Canadian Heritage Committee on May 13th, 2008

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

Mr. Chair, I'm thrilled to be back. I want to thank my honourable colleague, Bill Siksay, for inviting me so that we can continue with the fascinating discussions we've had with Mr. von Finckenstein.

I'm really interested in the situation with new media in terms of the tool boxes the CRTC has for dealing with the Internet, because certainly the impacts, the pressures on the bandwidth, have changed dramatically in the last few years. I would say that I think--contrary to one of my earlier colleagues--we're not very far behind the times. Western Europe is dealing with this; the FCC is dealing with this. We're dealing with pressures that really didn't exist even three and four years ago. We now have VoIP, video-on-demand, VPN traffic, peer-to-peer. I mean, when CBC is using BitTorrent to transmit television shows, we're in a brand new universe.

I would have loved to have this conversation tomorrow, in the wake of the CAIP relief decision, but I will make do without being able to comment on that. I won't ask you to comment on what's happening with the CAIP-versus-Bell issue. But it's significant, because every time—if you look here or anywhere internationally—there's been a case of Net throttling, the argument about bandwidth management is always countered with issues of content interference.

I want to question you in terms of the tool box you have to make sure that content isn't being unfairly interfered with. Virgin CEO Neil Berkett called Net neutrality “a load of bollocks”. Excuse the term, but that was the term he used. He said they were already in discussions with content providers that if they were going to access Virgin pipes, they were going to pay more.

Section 36 gives you the right to ensure that no carrier shall “control the content or influence the meaning or purpose” of content, but it doesn't say anything about interfering with the speed of that content, interfering with accessibility of that content. Would you see a situation if a telecom starts telling customers that if they pay more money, they will get access to the Internet customers, and if they don't pay any fees, then they'll be in the slow lane? Is that an area where section 36 would come into play?

[Konrad W. von Finckenstein]

As you said in the introductory portion, this is a difficult subject for me to address because I have a real complaint before us, the CAIP complaint. As you seem to be very well informed on indeed, we're issuing the interim decision tomorrow. Then we will have the hearing on the merit in the fall. I apologize if I seem to be avoiding your question, but I'm trying to be very careful not to in any way jeopardize the due process of that proceeding.

Clearly, Net neutrality is a big issue. What does it mean? How do you address it? Everybody is struggling with it. When Internet service providers throttle, as you called it, traffic by some function or other, the justification normally is that the Internet is used for various purposes--your voice over Internet, the telephone Rogers provides you comes over the Internet, as does your e-mail, as does downloading, as does the uploading.

If you don't manage the traffic, it could be that your telephone conversation will be s.u.d.d.e.n.l.y t.h.i.s s.l.o.w, just because there's too much traffic. The Internet service provider is trying to make sure that the VoIP is uninterrupted and that e-mails go at a regular pace. To the extent that something can be slowed down without affecting the user, they try to do it.

Obviously they have to do this on an non-discriminatory basis. They obviously can't do it by favouring some users over others, etc. What do they actually do? What is the complaint? In the one case you mentioned, the Canadian Association of Internet Providers versus Bell, there's a specific complaint. I will be hearing the issues and we will be pronouncing on this. Other than enunciating the principles, really, I can't do more in answer to your question.

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

I understand your complaint, but theirs really right now is on the gateway access charge, so I'm not really interested in going there.

[Konrad W. von Finckenstein]

Unfortunately, they go further. They manage—

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

They do, but your decision tomorrow will be on the relief.

If I could just continue--I only have a few minutes here--at the time that Bell announced it was having a problem with bandwidth capacity and it was needing to throttle, it also opened up offers to its customers for unlimited downloads per month, if they paid a fee. The question I have to you—and I'm not asking you about Bell specifically—is whether in the tool box of subsection 27(2) or section 36 you have the tools necessary to deal with the fact that the telecoms are also content providers who are actually in competition with VoIP, with other VPN services. Do you have the tools necessary to ensure that Net neutrality will be maintained on the Internet?

[Konrad W. von Finckenstein]

I was going to answer you, before you made that last comment, on the Net neutrality.

Both acts, the Broadcasting Act and the Telecommunications Act, do not by and large provide AMPs. The only portion where it is in the Telecommunications Act is when Parliament enacted the “do not call” list, they also provided AMP. It is something we need in our tool box.

As you know, in telecom we went from an ex ante regulation to an ex post regulation. Take your hands off, let the market operate, and only step in when there's market failure. It also means, if there's market failure, you want to repair, and you should also have meaningful.... We don't have that. I would love to have AMPs on both the broadcasting side and the telecom side.

One way to do it is rather than amending the Broadcasting Act, you would put it in the CRTC Act. The CRTC, with respect to all the acts where there are ministers, which are only two, may have the power to administer monetary penalties. That will indeed enhance our tool box and could be used both on the telecom side and on the broadcasting side.

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

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

We now move to Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Commissioner, thank you for being here.

I wonder if you would be able to make some suggestions to the committee. Recognizing that you are not doing this without my personal invitation to you, could you provide us with a list of entities that you believe would have meaningful input into our AMP study?

In other words, I think all of us around here want to do a good job. We want to make sure we are exhaustive and that we hear from all the people who would have a position on this and have something they could add to it. I would like to invite you to provide a list of those entities to the clerk. It would be very helpful to the committee.

[Konrad W. von Finckenstein]

We'll gladly do that. There are basically three groups. There are the broadcasters and BDUs on on one side, the telecom companies. There are the various law societies or bar societies. There's also the user groups. Those are the three categories. I can give you names for each one of them.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you very much. I'm sure that would be a big help.

