Final Evaluation of Industry Canada's Involvement in the International Telecommunication Union — Industry Canada's Involvement in the International Telecommunication Union

1.1 Introduction

An Evaluability Assessment³ (EA) was conducted in 2007–2008 to determine whether Industry Canada's involvement in the International Telecommunication Union (ITU) was ready for an evaluation, what might be the barriers to undertaking an evaluation, and how best to implement an evaluation. The EA concluded that Industry Canada's involvement in the ITU was ready to be evaluated and that Industry Canada managers believed there was value in doing so. The EA also set out the issues to be investigated in an evaluation and the methodologies to be employed.

This report presents the results of the evaluation of Industry Canada's involvement in the International Telecommunication Union in accordance with the EA. This evaluation was undertaken in consultation with a Steering Committee established for the purposes of the evaluation, and managed by the Audit and Evaluation Branch of Industry Canada. This report is organized into four sections:

1. Section 1 provides the general background and description of the activities;
2. Section 2 presents the methodology followed in conducting the evaluation;
3. Section 3 presents our findings, organized in relation to the evaluation issues; and
4. Section 4 presents our recommendations.

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1.2 Background and Context

Background

International activities are becoming more important to Canadians and the importance of Canadian participation and input into international forums that develop the technical basis for regulations and standards is increasing. International standards set common requirements for the global marketplace and federal government policy directs regulators to use international standards as the basis of national regulations and standards to the maximum extent possible. As a result, many Canadian telecommunications standards and regulations are adopted directly from those agreed internationally, such as within ITU. Particularly in radio communications, internationally agreed, treaty-binding regulations are incorporated into domestic regulations.

Context

The International Telecommunication Union (ITU), created in 1865, is the United Nations Specialized Agency for telecommunications. The ITU is an inter-governmental organization, based in Geneva, Switzerland, with 191 Member States party to its treaty instruments. Moreover, the ITU also engages more than 700 Sector Members and Associates,⁴ representing a cross-section of the telecommunications and information technology industry and other related organizations. As the global focal point for governments and the private sector, the ITU's role in helping the world communicate spans three core sectors: radio communication, standardization and development. The key functions of the organization are its treaty-binding regulations and the facilitation of world-wide standardization of telecommunications. The ITU also organizes TELECOM events and is the lead organizing agency for the World Summit on the Information Society.

Founded on the principle of international cooperation between the public and the private sectors, the ITU represents a global forum through which government and industry can work towards consensus on a wide range of issues affecting the future direction of this increasingly vital industry.⁵ The specific functions of the Union are as follows:

1. To effect through treaty level regulatory instruments, the allocation of bands of the radio-frequency spectrum, the allotment of radio frequencies and the registration of radio-frequency assignments. And, for space services, the ITU assigns any associated orbital position in the geostationary-satellite orbit or of any associated characteristics of satellites in other orbits, in order to avoid harmful interference between radio stations of different countries;
2. To coordinate efforts to eliminate harmful interference between radio stations of different countries and to improve the use made of the radio-frequency spectrum for radio communication services and of the geostationary-satellite and other satellite orbits;
3. To provide a unique world-wide venue for government and industry to work together to develop inter-operable, nondiscriminatory and demand driven international standards for telecommunications equipment and services which, in turn, may form the basis of many national standards and proposed regulations and statutes.

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1.3 Program Description

Mandate

As a state party to the Constitution and Convention of the ITU, and its complementary Administrative Regulations (i.e. the Radio Regulations and the International Telecommunication Regulations), Canada has been a Member State of the ITU in its own right since 1932, following an act of Parliament to join the organization. Membership in the ITU conforms to Section 6 (e) of the Department of Industry Act whereby the Minister shall "take any action that may be necessary to secure, by international regulation or otherwise, the rights of Canada in communications matters." Canada's membership in the ITU and Industry Canada's leading role contribute to the Department's strategic outcome of a fair, efficient and competitive market place. Moreover, this role is listed in the Main Estimates as part of Industry Canada's Program Activity Architecture under the Program Activity concerning the development of regulations, policies, procedures and standards governing Canada's spectrum and telecommunications industries and the digital economy, which is entitled "Spectrum, Information Technologies and Telecommunications Sector — Marketplace".

