PRIVATE MEMBERS' BUSINESS

BROADCASTING ACT

He said: Mr. Speaker, it is my pleasure to begin second reading debate on Bill C-216, an act to amend the Broadcasting Act (broadcasting policy). The act has one objective and that is to control the relationship more completely between the Canadian Radio-television and Telecommunications Commission, which Canadians love to call the CRTC, and the public. For the purposes of this discussion I refer to the public as those people who presently receive television services by way of cable transmission, but this bill will also cover those Canadians who will soon receive television services by way of telephone lines or direct to home satellite services.

Controlling a relationship is never easy, we all know that. Yet this is a relationship, the connection between the CRTC and its public, which the Government of Canada through the Broadcasting Act brought into existence and which we by Bill C-216 can once again bring back under control.

There are three components or factors to this argument which I refer to for discussion purposes as the three cs. These are: cost, choice and culture.

Last year when the CRTC authorized the grouping or bundling of new programs on to cable carriers and at the same time allowed cable companies across this country to charge more for them, that commission, those people who are supposedly protecting us and nurturing Canadian culture, forgot, ignored, or what I would suggest, turned their collective backs on Canadian cable subscribers. The consumers had two choices: they either paid more or they received less.

Who in this place could forget the anger, the vitriol and the simple disgust of those who were being held for ransom? We, the representatives of the people in this place, were besieged, harangued and generally deluged with hundreds of calls from angry consumers who from their perspective generally knew that their pockets were being picked with the express consent of the CRTC, the very government agency which was put there to protect them.

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Canadian consumers quite simply were held ransom by an industry with an astounding 52 per cent return on its capital investment. Who can forget at the same time the reaction of the CRTC, which referred to this practice of negative option billing as a necessary evil?

From my perspective as a representative of a certain group of people, it was a necessary evil to tell my constituents that they would receive, wrapped in the bundle of new channels, Canadian culture.

As to the issues of cost and choice, the CRTC chose not to do anything. Who can forget that Keith Spicer, the architect of this policy, was out of the country on vacation when this storm struck?

Keith Spicer, the so-called czar of Canadian culture, was on a foreign holiday as Canadians received a post Christmas gift they did not want.

While Keith was out exploring foreign cultures, members of the House were publicly stating, to use one quote, that the CRTC was in bed with the cable companies. Newspapers across the country gave anecdotal reports of what individual consumers felt and planned to do. All ridings across the country are certainly aware of that.

Let us in the House not forget that it was not the cable companies that decided Canadians would receive seven new channels they did not ask for. It was the CRTC that licensed the new services after deciding which, in its collective wisdom, were best for the whole country.

At the same time, it was the CRTC that permitted the packaging of new channels, totally unsolicited by Canadians, with popular

programs such as ``CNN'', an American network, to give its favourite seven infant channels a chance of survival.

The Globe and Mail noted in its editorial of January 7, 1995: ``Effectively the commission was levying a tax on television viewers to support quality broadcasting''.

Canadians some 15 months later understand what the Consumers Association of Canada observed in January 1995, that the equality for the practice was backward.

The CRTC and the cable industry justified the negative option tactic in the name of culture, but in reality it was driven by business imperatives. It is very interesting.

It was reported on January 7, 1995 that the president of Rogers Cablesystems, Colin Watson, in an interview which was reported widely across the country stated that this sleight of hand called bundling or negative option billing was the only way that Rogers Cablesystems could sign up enough new customers.

I do not have to suggest to anyone in the House or anyone watching the proceedings today that every business in the country would love to be the beneficiary of this kind of largesse which the CRTC was doling out but for which the Canadian consumer was being told they would pay.

Canadian viewers were being told what they could watch and what they would pay in the name of Canadian culture. Is it not interesting that one of the conduits of Canadian culture has today as its most popular program, according to the rating agencies, reruns of the ``Mary Tyler Show'', a great Canadian show, and that another has that hybrid of Cosmopolitan and Vogue magazines called the ``Fashion File'' as its most popular program.

In return for this, seven new networks were guaranteed cash for life-that is my term-by the CRTC. Cable companies, as we now know, reluctantly bent to public pressure. They bent in the sense that they apologized for the behaviour and most gave a window of opportunity to opt out of the new channels, but never did they allow Canadians to decide up front that they could decline the channels.

The onus, the burden, the obligation was decidedly on the individual within a certain timeframe to either cancel the channels or pay for them. This is a unique and tragically Canadian way of selling Canadian culture.

