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CRTC chairman Konrad von FinckensteinSean Kilpatrick

The overseers of Canada's telecommunications sector say they need more power to police the industry in an era of rapid technological change and consolidation.

This would include the power to slap financial penalties on companies that do not comply with licence terms or regulatory rules. The Canadian Radio-television and Telecommunications Commission recently called for such a move, and Industry Canada is adding its powerful voice to the push for increased oversight and more severe penalties.

As convergence increases between media companies and the distribution businesses that deliver their content, the CRTC says it is losing the ability to enforce regulations. At the same time, Industry Canada is trying to enforce rules in a bid to support new a raft of new competitors who are complaining about foul play. Such complaints led Industry Minister Tony Clement to announce a departmental review of some policies on Monday.

The CRTC said it is must become bolder as telecom companies expand in response to industry trends. "We don't have the tools to deal with it," CRTC chairman Konrad von Finckenstein told a telecom policy conference in Ottawa.

Mr. von Finckenstein stressed, as he has before, that the enforcement mechanisms at his disposal are "sub-optimal" and that monetary penalties are "really the only way."

The CRTC is to hold hearings next May to examine regulatory implications of industry convergence. (The hearings were announced last month, on the same day the regulator approved Shaw Communications Inc.'s purchase of the television assets of CanWest Global Communications Corp., and shortly after BCE Inc. bid $1.3-billion for control of CTV Inc.)

Helen McDonald, an assistant deputy minister at Industry Canada who was on a panel with Mr. von Finckenstein on Tuesday, spoke of her department's desire to levy financial penalties on companies that break the terms of their licences. Currently Industry Canada can rescind licences, but has few other enforcement measures.

"Pulling their licence is drastic," Ms. McDonald said in an interview. "You don't want to strand Canadians relying on their services. Give me something in between [pulling their licences and doing nothing]"

Critics, however, say there are questions about transparency in granting the bureaucracy such powers, as well as concerns about the potential size of financial penalties.

"You're left with the bureaucracy being both the prosecutor and the jury," said Michael Hennessy, Telus. Corp.'s senior vice-president for regulatory and government affairs.

Mr. Hennessy said he doesn't object to the regulator being given more power to enforce compliance, especially given that Telus is the only major distributor that doesn't own media. However, he thinks the real issue is the drawn-out, prolonged process inherent in regulatory disputes. Financial penalties wouldn't be necessary, he said, if the disputes were resolved faster.

Allowing Industry Canada to levy financial penalties would require legislative changes to the federal Radiocommunication Act; allowing the CRTC to do the same thing would require changes to the Telecommunications Act and the Broadcasting Act.

Ian Scott, a former adviser to Mr. von Finckenstein, said changes would be more palatable, politically, if financial penalties were kept below $1-million.

"If there's the political will, this would vastly increase the regulatory toolbox," Mr. Scott said. "To me, it's a no-brainer."

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