Transcription — An Overview of the Telecommunications Act
This presentation provides a high-level overview of Canada's Telecommunications Act. That Act, along with the Broadcasting Act and the Radiocommunication Act, is the subject of review by the Broadcasting and Telecommunications Legislative Review Panel.
In this presentation, we will briefly review:
- The history of Canadian telecommunications legislation
- And then look at development of telecom policy & legislation before the Telecommunications Act was passed in 1993
- Most of the presentation is devoted to an overview of the Act and a closer look at some of its key sections
This next slide, #3, lists some of the main developments in the history of Canadian telecommunications legislation prior to the enactment of the Telecommunications Act in 1993.
As you can see, the first legislation dealt with telegraphs, the state-of-the art communications technology in the 19th Century. Telephone rates were first regulated in 1892, initially by the federal Cabinet, but then subsequently by the Board of Railway Commissioners.
The Canadian Radio and Television Commission, which had become Canada's broadcasting regulator in 1968, was also given authority to regulate telecommunications in 1976. At that time, it was renamed the Canadian Radio‑television and Telecommunications Commission.
During the 1970s, after the new federal Department of Communications was established, it began a detailed review of Canadian communications policy. The Department issued several consultation papers with proposals to reform the policy. Cable TV had emerged as a new technology over the previous decade, and the "convergence" of telecom and broadcasting was a hot topic.
Stage 1 of the federal proposals was adopted in 1976, when responsibility to regulate telecommunications and broadcasting was combined in a single regulator—the CRTC.
Stage 2 saw the preparation of three federal Bills, which would have combined telecommunications and broadcasting laws into a single Act. None of these Bills was passed by Parliament, partly because of uncertainties about whether the provinces, as well as the federal government should play a role in regulation of communications.
In 1987, an important new Telecommunications Policy was announced by the Federal Government. This took place while the Canada‑US Free Trade Agreement was being negotiated. Among other things, the policy introduced the first Canadian ownership and control requirements for telecom carriers, to match similar US requirements that were then in place.
With the announcement of the 1987 Policy the Federal Government restarted a review of telecommunications legislation. Unlike the review of the 1970s, however, there were no further efforts to combine broadcasting and telecommunications legislation in a single Act.
Until the Telecommunications Act was passed in 1993, telecommunications carriers were regulated under a number of different Acts, including the Railway Act and the other Acts listed on this slide. To complicate matters, some telephone companies that carried on business in only one province were regulated by provincial public utilities commissions rather than the CRTC, and others were subject to company-specific legislation, such as the Bell Canada Act.
An important development was the 1989 decision of the Supreme Court of Canada, in AGT v. CNCP. That decision confirmed that all telephone companies whose networks were interconnected with the trans‑Canada telephone network were subject to exclusive federal jurisdiction, and not provincial legislation.
After several years of preparation and review, Parliament passed the Telecommunications Act in 1993. While there have been some amendments since, that Act remains in force today.
The 1993 Act contained a number of new regulatory provisions that had not been included in prior legislation. These include:
- A statement of telecommunications policy objectives
- Broader definition of types of telecommunications services subject to regulation and expanded regulatory powers over telecom carriers
- A forbearance power, which authorized the CRTC to refrain from regulation where markets are sufficiently competitive to protect consumers
- A Canadian ownership and control requirement for facilities-based carriers—that is the companies that own or operate the major telecom transmission networks
- Authority for the federal Cabinet to issue policy directions to CRTC
- More transparency and due process for the Cabinet power to review and change CRTC telecom decisions
Now we'll take a look at the specific sections of the Act.
First, we will note that the Act is divided into several Parts, which are listed on this slide.
This next slide, #8, lists some of the key provisions of the Telecom Act.
We'll take a look at each of these in the following slides.
A first section of note is s. 4, which makes it clear that the Telecommunications Act does not apply to broadcasting by a broadcasting undertaking as defined in the Broadcasting Act.
A corresponding provision, in subsection 4(4) of the Broadcasting Act, makes that Act inapplicable to telecommunications common carriers as defined in the Telecommunications Act—when those carriers are acting solely as carriers.
In this context it is important to note that in a 2012 decision the Supreme Court of Canada ruled that Internet Service Providers, or ISPs, that merely provide access to the Internet so end-users can access broadcasting content are not "broadcasting undertakings".
Therefore, ISPs are regulated under the Telecommunications Act, but not the Broadcasting Act.
Section 7 of the Telecommunications Act sets out statutory objectives for Canada's telecommunications policy.
As you will see from this list, there is a wide range of policy objectives listed in this section. Paragraph 47 (a) of the Telecom Act requires the CRTC to exercise its powers and perform its duties with a view to implementing the s. 7 policy objectives.
Section 16 sets out Canadian ownership and control rules for telecommunications carriers. As previously indicated, there were no such requirements prior to the 1987 Telecommunications Policy, and several carriers were owned by non-Canadians.
These rules were significantly amended in 2012, so that they only apply to carriers that earn 10% or more of total Canadian telecommunications service revenues.
As a result, today the rules only apply to the three largest Canadian carriers, Bell Canada, Rogers Communications and Telus.
