New Rules Give CRTC Power to Penalize Telecom Giants

Telecom rule-breakers can now face fines
December 17, 2014 Updated: December 18, 2014

OTTAWA—An open Internet advocacy group is hailing new powers the CRTC has to fine telecom companies that break the rules as a victory for the little guy.

OpenMedia says the Canadian Radio-television and Telecommunications Commission’s new powers come after a years-long campaign the group has led to give the regulator the power to levy financial penalties on telecom providers who mistreat customers.

While the CRTC is the agency that regulates broadcasting and telecommunications, it’s been described as toothless for its inability to fine companies that break the Telecommunications Act.

That is now set to change after Bill C-43 passed in the Senate on Dec. 16, making a host of measures from the government’s omnibus budget bill the law of the land.

While certain measures in the budget bill have attracted criticism—like giving provinces the right to impose a minimum residency period on immigrants before granting them access to social assistance—the changes to the CRTC are being praised.

OpenMedia, a community-based group that advocates for an open Internet and digital policy based on informed citizen participation, said giving the CRTC the power to levy fines is one of several measures the group has been calling for.

“We’re thrilled that James Moore has responded to another of the 10 major policy asks we put forward when he first became industry minister. These new powers are a great response to hundreds of thousands of Canadians who participated in our crowdsourced policy plans for wired and mobile Internet in Canada,” said OpenMedia campaigns manager Josh Tabish.

“Together with measures such as the Wireless Code of Conduct, these new powers are a huge win for Canadians and a significant step toward reining in our telecom giants.”

OpenMedia is now hoping the fines will be significant enough to deter “bad actors.”

Industry in Flux

OpenMedia has long railed against the high rates for Internet access, as well as Internet service providers’ willingness to share user information with police without due respect for privacy.

The group says Canada’s large telecoms, which control the transmission lines the Internet is accessed through, have a vested interest in charging high rates for Internet access as a way to maintain subscribers to their television services.

Those telecoms are facing fundamental threats to their business models as Canadians move away from the television to consume their favourite TV shows online and on-demand through providers like Netflix.

The CRTC has been wrestling with how to deal with Netflix and has asserted it has the power to regulate online services, something Netflix and Google have denied. During a showdown at recent hearings held by the CRTC, Google and Netflix refused to provide Canadian content and subscriber information.

Michael Geist , a law professor at the University of Ottawa where he holds the Canada Research Chair in Internet and E-commerce Law, has said the CRTC could take the matter to court and does have a case, but is unlikely to do so due to a lack of government support.

Geist calls the battle over Netflix and the future of broadcast one of the biggest stories of the year. It’s far from over.

With telecoms struggling on the one side, and consumers struggling on the other, it’s somewhat difficult for the CRTC to score a win these days.

The new rules come into effect just as Shaw, one of the largest Internet providers in Western Canada, announces plans to hike Internet rates.

The CRTC says it will take time to figure out exactly how to use their new powers. In a statement released Wednesday, the regulator said monetary penalties give it another tool to compel companies to follow laws and regulations.

The CRTC said it will give details in the weeks ahead on how it intends to use its new powers.