Dave Chan for The Globe and Mail
'This was going to be the Blais show'
Jean-Pierre Blais might be the most divisive chairman the CRTC has ever seen. From his public clashes with top executives to key rulings on wireless, cable and the Internet, the 56-year-old civil servant has set out to smash the perceived coziness between the regulator and industry. Despite his theatrics, questions remain about the commission's relevance.
The Blais Show has been one to behold. But is the average Canadian even tuning in?
Time is running out. There is less than 10 minutes before his next meeting, and Jean-Pierre Blais is in tears in his seventh-floor corner office.
He chokes up, pauses, reaches for his water glass to compose himself. "Sorry," he says, voice wavering. "I don't break up like that so often."
In a two-hour interview, the chairman of the Canadian Radio-television and Telecommunications Commission – the chief watchdog for Canada's broadcast and telecom industries – is recounting a chance encounter at church last winter. As a parishioner cornered him, he braced for the complaints he's grown accustomed to hearing about cable and broadcast firms over four-plus years in a job that has long been a contentious one. This time was different. "She said, 'Oh, I spend most of my winters down in Florida, but I watch what you've been doing and it's great. Thank you for protecting us.'"
That this simple vote of support from a total stranger taps such a deep emotional vein is telling. "Because that's what I do this job for," he says, driving home his zealous belief in the nobility of his role as a public servant. "It's not for me."
It is surprising to see one of the most powerful men in Canada's telecommunications industry shedding a tear at his desk. But Jean-Pierre Blais is not like those who came before him.
Mr. Blais, 56, is entering the final nine months of his first – and likely last – five-year term. While he is by no means the first chairman to have a strong personality, he has certainly been among the most divisive, casting himself as a crusader against the perceived excesses of the broadcast and telecom industry. In doing so, he has come to be seen as a polarizing figure, both by the industry he oversees as head of the CRTC and even within the regulator itself.
When he took the job in 2012, Mr. Blais envisioned moulding a very different institution by 2017, one that would be "trusted by Canadians" and shake the perception it was "in the pockets of the big companies."
In pursuit of this goal, he has gone toe-to-toe with communications industry executives on the public stage, taking sides with their customers more than any CRTC head in recent memory. Through tough talk that often bordered on the theatrical and highly publicized rulings on pocketbook issues, he set out to give consumers more choice and paid careful attention to their cellphone, cable and Internet bills.
But despite his increased focus on these key issues, average Canadians still might question the broader impact of Mr. Blais's changes.
He forced the cellphone industry to put caps on data overage charges and slashed the length of wireless contracts from three years to two, hoping to give consumers more flexibility and spur competition. But since carriers have less time to recover upfront subsidies on expensive handsets, monthly payments have actually gone up.
He also set out to overhaul the way people watch and pay for TV with the introduction of the pick-and-pay model. Cable providers must now offer a slimmed-down basic package and by the end of the year, customers will be able to add on any individual channel they want to receive. But fewer than 2 per cent of TV subscribers have signed up for "skinny basic" packages, with many complaining it's not actually a better deal.
Still, these rulings and Mr. Blais's flair for the dramatic have made for a slew of headlines.
The Globe and Mail interviewed nearly two dozen people who have worked closely with Mr. Blais as colleagues or stakeholders – many of whom spoke on the condition of anonymity because he still wields considerable influence over their careers or business interests.
What emerges is a picture of a man who has ruled the federal regulator with a heavy hand, directing its every move in a bid to reassert the CRTC's purpose – as a regulator of domestic broadcasters and telecom providers – at a moment when old-fashioned policy tools can seem outdated in an age of streaming and globalization.
With a desire for control and an admittedly low tolerance for dissent, he moved to transform the CRTC from inside the commission's walls – sometimes with unintended consequences. A push to instill a new workplace culture and a noisy battle between Mr. Blais and a former commissioner have led to a startling split in loyalties over the past two years that has spilled into the public domain.