Objectives

Active Canadian participation in ITU activities supports both government and industry objectives. The key objectives in contributing to the ITU are as follows:

• To secure Canada's interests in the international regulation of the radio frequency spectrum and international telecommunication regulation to protect Canadian interests in the access to the spectrum and satellite orbit resource as a means, for example, of facilitating communications across Canada and of protecting Canadian sovereignty in remote areas through modern digital technologies;
• To provide leadership and focus in promoting the competitiveness of the Canadian telecommunications industry's interests, i.e., by working closely with Canadian stakeholders to obtain spectrum allocations at the global conferences, and development of global standards for telecommunications through the work of the ITU;
• To work with other countries to harmonize policy and regulatory frameworks, promote interconnection and interoperability of global telecommunication networks and services, and deal strategically with them to facilitate access to key markets;
• To build effective consultation and information dissemination processes with Canada's key trading partners; and
• To promote Canadian expertise, products and services with the ITU Member countries and over 700 Sector Members and Associates.

Resources

There are three primary cost elements of Industry Canada's participation in the ITU: Canada's financial contribution to the ITU, Industry Canada's staff costs and Industry Canada's travel costs.

Industry Canada receives authorization to provide a financial contribution to the ITU from Treasury Board. The current authorization level is $6,808,000 per year. This allows for currency fluctuations as the payment is in Swiss Francs and Industry Canada is also authorized by Treasury Board to use any surplus funds for other-related ITU activities. The use of surplus funds can be seen in Table 1 where they are described as "Other Uses of Grant". It should be noted that Industry Canada has not fully used the authorized funds in each year. For example, Industry Canada lapsed between $9,000 and $709,000 spanning the years 2003–2004 through 2006–2007.

The amount of the Canadian contribution to the ITU is commensurate with its international standing and commitment to the UN system and its specialized agencies, as well as, for example, a member of the G8.⁶ The authorized cost is associated with Canada's contribution level of eighteen units⁷ under the Minister of Industry's discretion; and other ITU related costs of benefit to Canada.

As shown in the organization chart of Industry Canada's involvement in the ITU, there are six directorates that are directly involved in the ITU activities. ITU staff estimate that on average they employ 25 FTEs on ITU activities across the six directorates which represents approximately $2.28 million dollars in salary per year.

Table 1 shows that the average cost of Industry Canada participation in the ITU, including contributions, was approximately $9.5 M per year over the past five years.

Accountabilities

Industry Canada's ITU activities are carried out mainly by two sectors: the Strategic Policy Sector and the Spectrum, Information Technologies and Telecommunications Sector (SITT). The two branches under SITT, Spectrum Engineering, and Radiocommunications and Broadcasting Regulatory, are directly involved in the ITU technical and regulatory issues. The Telecommunications Policy Branch of the Strategic Policy Sector is responsible for coordination of Canadian participation in ITU activities, as well as a broad range of organizational and governance issues related to the strategic policy direction and management of the Union. There are principally six directorates from three branches that are directly involved in ITU activities:

• Strategic Policy Sector:
• Telecommunications Policy Branch:
  • International Telecommunications Policy and Coordination (DIT)
  • Spectrum and Radio Policy (DSRS)
• Spectrum, Information Technologies and Telecommunications Sector:
• Spectrum Engineering Branch:
  • Spectrum Planning and Engineering (DDGSE)
  • Broadcast, Multimedia Planning and Technical Policy (DBCP)
  • Telecom Engineering and Certification (DSI)
• Radio Communications and Broadcasting Regulatory Branch:
  • Space and International Regulatory Activities (DSIR)

The organization chart in the Figure 1 shows Industry Canada's involvement in the ITU.