Several points should be kept in mind in considering the Canadian ownership rules:
- Most carrier groups, including Bell Canada, Rogers, Shaw and Quebecor, also hold broadcasting licences—which remain subject to Canadian ownership rules; and
- The Investment Canada Act empowers the Federal Government to review and deny acquisitions of Canadian carriers (and other Canadian companies) by foreign entities for national security reasons. That Act gives the government a wide discretion to prohibit foreign takeovers of Canadian carriers, when it considers these would be contrary to Canada's national security interests.
Section 24 empowers the CRTC to impose conditions on the services provided by telecommunications carriers. Some of these conditions are set out in the "Terms of Service" the CRTC has approved for various regulated services. Others are set out in the carriers' General Tariff and in other CRTC-approved decisions and orders.
Section 24.1, which was enacted in 2014, expressly authorizes the CRTC to impose conditions of service on resellers or other entities that provide telecommunications services but are not "telecommunications common carriers"—in other words, that do not own or operate basic telecommunications transmission infrastructure, such as wires, cables, radio-transmitters, etc.
"Resellers" are companies that provide services such as ISP or Internet access services, and Voice‑over‑Internet Protocol services using the network infrastructure of telecommunications common carriers. Resellers, sometimes called "resale carriers", obtain access to such network infrastructure on a wholesale basis and use it, often combined with other services and facilities, to provide retail service to the public.
Subsection 27(1) is one of the longest-standing provisions of telecommunications law. It authorizes the CRTC to regulate the prices charged by telecommunications carriers.
In practice, as the telecommunications industry became more competitive over the past decades, the CRTC used its forbearance power (which we'll look at in a minute) to deregulate the prices and service conditions of competitive services provided to the public.
Instead of regulating retail prices, the Commission has become more focussed on regulating wholesale prices charged by the telecommunications common carriers that own the major networks to resellers and other competitors that use these networks to deliver their own retail services. In effect, as the telecom industry transitioned from a monopolistic industry to a competitive one, the Commission moved from a traditional "public utility" style of regulation to competition policy as its main approach to protecting consumers.
Subsection 27(2) provides a broad and highly discretionary power to the CRTC to prevent "unjust discrimination" by telecom common carriers.
Since the CRTC's Challenge Communications decision, which was upheld by the Federal Court of Appeal in 1979, the Commission has used this power to regulate conduct by telecommunications carriers which it considers unjustly discriminate against competitors. Prior to that decision, some parties took the view that ss. 27(2) was only aimed at preventing discrimination between different customers of a carrier.
The CRTC has used its ss. 27(2) power not only to promote competition, but to support the principle of network neutrality. To this end, the Commission issued a policy governing Internet Traffic Management Practices (ITMPs) of Internet Service Providers (ISPs). The Commission stated that this policy will be used to determine whether ITMPs are in compliance with ss. 27(2) of the Act.
Section 36 is also related to the concept of network neutrality.
This section prohibits a Canadian carrier from controlling the content or influencing the meaning or purpose of telecommunications carried by it for the public.
The section does permit exceptions, but these must be approved by the CRTC. Thus the Commission could approve actions by carriers to control traffic on their networks that is illegal or otherwise harmful, or for other reasons consistent with the telecommunications policy set out in s. 7 of the Act.
Section 40 is one of a number of provisions in the Act that empower the CRTC to require interconnection of network facilities among carriers.
This power can be used to promote competition and greater interconnectivity among networks, including the Internet. In practice, today, most carriers negotiate their own network interconnection arrangements, but the CRTC, retains the power to order interconnection and specify the related rates and conditions.
Sections 41 and 41.1 regulate the use of unsolicited telecommunications, such as telemarketing phone calls.
Section 41 gives the CRTC a broad power to prohibit or regulate such communications. This power was seldom used by the CRTC in the first decade after the Act was passed.
In 2005 Parliament enacted s. 41.1 to 41.7. These sections specifically authorize the Commission to administer a national Do Not Call List (DNCL), similar to the ones that had been set up in other countries, such as the U.S.A.
Section 43 provides procedures that govern the use of public property, such as roads and rights of way by telecommunications carriers and broadcast distribution undertakings, such as cable TV companies.
The procedures encourage agreements between carriers and BDUs on the one hand, and the municipalities or other public authorities that have jurisdiction over the property. However, they also empower the CRTC to establish conditions for access to the property of the parties fail to agree.
In a decision in 2003, relating to Barrie Public Utilities, the Supreme Court of Canada ruled that subsection (5) of s. 43, did not empower the CRTC to regulate the conditions of access by cable TV companies (and thus telecom carriers as well) to poles and other support structures owned by provincially regulated electrical utilities.
Section 46.5 provides the CRTC with the authority to require all telecommunications service providers (and not just facilities-based carriers) to pay into a fund used to support access by Canadians to basic telecommunications services.
For many years, this contribution fund was used primarily to subsidize the cost of telephone service in high-cost areas, such as in remote parts of Canada.
In a 2006 policy decision, however, the CRTC defined access to broadband Internet service, as well as voice telephone service, as part of its "universal service objective". The Commission decided to establish new mechanisms under s. 46.5 to fund broadband Internet access across Canada.
This concludes our overview of the Telecommunications Act.