On top of it all, the battle for relevance is only getting started. Mr. Blais inherited a CRTC battling to remain relevant as new technological players from beyond Canada's borders muscled in on the $63-billion industry the watchdog oversees, raising questions about the regulator's influence as more consumers cut the cord. Attempts to assert power over the likes of Netflix have largely failed.
Now, even as his current mandate winds down, Mr. Blais is still fighting to win over skeptics both inside the regulator and out. His fellow churchgoer may be glad the regulator "had her back," as he puts it, but the CRTC's continued influence in an increasingly digital age is far from assured.
Dave Chan for The Globe and Mail
Tinker, tailor, public servant
In speeches, Mr. Blais is fond of quoting historic figures, among them Napoleon Bonaparte. The two leaders share some traits, from ruthless ambition to a diminutive stature, which helps explain why Napoleon is a nickname sometimes quietly attached to Mr. Blais, even on occasion by his own staff.
The famed Frenchman may be "often remembered for devastating wars in Europe," as Mr. Blais noted in a 2013 address, but it's not military prowess that inspires a sense of kinship. It is his "other lasting accomplishments as a regulator," codifying civil law and standardizing weights and measures, which speak to Mr. Blais's sense of duty to bring order and discipline to the realm he commands.
After 22 years as a civil servant, he is steeped in the rules, responsibilities and hierarchies of the federal bureaucracy, and reveres public service as "a very noble cause." But it wasn't always clear he would choose that path.
Born in Shawinigan, Que., to an accountant and a schoolteacher, his family moved to Toronto when he was young, where he became fluently bilingual. He learned discipline from the Jesuit teachers at Montreal's Loyola High School, then channelled it into a law degree from McGill University, which in turn launched his career as a lawyer at the firm Martineau Walker.
At the time, he recalls, lawyers at private firms often looked down on working in the public sector. But after taking a professional break to earn a graduate degree in Australia, he came back to find a slow job market, and joined the CRTC's legal branch instead.
Those who know him say he is fiercely ambitious, intelligent and hard-working – qualities that helped him climb the CRTC's ranks to become executive director of broadcasting. That was where Judith LaRocque, deputy minister at the Department of Canadian Heritage, first spotted him as "a rising star." Mr. Blais joined Heritage as an assistant deputy minister before moving on to the Treasury Board, where he was tasked with smoothing government operations.
"He was a very savvy, smart bureaucrat before he arrived … and he was, I think, always viewed as a force to be reckoned with," said Michael Geist, a law professor at the University of Ottawa. "Anyone who knew him knew he was going to bring those skills to the chair, and that this was going to be the Blais show."
He had a particular knack for briefing ministers, Ms. LaRocque said, and for "gaining their confidence quickly." James Moore, the Conservative cabinet minister who often heard Mr. Blais's advice at Heritage as well as Industry Canada, remembers "he was never shy about offering his opinion" – "always blunt," but also "always professional."
Mr. Blais is polite and well-mannered. He chooses his words with the same care as his impeccable dress – neat and tidy suits and ties, and rectangular, rimless glasses, a watch but no rings. In less-guarded moments, he can be personable and funny, or biting and wry.
He is also hard on himself, even in his hobbies, which include gardening and athletics – mostly individual sports like golf. "It's a rules-based system," he says. "Why wouldn't I like it?"
From the start, he took steps to reset the CRTC's culture and exert his influence.
At the Conservative government's urging to find "greater efficiencies," he scrutinized travel and hospitality expenses, slashing them by 36 per cent in his first year. The next year, he cut operating costs by 8 per cent. Even the smallest items didn't escape notice – free coffee on the seventh floor of the CRTC's Gatineau, Que., headquarters was suddenly no longer free.
In conversations with numerous sources, Mr. Blais is painted as a man who doesn't just take control – he needs it. A sense that his own reputation is on the line seems to fuel this desire.
