To regulate, forbear or disappear: will the CRTC get starved out of existence?

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“There’s no such thing as summer any more.”

Michael Hennessy, Telus, June 30, 2011

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Over the months you may have noticed me finding fault with the way the CRTC does its job. Not only has the Commission demonstrated a highly skewed interpretation of the public interest. It has done so across an ever-expanding list of issues touching on consumer welfare: the new media exemption order, speed matching, ITMPs, UBB (times 2 or more), vertical integration, broadband target speeds, OTT content and Netflix, on it goes. It’s hard to gauge whether all this adds up to more than it used to be. Maybe it’s the writer’s cramp. A figment of my tired imagination?

Well, imagine the gratification when I came across the Wire Report piece entitled “Insiders expecting ‘busy as hell’ summer on the regulatory front” (June 30: subs can go here). Michael Hennessy, not one to complain about having to show up at hearings, suggests there’s been a serious jump in the overall workload:

There’s no downtime in the regulatory agenda anymore. It never stops… It seems every year gets busier. There’s no such thing as summer any more.

Add PIAC’s John Lawford, another guy who’s earned some time off, who admits that finding summer vacation time is “trickier than it used to be.” And to think Ottawa was once famous for how little got done during the dog days of summer.

Follow the money

Then I had a charitable thought. I carp about how little research the Commission undertakes, the poor quality of its decisions, the truly lousy quality of its Web site and its infatuation with phony-baloney online consultations, to mention a few. But if the consensus among insiders is the workload is getting worse, then maybe there’s another angle – besides regulatory capture, cultural lag and anomie. Does the Commission have the resources to keep up? Are they “broke”? Why didn’t I think of this sooner?

Any self-respecting policy wonk should have a copy of the Main Estimates handy, but better late than never. Actually the Estimates (get ’em from Treasury Board Secretariat, here) didn’t have the nice neat trendline I was looking for: the CRTC budget numbers graphed over a multi-year period. That’s what you see in the figure below, taken from the CRTC Report on Plans & Priorities (2011-2012): Expenditure Profile (another TBS special, here). Yes, I’m aware this isn’t the whole story. And yes, just because some of the usual supplicants are skipping trips to the cottage doesn’t necessarily mean the CRTC is doing more with less. But it sure looks that way to me…

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The CRTC’s budget: flat or lower, out to 2013-2014

Source: CRTC Report on Plans & Priorities (2011-2012) - Spending Profile (p.18)

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Let’s take FY2010-11 as our starting point and break out the yearly spending changes:

Year-over-year changes: CRTC spending

– 2010-11 to 2011-12 = +$0.6 mill or +1%

– 2011-12 to 2012-13 = ($0.5 mill) or (1%)

– 2012-13 to 2013-14 = ($0.2 mill) or (<1%)

Looks almost flat – except these figures are in current, not constant dollars. That pretty much ensures that in each of the three years tabulated above, the CRTC’s budget will have shrunk (the Bank of Canada online calculator indicates our money declined 3.7% in value from 2010 to 2011).

Ballet vs broadband

For as long as I can remember, successive governments have made lots of noise about how federal departments have to tighten their belts. It seems the current Ottawa gang is determined to follow suit. Last month James Moore, responsible for the CRTC as Minister of Heritage, warned “all government spending, except for health care and support for seniors, is under review” (July 12, CBC News). Finance Minister Jim Flaherty made the news a month earlier when he delivered an even more ominous warning to Canada’s whole arts and culture community: stop counting on regular federal funding. I have a theory about that.

Conservatives aren’t known for being big supporters of the arts. But Moore has let it be known that the idea Conservatives don’t support the arts is just a mean-spirited “stereotype.” He explained his position by saying the government “fully understands the importance of culture to Canada’s economy.” Culture’s astonishing economic multiplier effects may not be as grand as, say, the social benefits of an enlightened mind, but the arts groups that want to keep the money flowing from Ottawa need the we’ll-all-get-rich argument to win over doubters. I see lots of reasons for Moore and his colleagues to keep the culture-vultures happy – not the least of them being they know how to use a megaphone very effectively.

