Canadian Heritage Committee on March 1st, 2007

[The Chair, Conservative, Gary Schellenberger]

Good morning, everyone. I'd like to call this meeting to order, please.

This is the 39th meeting of the Standing Committee on Canadian Heritage. Pursuant to Standing Orders 110 and 111, we are dealing with the order-in-council appointment of Konrad von Finckenstein to the position of chairperson of the Canadian Radio-television and Telecommunications Commission, referred to the committee on February 22, 2007.

I welcome Mr. von Finckenstein here this morning.

Before we take your presentation, sir, and the questioning, I would just like to remind the committee of our House of Commons procedure and practice when we interview a candidate such as Mr. von Finckenstein:

The scope of a committee's examination of Order-in-Council appointees or nominees is strictly limited to the qualifications and competence to perform the duties of the post. Questioning by members of the committee may be interrupted by the Chair, if it attempts to deal with matters considered irrelevant to the committee's inquiry. Among the areas usually considered to be outside the scope of the committee's study are the political affiliation of the appointee or nominee, contributions to political parties and the nature of the nomination process itself. Any question may be permitted if it can be shown that it relates directly to the appointee's or nominee's ability to do the job.

With that, Mr. von Finckenstein, you have the floor, sir.

[Konrad W. von Finckenstein, Chair, Canadian Radio-television and Telecommunications Commission]

Thank you, Mr. Chairman.

Good morning Mr. Chairman and members of the committee.

It is pleasure to be here today to talk about my appointment as Chairman of the Canadian Radio-television and Telecommunications Commission.

When we appeared before you last week, we jumped right into the issues surrounding the Canadian Television Fund and so I did not have an opportunity to properly introduce myself.

I was born and raised in Germany and came to Canada when I was 17. I have a bachelor of arts from Carleton University and a bachelor of laws from Queen's University. I joined the public service in 1973 and since then I have had a number of positions in the public service. In 2003 I was appointed a justice of the Federal Court of Canada, a position I resigned to take this position.

On the Federal Court, I heard many interesting legal disputes involving various industries and areas. I handed down decisions on cases involving immigration and refugee law, intellectual property, particularly copyright, private law and administrative law.

Before that, I had the privilege of serving as Commissioner of Competition and head of the Competition Bureau for a period of seven years. During that time, I was responsible for the enforcement of the Competition Act, as well as championing the promotion of competition in every field of policy-making. This involved, among other things, reviewing proposed mergers between companies, including banks, airlines, and broadcasting companies; and investigating allegations of anti-competitive behaviour, such as price-fixing and deceptive marketing practices.

The Competition Bureau and the CRTC have a history of working together, given that their roles in certain areas are complementary. For instance, the bureau is a frequent intervenor before the CRTC on matters related to competition, and both organizations have the authority to review and approve certain transactions. In fact, during my term as Commissioner of Competition, an interface agreement was drafted to clarify the organization's respective areas of responsibility.

My predecessor, Françoise Bertrand, and I both got involved personally in the interface agreement and are very proud that we managed to lay down the lines of interacting with each other. Some parallels can be drawn between my role and my past experience as a judge and the Commissioner of Competition. The common thread is the importance of maintaining impartiality and objectivity in seeking out the information required to make good decisions.

I have also had the opportunity to be involved in some challenges facing our country from an international perspective. A few years ago, for example, there was a need identified by organizations that we had to bring the competition regimes around the world together. Competition is a bit of the flavour of the day, and there was a danger that everybody was going a different way.

We have created something called the International Competition Network, which brought all the competition agencies and the practitioners from the world together to have the best minds in public and private employed in competition in laying out how competition regimes should perform and on what principles it should work. I had the privilege of being the chairman of that network. It's now in its seventh year. It's holding its conference in Russia this year.

I hope that this brief outline of my qualifications has provided you with a good idea of my experience and depth of expertise in commercial and competition law, both in a national and international context. I have been proud to serve Canadians in my various capacities, and I'm honoured to have been appointed as Chairman of the CRTC at such an important moment in its history.

