CRTC chair Ian Scott: the exit interview

Ian Scott's tenure as chair of the CRTC comes to a close Thursday. The Wire Report sat down with Scott to reflect on his time leading the organization. The Wire Report: Have you figured out what's next? Ian Scott: I haven't. We have, as you know, post-employment ethics rules. And they're very large, very broad. And so I haven't engaged in – I decline to engage – with anyone who's approached me in any way, shape, or form. But I'm looking at a variety of things. I may do some teaching. I may do some research. I'm not retiring. WR: Have you spoken to Vicky Eatrides yet about the position, or about the transition? IS: I have spoken to her. I do know Mrs. Eatrides from her time at the Competition Bureau and, and also at I've certainly been conveying some of the, sort of, necessary transmission information, but I am not going to try and influence how she runs this commission. She'll be, as we've always said, one of nine – a very important one. And she's the CEO, but she has lots of experience in being a senior executive in the federal public service. So those things she'll understand well. We have a superb staff, including the senior staff, who are no doubt diligently writing up introductory briefings on all the subject areas and how the Commission works. But I have spoken to her, yes. WR: Is there any sort of advice that you think an incoming co-chair of the CRTC should have? IS: Well, the the advice that I have lived by came from my mother and I would pass it on to Vicky: leave the place better than you found it WR: As you look back across your tenure at the CRTC, what surprised you that you didn't expect coming into the position? IS: Did anything really surprise me? It's a tough job. But I suppose I knew that. I don't know that anything was a shock. There are things that you know, that you wish weren't so. You know, when you have major proceedings, how long they take. And there have been reasons for that: when they involve costs and cost accounting, and the models are very complex. So these things I knew. Or if you do a major structural hearing like wireless, they're long, protracted proceedings, because you're building a base of evidence on which to render a decision. And they're very, very important to Canadians and to stakeholders. And so they weigh in with a lot of evidence and views and so on. So you know it's going to take a long time. You wish it didn't take quite so much. I guess if I had to say the single most tough thing was I did half my term through COVID. And that was not planned, not expected. And made things more challenging. But no, I think I was well aware of what I was getting into. At the end of the day I spent about half my career in the public service, and half in the private sector, almost an exact split.So I'm not surprised by what happens in either place. WR: After the appointment of Vicky Eatrides, a financial analyst wrote that "decisions by Ian Scott's CRTC tended to skew in favor of the industry." And a number of people commenting after the appointment of Eatrides keyed in on her history at the Competition Bureau and said that this augured a more pro-consumer CRTC. I'm wondering how you feel about the classification of a pro-consumer versus pro-industry CRTC? IS: I disagree profoundly. I disagree with the premise of the question or observation. I said, when I was appointed: what was my vision? The vision wasn't an individual one. I had not one, but for the commission, it was to render decisions in the public interest that were balanced based on the record. And that's what we have done. And no: it is neither pro-consumer nor anti-consumer, or pro-business or anti-business. I'd say every chair is pro-consumer. And if they're not they shouldn't be in this chair. WR: Why do you think that those observations are out there? IS: I'm hesitating for words – I don't want to be unkind to media. But sometimes they don't do their work. And they simply pick up on themes and repeat them. And I've seen that way too much in the last year and a half or so. You know, people commenting on decisions that have never read the decision. People just keeping a theme. Maybe that's the evil of social media, I don't know. It's a reality. The most obvious thing, because I worked in the private sector, it's been referred to endlessly. I always find it I'm somewhat bemused by the fact that they always go back to for some reason, which is some 14 years ago when I left. No one ever asked me why I left there: if it was good or bad. No one paid any attention to nine years at the world's fourth largest satellite operator . More importantly, perhaps, no one paid any attention to Call-Net slash Sprint Canada, which was an entrant. And we fought tooth and nail: first, to lower long distance prices. And secondly, as the first unbundled local loop competitor in the country. No reference to those. So people chose the references. They kept making reference to one phase of my career, and I suppose that's where it comes from? I don't know, I am neither, I have always approached every file with an open mind. And can say that, honestly and proudly. WR: In closing arguments at the Competition Tribunal hearings into the Rogers-Shaw merger, Competition Bureau lawyers referred to the CRTC's TPIA regime as a "quagmire," and that it wasn't good enough for Quebecor to launch a western brand with its acquisition of Freedom Mobile. How do you think about where that file is at the end of your tenure? Is it in a good state? IS: First, I don't know how much the bureau lawyer knows about TPIA, knows about our process, knows about the record of that proceeding. But I tend to doubt it's very much. And they're free, and welcome to participate in any and all future proceedings, and educate themselves. There's a lot of armchair quarterbacks out there who say a lot of things, perhaps not with full information. But that said: is the competitive landscape or framework for broadband