More important, did Canadians receive any assurances from the CRTC that this would not happen again? Apologize? The cable companies did. The CRTC? Certainly not. Mr. Spicer and his commission, in my opinion, are much too busy regulating to acknowledge any errors.

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Last week my office received from the CRTC a recent bulletin which stated: ``The CRTC regulates the rates but expects each cable operator to inform subscribers in advance what subscribers must do to have optional packages removed''. I have to emphasize ``removed'', not ``added''.

The Canadian public today, 15 months later, does not have real choice on what services are to be added but only, in the words of the CRTC, what can be removed. Quite simply, negative option billing still survives. It is very much alive and well.

Canadians would also be upset to learn the CRTC is about to consider 40 new applications for specialty channels. Members of the House and Canadians will be pleased to know that the potential exists to receive, if the CRTC will bless them, such great Canadian programming as the ``Horse Network'', the ``Home and Garden Network'' and the ``Mystery Network''.

Forty corporations, most of them individuals who have recently incorporated shell companies, are poised to sell a concept which they hope will be richly rewarded by these guardians of Canadian television.

Soon telephone companies and direct to home satellite services will be channelling TV programming into homes across the country. What can those people expect? If we follow Mr. Spicer, the chair of the CRTC, in a speech delivered to the Canadian Cable Television Association, he noted that Canadian consumers want, deserve and will increasingly settle for nothing less than the maximum control possible over which services they select and pay for. As a consumer, Mr. Spicer agrees 100 per cent with that goal. He went on to say that full pick and pay, beyond a few rock bottom, common national interest services, can come only after this decade, meaning sometime in the year 2000 or thereafter.

With 40 applicants lining up, with new carriers pressing to enter the marketplace, we in the House have a choice, a choice we must make for consumers. That choice is clear. Bill C-216 would amend the Broadcasting Act, specifically section 3, so that consumers from this time forward will be given control over what they receive and the cost of what they receive.

Section 5 of the act imposes an obligation on the CRTC to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy which is set out in the act.

This bill would amend the broadcasting policy section, section 3, so that a cable distributor or other distribution undertaking, which could be a telephone company or a direct to home satellite company, could not demand money from a person for the provision or sale of a new programming service when the person has not agreed to receive the new service. In the vernacular, consumers will not pay for what they do not want. Certainly this is what consumers want.

The Consumers Association of Canada liked this bill. It issued a press release yesterday which called on members of the House to support it. At the same time the Public Interest Advocacy Centre has endorsed it. That group noted there are generations of laws protecting consumers against unsolicited goods and yet still today

cable companies, as merchandisers of goods, do not have to await the consumer's choice.

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Section 3 of the Broadcasting Act imposes a statutory duty on the CRTC to be ``responsive to the evolving demands of the public''. Since the CRTC has been silent for 15 months, we as members of the House can now move to respond to the demands of the public. There are those who would suggest that as members of the House we have a statutory duty to uphold the laws of the country.

As is often the case there is always the question of powers between the federal government and the provinces. Certainly in the House we have the authority to regulate in this domain throughout Canada and we, the members of the House of all parties, have the opportunity to take in hand the rights and the interests of consumers.

The issue of provincial versus federal jurisdiction is as old as the country. The question of whether a law is intra vires or ultra vires has always been a healthy industry for the legal profession and certainly has kept the judiciary busy.

When the storm erupted over this issue last year the then minister of Canadian heritage stated, as was reported by the press, that this was a matter of provincial jurisdiction. He then a few days later acknowledged that broadcasting was four square within federal jurisdiction.

We must remember that cable companies as federally regulated undertakings can claim immunity from provincial laws, especially consumer protection laws. Quebec has a consumer protection act which would appear to forbid the practice. In section 5 of that act the following are exempt from the application of the title on contract regarding goods and services: contracts regarding any telecommunication service supplied by an operating company within the meaning of section 2.

Professor Hudson Janisch in an interview with the Ottawa Citizen January 7, 1995 noted that provinces are free to control commerce but they lose that control. Quebec acknowledged that in section 5 when it comes to federally regulated industries such as cable.

Professor Janisch, an expert and professor in regulatory law at the University of Toronto, pointed out that the Broadcasting Act instructs the CRTC to protect consumers as set out section 3 of that act.

There are a number of underlying factors we must realize. Consumer protection is not clearly federal, it is not clearly provincial. The federal government has jurisdiction over cable television pursuant to its powers. Consumer protection legislation, whether enacted by the federal or provincial governments, usually provides a remedy. This bill does not provide a remedy. Proposed Bill C-216 does not provide this remedy to consumers because clearly it is not consumer protection legislation.