Stakeholders and Beneficiaries

Industry Canada's contribution to the ITU enables the Government of Canada, working with stakeholders, including Canadian telecommunication carriers, service providers and manufacturers, to reflect Canadian interests and requirements in the formulation of treaty-binding regulations, in the development of global standards and in enabling Canadian industry to use ITU processes, products and services to enhance Canada's competitiveness in telecommunications worldwide. It should be noted that many Canadian companies and organizations also participate directly in the ITU as Sector Members or Associates.

In addition, more than forty companies in Canada participate in Industry Canada's national ITU consultation process along with other government departments and agencies, such as:

• Department of Foreign Affairs and International Trade (DFAIT)
• The Canadian Space Agency (CSA)
• Department of National Defence (DND)
• Canadian International Development Agency (CIDA)
• Indian and Northern Affairs Canada (INAC)
• Canadian Radio-television and Telecommunications Commission (CRTC)
• Transport Canada (TC)
• Environment Canada (EC)
• National Research Council (NRC)
• Health Canada, (HC), and
• The International Development Research Centre (IDRC).

General Description

Consistent with Industry Canada's statutory responsibilities under the Department of Industry Act and the Radiocommunications Act, active Canadian participation in ITU activities supports both government and industry objectives. The most important objectives are:

• securing access to the radio-frequency spectrum and satellite orbit slots;
• avoiding harmful interference to radio communication services;
• ensuring management and functioning of ITU meets Canadian requirements and is consistent with best practices for governance in the United Nations system; and
• reducing costs for equipment manufacturers to bring products to market for the ultimate benefit of the Canadian consumer.

The processing of satellite and frequency registrations is primarily an operational activity that is undertaken by the Space and International Regulatory Activities directorate. The work of ensuring ITU regulations, frequency allocations and technical standards conform to Canadian interests and requirements involves all six Industry Canada directorates.

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1.4 Logic Model

Expected Results

Logic Model

In this section, we provide a logic model of Industry Canada's involvement in the ITU. A logic model describes the relationship amongst activities, outputs and outcomes. The following section provides more details on the activities and outputs. There is a graphic of the model presented at the end of the section.

Activities and Outputs

Consult with Stakeholders and Partners
Industry Canada consults with stakeholders and partners in relation to the ITU using a number of different methods. Industry Canada conducts a national ITU consultation process with more than forty companies in Canada along with other government departments and agencies, such as Department of Foreign Affairs and International Trade, Environment Canada, Health Canada, the Canadian Space Agency, the Department of National Defence, the Canadian International Development Agency, Indian and Northern Affairs Canada , the Canadian Radio-television and Telecommunications Commission, Transport Canada, the National Research Council, the International Development Research Centre. Consultation is done partly through the establishment of a number of Canadian National Organizations (CNOs) that parallel ITU activities. The objective of the CNOs is to coordinate Canadian participation in the activities of the ITU, with the ultimate objective of promoting and protecting Canadian public and private sector interests.

Through this consultative process, Industry Canada is able to ascertain the requirements and interests of Canadian companies and other government departments. In developing a Canadian position, Industry Canada must balance the interests of all stakeholders including other government departments to formulate the optimal position for Canada. While Industry Canada considers the inputs of all consultative participants, it has the ultimate authority in finalizing the Canadian proposals and positions.

It should also be noted that Canadian companies can, and do, represent themselves at the ITU as Sector Members or Associates. There are twenty-nine Canadian Sector Members and eleven Associates, which participate in the activities of the three ITU Sectors, namely, the Radiocommunication Sector, the Telecommunication Standardization Sector and the Telecommunication Development Sector.

Consulting with stakeholders and partners is an activity that facilitates the activity, Prepare Submissions, Participate in Conferences, Meetings, Study Groups, Assemblies, and Chair Committees.

Consult with other Countries and Regional Bodies
Industry Canada consults with other countries and regional bodies to garner support for Canadian positions and to influence the positions put forward by regional blocks.

The regional block that Canada is a part of is the Inter-American Telecommunication Commission (CITEL). As part of the Organization of American States, it is the main forum in the hemisphere in which the governments and the private sector meet to coordinate regional efforts in telecommunications. Canada is currently one of the elected eleven Permanent Executive Committee (COM/CITEL) members of CITEL.