I trust my comments have been useful. I will be pleased to answer any questions you have.

[The Chair, Conservative, Gary Schellenberger]

Thank you, sir.

Mr. Scott.

[Andy Scott, Liberal, Fredericton, NB]

Thank you very much.

Welcome back.

[Konrad W. von Finckenstein]

Thank you.

[Andy Scott, Liberal, Fredericton, NB]

My questions will be limited to any sense of previous position. I ask these questions respectfully; I think that's the purpose of this exercise, and I think it's a healthy one.

During the course of the discussions we had earlier this week, one sentence in the text--I mentioned it in the questioning at that time--said that Shaw and Vidéotron had expressed some concerns about the operation of the television fund, and that those had not been addressed. I took that to be a bit of a statement of predisposition, because if the television fund people had been here I'm sure they would have said those concerns were addressed--and others weighed in as well.

Again I do this very respectfully. You see the need for complete objectivity--you said that here and you said that then. There are some pretty fundamental questions here about the fact that in Canada we invest in a private broadcaster, the relationship with American broadcasters, how we have to protect our cultural sovereignty, and all of those questions. How would you respond to a question of your predisposition on those kinds of issues? That would be of concern to us. I would welcome reassurance.

[Konrad W. von Finckenstein]

As you know, I'm a lawyer and a former judge. I approach these things through that prism.

First of all, what is my mandate, the objectives of this job? The mandate is clearly laid down in the two key acts: the Broadcasting Act and the Telecommunications Act. Of course there's the CRTC Act for the governance of the organization and such. They are clear. If it's broadcasting, which is what you're talking about now, the objectives are clearly laid out. My job is to make sure we attain those objectives through the tools given by that job.

Of course, we can't act in isolation. We have to take into account the industry reality that people in this industry expect to get a return on their money. While we regulate--and that's the objective--we also live in a free-market economy. We want to make sure that market forces, to the extent they are helpful, can be deployed to their fullest, because that's the best way we have for creating wealth and opportunity and having an expanding economy.

But clearly the overriding objective is set out in the Broadcasting Act. It is to make sure that we have Canadian content, that the broadcasting system reflects Canadian society and Canadian values, and that Canadians see themselves reflected in the broadcasting offered to them. So those are the things we balance in trying to come up with the appropriate mix.

[Andy Scott, Liberal, Fredericton, NB]

As a national body mandated by Parliament and representing public interest, you would be aware of the fact that there are those of us who were concerned about the decision you announced earlier this week that the task force work would be done privately; that the report would be public but the exercise would be private. Can you explain your decision in that regard and how you square that with the obvious public interest this exercise speaks to?

[Konrad W. von Finckenstein]

Yes, with pleasure.

There are all sorts of assertions and allegations about the CTF, how it functions and what it does and doesn't do. The first thing is, let's have the facts. Let's find out what the facts are and have people speak to us in the comfort of confidentiality so that they can point out what their concerns are without the fear of reprisals or adverse consequences. That's why I said let's have a task force, headed by my colleague, Michel Arpin. Let's find out what the facts are.

I mentioned to you or in response to a question from one of your colleagues that if you are a producer and you are funded by the fund, and then you sell your product to the BDUs or to the broadcasters, you'd be very careful what you say in public, because these are the very people who control your life as to you being funded or who will buy your product, and so on. However, if you really have serious concerns with the fund, hopefully you will lay them out to Michel. Michel then will gather all these facts and make a report saying these are the facts.

It seems to me these are some of the possible solutions. Or maybe there actually is a consensus. Wonderful. If not, these are possible options.

At that point in time, having the facts as he found them on the table, we will make the report public. You will probably summon Michel and me to come here and explain the report, and then we have to decide what is the best way of going forward. But first of all, I need a factual base. At this point in time, we have nothing but a whole set of assertions and allegations. I lack the factual background, the factual documentation in order to even attempt to find out how to solve this issue. As I say, it may very well be that there's a lot of common ground that gets lost in the exchange of recriminations and allegations and so on.

[Andy Scott, Liberal, Fredericton, NB]

My time is up.

