.

Electronic communications capabilities were improved through initiatives such as: migration from e-pass to Access Key for enhanced security of electronic submissions; modification of online forms in relation to the Rules of Practice and Procedure; enhancement of the e-hearing tool for reduced paper consumption and greater distribution efficiency; development of an instant messaging system to facilitate information sharing among client services staff; and ongoing enhancement of an integrated case-management system. 

The CRTC Rules of Practice and Procedure will come into force on April 1, 2011. To accommodate such a change, the CRTC revised its internal processes and updated its website to facilitate and expedite the filing and publication of official documents.

Communications Monitoring Report
During 2010–2011, the CRTC collected financial data from telecommunications companies, which it published in aggregated form in the Communications Monitoring Report. The report also included the percentage of Canadians who subscribed to different broadband Internet speeds and, for the first time, mobile broadband results. The mobile broadband results were shared with the Organisation for Economic Co-operation and Development for inclusion on that organization’s broadband portal. All data collection forms were reviewed with Statistics Canada and modified as required.

International outreach
During 2010–2011, the CRTC continued its International Outreach Program. Although much of the program’s work focused on many of the same activities as in previous years, the CRTC was able to expand the program’s reach to two important international organizations: REFRAM, the association of French speaking broadcasting regulators, and the OECD—the Organisation for Economic Co-operation and Development. The CRTC’s association with these two organizations has resulted in more accurate international data measurement and comparisons, and an increased exchange of information in the international arena.  

The CRTC has taken a lead role toward the development of an international Do Not Call (DNC) network to enhance international cooperation and facilitate enforcement on cross-border cases.  Toward this goal, the CRTC along with its Australian counterpart will co-chair the International DNC Forum.  The Forum will hold its inaugural meeting in October 2011.  The Forum’s broad objectives include outreaching to other foreign DNC authorities, developing and sharing best practices, and exchanging information on issues of common interest.

Official languages
The CRTC tabled the results of the 2010–2011 report on the implementation of section 41 of the Official Languages Act and a three-year action plan (for the years 2011 through 2014) in which it reiterates its commitment to official-language minority communities (OLMCs).

Over the past three years, the CRTC has taken steps to encourage OLMCs to participate in public process that affect them. As a result, the Commission can systematically take OLMC interests into account when making decisions.

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