Depending on Canadian policy objectives and/or commercial needs and concerns, Canadian positions and proposals may be aligned with either the United States, countries of the Americas through CITEL common proposals, Europe on matters of mutual interest, the Asia Pacific Telecommunity countries under the auspices of CITEL or ISACC, or others.

Industry Canada also seeks support for positions and proposals through:

• bilateral negotiations in select countries;
• multilateral negotiations; and
• the development of common objectives within the Commonwealth ITU Group.

The output of this activity is Regional and/or Country Consensus. This consensus can be evidenced through the establishment of CITEL Inter-American Proposals and positions to be presented at the ITU. In other cases, Canada can be assured of the support of other regional member countries for its positions.

Process Satellite Applications and Terrestrial Frequency Assignments
Industry Canada reviews satellite network licensing applications submitted by industry; submits coordination and notification information to ITU; and completes ITU coordination and notification procedures to secure international rights for the use of spectrum and orbit.

For terrestrial networks, Industry Canada submits notification information and completes the relevant ITU procedure to secure international rights for the use of spectrum.

The outputs of this activity are Satellite Filings and Spectrum and Terrestrial Notifications to ITU. Essentially, Industry Canada notifies the ITU of the planned usage of satellite orbits and spectrum usages according to Canadian interests.

Prepare Submissions, Participate in Conferences, Meetings, Study Groups, Assemblies, and Chair Committees
Industry Canada, in representing Canada, participates in the following ITU activities:

• Radiocommunication Sector (ITU-R):
  • World Radiocommunication Conferences, Radio Assemblies, Radiocommunication Advisory Group and Study Group meetings and related activities
• Telecommunication Standardization Sector (ITU-T):
  • World Telecom Standards Assemblies, Telecommunication Standardization Advisory Group and Study Group meetings and related activities
• Telecommunication Development Sector (ITU-D):
  • World and Regional Telecom Development Conferences, Telecommunication Development Advisory Group and Study Group meetings, and related activities

While Industry Canada does not participate in all ITU activities, it strategically selects those that are most important to Canadian interests, as determined through the CNO consultative process. Industry Canada prepares proposals and positions on regulatory and procedural issues and participates in ITU conferences and meetings to secure and facilitate Canada's access to orbital and spectrum resources and to promote Canada's interests in global standards development and interoperability.

In some cases, Industry Canada advocates a position that will be beneficial to Canadian businesses or protects Canadian interests. In other cases, Industry Canada attempts to anticipate future requirements and stake out territory for Canada.

The outputs associated with this activity are submissions, positions, contributions and proposals. In different formats, this is the Canadian position on particular issues that are presented to the ITU.

Develop Canadian Standards, Regulations and Licensing Procedures
Industry Canada develops Canadian standards, regulations and licensing procedures to harmonize with the ITU, when it is required to do so under treaty with the ITU or when there are benefits for Canadian businesses or spectrum users. Canada as a signatory to the ITU is required to implement its treaties domestically.

Some examples of how international regulations affect Canadian standards, regulations and licensing procedures include:

• The ITU Radio Regulations form the basis for spectrum policy and technical standards in Canada (e.g. cellular and PCS services);
• Coordination of satellite services is governed exclusively by the ITU Radio Regulations; and
• Interference criteria developed in the ITU-R are the basis of Industry Canada coordination processes.

The outputs associated with this activity are Canadian Standards, Regulations and Licensing Procedures.

Immediate Outcomes (ITU)

The first level of outcomes, associated with Industry Canada's involvement in the ITU, are actions taken by the ITU:

• The ITU Adopts Binding Regulations;
• The ITU Allocation of Radio Spectrum;
• The ITU Develops Global Technical Standards; and
• The ITU Registration of Satellite Orbits and Frequency Assignments.

In the first three areas, adoption, allocation, and development, Industry Canada is looking for outcomes that are consistent with Canadian interests. The last area, registration, assures the protection of Canadian spectrum uses.