"Look, there's some things I delegate, don't get me wrong. But in the end, even when I delegate I remain accountable," he says. "It's my signature, it's my name. Obviously I'm going to look at it, because it's not my money."
Mr. Blais embraces his role as the CRTC's public face, but several sources said he is seen as thin-skinned. Colleagues and stakeholders tread lightly around him. He is known to be keenly aware of media coverage of the commission, Googling his own name and even following a stream of live tweets during hearings to gauge the public response.
"I think he's average-skinned, if you will," Ms. LaRocque said. "I think he knew darn well what he was getting himself into, and that there would be criticism."
But it's not a burden Mr. Blais bears lightly. He describes his job's high public profile as a "harness" he wears. He has been the target of vicious personal attacks in which critics have branded him with words like "fascist" – "check the Internet," he says.
"It's part of the job. I'm not looking for it, but it's what I have to do."
Brian Gable for The Globe and Mail
Less than 100 days into his chairmanship, in September of 2012, Mr. Blais walked into a Montreal convention centre ready to take the public stage for the first time. A high-profile, five-day hearing on the fate of BCE Inc.'s $3.4-billion deal to acquire Astral Media Inc. offered the perfect chance to make a statement about how his tenure would unfold.
First up on Monday morning was George Cope, chief executive officer of BCE, flanked by a team of 13 executives from BCE and Astral. At six-foot-seven, Mr. Cope is a literal giant in the Canadian telecom and media business, and his commanding physical presence projects the power he wields as the head of the country's largest communications company.
But the five-foot-seven-inch Mr. Blais came prepared to cut both the BCE CEO – and the powerful, entrenched industry he represents – down to size. He set the tone early with his opening remarks, stressing that the deal should benefit his favoured trifecta of "citizens, creators and consumers."
"Mr. Cope, it is you and your team that have the burden of proof. This is not a negotiation session," he said, peering directly at the CEO over his glasses.
Mr. Blais asked what Mr. Cope would think about a condition of approval requiring BCE to keep local TV stations open for a certain number of years.
"Commercially, I'm not used to being asked for guarantees," Mr. Cope said.
"As I said, it's not a negotiation," Mr. Blais replied.
"No, I get it. You're there and I'm here – I got it," Mr. Cope said with a laugh, pointing with exaggerated deference to where Mr. Blais was sitting, surrounded by his fellow commissioners.
The mood was less jovial at BCE a month later when the CRTC rejected the deal. An outraged Mr. Cope gave indignant interviews and the company argued the ruling arbitrarily changed the rules of play. It called on the federal cabinet for help but the government declined to get involved.
The next spring, Mr. Cope was again seated before Mr. Blais, this time taking pains to show that his company had changed its proposal to address the commission's concerns and was prepared to sell off a number of TV stations.
"Canadian consumers are the focus of our investment in media," he said.
Mr. Blais had scored a major win, and approved the revised deal. Fast forward to 2014, when the chairman presided over another high-profile hearing, locking horns with Netflix Inc. – a different breed of giant – with decidedly less success. The U.S.-based leader in video streaming appeared on the last day of the CRTC's exhaustive Let's Talk TV hearing, at the regulator's invitation. When Mr. Blais demanded that Netflix hand over data about its revenue, subscriber base and expenditures in Canada, the company refused, citing concerns about confidentiality.
The chairman, visibly angry, called an abrupt break in the proceedings and stormed out. He soon returned and scolded Netflix's global public policy director, Corie Wright: "You are not entitled to special treatment."
Ms. Wright held her ground, and early the next week, the company challenged the CRTC's jurisdiction in a statement, saying Mr. Blais's orders were "not applicable to Netflix under Canadian broadcasting law." The CRTC struck Netflix's comments from the hearing's record, but many in the broadcasting industry saw the incident as a black eye for the commission, evidence of a lack of influence over new global players.