On the other hand, Conservatives are really, really not well known for being supporters of regulation. On the contrary, this is the government that is fond of turns of phrase like “unnecessary, job-killing regulation” – as though killing jobs might actually be a sacrifice the CRTC would contemplate in order to, oh I dunno, protect consumers from rapacious, lying, cheating broadband incumbents (phrase taken from the 2010 digital economy consultation paper, p.13).

I believe this Conservative government has every reason to starve the CRTC of resources. I’m not saying the financials cited above prove anything, not yet at least. But if I were betting on federal budget to strengthen the arts, versus federal budget to promote the regulation of telecom, the arts would get my chips every time, no matter how philistine these Tory pols may appear to be. Look at how the table’s been laid. The Commission continues to operate under the absurd 2006 “market forces” cabinet direction, which requires it to regulate as little as possible while leaving the market to achieve Canada’s policy goals (regulate telecom less, of course, not broadcasting). The incumbents, including the four vertically integrated conglomerates, have momentum, ideology, money and market share all going for them. Meanwhile, who’s beating at Moore’s door on behalf of those that regulation is intended to protect – say, for example, the now one million Canadians who subscribe to Netflix? Nobody, that’s who.

Keep an eye on the CRTC and its resources. As the Commission and usual suspects keep getting busier (if indeed that’s the trend), watch the Tories to see if they do anything to make the Commission at all like the “consumer-protection agency” Denis Carmel says it isn’t – whether that takes the form of cold hard cash, or alternatively, the form of badly needed, long overdue amendments to our Broadcasting Act and Telecommunications Act, respectively.

Compared to what?

Meanwhile, is there anything we can learn from other jurisdictions? Is the CRTC a thing sui generis – or can we compare it to other regulators and their current fate? Well, it turns out there’s a very useful political lesson waiting for us in Washington and London.

The FCC. President Obama’s 2012 budget requested $354.2 million for the FCC, up from $335.8 million in 2010 – an increase of just over 5%. But those tireless House Republicans want to rid the planet of any net neutrality horseshit and all the other job-killing regulations the Genachowski gang comes up with. So the counter on the table (before the debt blowout anyway) is this: the FCC is going to have to settle for $319 million, a decrease of 5%. Well, a decrease of about 10% from Obama’s target.

Ofcom. The Register reported last month that Britain’s communications regulator, Ofcom, has reduced spending by 28.2% in real terms, or £26.7m. It also says the budget for next year will be £116.2m, down from £145.42m in the last year – a further decrease of some 20%. This hilarious news item points out Ofcom says nothing in its latest annual report about DAB, digital audio broadcasting – but has plenty to say about reducing its carbon footprint and being in a select group of employers that treat women in a civil fashion. El Reg also reminds us that the Conservatives have “vowed to abolish uber-regulator Ofcom, or at least reduce it to a table, a few chairs and a kettle.”

That’s a burning question angry critics of the CRTC should be asking themselves. Do they really want to make common cause with the right-wing ideologues who are out to kill “job-killing” regulations – and the regulators who promote them? Is there writing on the wall in London and Washington?

D.E.

2 thoughts on “To regulate, forbear or disappear: will the CRTC get starved out of existence?

  1. Excellent post again, and as usual, David.

    Earlier in the decade, and based on hearsay from those I know in the bowels of the beast that is the CRTC, the number of people working there was up, the number of files in play up, budgets up, etc. So, dereg my arse, but regulation as part of the machinery of buttressing powers that be.

    That said, you’re bang on about needing to worry about criticism — and incessant criticism of CRTC — must avoid being complicit with knuckle draggers who sing libertarian hymns to their flocks and would like to see nothing more than a stake put through the poor beast’s heart.

    We need a better away not a throw away, I think is your key point, and I’m foursquare behind you. Thanks again for the great posts as of late. DW

  2. Pingback: Will the CRTC get starved out of existence? | Life on the … | Telecom Regulation

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