The CRTC does not prohibit cable companies from using negative option billing, we all know that, to sell new discretionary services because it does not regulate discretionary services. It could regulate discretionary services but it has decided not to do so.

Instead it informs cable operators that it expects them to notify subscribers when they will be given new services and how to opt out if they wish. The CRTC is required by section 5 to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in section 3(1).

We know that cable companies have used negative option billing. There are 40 applicants which now want to get on the system and enter the homes of Canadians. There is a new method by which cable providers could still slide those services in without using negative option billing. If we assume there are four new channels, they will provide these services free for six or eight or twelve months and then will apply for a rate increase. We have the opportunity by this bill to stop these hybrid variations on negative option billing.

There will be those who say this bill is not necessary. I have heard representations from public servants who maintain this legislation is not necessary; it can be done by regulation, it can be done by ministerial directive, it can be done by all sorts of methods. We know that regulation changes. Regulation is not law. It is not in a statute. All of us know that ministers come and go and that ministerial directives can easily be changed.

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The only assurance anyone could possibly give would be that there is no assurance at the moment unless Bill C-216 is passed. We must embody in statute, in the Broadcasting Act, that this practice is policy in this country. On behalf of Canadian consumers we must be willing to build a firewall between the CRTC and the consuming public to ensure that this does not happen again, either directly as it did last year or in some other hybrid variation.

[Translation]

Mr. Gaston Leroux (Richmond-Wolfe, BQ): Mr. Speaker, I am happy to speak to Bill C-216, an act to amend the Broadcasting Act, which was introduced by my colleague from Sarnia-Lambton. I am happy to participate in this debate both as the member for Richmond-Wolfe and as the official opposition's critic on heritage and cultural industries.

I would like to tell my colleague from Sarnia-Lambton that I applaud his initiative because it clearly shows his concern for consumers, who are too often left to fend for themselves when dealing with organizations such as the CRTC. Also organizations like the CRTC and others often let things slide without taking a stand.

The purpose of the bill introduced by the hon. member for Sarnia-Lambton is to protect consumers against a questionable business practice called negative option billing that forces people to pay for a cable service they did not request. They receive this service and, if they do not ask for it to be stopped, they are considered to have bought it.

For the benefit of our listeners and my colleagues, I would like to put the situation in context. I would remind you that, by amending section 3 of the Broadcasting Act, this bill provides that a cable distributor should not demand money from a person for the provision or sale of a new programming service where the person has not agreed to receive the new service. It seems to me that, in our society, people should not have to pay for a product or service they did not ask for.

This business practice of selling programming services to consumers who have not asked for them, which is called negative option billing, started in 1994 when the Canadian Radio-Television and Telecommunications Commission or CRTC granted eight new special cable service licences.

Why were eight new licences issued? The CRTC had one main goal, namely to strengthen the Canadian presence in the Canadian broadcasting system in anticipation of this system being inundated by American services, thus preventing an American invasion of Canadian distribution systems.

This goal in itself is certainly commendable. However, after this decision was made by the CRTC, in many cases, new channels were added to cable subscribers' discretionary service package. This means that those who already paid for a cable package now had this service added, and that made them angry. Why? Protests were sparked by this marketing strategy used by cable operators, which consists in imposing new and unrequested services on consumers and charging them extra for it.

No one in this House has to pay nor wants to pay for services they never asked for, that appear out of nowhere.

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The CRTC decision resulting from the public hearings on the industry's structure released in 1993 kicked off a number of regulatory reforms that were implemented when the eight dedicated cable broadcasting licences were issued. Marketing strategies based on negative optioning were debated and tacitly agreed to, since the CRTC did not take a stand.

The CRTC never regulated or attempted to regulate the negative optioning marketing practices of cable operators.

It seems obvious that a deliberate choice was made not to make public statements on the appropriateness of such practices. The CRTC did not react. It gave tacit approval by letting cable distributors set the rules themselves. It seems that, in the past, such practices helped new specialty services succeed on the market, while also promoting the cultural development goals set out in the Broadcasting Act.

So, the CRTC said: ``Since this has worked before, we will leave them alone''. Monopolizing consumers' ability to buy at their own expense is definitely a curious way to protect the culture of Quebec and Canada. Consumers are the ones who should decide on the content and the services they want.

During the 1993 public hearings on the industry's structure, however, some witnesses expressed their concern regarding the negative option billing for new services. Later, consumer protection groups expressly asked that the Broadcasting Act be amended to force the CRTC to protect the interests of consumers, not just cultural interests, when regulating the monopoly that the cable television industry is.