working well, right now? The answer is not well enough, no. And I've said that publicly several times. We have and continue to invite all forms of competition. Obviously, there are facilities-based competitors. But importantly, there are resale competitors that use wholesale facilities. And the framework – which is established before I got here, by the way, it's worth remembering – isn't working the way that the Commission anticipated. The marketplace hasn't evolved that way. It also was ever only directed at Ontario, and Quebec. It didn't take into account well enough, it would appear, rural and sub-rural areas. And it is not working well enough insofar as rates are creeping upwards, not downwards. Then we can talk about the wireless framework, there are lots of armchair quarterbacks in that space as well. But the rates are doing what they're supposed to do: they're coming down and will continue to be. On broadband, they're creeping up. And that's concerning. Now, there are lots of arguments that can be made by people – if you will, on the other side – to say: "yeah, but they're consuming a massive more amount of data, particularly through COVID. And if you look at the cost per bit", Like everything you can slice and dice it the way you want to make the point you want. The thing that I care about the most and the Commission cares about the most as you look, overall at the availability, the quality of broadband, and the price of broadband. We're making progress on closing the digital divide, not perfect, but all governments – provincial, territorial, federal – the money is going out the door. The project is underway. Lots of work to be done to be sure, but underway. Speed, that that's going to be dealt with and monitored more carefully. I think there's a consumer education piece to that as well. I don't think people understand that their device doesn't necessarily process at the speed that their modem does. Or when you share multiple video feeds, you know, you're dividing whatever your incoming bandwidth is, and so on and so on. And the third leg of that stool is is price. And no, it's not good enough. The commission has been steadily working on it. And we've taken some internal determinations, and there'll be further steps to come up shortly. WR: When you see wholesale based competitors, in some characterizations, folding? How do you think about that? IS: Well, first of all, they have a right to be sold. And most entrepreneurs when they start businesses, particularly in the high tech field, don't envision becoming another Bell Canada. The fact of the matter is there are private interests involved, and they may or may not want to stay around. I noted when Distributel's current executives gave the commission notice that it was happening, I sent my regards to the founder who's still involved in that company. He was in the industry reselling Centrex when I was at the Competition Bureau right out of grad school. He's been in this game a long time. And they made a call to sell. In the marketplace, that's not abnormal. Would they stay in the market if they were making more money? I don't know. But it's not abnormal to sell. It's not abnormal in a competitive market to go out of business. What's abnormal is we don't have enough competition. We don't have enough price competition. That's why there is regulation. WR: Do you have any regrets about how the TPIA process played out? IS: The process is the process. No. Look, I have really nothing to say about this that I haven't said publicly. We ran a proceeding. A complex one, made a determination. And like all decisions, there are winners and losers. It was appealed: it was appealed to the courts, was appealed to cabinet. It was submitted as a review-and-vary, also a form of appeal to us. We re-examine it as we must. And we would in every case, when there's a review-and-vary, whether it's filed by a competitor, a consumer group or a large stakeholder. They determined errors were made, and we fixed them. What choices do you have in those processes? Were you to not fix it, once you determined an error? Were you to stop the process because it's taking too long and make something up? I mean, these are legal, quasi-judicial processes that people participate in. How long does it take? Part of that is how many interventions there are, how many requests to change the scope of the preceding, how many requests for extensions. Every one – and I literally mean every party – contributes to that, many for very altruistic reasons: accessibility groups who seek more time so they can participate meaningfully, but also cynically, on both sides. It is what it is. We follow principles of administrative law and fairness. And that's what came out. WR: Some said you could have launched a new process. IS: And I believe the decision spelled out why we didn't. The cost models at that point would have been too old. And then you start the process of filing new costs, and everyone intervening, and that's fine. But it would have taken – the estimate was – it would have taken as long as the first proceeding or longer. And, again, quasi judicial, fair administrative law principles, you can simply take outdated Parties were free to argue that those costs were no longer relevant, and that they had to be given an opportunity to refile. We're not blind to everyone's interests. It's so hard to communicate at times, to those who are less familiar with the processes we follow, that it's not just picking things out of a hat. We follow a process and it's based on evidence. WR: Do you think now, a year and a half out from the decision that flowed out of the wireless review, that competition is going in the right direction in the wireless space? IS: I do. Let's just pick up on a couple of the themes that we talked about earlier. One, I'll go back to the pro-consumer/ not pro-consumer. Can I just remind you that there was a wireless review done prior to my arrival, and they said "no" MVNOs. And they said no to a number of things, and didn't change roaming rates and so on. They also established that wholesale regime for TPIA. We then, among other things, implemented broadband, went at establishing final rates for TPIA, and ran a full, full review of the wireless space to determine whether they had market power or not, and whether further steps were required. And the answer was: yes, they do. They have joint market power, and in some cases, unilateral market power. And then, as the decision sets out, you have two choices. The first choice is: regulate the rates. And nobody wants that. I mean, retail , we're going back to the 1970s, we're going to decide what plan you get, what phone you get. That's not a reliance on market forces. And so the other solution is the one we pursued, which is wholesale. And, yes, parties argued for an unlimited MVNO. The record of that proceeding, the weight of the evidence, demonstrated that that would have damaged – not enhanced – competition. Because the competitors who are making the biggest impact the regional players would be first and foremost the target of new entrants. And their returns were razor thin, and they would have been lesser competitors. That took a year and a half of record and evidence and consideration and analysis to determine. But there's a peanut gallery out there that goes "oh, well the other one would have been better." Well, we based our decision on extensive evidence. And the reality is that the rates are going down, and they're continuing to go down. And the commission is implementing that framework on the timeframe. It said it would. Is it fast? No. Are we keeping up with the deadlines or milestones that we created? Yes. Have we dealt with attempts to delay or derail the implementation? Yes. So I think it's a very positive story. Again, availability of service, coverage, technology? They score well. Price? Not good enough. And it is heading in the right direction. But it absolutely isn't good enough. I'll return to your first question: Will the commission be focused on consumers? Yes: as it was, as it is, and as it will be. WR: You touched on the amount of time proceedings take. The CRTC has a lot more coming onto its plate very soon, potentially with news compensation, with C-11, and a telecom policy direction. How do decisions get faster with all this stuff coming on board? IS: First of all, the timeframes on decisions is not bad, okay? Again, little bit of information, and a lot of commentary. They're focused on certain ones and I understand why. Because they're the ones that take two years. So it's "it took the commission two years to render a wireless decision." No, it took two years to complete a detailed market power analysis and assessment, and so on and so on. We are well on our way, we've done a tremendous amount of preparatory work on C-11. Assuming it passes into law, the Commission is well equipped to move forward. C-18 is in its early stages, but we have been given money to establish the, if you will, the core functionality. And that's being done. We await the telecom policy directive, we've implemented those before, and we have sought and are receiving additional telecom resources. So resources are being provided, and the Commission will continue to do its work. But the focus on timing usually are major structural reviews, or files that have a significant costing on it. Things which take a lot of time and are argued over by all parties. WR: When commentators say that the CRTC doesn't have the wherewithal to incorporate C-18 or C-11, what are they missing in your mind? IS: Can I be blunt, and say they don't know what they're talking about? The CRTC has been regulating broadcasting for over 50 years. It developed the regulatory framework that exists today. It has gone through numerous iterations, and fundamental changes over that 50 plus years. This is another one. It will be done, and it will be done well, and it will be done in the public interest. I'm not concerned at all for the commission's ability to do it. News remuneration is a new area, it will take some time. We have more expertise than does anyone else. We are already very familiar with broadcast news. We are very familiar with arbitration and mediation of competing interests. We are familiar with dealing with imbalances in bargaining power and market power. I challenge those commentators to tell me what regulatory authority is better equipped to deal with it. WR: What are you most proud of in your tenure at the CRTC? IS: The organization. Chairs come and go, commissioners come and go. Even staff – although they're here a lot longer – come and go. The institution prevails. This is a wonderful institution that does really important work. The chair has a tough job because they are the name at the top of it. And they are accountable to parliament. And it's totally fair, for the most part, to hold them to public account. But we make decisions every day. You know we put out over a hundred decisions a year? People talk about "the commission sucks because it didn't do this right. There are 98 other ones that are fabulous, or could have been given rave reviews that get nothing. We've done a lot of work on telemarketing fraud, and unwanted communication. That doesn't see the light of day generally in the news. We make decisions to ensure that Canadians see Canadian stories and hear Canadian quality news and all that stuff. Telecom and broadcasting are such fundamental elements of Canadians' everyday life. The commission makes important decisions every week and every month affecting them, and they do a hell of a good job. That's what I leave here: a wonderful institution. This interview has been edited for length and clarity

CRTC chair Ian Scott: the exit interview

News | January 4, 2023

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CRTC chair Ian Scott: the exit interview

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