moved that Bill C-216, an act to amend the Broadcasting Act (broadcasting policy) be read the second time and referred to a committee.
Mr. Speaker, it is my pleasure to begin second reading debate on Bill C-216, an act to amend the Broadcasting Act (broadcasting policy). The act has one objective and that is to control the relationship more completely between the Canadian Radio-television and Telecommunications Commission, which Canadians love to call the CRTC, and the public. For the purposes of this discussion I refer to the public as those people who presently receive television services by way of cable transmission, but this bill will also cover those Canadians who will soon receive television services by way of telephone lines or direct to home satellite services.
Controlling a relationship is never easy, we all know that. Yet this is a relationship, the connection between the CRTC and its public, which the Government of Canada through the Broadcasting Act brought into existence and which we by Bill C-216 can once again bring back under control.
There are three components or factors to this argument which I refer to for discussion purposes as the three c s. These are: cost, choice and culture.
Last year when the CRTC authorized the grouping or bundling of new programs on to cable carriers and at the same time allowed cable companies across this country to charge more for them, that commission, those people who are supposedly protecting us and nurturing Canadian culture, forgot, ignored, or what I would suggest, turned their collective backs on Canadian cable subscribers. The consumers had two choices: they either paid more or they received less.
Who in this place could forget the anger, the vitriol and the simple disgust of those who were being held for ransom? We, the representatives of the people in this place, were besieged, harangued and generally deluged with hundreds of calls from angry consumers who from their perspective generally knew that their pockets were being picked with the express consent of the CRTC, the very government agency which was put there to protect them.
Canadian consumers quite simply were held ransom by an industry with an astounding 52 per cent return on its capital investment. Who can forget at the same time the reaction of the CRTC, which referred to this practice of negative option billing as a necessary evil?
From my perspective as a representative of a certain group of people, it was a necessary evil to tell my constituents that they would receive, wrapped in the bundle of new channels, Canadian culture.
As to the issues of cost and choice, the CRTC chose not to do anything. Who can forget that Keith Spicer, the architect of this policy, was out of the country on vacation when this storm struck?
Keith Spicer, the so-called czar of Canadian culture, was on a foreign holiday as Canadians received a post Christmas gift they did not want.
While Keith was out exploring foreign cultures, members of the House were publicly stating, to use one quote, that the CRTC was in bed with the cable companies. Newspapers across the country gave anecdotal reports of what individual consumers felt and planned to do. All ridings across the country are certainly aware of that.
Let us in the House not forget that it was not the cable companies that decided Canadians would receive seven new channels they did not ask for. It was the CRTC that licensed the new services after deciding which, in its collective wisdom, were best for the whole country.
At the same time, it was the CRTC that permitted the packaging of new channels, totally unsolicited by Canadians, with popular
programs such as "CNN", an American network, to give its favourite seven infant channels a chance of survival.
The Globe and Mail noted in its editorial of January 7, 1995: ``Effectively the commission was levying a tax on television viewers to support quality broadcasting''.
Canadians some 15 months later understand what the Consumers Association of Canada observed in January 1995, that the equality for the practice was backward.
The CRTC and the cable industry justified the negative option tactic in the name of culture, but in reality it was driven by business imperatives. It is very interesting.
It was reported on January 7, 1995 that the president of Rogers Cablesystems, Colin Watson, in an interview which was reported widely across the country stated that this sleight of hand called bundling or negative option billing was the only way that Rogers Cablesystems could sign up enough new customers.
I do not have to suggest to anyone in the House or anyone watching the proceedings today that every business in the country would love to be the beneficiary of this kind of largesse which the CRTC was doling out but for which the Canadian consumer was being told they would pay.
Canadian viewers were being told what they could watch and what they would pay in the name of Canadian culture. Is it not interesting that one of the conduits of Canadian culture has today as its most popular program, according to the rating agencies, reruns of the "Mary Tyler Show", a great Canadian show, and that another has that hybrid of Cosmopolitan and Vogue magazines called the ``Fashion File'' as its most popular program.
In return for this, seven new networks were guaranteed cash for life-that is my term-by the CRTC. Cable companies, as we now know, reluctantly bent to public pressure. They bent in the sense that they apologized for the behaviour and most gave a window of opportunity to opt out of the new channels, but never did they allow Canadians to decide up front that they could decline the channels.
The onus, the burden, the obligation was decidedly on the individual within a certain timeframe to either cancel the channels or pay for them. This is a unique and tragically Canadian way of selling Canadian culture.
More important, did Canadians receive any assurances from the CRTC that this would not happen again? Apologize? The cable companies did. The CRTC? Certainly not. Mr. Spicer and his commission, in my opinion, are much too busy regulating to acknowledge any errors.
Last week my office received from the CRTC a recent bulletin which stated: "The CRTC regulates the rates but expects each cable operator to inform subscribers in advance what subscribers must do to have optional packages removed". I have to emphasize "removed", not "added".
The Canadian public today, 15 months later, does not have real choice on what services are to be added but only, in the words of the CRTC, what can be removed. Quite simply, negative option billing still survives. It is very much alive and well.