We agree that the content should be Canadian and should protected from neighbouring countries, but not at the expense of consumers, not by leaving them at the mercy of cable distributors. This does not make sense.

Cable television subscribers had already started rebelling. The CRTC's way of looking after their interests was to merely urge cable distributors to pay greater attention to consumers' requests. It said to those who provide the service and make money in the process: ``Set your own rules, but please act properly''.

In reality, the marketing component in the Canadian cable distribution industry is left to the association itself. In the end, the association is the one that sets the marketing standards advocated by the national Cable Television Standards Council. As regards this issue, it is clear that not only the CRTC but also the Liberal Party dragged their feet and did not take their responsibilities on time, since consumers had to send a wake up call.

On January 5, one year after consumer associations protested against negative option billing, Rogers Broadcasting Ltd., the largest cable distributor in Canada and the initiator of that practice, gave up the idea and apologized for its mistake. The company called itself to order, which is a good sign. But it was the result of pressure from consumers and not the government acting responsibly and declaring that, in this field, the commercial practice was unacceptable. From now on, says the Canadian Cable Television Association, in an attempt to reassure us, the practice of negative

option billing is a thing of the past and the cable distribution industry will listen to consumers.

Thus, the bill introduced by the hon. member for Sarnia-Lambton merely confirms a single practice. This brings me to the question of duplication. A single practice. The bill confirms an intrusion into the jurisdiction of provinces that have already taken responsibility in this area. This is not the case in all the provinces, I admit, but for Quebec particularly, where the Consumer Protection Act is strong and has been around for a long time, the proposal of similar legislation in the House of Commons represents a direct intrusion into one of Quebec's areas of jurisdiction.

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I am pleased to see this initiative by the hon. member, because he is, to all intents and purposes, reminding his own government of its responsibilities. He has just told it: ``You have neglected the situation''. And unlike in Quebec and in another province that has a consumer protection act, in all the other provinces, no action is taken and cable distributors are asked to regulate themselves and decide on their own what the rules should be.

The Government of Quebec has already established its jurisdiction by way of its Consumer Protection Act through a general prohibition on the sale of any service through negative option billing. Paragraph 230 (a) of this act is very clear. By regulating the commercialization of cable distribution services through an amendment to its Broadcasting Act, Ottawa reveals once again its determination to interfere in an area of provincial responsibility.

In Quebec, however, any contractual agreement between a consumer and a cable distributor has been subject, since the introduction of these services, to the Consumer Protection Act.

I must therefore reiterate that any such bill tabled in this House is very clearly a duplication of regulations and an intrusion of the federal government into the jurisdiction of the State of Quebec. It is not ill will on the part of the member. It is because his own government has not taken its responsibilities and he is calling it to order. He is also reminding the government that many provinces have no consumer protection legislation and that the present government, with the CRTC, is sending a very clear signal to cable distributors to take whatever action they see fit.

In terms of the content of the bill and the concerns of the hon. member for Sarnia-Lambton, I would say to him that we think alike. But as for the principle of tabling a bill in this House that represents a direct intrusion into the province's area of jurisdiction, we have no choice, as the official opposition, but to vote against Bill C-216.

[English]

Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, I rise to speak on behalf of the Reform Party. Our position on this bill, subject to individual members' votes, is that we would be supporting the bill.

Part of the problem and one of the hesitations I had as heritage critic in recommending to my caucus that we look at supporting this bill is the fact that it does not really deal with the issue. It is a little band-aid on a great big problem.

Anybody who comes to my home will see some of the construction I have done. It is really quite laughable and identifiable. There is a fairly broad piece of trim which covers up the error I made when I was trying to put the corners together. On top of that broad piece of trim is a medium size piece of trim to cover up the errors I made when I was crafting the broad piece of trim. Then there is a very small piece of trim which actually covers up the problem that was created with the medium size piece of trim. In other words, I am not a particularly good carpenter and it requires a tremendous amount of work to cover up the fact that the whole thing is being held together by chicken wire and chewing gum.

It seems to me that is a word picture of what we have with the CRTC and the fact we are dealing with this issue. This bill is a band-aid, a small piece of trim on a far larger problem. This is the reason there was concern about supporting the bill.

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The heritage minister has called for a review of the CRTC. I am not sure how serious she was. It seems to me that just about every time she wakes up in the morning she has some new ideas and then her department has to run around after her picking up the pieces. Whether or not she was really serious about a CRTC review, I do not know.

The problem is that there is a need for a CRTC review. The CRTC reflects what would be best classed as horse and carriage electronics. What I am saying is we have moved from the horse past the car to the jet, to the space age piece of equipment, while the CRTC mandate itself and the way it goes about doing its regulations is held back still feeding oats to the horse. An awful lot of the regulations show the results of feeding the oats to the horse by the road apples.