Immediate Outcomes (Canada)

The actions of the ITU have direct consequences for Canadian businesses and spectrum users. The following are the immediate outcomes (Canada) that are expected to be realized:

Canadian Companies Exploit Existing/Develop New Services and Technologies
There are two aspects to this outcome. The first aspect is the exploitation of existing technologies. Industry Canada will often promote positions at the ITU that will allow Canadian companies to exploit their existing technologies. On the other end, once ITU regulations or standards are developed, Canadian firms can target their R&D to technologies that will be consistent with the ITU standards and regulations.

Protection and Access of Spectrum Consistent with Canadian Interests
When the ITU allots spectrum, this protects the use of that spectrum for existing Canadian users or it may provide access for new uses. When allocation for new uses occurs, Canadian companies may be able to take advantage of their existing technologies to create new applications and services.

Economies of Scale for Canadian Companies
When ITU standards and regulations are developed, it allows Canadian businesses to develop and manufacture products consistent with those standards and regulations. Because these standards and regulations are recognized around the world, it allows Canadian companies to develop a product that can be sold worldwide, resulting in economies of scale and increased market access.

Connectivity and Interoperability of Global Communications Networks and Services
Connectivity refers to the ability of telecommunication devices and networks to connect with devices and networks in other countries. For example, Canadians can use their landlines, cellular or Internet phones, to contact parties in other countries. They can also use their computers to access web sites in other countries. Interoperability refers to the ability to use telecommunication devices in other countries. For example, Canadians can use their cell phones in Europe and RIM can sell their Blackberries in many countries around the world. Interoperability also ensures that the networks in different countries can interconnect and interwork with each other. Binding regulations, allocation of radio spectrum, and global technical standards all facilitate connectivity and interoperability.

Protection and Access of Satellite Orbits and Frequency Assignments Consistent with Canadian Interests
Canadian registration of satellite orbits and frequency assignments connotes the right of those registered to use those satellite orbits and frequency assignments. This then protects Canadian users from others who may wish to use these orbits and frequency assignments in a way that would interfere with the Canadian use.

Intermediate Outcomes

The immediate outcomes for Canada lead to a series of intermediate outcomes:

Increased Sales for Canadian Businesses to International Markets
When Canadian companies are able to exploit their technologies for application in the global market or target their R&D to this market, it is then possible to expand their market potential and increase their sales to international markets. Furthermore, economies of scale allow them to be competitive in a global market, further leading to increased international sales.

Countries around the World Serve the Canadian Market
Connectivity and interoperability means that many of the products of foreign telecommunication companies will function in Canada and as a result, many of these companies will sell their products directly or indirectly in Canada, thus ensuring the widest possible choice of communications technologies and products for Canadian consumers.

Interference Managed and Communication Facilitated
The Protection and Access of Spectrum Consistent with Canadian Interests ensures that other uses of spectrum do not interfere with the Canadian uses and thus communication is facilitated.

Connectivity and interoperability also serve to facilitate communication. Finally, the protection and access of satellite orbits and frequency assignments also prevents interference with Canadian uses, further facilitating communication.

Ultimate Outcomes

There are four broad outcomes from Industry Canada's involvement in the ITU:

Globally Competitive Telecommunications Carriers, Suppliers and Manufacturers
A larger market, global interoperability and resultant increased sales are expected to lead to Globally Competitive Telecommunications Carriers, Suppliers and Manufacturers.

Lower Costs and More Technologies Made Available to Canadians
With manufacturers around the world being able to serve the Canadian telecommunications market, Canadians benefit from lower costs due to competition and economies of scale. Consumers also benefit from access to new technologies developed around the globe.

Other Government Department Outcomes That Benefit Canadians
There are a myriad of benefits that accrue to Canadians through other government departments' use of spectrum. These include national defence, public safety, law enforcement, weather prediction, civil aviation, space program, maritime safety, etc.