[The Chair, Conservative, Gary Schellenberger]

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chairman.

Good morning Mr. von Finckenstein. I am delighted to see you again, in these different circumstances.

In your written statement, you say that you are honoured to have been appointed as Chairman of the CRTC at such an important moment in its history. Indeed, the Minister of Industry has just issued an order concerning local telephone. He has also criticized how the CRTC operates.

I would like to know how you intend to deal with the minister's most recent announcement of this measure which will come into effect in April, if the minister maintains his position.

[Konrad W. von Finckenstein]

As you know, certain provisions in the Telecommunications Act allow the minister to issue orders. They must be general orders. They must be tabled at this committee and publicly debated. They can then be amended or left as is.

Under the current system, the CRTC acts as an independent organization and carries out daily work concerning telecommunications. In the context of the government's general direction, Minister Bernier can decide to igive us orders. Once consultations have been concluded, the decision is final and we must comply with the orders. We are given broad instructions and use these as our framework. It is within this specific framework that we make specific decisions on a case-by-case basis.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Under the act, your responsibility is to make sure that in the absence of true competition, the regulation must be applied in order to establish a truly competitive environment.

However, the minister believes that the CRTC is not on the right path, and he wants to see it follow a specific direction. How are you going to deal with this? Is there a difference between what you are currently having to face and what you did face when you were Commissioner of the Competition Bureau?

[Konrad W. von Finckenstein]

Pardon me, can you please repeat the last part of your question?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

We spoke about the need to allow for real competition in these markets. In this sense, is there a difference between your former role as Commissioner of the Competition Bureau and your role as Chairman of the CRTC?

[Konrad W. von Finckenstein]

As Commissioner of the Competition Bureau, I was the champion of competition. I looked at everything from a competitive point of view. My role was to spear competition, whereas my role as Chairman of the CRTC is to administer telecommunication systems and to develop regulations. One of our main objectives is to deregulate to the furthest extent possible. In the area of telecommunications, we must make sure that there is access, and interconnection. I do not see any contradiction between these two roles.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

If the minister maintains his order on local telephony, what do you have to do to make sure that it is applied?

[Konrad W. von Finckenstein]

This is a matter of policy. There is no wrong or right way of moving ahead. It is a matter of degree.

The minister has chosen an approach that is slightly different from that of the Commission, and this is his right. If you approve this order, the decision will be final. The decision, for us, becomes a guideline. The one we are currently following is slightly different, but nobody really knows which of the two is the better one. For our superiors, the goal is to deregulate the sector as much as possible.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Are you under the impression that your role as Chairman of the CRTC will get you to look at how the market will react following the minister's order?

[Konrad W. von Finckenstein]

We are going to enforce this order, because it is holistic in nature. Naturally, we enjoy some leeway in interpreting the order. Regardless, we are going to move to implement the order in accordance with what it clearly states.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

If the order is implemented, do you believe that the CRTC would have the mandate to comment on the repercussions of its implementation one year later?

[Konrad W. von Finckenstein]

You're asking me to predict what will happen, which is always a bit dangerous. If, in one year, we see that the order, and the way it has been interpreted, are not working and go against the general policy, we will attempt to find ways to avoid the adverse consequences.

[The Chair, Conservative, Gary Schellenberger]

Your time is up.

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

Thank you for coming back, Mr. von Finckenstein. We're feeling like old friends here; we keep meeting like this.

I'd like to follow up on our discussion of the other day on the whole role of moving forward on closed-door meetings. We've already discussed the CTF, so I'm not going to go there, but I'm interested in the role of the CRTC and how it accomplishes its stated goal, which I found under “Accomplishments 2005-2006” on its website. It said the commission processes are “fair, transparent, and effective.” Yet since 2003 the CRTC has made at least 90 decisions involving transfers of ownership that have had no public process whatsoever, no publication, no gazetting, no intervention process.

In order for justice to be seen to be done, I'd like to get your perspective on how we ensure transparency and openness when there's a major amount of change being made apparently behind closed doors.