The problem is the CRTC comes forward with the kind of regulations that it does, particularly the kind of decisions it makes with respect to content. It ends up effectively forcing the cable companies to find creative ways to get around the problem, that somehow they are going to have to get dollars for some of these programs and some of the content that is going to be put on the air.

Clearly with the way the technology is right now in 1996 in the majority of homes in Canada, there cannot be true competition in the cable industry. In fact, we have to go outside the cable industry, speaking of technology, in order to create competition for the cable industry.

The marketplace probably would take care of this kind of negative option billing, this kind of high handed approach that was exercised by the cable companies in trying to come forward and get the revenue the CRTC said they had to get for these channels that nobody wanted. It would have worked out.

For example, there would have been competition if we had had a coherent policy from this government with respect to direct to home satellite service. Right now the DTH and the decision cabinet made to not interfere with the CRTC is driving a grey market of gigantic proportions.

Across the border from my constituency is a very small town in the northern area of Idaho. On a very busy day I do not think we would find 50 people in that town but amazingly there are 600 mailboxes. I wonder why there would be 600 mailboxes for 50 people. I bet it has something to do with the fact that if someone wants to get into the satellite grey market they have to have a post office box in their name in the United States. I will bet that is the answer.

That is the reality of what is going on, not only to people who are adjacent to the border as my constituency is but to people further north, in northern areas of British Columbia and in northern areas of Alberta. That is what is going on in western Canada. Quite frankly if it is not happening in Atlantic Canada, Ontario, the prairies and Quebec, I would be very surprised. That is going on because of the very bad, antiquated, out of touch, out of date policies this government is having the CRTC enact. We are driving people to become electronic Americans. That is the shame of it.

This is the same cabinet that made the decision not to interfere with, not to question the decisions that were made with respect to the direct to home satellite. This is the same cabinet which said: ``No, we cannot do that''. It is the same cabinet which on the same day decided it was going to interfere for the second time with digital audio services that had been proposed by Shaw Cable. It defies logic to have people believe that the same cabinet which would not overturn the boneheaded position of the CRTC with respect to direct to home satellite service, on the same day by some coincidence would interfere with a Canadian company trying to bring digital audio services to Canadians on a Canadian service. It defies logic for the cabinet to suggest that it could not do one but could just happen to do the other.

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It is for that reason, if the heritage minister is serious and if she is calling for a real CRTC review from top to bottom particularly with respect to its mandate, we would be fully supportive of that. However, I do have a caveat on that as well. The difficulty is that these little mental droppings she gave to us about her thinking of having a CRTC review, which I happened to see in ink in the newspapers, indicated that she was going to have the CRTC review itself.

Heaven forbid that we should get into another $2.5 million Juneau boondoggle as we did with the CBC review. That was pretty ridiculous when the budget for the CBC review I believe was struck at around $900,000 and the Canadian taxpayer ended up paying out over $2.5 million for it. I am not recommending that.

On the other side of the coin I also think it is very short sighted, narrow minded and myopic on the part of the minister for her to say: ``Why don't we have a review of the CRTC by the CRTC for the CRTC so that it can tell me about the CRTC and what it should be doing''. The minister does not seem to have a tremendous amount of control over a lot of things, quite frankly.

Let me get back to the issue of Bill C-216. The reason I support it and in spite of the fact that I see it as being a necessary little band-aid on the larger issue of whether the CRTC should be doing these things is that I do believe there has to be protection in our society for tactics that can be used by people in a broadly based commercial marketplace.

Let me make my position really clear on that. I do not believe in overregulation in a narrow marketplace. The reason I do not believe in overregulation in a narrow marketplace is that I do believe in the basic assumption in business of caveat emptor, let the buyer beware. Far too often we try to mandate with government action things that could be better handled by the free market.

In this instance, there is a very broadly based marketplace and there are seniors and people who require some protection. Therefore, I would support and I am recommending to my colleagues in the Reform Party to support Bill C-216 to afford that protection to a broadly based marketplace.

Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, it is a great pleasure to enter into the debate on Bill C-216 introduced by my colleague from the riding of Sarnia-Lambton. I applaud his initiative in this matter.

Generally I recognize the importance of maintaining the cultural industries within our country. I believe it is part of the mandate of the CRTC to ensure that there is a cultural identity that goes from sea to sea to sea. I also believe this is part of its mandate that the CRTC attempts to do reasonably well.