Communication, Broadcasting Benefits to Canadians
With protected spectrum and a lack of detrimental interference, Canadians benefit from the unfettered use of their telecommunication devices, systems and networks and the enjoyment of broadcasting services.

Industry Canada's Strategic Objectives

Under Industry Canada's Program Activity Architecture, ITU activities are expected to contribute to the Industry Canada Strategic Outcome of a Fair, Efficient and Competitive Marketplace. This is expected to be realized through both globally competitive telecommunications carriers, suppliers and manufacturers, as well as lower costs and more technologies made available to Canadians. However, an argument can made that ITU activity also contributes to the Industry Canada Strategic Outcome of an Innovative Economy as a result of the ultimate outcome of Globally Competitive Telecommunications Carriers, Suppliers and Manufacturers. Furthermore, other government department Outcomes That Benefit Canadians and the Communication, Broadcasting Benefits to Canadians can be seen to logically lead to the sustainable communities' aspect of the Strategic Outcome, Competitive Industry and Sustainable Communities.

The graphical logic model is portrayed in the Figure 2 below.

ITU Accountability and Performance Measurement Activities

International Organizations (IO) have internal accountability and performance measurement functions on which member countries can rely. However, Canadian departments contributing to those IOs must assure themselves that these accountability and performance measurement functions satisfy their own requirements. Otherwise, they must be supplemented by additional Canadian accountability and performance measurement activities.

In the case of the ITU, Industry Canada functions involved in the ITU report that the ITU has stringent internal controls and internal mechanisms which include audit, evaluation, inspection and investigation services that ensure its visibility and transparency. For example, the ITU Financial Operating Report, which has to be approved by the ITU Council.

The ITU has annual audits conducted by an independent External Auditor. The external Auditor is the Auditor General of the host nation, the Swiss Confederation. Through analysis of the ITU's financial transactions, evaluation of its activities and functions, the External Auditor offers comments and recommendations for improvement of financial and operational aspects, control mechanisms, and aspects of economy, efficiency and effectiveness of activities and operations of the ITU.

The External Auditor issues an annual report on the audit of the ITU, which is submitted to the ITU Council for follow-up action. There is also an internal control and audit function governed by the relevant provisions of the Financial Regulations.

The ITU is also subject to oversight by the Geneva Group, a policy and governance oversight mechanism. The Geneva Group is comprised of 14 countries, representing the largest "assessed" contributors to the UN system including Australia, Canada, France, Germany, Italy, Japan, Switzerland, the United Kingdom, and the United States.

In reviewing recent audit reports, the evaluators found that the primary focus has been on financial accountability. There does not appear to have been significant evaluation activity except perhaps on processing and procedural efficiencies. For example, the Kyoto Plenipotentiary Conference in 1994 adopted the first-ever Strategic Plan for ITU, which advocated a more client-oriented approach and a program of activities centered around the changing roles, needs and functions of ITU members.

In terms of performance monitoring, Canada has been instrumental in pushing results-based management concepts at the ITU. For example a Canadian proposal to the 2006 ITU Plenipotentiary Conference for the ITU to implement results-based management at the earliest opportunity, was adopted.

The ITU has set strategic goals and key expected results and is now developing key performance indicators. However, the goals and performance indicators focus primarily on the ITU functions of participation and coordination and are mostly irrelevant for evaluating Canada's participation in the ITU.

In conclusion, the ITU appears to have solid financial accountability. However, the performance measurement and evaluation functions of the ITU appear limited at this time and do not seem to be sufficient to meet Industry Canada's requirement to measure the value of its participation in the ITU.

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³Evaluability Assessment of IC's Involvement in the ITU, Industry Canada, 2007 (Return to text.)

⁴International Telecommunication Union (Return to text.)

⁵International Telecommunication Union: Membership overview (Return to text.)

⁶Deck — ITU Overview, Industry Canada-SITT, March 2007. (Return to text.)

⁷Note: under the ITU, system, Member States are required to commit themselves to a level of contribution which is based on a unit system, and not to a specific annual contribution amount. (Return to text.)