Other companies have been wary of openly antagonizing Mr. Blais, but widespread tension over the way he has run the commission simmers barely below the surface. Many bristle at his lectures on how to run their operations when he has no business experience, and while he says he understands they have to answer to their shareholders, he has also made it clear that industry profits rank low on his list of priorities. "Frankly, we're not there for them, we're there for Canadians."
Mr. Blais claims to be moving the commission in a modern, more flexible direction, and many within the industry actually praise him for focusing on consumers to a degree not seen under previous chairs. At a Toronto conference in June, John Lawford, head of the Public Interest Advocacy Centre, called it a "refreshing approach," and BCE's own chief regulatory officer, Mirko Bibic, called it a "commendable, undeniably good objective," even though he doesn't always agree with the outcomes.
Mr. Blais, who once chided "corporate executives who own luxury yachts and private helicopters" for coming to the commission "looking for subsidies" doesn't seem to care what industry thinks of his methods. He says he is "not a fan of entitlement," but insists he keeps an open mind. "The one thing I do is I always listen as if I'm wrong, but I speak as if I'm right," he says.
The chairman's approach has shifted the regulator's relationship with the companies it watches.
"I think he's very conscious of keeping arm's length," Corus Entertainment Inc. CEO Doug Murphy said in an interview. "I think Jean-Pierre has a style that with industry, he's polite but somewhat guarded."
To some, the desire to stand apart has gone too far, reducing confidential and frank exchanges between industry executives and CRTC commissioners and staff that kept the regulator better informed of industry dynamics and realities.
"There has been a large absence of dialogue between all stakeholders in a collaborative fashion, including with the commission, because the only time we ever talk is in the confines of the formal hearing process," Mr. Bibic said. Mr. Bibic's counterparts at Rogers and Telus agreed, and said such conversations could be made be fair to all stakeholders, including public interest groups and smaller companies.
But Mr. Blais has little time for back channels. "I would rather err on the more formal," he says, though he supports some private conversations with legal counsel present.
"What they want is that informal 'yeah yeah, nudge nudge, wink wink, your application will be approved,'" he said, affecting a dramatic whisper. "If that's what they want, they're not going to get it from me and my commission."
'A lingering, festering problem'
Tensions with industry, however, pale in comparison with the strife inside the CRTC.
Those familiar with the commission's inner workings say Mr. Blais has isolated fellow commissioners, limited their independence and made it plain he does not appreciate dissent.
Mr. Blais insists he accepts opposition when it's well-argued and legally correct, but also suspects there have been fewer dissents under his tenure. "I think the commission speaks much more powerfully when it speaks with a united voice."
His biggest internal struggle was a clash with one commissioner. When e-mails penned by Raj Shoan – the former regional commissioner for Ontario, who frequently wrote dissenting decisions and called Mr. Blais's authority into question – became the subject of a harassment complaint by a senior CRTC staffer, Mr. Blais was outwardly critical of Mr. Shoan.
Mr. Shoan dragged the internal dysfunction at the CRTC into public view when he appealed the outcome of the resulting investigation to the Federal Court. Mr. Blais will not comment on "the Raj files in any way, shape or form," except to say that many commission employees were upset that Mr. Shoan put confidential details on the public record. In the wake of Mr. Shoan's court case, then-Heritage Minister Shelly Glover recommended that the chairman conduct a "workplace assessment" to study and fix "what appears to be a toxic work environment," but such an appraisal was never finished.
Mr. Blais appeared to view Mr. Shoan as the epicentre of the commission's personnel problems and court filings show the chairman himself wrote repeatedly to government officials at the Privy Council Office, the Treasury Board, the office of the Ethics Commissioner and the Department of Canadian Heritage, pressing his case against Mr. Shoan.
Since then, Mr. Shoan has launched multiple lawsuits against the CRTC, and Justice Zinn of the Federal Court heard his first complaint over the harassment investigation in June. But just two days after that hearing, the federal cabinet revoked Mr. Shoan's appointment on the advice of Heritage Minister Melanie Joly. Mr. Shoan is appealing his dismissal and won a victory last week when Justice Zinn overturned the finding of harassment. The judge rebuked the chairman for his role as both witness and final decision-maker.