Having said that, I also realize that the concept of dividing up our country into areas where cable providers can function is a method of granting monopolies. From someone who believes in free competitive forces in the marketplace, I have initial reservations about that process.

I have also realized that there is a significant advantage to Canadians rationalizing their marketplace to provide enough revenue for some of these businesses to do research and development. We are talking about convergence in the communications businesses throughout Canada. Canada has been able to compete internationally and allow the penetration in telecommunications because we have taken these initiatives.

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When creating a monopoly it must be done with a certain degree of caution. We do not want people to use their market areas in such a way that they disadvantage their customers. This is the essence of the bill. It attempts to address a practice which for some reason has become acceptable to the cablevision industry but clearly is not acceptable to everyday Canadians. Why do I say that?

Most of my riding is serviced by the Rogers cablevision network system, on which I do a program once every two weeks. When this process of negative option billing was introduced, there was an immediate outrage among my constituents. It would appear that governments had allowed the monopolistic part of the CRTC regulatory environment to gouge them. It was not really any different from a neighbourhood theatre sending a bill to someone for a movie they have never seen or ever desire to see. This is what we did to average Canadians.

It was not that Canadians were upset about the concept of Canadian content. Maybe if somebody took the time to explain to them the need for Canadian content, they would pay more themselves directly or they would agree to support it through their governmental system, as we do with the CBC, or possibly through public broadcasting arrangements. The bottom line is that they were not given the choice and that is what upset them.

I talked to my local cablevision company to see what was the fallout to this, what actually happened after the smoke cleared. Rogers said it was sorry and so on but the bottom line is that most people, after having been given the option to send in a little card to say they want out of the system, did not do that. In reality, the negative option billing system was successful for Rogers and that industry.

Why do we need negative option billing in the first place? It is interesting to note a comment from Mr. Watson who was a director at the time. He said: ``Outlawing the negative option sales tactic''-I underline the word tactic-``would decrease subscribers' acceptance rates, cut cablevision services expected revenue and choke new channel source of cable fees and advertising''. What he is saying is that this tactic was designed for the express purpose of making people pay for things they would not normally have. He is saying that if they were given this choice, they probably would not do it.

We have set up a governmental process that is unacceptable to the average Canadian. It is clear that the essence of this bill is to address that wrong. For that reason, it is highly appropriate.

A number of other things were going on in the cablevision industry at that time. There was a concept of consolidation. In my area it used to be Maclean's. Maclean's became Rogers and Rogers became a huge organization. Part of that consolidation cost a lot of money. People got some money out of this. They were paid off and so forth. How will that be financed for rationalization? It will be done through a fee structure. That is exactly what this is all about. The CRTC acquiesced in that situation. Possibly it saw the rationalization of the cablevision market to be a long term goal for Canada. Maybe it is. I have not really taken the time to study all that.

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However, the bottom line was that Rogers, in particular, gave a new definition to the word over-extended. Indeed, by subsequently reducing its rates, I suspect it is having financial problems.

Nobody took the average Canadian into consideration. Some of my colleagues have noted that at least two provinces already have legislation in place that prohibits negative option billing. In addition, the industry is attempting to develop the technology to give recipients of cablevision the choice.

At the time, a Regina company had the facilities to give certain numbers, approximately 9,000 of its 50,000 subscribers the option to say no. If they did not want certain channels coming into their houses they did not have to pay for it.

The industry realizes the importance of individual choice. As I understand it, the industry is now working on the technology to provide that very service. In four or five years from now people will have the choice of channels. They recognize the importance of consumer choice. It appears that the menace of negative option billing is still within the system today. The purpose of this bill is to eliminate it.

In conclusion, I believe this has told us that we must have another way to sell Canadian content. Maybe we need to allow free access to home environments for a period of time so that people can become adjusted to new programming and learn to accept or reject it. People cannot be charged for services they did not ask for. It is just not fair within the existing marketing system.

Mr. Svend J. Robinson (Burnaby-Kingsway, NDP): Mr. Speaker, I will be very brief.

I want to take this opportunity on behalf of my colleagues in the New Democratic Party to indicate our support for the bill that has been proposed by the member for Sarnia-Lambton.

As the member of Parliament for Burnaby-Kingsway, I recall the tremendous sense of outrage and the anger of my constituents at the time that Rogers Cable proposed the negative option billing. There were many calls and letters. I spoke out at the time against that option and urged the government to move forward with strong and effective legislation. Therefore, I am pleased to see that this bill is now before the House.

I also want to note that the New Democratic government of British Columbia has also shown national leadership on the issue. I know that members of the House and those watching would want to know that the B.C. New Democratic government has shown leadership and has moved on this front at the provincial level under consumer legislation to ban negative option billing in the province of British Columbia.

