CRTC chairman Konrad von FinckensteinSean Kilpatrick/The Canadian Press
As Canada's top telecom executives met with the federal regulator this week in Gatineau, Que., the tense discussion was interrupted by a PA announcement: "We wish to inform you that the water in this building is now safe to drink."
The cryptic news broke up the normally staid proceedings of the Canadian Radio-television and Telecommunications Commission. But judging from the sometimes hilarious, sometimes angry nature of the discussion, perhaps there was something in the water.
At issue is whether huge telecom providers, such as BCE Inc.'s Bell Canada and Rogers Communications Inc., will share their newer, more advanced networks with small resellers who already lease space on existing networks.
From Monday until Thursday, when hearings concluded, both the regulator and the companies it regulates have grappled with the problem of how to discuss future investments and possible negotiations with competitors present.
"We'd negotiate anything. Bite me. This is bullshit," Michael Hennessy, Telus Corp.'s vice-president of regulatory and government affairs, told the commission on Thursday, after being asked repeatedly how Telus would negotiate.
Earlier, BCE president and chief executive officer George Cope, said he did not want "to talk about future technology with our cable competitors in the room."
Companies were understandably cagey as billions of dollars and the future rollout of advanced technology in Canada are at stake.
Telecom firms submit reams of documents ahead of CRTC hearings and many of these are kept private. But not everything can be done behind closed doors. The regulator has to consider the public interest, given that some of the companies under discussion are former monopolies with a head start on building infrastructure.
Greg MacDonald, a telecom analyst at National Bank Financial Inc., said the regulator has done an admirable job in the past of balancing corporate, government and public concerns.
But the current negotiations are unusually tense. Big companies say they won't invest in new networks if they have to share, while small resellers say they could be forced out of the market if kept off the next-generation of telecom infrastructure, such as fibre-optic cable.
Because of this, the usual mixture of tedium and tension at CRTC hearings veered towards conflict. "I'm tired of being misled by you guys not answering my questions," Konrad von Finckenstein, CRTC chairman, told telecom executives.
Matters were not helped by the complex technologies being discussed. Folksy analogies were plentiful. Bell's Mr. Cope compared the proposed opening up of his company's network to Tim Hortons being forced to sell its coffee to rivals, while Ken Engelhart, Rogers' vice-president of regulatory affairs, said cable companies "are the Rodney Dangerfields of the telecom industry. We don't get no respect."
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Radio revenues fall
Canada's federal broadcast regulator says commercial AM and FM radio stations generally produced lower revenues and profits in 2009, although French-language FM stations managed to buck the trend.
The Canadian Radio-television and Telecommunications Commission said Thursday that overall profits before interest and taxes tumbled to $272-million from $334.9-million in 2008.
At English FM radio, profits before interest were $234.1-million, a drop from $299.9-million in the previous year. However, French FM radio's profits before interest moved higher to $35.4-million from $33.3-million.
Revenues overall fell 5.2 per cent to $1.5-billion in the year ended Aug. 31, 2009. English-language FM radio revenues were down 5.8 per cent to just under $1-billion, while French-language FM radio reported slightly higher revenues of $227-million.
AM radio station revenues were down 7.4 per cent to just over $300-million.
The CRTC noted that the number of AM stations continues to decline across the country, with seven going off the air in 2009.
AM and FM radio stations classified as "ethnic" reported revenues that dropped 1.1 per cent to $38.8-million. Profits rose to $2.2-million from $1.7-million.
The entire radio industry employed 10,191 people and paid salaries of $632-million in the period, the broadcast regulator said.
The Canadian Press