I wonder if you could give us your expert opinion on the technological constraints. Mr. Angus raised a couple of interesting issues where Bell and other service providers have gone into bandwidth management and so on and so forth. Some may see some of that activity as being nefarious, trying to squeeze the best they can out of the resource. Others would see it as the sheer reality that there is a finite volume, and until we get to more and more new technology of compression and other ways of managing things, then in fact to be able to broadcast on Internet at this point is relatively constrained, realistically speaking. I don't know if you would agree with that assessment or not.

What else has to happen, in your judgment? If you were in a science fiction movie and you could create whatever you wanted, what else has to happen for it to be practical for us to be able to telecast, virtually, on the Internet?

[Konrad W. von Finckenstein]

You can telecast on the Internet now. You can subscribe to some services. You pay a fee and you can watch programs online just the same as you can on your TV. As you quite rightly put it, there are constraints. Our whole broadcasting system right now has close to 500 channels that you can get over your cable system. If everybody watched that over the Internet, it would be an impossible overload. There are clear constraints regardless. You need more pipes, better compression facilities, and technology. Will we get that? Probably at some point, but I don't know how far out. It's clear that right now it is best used for short episodes or a complimentary run. It's ideal for marketing or for test marketing, etc. To have a full-scale service solely on new media, that capacity isn't there.

When and how will it come? I have no better crystal ball than you. All I know is that in all the developments on this, everybody who forecast the regular development and was audacious enough to outline it by way of a timetable was usually wrong. I am not going to hazard a guess here, but I think it will come and it will come quickly. It is not a slow progression. All the developments have been more or less breakthroughs and completely changed the paradigm. I would not be surprised at all if the same thing happened here.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Good. Thank you.

[The Chair, Conservative, Gary Schellenberger]

Mr. Bélanger.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chairman.

Mr. von Finckenstein, on the matter of the AMPs, you reminded us that when you appeared before the committee in March, as we were looking at Bill C-327...which I gather we might be disposing of today, perhaps, in the House if the recommendation is carried. You put on the table the matter of AMPs. I recall asking you at the time if the CRTC had ever presented such a request to the government and was turned down.

I don't know whether you recall that.

[Konrad W. von Finckenstein]

Yes. It was not during my tenure; that's all I can say. The subject of AMP has come up, but I do not recall this specific initiative. I don't believe they have--

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I was told at the time that, no, the CRTC had never tried, never asked for, and therefore never obtained that. My first question, therefore, is why wouldn't the CRTC ask?

You stated it yourself, that in other cases, and in the case of the Telecommunications Act with the “do not call” list, these tools were given to the CRTC as the act was being approved in Parliament. It's a matter of process, I suppose. Why wouldn't the CRTC put that request to the government?

[Konrad W. von Finckenstein]

There is absolutely no reason. I guess, indirectly, if I was appearing before you and suggesting this, I'm also putting it before the government. We have not had a session with the government to speak about legislative amendments, first, because there are enough very difficult issues on the agenda that the government is presently addressing. Copyright, for instance, is one of them. Secondly, I would rather present a comprehensive picture to them.

I raised this issue with that bill because it clearly was not there. The solution, as suggested by Mr. Bigras, in my view didn't work. But if you want to do something, it seems to me that this the logical thing.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

The reason I bring it up is that I think we all know that committees do not have the authority or power to propose legislation. It either comes from private members or the government. So if indeed there is a desire, and there might be, at the CRTC and around the community, to have this extra tool in your tool box--to use someone else's words--then I will ask whether it is the intent of the CRTC to make such a proposal to the government.

[Konrad W. von Finckenstein]

Mr. Bélanger, the short answer is yes. The question of when is a different one. I've been in my job for one year. It has been a rather hectic year, full of things that had to be addressed, and we haven't been able to develop a comprehensive legislative program to present to the government.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Fair enough. That's good. So we could expect that there would be such a request at some point in the future. If it's turned down at that point, a committee of Parliament could perhaps look into that.

On the matter of the new media, is the CRTC familiar with recommendation 2.9 of the committee's report on CBC/Radio-Canada, which was issued at the end of February of this year? I can read it to you. It said:

The Standing Committee on Canadian Heritage recommends that the CRTC, as part of its New Media Project Initiative, consider the need to protect the neutrality of carriage of Canadian public broadcasting content, and of CBC/Radio-Canada content specifically, over new media platforms.

Has the CRTC had a chance to look at that?

[Konrad W. von Finckenstein]

As I mentioned, on Thursday we are issuing our document on new media. We will then be hearing from the public as to the questions that should be asked as part of a full-scale hearing on new media.

Undoubtedly people will make reference to your committee report and suggest that one issue you have to address in this context is the CBC and neutrality of its broadcasting, or whatever the wording you were using. I'm sure we will then, in that context, decide this is how we're going to address it. Or perhaps we will say this is really something we should address in the context of the CBC licence renewal.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

The reason I bring it up is that the committee is expecting a response from the government by the end of June. From your answer I infer that thus far the government has not sought the CRTC's comments on this particular recommendation. I suppose all we can expect, then, as a response--when we get it--is, “We're looking into it and we'll have to keep you posted.”

That's unfortunate, because there are some things going on now in the marketplace that would have demanded perhaps a bit more reaction to this particular recommendation.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Go ahead, Mr. Malo.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you, Mr. Chair.

Mr. von Finckenstein, if I understand correctly, you wish to regulate the Internet, but you are in the process of determining how you are going to do so and how broad a mandate you are going to have. So, you are defining the way in which you are going to follow a process that will enable you to regulate the Internet.

Have I understood correctly?