However, this is a matter that falls within federal jurisdiction under broadcast regulations. I welcome the opportunity to support the legislation and I hope members of the House will pass this bill.

Mr. John English (Kitchener, Lib.): Mr. Speaker, like the other speakers in the debate on Bill C-216, I too received hundreds of calls over a period of one week in my constituency office. This issue is perhaps the one on which I have received the most calls during my period as a member of Parliament. One resident of Kitchener continues to call me every two or three days on this topic.

The importance of this issue to my constituents is clear. I do not intend to talk today about the questions which have been raised by the member for Kootenay East or the member for Durham, which were on technology and the CRTC regulations in general.

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The questions of negative option billing and consumer choice are important to me and to my constituents. Negative option billing is not something new to the cable industry in Canada. It is a practice which has been sanctioned and condoned by the CRTC. With the rapid change in telecommunications and the way in which television is delivered with black box decoders and satellite dishes, the cable industry faces major difficulties in adjusting to market changes.

We know fairly clearly what is in the cable companies' interests in this regard, but we must ask ourselves what is in the interests of the consumers.

When this issue first arose and when I heard about the intention of the hon. member for Sarnia-Lambton to introduce this bill, I immediately decided that I would second it when he asked me to do so. I did so because of the interests of my consumers and also because this practice raises other problems in the area of consumer choice.

Some have spoken about Canadian content and have seen that issue to be of particular difficulty. I do not share that concern. In fact I talked to many of my constituents about their reaction to the action by the Rogers cable system. It led some of them to be concerned about Canadian content. Indeed, they even suggested imposing higher Canadian content rules because of negative option billing. In short, there were unintended consequences of the action which impaired the support that Canadian cultural content has had in Canadian broadcasting.

There is a danger. Canadian content is very important. The CRTC, through its regulations, has accomplished some fairly important things. It has promoted the Canadian music industry.

We have heard a great deal about Alanis Morissette recently. At the Grammy awards Canadian entertainers did extremely well. CRTC practices may have in fact created this very strong and vibrant Canadian music industry.

Canadians, in general, support the cultural practices of previous governments in supporting the CRTC and its regulations. However, they do not support a policy which misleads consumers. As the hon. member for Durham said a few moments ago, this is a tactic which has developed. People take these channels without realizing the additional cost. Even after the controversy ended, it turned out that most did not opt out.

This approach undermines moral principles. The CRTC received a lot of criticism. Rogers cable system admitted that this practice would not be accepted. There was negative publicity about the entire industry. The fact that negative option billing still exists is unacceptable to all Canadians.

The government should listen to the statements which were made by consumer groups. The Consumers' Association of Canada was mentioned earlier. I would like to read into the record a statement which was made by the executive director of the Consumers' Association of Canada. She stated:

The new telecommunications environment is about competition and choice-this Bill will help to make sure that Canadians are informed and willing consumers of cable services.

The executive director of the Public Interest Advocacy Centre stated:

Bill C-216 drags the regulation of the Canadian cable industry into the twentieth century. Governments have long recognized that consumers should not pay for unsolicited goods. No matter what the motive is behind negative option marketing, it is an abuse that must be corrected.

This Bill is an important precedent for the future, when multi-media program services will be fighting for a niche on the Information Highway. Consumers have every right to know what they are receiving and to obtain only what they request.

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The consumers of Canada have spoken. The member for Sarnia-Lambton has listened and I stand with him supporting the interests of the consumers of Canada.

Mr. John Maloney (Erie, Lib.): Mr. Speaker, I am pleased to speak on private member's Bill C-216, an act to amend the Broadcasting Act with respect to broadcasting policy, put forward by my colleague from Sarnia-Lambton.

In the week between Christmas and New Years in 1994, my office, like those of my colleagues, received a deluge of calls from Erie constituents who were concerned with their cable package and the billing option that was to take effect on January 1, 1995. They were angry and they had had enough. I certainly did not fault them. They were right. Negative option billing is unacceptable.

I am in favour of Bill C-216 because it would ban negative option billing. It would apply not only to cable companies but to any other company that provided a distribution undertaking which is defined under the Broadcasting Act as ``an undertaking for the reception of broadcasting and the retransmission thereof by radio waves or other means of telecommunications to more than one permanent or temporary residence or dwelling unit or to another such undertaking''.

Today we are looking at more players entering the market for broadcasting services such as telephone and satellite companies which will soon provide competition to cable companies. By passing Bill C-216 we can ban negative option billing for new programming services no matter who provides them.

