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Jean-Pierre Blais, CEO of the Canadian Radio-television and Telecommunications Commission, addresses the Canadian Chapter of the International Institute of Communications, Wednesday, Nov. 16, 2016 in Ottawa. (Justin Tang/THE CANADIAN PRESS)
Jean-Pierre Blais, CEO of the Canadian Radio-television and Telecommunications Commission, addresses the Canadian Chapter of the International Institute of Communications, Wednesday, Nov. 16, 2016 in Ottawa. (Justin Tang/THE CANADIAN PRESS)

CRTC's Blais raps Rogers, Shaw over Shomi Add to ...

Jean-Pierre Blais is defending his four-year record as chairman of the federal telecom and broadcast regulator with a defiant speech that took on critics and industry players and emphasized Canadian consumers are central to everything he does.

In a keynote address Wednesday, Mr. Blais, who has led the Canadian Radio-television and Telecommunications Commission since 2012, said that after making efforts to include and engage the public in hearings and other work the regulator does, he hopes Canadians now “trust us at least a little more than they did four years ago.”

His speech featured notably harsh words for Shaw Communications Inc. and Rogers Communications Inc. regarding their September announcement that they plan to shut down their joint venture online-streaming service Shomi at the end of November.

Mr. Blais said the move came as a shock to him and while he didn’t want to “criticize the decisions taken by seasoned business people … I can’t help but be surprised when major players throw in the towel on a platform that is the future of content – just two years after it launched.

“I have to wonder if they are too used to receiving rents from subscribers every month in a protected ecosystem, rather than rolling up their sleeves in order to build a business without regulatory intervention and protection.”

Shomi’s owners have said the service failed to attract enough subscribers in a rapidly changing and fragmented marketplace for online video that includes domestic competition from Bell Media’s CraveTV as well as global giant Netflix Inc.

“We created a beautiful service that customers loved. The problem is not enough of them loved it to pay the bill,” said then-Rogers CEO Guy Laurence in early October.

Both Shaw and Rogers have lost money on the service, with Rogers recording a loss of $140-million in the third quarter related to Shomi, and Shaw stating it expects to incur an investment loss of up to $120-million when it next reports its quarterly earnings. (That follows a writedown of $51-million on Shomi’s value the company already recorded earlier this year).

In an interview after his speech, Mr. Blais said “there are a lot of failures in business,” and if every company that faced losses shut down, “you would never start a new business in Canada.”

“Unfortunately, that’s the world we live in in the communications sector. It’s borderless, it is subject to a lot of international competition and losing money is part of it,” he said.

Mr. Blais, whose term as chair expires next June, sought to frame his legacy during a period of incredible change for the communications industry – owing to the disruption of the Internet – as a regulator that intervenes when necessary but otherwise stays out of the way.

“The CRTC’s role now is to focus on outcomes rather than making rules,” he said during his lunchtime speech in Ottawa to an annual conference of the Canadian chapter of the International Institute of Communications.

Many of the CRTC’s decisions under his tenure have, in fact, involved rules and regulations – such as the commission’s move to regulate the wholesale rates that wireless carriers charge small competitors, its ruling that large Internet providers must provide resellers with access to their highest-speed fibre-optic broadband services, and the requirement that cable and satellite providers offer slimmed-down basic packages and offer a choice of individual channels on top of that.

“I’ve always said regulation is a poor substitute for a properly operating marketplace,” Mr. Blais said in the interview. “I think the rules we’ve put in place have been rules that have tried to support a dynamic marketplace.”

Mr. Blais’s wide-ranging speech also took aim at critics of CRTC decisions, who he said “take to TV and radio broadcasts and their own private blogs to spread fear and worry, and I dare say make false and misleading statements.”

He later said he has little patience for those who fail to show up and present evidence before the commission but later complain about the results.

Mr. Blais was also defiant in the face of a wave of criticism the commission faced – which he called “spilled ink and exhaled air” – over its August ruling that reduced the number of “points” necessary to win access to certain funding and tax credits for Canadian content. Groups of actors and writers have said this will undermine the Canadian creative industry.

During an appearance before the federal Heritage committee on Oct. 20, Liberal MP Seamus O’Regan asked Mr. Blais why the CRTC didn’t hold off on that decision until the Minister of Canadian Heritage has completed a sweeping review of Canadian cultural policies currently under way, which even put the CRTC’s mandate up for discussion.

“We got elected. We want to institute it democratically. We want to institute a comprehensive review. I would have thought that perhaps some respect would be shown to that wish,” Mr. O’Regan said.

The time expired on Mr. Blais’ appearance and he did not have a chance to respond that day, but in his speech Wednesday he said calling for the CRTC to stop its work while the Minister conducts her review, “ignores that Parliament has bestowed upon us a mandate to act in the public interest.

“Those who are asking us to stop are operating under the belief that the minister’s review will be favourable to them,” he said. “The disruptive nature of broadband is not taking a pause while the review is ongoing.”

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