THE CRTC’S BIG TEST.

Now seven months into his role as chair of the Canadian Radio-television and Telecommunications Commission, Ian Scott faces a couple of contentious issues. Both will test the independence of the commission and its ability to stand up to the perpetually agitated believers in net neutrality, open media and free telecom services. Well, okay, not literally “free” services, but in such circles, anything that’s not free must be overpriced and a threat to the internet.

One agenda item is an application from Bell, Rogers and the major telecom firms — supported by a phalanx of culture and entertainment groups and unions — asking the CRTC to set up a regime to block websites that illegally stream copyright programming into Canada. The group, called FairPlay, says content piracy costs Canadian industries money and undermines the integrity of the system.

Standing in screaming opposition to the idea of stopping copyright abuse and theft are the usual suspects. They include the University of Ottawa’s Michael Geist and OpenMedia, which once again claims that the telecom giants are out to throttle Canadians’ access to free stuff. “Don’t let Canada censor the internet,” OpenMedia says.

That’s not what it looks like in FairPlay’s application, as described by legal adviser Barry Sookman. These pirate sites are “blatantly, overwhelmingly, and structurally engaged in piracy.”

It seems clear something needs to be done. FairPlay’s solution is to establish an agency that would advise the CRTC that certain websites streaming copyrighted content to Canadians should be blocked. Seems reasonable in principle. Or will the new Scott-led CRTC — currently accepting submissions on the issue — decide to humour the claims of activists that there is no problem? Keep on pirating!

Somewhat more challenging for the commission is the second item on its spring agenda. Between now and the end of March, the CRTC must respond to a Trudeau cabinet order, issued last June through Innovation Minister Navdeep Bains. The order instructs the CRTC to review and overturn an earlier decision and force Canada’s telecoms to turn their facilities over to upstart wireless providers.

The wireless company in the case is Sugar Mobile, a subsidiary of Ice Wireless, which is in turn associated with Iristel, a voice-over-internet protocol operator. The main Sugar and Ice player appears to be Toronto entrepreneur Samer Bishay.

Although headquartered in Markham, Ont., Sugar and Ice provides mobility, broadband and landline telephone service in the Yukon, Northwest Territories and Nunavut. To service its clients in the North, Ice struck a roaming agreement with Rogers that would allow Northern residents in, say, Whitehorse, to use Sugar Wireless when they travelled south to Vancouver or Toronto or wherever.

But somewhere along the way, Bishay had an entrepreneurial revelation. Sugar Mobile could sell its wireless services anywhere in Canada even though it owned no facilities anywhere else in Canada. For $19 a month, a resident of Toronto could sign up with Sugar Mobile and use an unlocked cellphone simply by walking into a Starbucks or any other public Wi-Fi zone. As Bishay once put it, “most people are in a Wi-Fi hotspot 85 to 90 per cent of the time.”

By acting as what is known as a mobile virtual-network operator, Sugar Mobile was moving into the national wireless market through the back door. Brilliant! A national service and not one cell tower to build. Except for one problem: Rogers objected to the freeloading use of its networks and threatened legal action against Ice for breaching its roaming contract, which was set up to accommodate Sugar’s clients in the Yukon not denizens of Yonge Street.

Last March, the CRTC ruled against Sugar and Ice’s actions. “It would be inconsistent with the wholesale wireless framework to permit mandated wholesale roaming to be used as a means to obtain permanent access to the incumbents’ networks. Such an approach would render meaningless the Commission’s decision not to mandate MVNO access to these networks and would require the Commission to fundamentally redefine the meaning of wholesale roaming.”

That should have been the end of it, but somehow Bishay managed to infiltrate the Trudeau cabinet. In June, the CRTC received an order-in-council telling it to “reconsider” its decision. The cabinet order itself was filled with the usual claims that circulate among digital-rights activists. Canadians, it said, “continue to pay high rates for mobile wireless” and Canada has the “lowest adoption rates for mobile wireless.” And the final kicker: Low-income Canadians “in particular face challenges” with affordability.

Sugar and Ice portray their business model — this free ride on the facilities of the telecom networks — as a social-policy crusade. Bishay wants the CRTC to redefine public Wi-Fi networks as equivalent to “home networks” that would allow Sugar to use any Tim Hortons’ Wi-Fi as mandated entry to the networks operated by Rogers and others.

Not surprisingly, Rogers and the other telcos object to the Sugar and Ice plan and to the order-in-council. Among other things, they argue that by allowing Sugar to use their networks the CRTC would be undermining massive new investment in telecom facilities. With big expenses looming for the new and improved 5G network, the telcos argue that now is not the time to green light back-door operators who are playing politics and gaming the regulatory system.

The test for the CRTC, in both the FairPlay piracy issue and the Sugar Mobile case, is whether it can overcome pressure from Innovation Minister Bains and the usual suspects who see telecommunications as a public utility and social program rather than a successful competitive industry.