My constituents were calling me because the cable companies are federally regulated by the Canadian Radio-television and Telecommunications Commission, commonly referred to as the CRTC.

In 1994 the CRTC licensed six new English language and two new French language specialty services. The commission's two primary objectives in doing this were to strengthen the Canadian presence in the Canadian broadcasting system, especially in anticipation of an invasion by American direct to home satellite services and to ensure that the widest possible selection of new Canadian services would be available at a reasonable cost.

I support these objectives. I support strong Canadian content and a strong Canadian presence in the entertainment industry. However, this cannot be achieved by taking advantage of the Canadian consumer. My constituents were not upset there were eight new channels on January 1, 1995. They were angry because they would automatically be billed for a service they did not request. They felt manipulated through higher fees and the repackaging and repositioning of channels-

The Deputy Speaker: I am very sorry to interrupt. Unfortunately the time has expired.

Mr. Arseneault: Mr. Speaker, I rise on a point of order. The hon. member is in the middle of his speech. We are wondering if he could have the unanimous consent of the House to finish. Perhaps the Speaker would not see the clock for the remainder of this member's speech.

The Deputy Speaker: Is there unanimous consent to let the member have three more minutes to finish his speech, if that is sufficient?

Some hon. members: Agreed.

Mr. Maloney: Mr. Speaker, I appreciate your indulgence and that of my hon. colleagues.

In recent years Canadian producers have proved themselves to be formidable broadcasters, able to compete at home and around the world in the fields of drama and entertainment. Many of these new specialty channels licensed by the CRTC offer excellent programming and would have survived without having to be forced on anyone. However, I am afraid that the consumer backlash did little to enhance the popularity of the new specialty channels.

On January 5, 1995 a major cable company had partially capitulated, apologizing for its mistake in not presenting the new services as a separate discretionary package. It offered consumers the choice of keeping only their current package of specialty services at additional fees. However, the much disputed negative option marketing scheme used to launch the new line-up remained firmly in place, leaving the onus on the consumer to refuse the new package.

This brings me to my role as a parliamentarian and a representative of my constituents in this House. Some would argue this is a consumer rights issue under the jurisdiction of the provinces but provincial consumer laws do not apply to cable companies which are clearly under federal authority.

I do not understand how the protection of the choice of Canadian cable consumers is a matter outside of federal broadcasting jurisdiction, as some have suggested. Section 5 of the federal Broadcasting Act creates an obligation for the CRTC to regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in the act. Proposed changes to section 3 of the Broadcasting Act would ban the practice of negative option billing for new programming services.

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There is no doubt that over the next decade the cable industry will change drastically. More and more consumers are beginning to demand that they pay only for those channels they want. However, I understand the technology to allow this is not to be realized until the turn of the century. Thus television and the cable industry are currently in a period of transition. Program selection is increasing but the technology to give viewers real choice has not yet arrived.

In May 1994 the CRTC chairman acknowledged that television consumers want more control: ``Consumers want, deserve and will increasingly settle for nothing less than the maximum control possible over which services they select and pay for. As a consumer and the CRTC chairman, I agree 100 per cent with this goal''.

Cable television services in Canada are distributed either as part of a basic service or on an discretionary basis. Basic cable service is a standard package of services provided to all subscribers within a cable company's service area. It consists of a number of mandatory or priority Canadian programming services, including the CBC English and French network services, local and regional stations, provincial educational services, a community channel as well as various optional services.

The proposed changes in my colleague's bill are timely because commencing May 6 of this year the CRTC will consider licensing more TV channels and all these new channels will be scrambling for an audience. My constituents must be allowed to make a positive choice to obtain these services. Some may not realize a response is necessary or even possible. Some may inadvertently forget. They do not want to have to call their cable company to say stop these extra channels.

I criticize the negative option billing approach used to introduce the new services on the grounds of fairness and consumers' right to choose. Consumers should have the right to select the brand of programming they want rather than having it imposed on them by a paternalistic regulator and monopolistic industry.

Negative option marketing favours corporations and disempowers consumers. The Broadcasting Act is too one sided in requiring the CRTC to protect only Canadian cultural interest, not consumer interest.

As MPs we have a golden opportunity to respond to Canadian consumers who demanded that we put an end to negative option billing for new programming services. Government have long recognized that consumers should not pay for unsolicited goods. No matter what the motive behind negative option marketing, it is an abuse that must be corrected.

I urge my colleagues to support this legislation.

The Deputy Speaker: The item is dropped to the bottom of the order of precedence on the Order Paper, the time having expired.