Mr. Speaker, it is my pleasure to participate in this debate at report stage of my private member's Bill C-216.
This bill has one clear objective and that is to prohibit negative option billing by cable companies. This prohibition would also apply to other distribution undertakings as defined by the Broadcasting Act, such as direct to home satellite.
On Motion No. 1, I cannot support this amendment as proposed by the member for Richmond-Wolfe. The amendment would have the effect of defeating this bill totally. Quite simply, we cannot turn our back on consumers and leave the door open to a repeat of last year's cable fiasco.
I am fully aware of the position expressed by the Bloc critic in his belief that the consumer protection act in the province of Quebec prevents negative option billing by cable companies. However, I must say I am confused in that I heard that argument and then I also heard the argument that if it applies in Quebec it should not apply outside the province of Quebec.
The reality in Quebec is such that all new programming services are marketed through negative option billing. In fact in most cases the Quebec consumer is afforded less choice by cable companies than elsewhere in the country. In Quebec new services are simply tacked on to the basic service and the price goes up. There are no additional tiers of specialty services.
The cable television industry has a unique and powerful position in providing programming services to Canadians. Very few industries are capable of supplying a service directly into our homes 24 hours a day, 365 days per year.
More important, in this country the cable industry has a monopoly on the service it provides. The cable industry abused its unique and powerful relationship with consumers by employing an outrageous billing practice known as negative option billing to market the last round of specialty channels.
With the CRTC's blessing the cable monopolies added new specialty channels to existing services and increased the price, but apparently no one felt it necessary to ask consumers and customers if they wanted the new service. The onus was on the customers to somehow contact the cable company and cancel the service before it was charged to their bill. To add insult to injury, some of the larger cable operators packaged the new channels in such a manner that by cancelling them the customer would lose existing services.
By mid-January 1995 the cable companies finally backed down on forcing customers to cancel existing services to avoid new ones. Apologies were issued. Free viewing periods were extended. However, the onus was still on the customers to somehow cancel the new service before it appeared on their bills. The negative option survived and remains a threat to this very day.
This bill was first tabled in February 1995 in response to Canadian consumers who demanded that we put an end to this practice. The bill was reintroduced in this session of Parliament and passed second reading on April 30, 1996 and I might say by an overwhelming majority. It was then referred to the Standing Committee on Canadian Heritage.
In May, the committee heard testimony from various consumer groups, representatives of the cable industry and officials from the CRTC. In committee on May 30 of this year the parliamentary secretary to the Minister of Canadian Heritage moved an amendment to Bill C-216. The amendment was adopted by the committee and the bill was reported back to this House as amended.
The parliamentary secretary's amendment fine tuned and improved this important piece of legislation. I would like to thank the hon. member and indeed all members of the committee for their efforts in this regard.
The House should also note that the parliamentary secretary's amendment to Bill C-216 came as a result of testimony from the CRTC. CRTC officials had suggested the alternative wording as a means of improving the bill.
Some would say that a legislative end to negative option billing by cable companies is not necessary because the cable companies have learned their lesson.
We heard last week from the new chair of the CRTC as she announced 23 new specialty channels. We heard the former chair, Mr. Spicer, when he testified before the heritage committee. He said the issue was dead, but if we wanted to make certain it was dead we could do so and he would send flowers. He also stated that there was no harm in passing Bill C-216; this from the then chair of the CRTC.
The head of the Canadian Cable Television Association, Mr. Stursberg, testified at the committee that the cable industry would only use positive option billing practices. They said it will not happen again. If it will not happen again, I am prepared to call their bluff. This past week I received confirmation that contrary to what
the cable industry would have us believe it intends to use negative option billing to market the new round of specialty channels.
I received a call from Pauline Couture, a lobbyist who represents one of the 23 new specialty channels. She freely admitted that her client's business plans call for a negative option marketing strategy. When I asked how she reconciled this fact with the pledge made by the cable industry, she stated that in her view there are different kinds of positive option billing.
We can see that the industry intends to keep its pledge to consumers. It will use negative option billing but it will call it something else. That is not good enough. It said it will not happen again. Then why is the industry still trying to derail Bill C-216?
It was reported in the press last week that André Bureau had been lobbying MPs to speak against this bill. Interestingly, the same André Bureau was until 1989 the chair of the CRTC and could probably be described as the godfather of negative option billing. He was the person who first validated the practice. He is now the president and CEO of Astral Broadcasting, a group which is in the marketing of specialty channels.
With respect to the proposed amendment moved by the critic from the Bloc, I would tell my hon. colleague that I disagree with him on the issue of jurisdiction. I should point out that cable companies, telephone companies and direct to home satellite companies are all federally regulated undertakings. As such they can claim immunity from provincial laws, especially consumer protection laws. If my hon. friend would take the time and closely read Quebec's consumer protection law, he would see that in section 5 of the act there are services which are in fact exempt from the application. It refers to contracts regarding any telecommunications service supplied by an operating company.
Finally I would ask my hon. friend from the Bloc if, as his party maintains, Quebec has already solved the problem of negative option billing by the cable industry then why should we in this House neglect to do the same for the rest of the consumers in Canada?
Speaking with respect to Motion No. 2, which is the one I have proposed, I would like to briefly explain why I have proposed this small change to Bill C-216. My amendment would delete the words "offered by an undertaking licence" from line 11 of Bill C-216.
Quite simply these words which were added as part of the amendment passed at the committee stage are redundant and I must emphasize redundant. They are unnecessary because paragraph 3(1)(t) of the Broadcasting Act, which my bill seeks to amend, already states clearly that we are talking about distribution undertakings, in other words, cable companies that are licensed to provide programming services.
Since the Broadcasting Act already makes this crystal clear, there is no need to include these additional words in Bill C-216. As a result I would encourage all members to support Motion No. 2 which is the motion fine tuned which was proposed and put forward by the parliamentary secretary and was the amendment proposed by the CRTC itself.