Canadians would also be upset to learn the CRTC is about to consider 40 new applications for specialty channels. Members of the House and Canadians will be pleased to know that the potential exists to receive, if the CRTC will bless them, such great Canadian programming as the "Horse Network", the "Home and Garden Network" and the "Mystery Network".
Forty corporations, most of them individuals who have recently incorporated shell companies, are poised to sell a concept which they hope will be richly rewarded by these guardians of Canadian television.
Soon telephone companies and direct to home satellite services will be channelling TV programming into homes across the country. What can those people expect? If we follow Mr. Spicer, the chair of the CRTC, in a speech delivered to the Canadian Cable Television Association, he noted that Canadian consumers want, deserve and will increasingly settle for nothing less than the maximum control possible over which services they select and pay for. As a consumer, Mr. Spicer agrees 100 per cent with that goal. He went on to say that full pick and pay, beyond a few rock bottom, common national interest services, can come only after this decade, meaning sometime in the year 2000 or thereafter.
With 40 applicants lining up, with new carriers pressing to enter the marketplace, we in the House have a choice, a choice we must make for consumers. That choice is clear. Bill C-216 would amend the Broadcasting Act, specifically section 3, so that consumers from this time forward will be given control over what they receive and the cost of what they receive.
Section 5 of the act imposes an obligation on the CRTC to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy which is set out in the act.
This bill would amend the broadcasting policy section, section 3, so that a cable distributor or other distribution undertaking, which could be a telephone company or a direct to home satellite company, could not demand money from a person for the provision or sale of a new programming service when the person has not agreed to receive the new service. In the vernacular, consumers will not pay for what they do not want. Certainly this is what consumers want.
The Consumers Association of Canada liked this bill. It issued a press release yesterday which called on members of the House to support it. At the same time the Public Interest Advocacy Centre has endorsed it. That group noted there are generations of laws protecting consumers against unsolicited goods and yet still today
cable companies, as merchandisers of goods, do not have to await the consumer's choice.
Section 3 of the Broadcasting Act imposes a statutory duty on the CRTC to be "responsive to the evolving demands of the public". Since the CRTC has been silent for 15 months, we as members of the House can now move to respond to the demands of the public. There are those who would suggest that as members of the House we have a statutory duty to uphold the laws of the country.
As is often the case there is always the question of powers between the federal government and the provinces. Certainly in the House we have the authority to regulate in this domain throughout Canada and we, the members of the House of all parties, have the opportunity to take in hand the rights and the interests of consumers.
The issue of provincial versus federal jurisdiction is as old as the country. The question of whether a law is intra vires or ultra vires has always been a healthy industry for the legal profession and certainly has kept the judiciary busy.
When the storm erupted over this issue last year the then minister of Canadian heritage stated, as was reported by the press, that this was a matter of provincial jurisdiction. He then a few days later acknowledged that broadcasting was four square within federal jurisdiction.
We must remember that cable companies as federally regulated undertakings can claim immunity from provincial laws, especially consumer protection laws. Quebec has a consumer protection act which would appear to forbid the practice. In section 5 of that act the following are exempt from the application of the title on contract regarding goods and services: contracts regarding any telecommunication service supplied by an operating company within the meaning of section 2.
Professor Hudson Janisch in an interview with the Ottawa Citizen January 7, 1995 noted that provinces are free to control commerce but they lose that control. Quebec acknowledged that in section 5 when it comes to federally regulated industries such as cable.
Professor Janisch, an expert and professor in regulatory law at the University of Toronto, pointed out that the Broadcasting Act instructs the CRTC to protect consumers as set out section 3 of that act.
There are a number of underlying factors we must realize. Consumer protection is not clearly federal, it is not clearly provincial. The federal government has jurisdiction over cable television pursuant to its powers. Consumer protection legislation, whether enacted by the federal or provincial governments, usually provides a remedy. This bill does not provide a remedy. Proposed Bill C-216 does not provide this remedy to consumers because clearly it is not consumer protection legislation.
The CRTC does not prohibit cable companies from using negative option billing, we all know that, to sell new discretionary services because it does not regulate discretionary services. It could regulate discretionary services but it has decided not to do so.
Instead it informs cable operators that it expects them to notify subscribers when they will be given new services and how to opt out if they wish. The CRTC is required by section 5 to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in section 3(1).
We know that cable companies have used negative option billing. There are 40 applicants which now want to get on the system and enter the homes of Canadians. There is a new method by which cable providers could still slide those services in without using negative option billing. If we assume there are four new channels, they will provide these services free for six or eight or twelve months and then will apply for a rate increase. We have the opportunity by this bill to stop these hybrid variations on negative option billing.
There will be those who say this bill is not necessary. I have heard representations from public servants who maintain this legislation is not necessary; it can be done by regulation, it can be done by ministerial directive, it can be done by all sorts of methods. We know that regulation changes. Regulation is not law. It is not in a statute. All of us know that ministers come and go and that ministerial directives can easily be changed.
The only assurance anyone could possibly give would be that there is no assurance at the moment unless Bill C-216 is passed. We must embody in statute, in the Broadcasting Act, that this practice is policy in this country. On behalf of Canadian consumers we must be willing to build a firewall between the CRTC and the consuming public to ensure that this does not happen again, either directly as it did last year or in some other hybrid variation.