"It is impossible to see how, in light of the opinions expressed by the chairman … it could be said that he, whether consciously or unconsciously, could decide the matter fairly," Justice Zinn wrote.
Sources close to the commission say the affair consumed Mr. Blais and his office. The chairman doesn't dispute that it was distracting, calling it a "lingering, festering problem."
"Heck, we now have four litigations in the Federal Court, whether trial or court of appeal. Obviously, that consumes time," he says. He believes the mood at the commission has improved with the passage of time and the summer holidays.
Building a legacy
When Mr. Blais's time as chairman is up, he will leave behind a regulator reshaped according to his ideals. And, at least for now, the CRTC still has considerable clout in setting the rules for the $63-billion communications industry.
"It's a high-powered, high-influence institution that with a slightly miscalculated regulatory move can devastate industries," Mr. Moore said. The former cabinet minister believes Mr. Blais has been "an important pillar of substance at a time of incredible uncertainty" for media and telecommunications companies.
Yet the consensus among industry sources is that Mr. Blais faces slim odds of his chairmanship being renewed for another term. Past chairs have rarely served more than five years, political power has changed hands since Mr. Blais was appointed, and being chided by a federal judge won't help.
Asked whether he wants another term, he answers tactfully. "We'll see," he says. He would like another five years in public service and since he is technically on leave from his previous role, he says, "At worst, I'll have an [assistant deputy minister] job somewhere in the government when I'm done."
He is also keen to point out the CRTC has several crucial matters to decide before his term is up. The regulator must issue its decision on basic access to broadband Internet service, hold a hearing on whether companies can waive charges for data used by certain applications, which has implications for net neutrality, oversee a review of the wireless code of conduct, and renew a slew of broadcasting licences.
But in the face of competition from Web-based giants like Netflix that reach across borders, the CRTC's authority over new media has been challenged, and by extension, so has its continued relevance.
"Perhaps that's a sign of times – that the power of the regulator in a more traditional telecom world is very different from an Internet world," Mr. Geist said. "So we ended up seeing what we saw, where George Cope isn't able to essentially walk away, whereas Netflix and Google [which also refused to hand over confidential information] said they could."
Mr. Blais understands the implications of Netflix's defiance. "They can't just show up and we let them not answer without consequence. What happens if Bell does that, or Shaw does that, or Corus, or Telus, or Cogeco? How can a regulator allow that?" he says. The notion that Netflix, with millions of Canadian subscribers, can exist outside the country's laws is "a lot of BS."
If he worries his authority over industry is slipping, however, he is far more concerned that the CRTC not only makes bold changes, but is seen by citizens to be taking action on their behalf.
He set to work on his image again last week during a follow-up hearing on "skinny basic" cable packages. When the new offers rolled out in March, consumers were dismayed that they couldn't choose only the channels they want and still save money. New CRTC regulations cap the price of those packages at $25 but didn't address the cost of equipment rentals, lost bundling discounts or the high à-la-carte prices for attractive add-ons such as sports networks.
Mr. Blais initially insisted the commission's goal was simply to increase choice and said he never promised lower prices. But after receiving hundreds of complaints and negative press coverage, the CRTC called the four largest TV providers on the carpet to answer consumers' complaints.
As his staff promoted the hearing on social media with taglines – "You have choices" and "Demand better" – the chairman opened the spectacle Wednesday morning calling on those companies to prove "their actions are consistent with our objective of offering Canadians more choice."
In Mr. Blais's eyes, that added choice will be key to his legacy as chairman. He hopes those oft-mentioned citizens, consumers and creators – people like his fellow churchgoer – believe that the CRTC tried to be their champion on his watch. Back in his Gatineau office last month, he reflected on whether Canadians will ever truly be convinced.
"Time will tell whether it's irreversible, but I do think the institution is more focused on Canadians than ever before."
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