Convergence Policy — News Release

Competition and Culture Set to Gain in Convergence Policy Framework

OTTAWA, August 6, 1996 -- Getting cable service from your phone company or telephone services from the local cable company, moved closer to reality today as the Government released its policy framework on convergence.

The policy and principles, announced by Deputy Prime Minister and Minister of Canadian Heritage Sheila Copps and Industry Minister John Manley, clear the way for cable and telephone companies to compete in each others' core businesses while ensuring better access and strong Canadian content.

"The policy framework will guide industry as it gears up to meet the challenges of heightened competition," said Minister Manley. "The cable and telephone companies have said they are poised to spend about $15 billion over the next 10 years to take advantage of new business opportunities. Consumers will benefit from the increased competition, new innovative services, and jobs and growth that are the certain results of this investment."

"This policy statement makes it clear that Canadians will continue to have the tools and mechanisms necessary to promote Canadian content," said Minister Copps. "Convergence creates new and exciting tools for Canadians to see and hear each other."

The policy statement and implementation principles cover three major areas: facilities, content and competition. They reinforce the policy objectives announced in the Fall of 1994, and bring to a close a series of initiatives aimed at introducing competition in virtually every area of the communications industry. The policy will allow for fair and sustainable competition between cable and telephone companies.

Telephone companies may offer broadcasting services once the regulatory framework and tariffs for competition in local telephone service are in place. Competition could begin as soon as the end of 1997.

Minister Copps addressed the unique situation of BC Tel and Québec-Téléphone. These companies, while majority-owned by foreign interests, were "grandfathered" as Canadian carriers under the 1993 Telecommunications Act. The Government of Canada has decided to allow BC Tel and Québec-Téléphone to seek broadcasting distribution licences only.

"We have decided to amend foreign ownership regulations in this instance in order to ensure that these two major companies, which serve the residents of British Columbia and Eastern Quebec, can participate in competitive communications systems like other phone companies," said Minister Copps. The Minister added that safeguards would be imposed to ensure that neither the parent company (GTE) nor its subsidiaries (BC Tel and Québec-Téléphone) interferes in the programming decisions of the broadcasting undertakings, and that Canada's cultural policy objectives are respected.

The convergence policy framework was hammered out through an exhaustive process of public and industry consultations. Reports by both the Canadian Radio-television and Telecommunications Commission and the Information Highway Advisory Council last year examined in detail the complex issues involved in convergence. They provided insight and precision to the government's policy objectives.

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