Thank you.
Good afternoon, members of the committee. My name is Pam Dinsmore and I'm the vice-president of regulatory cable for Rogers Communications.
Thank you for the invitation to outline Rogers' views regarding the ongoing North American Free Trade Agreement renegotiations.
Rogers is one of the largest Canadian telecommunications and media companies. We provide Internet and telecommunication services on both a wireline and wireless basis. We are also creators and distributors of content. We operate two over-the-air local television stations, City and OMNI, a number of speciality channels, including Sportsnet and FX, 55 radio stations, a suite of digital publishing brands, including Maclean's and Chatelaine, and cable systems in Ontario and Atlantic Canada. We employ over 25,000 Canadians. We have a broad perspective and a profound interest in the outcome of these trade negotiations.
In my remarks today, I will address three key areas: copyright, telecommunications, and the cultural exception. I will start with copyright.
A number of issues emerged out of the United States trade representative's process, with recommendations that Canada be required to make changes to its copyright legislation through the NAFTA renegotiation. We are concerned that the scope of the renegotiations could be broadened to include copyright issues that were not addressed in the existing agreement. These issues include replacing the made-in-Canada “notice and notice” infringement complaints system with a “notice and take down” regime, providing U.S. over-the-air broadcasters with exclusive retransmission rights over their freely available signals, repealing or amending the Copyright Modernization Act's personal use and intermediary exceptions, and/or taking away the protections granted to Internet intermediaries, such as ISPs and search engines.
The 2012 Copyright Modernization Act was carefully developed by Parliament over many years and is designed to serve the interests of all Canadians in its balance between rights holders and users of copyrighted works. We are concerned that a trade renegotiation, where copyright issues are used as bargaining chips, could endanger this delicate balance. In our view, any changes to our domestic copyright laws should be made through the upcoming five-year review of the Copyright Modernization Act, not through the NAFTA renegotiation.
In the area of telecommunications, I would like to comment on two of the USTR's objectives for the telecommunications sector set out on July 17. The first is the objective to promote a competitive supply of telecommunication services by facilitating market entry through transparent regulation and an independent regulator. Canada has an independent regulatory agency, the CRTC, which is transparent in both its rules and its decision-making processes. In fact, its processes and procedures are very similar in nature to those exercised by the Federal Communications Commission in the U.S.
Also, the current Canadian foreign ownership rules already permit market entry by foreign firms into the telecommunications sector. Canada's Telecommunications Act exempts companies with less than 10% of the Canadian telecommunications market from foreign investment restrictions measured by revenue. The U.S. and other foreign companies can enter Canada today, either as a start-up or through acquisition. As an example, the Zayo Group acquired Allstream in early 2016. If the rules were changed to permit U.S. companies to acquire Bell, Telus, or Rogers, this would not promote a more competitive supply of telecommunication services, but instead would simply replace one large provider with another.
The second objective I will comment on is the desire of the USTR to secure commitments to provide reasonable network access for telecommunication suppliers through interconnection and access to physical facilities and scarce resources. This regime is already in place. The CRTC has implemented well-established rules of regulated access, including mandated tariffs for telecommunication suppliers to interconnection services, as well as access to essential physical facilities. This regime is used today by literally hundreds of foreign and domestic telecom service providers operating in Canada. Zayo is an example of a U.S. company that uses these rules and has participated in their formulation by the CRTC.
Lastly, I would like to voice Rogers' support for the emphasis the minister for Global Affairs Canada is placing on the maintenance of the cultural exception in NAFTA. Some parties in the USTR process called for the liberalization of foreign ownership rules as they pertain to broadcasting, as well as modifications to section 19.1 of the Income Tax Act.
Others went further and asked that the cultural exception be modified to improve market access for U.S. goods or be eliminated altogether. In our view, section 19.1 of the Income Tax Act, as well as the foreign ownership rules that flow from the direction to the CRTC regarding ineligibility of non-Canadians, are important components of the cultural exception. The foreign ownership rules exist in part to ensure that, as section 3 of the Broadcasting Act stipulates, “the Canadian broadcasting system shall be effectively owned and controlled by Canadians”. This enables the various players who contribute to the health and success of the system to fulfill cultural policy goals for the benefit of all Canadians.
With respect to section 19.1 of the Income Tax Act, we believe it should be strengthened to also apply to foreign digital players, not eliminated.