Bell Canada, a subsidiary of BCE Inc. of Montreal, is the largest of Canada's telecommunications companies. It provides telephone service to about 9 million customers in the provinces of Ontario and Quebec, and in portions of the Northwest Territories. Bell was created by federal Act of Parliament in 1880 and since 1906 has been subject to regulation by a succession of federal regulatory agencies, currently by the Canadian Radio--television and Telecommunications Commission (CRTC).

Bell Canada's involvement in broadcasting type services dates back to the earliest years of telephony in Canada. Bell's predecessor companies, controlled by Alexander Melville Bell (father of Alexander Graham Bell), offered point-to-mass content services over telephone lines as early as 1877: songs, duets, glees, and sermons, for example, were transmitted for reception by subscribers using ordinary telephone instruments as receivers. As in other jurisdictions, these experimental closed-circuit content services dwindled within a few years, to re-emerge only in the 1950's with the advent of cable television.

Bell entered Canadian broadcasting in 1922 by securing licenses for radio stations in Toronto and Montreal. These one year licenses were allowed to lapse in 1923, however, when Bell signed a patent sharing agreement with radio set manufacturers (Canadian Westinghouse, International Western Electric, and Canadian General Electric) and with a radio telegraph company (Marconi) whereby the signatories agreed to split the fields into exclusive domains: Bell henceforth was not to engage in broadcasting or in radio telegraphy, while the other parties agreed not to compete with Bell in telephony.

Resulting from this 1923 contract bifurcating communication into distinct broadcasting and telephone (telecommunication) sectors, unique regulatory frameworks arose for each. Broadcasting companies came to be regulated under the provisions of a succession of Broadcasting Acts, requiring that licensed broadcasting undertakings contribute to the Canadian cultural and political identity. Broadcasting undertakings, furthermore, were to retain full responsibility for a11 programming carried; as a practical matter this meant that broadcasting organizations or their affiliates produced themselves a large portion of their Canadian content.

The legal/regulatory paradigm governing the telephone industry differed markedly from that for broadcasting. Telephone companies, as common carriers, came to be precluded from influencing message content; their mandate, rather, was simply to relay any and all messages on a non discriminatory basis upon the request of clients and upon payment of government-approved tariffs. As well, telephony, unlike broadcasting, was presumed to be a "natural monopoly," whose prices and profits needed to be subject to regulatory supervision and approval.

Although precluded from engaging directly in broadcasting, telephone companies nonetheless figured prominently in the provisioning indirectly of broadcasting services. With the advent of network broadcasting, for example, telephone companies such as Bell Canada provided inter-urban transmission facilities interlinking stations regionally, nationally and internationally. Telephone companies also served the cable television industry by providing independent cable firms with poles, ducts, rights'-of-way, and with certain essential equipment such as coaxial cables. Initially telephone companies forced upon cable firms highly restrictive contracts intended to foreclose all possibility of competition in the provisioning of two-way, point-to-point telecommunication services. By the late 1970s the CRTC had overturned most of these restrictive contractual provisions, however, requiring telephone companies under its jurisdiction to provide reasonable access to telco poles and rights-of-way.

Under Canadian law, cable TV constitutes a component of the broadcasting system, and the CRTC to date (April 1995) has been unable and unwilling to license telephone companies to provide cable-type services. Bell Canada and other Canadian telephone companies for many years argued, however, that they should be permitted to own exclusively any and all communication wires into the home or office, including the cable TV connection. Telephone companies proposed leasing portions of the bandwidth of their (to be acquired) broadband facilities to licensed cable entities that would thereby provide cable TV service in the mode of a value-added carrier. These proposals have never met with government approval.

More recently Canadian telephone companies led by Bell, as part of an "information highway" initiative, have argued that the technological convergence of broadcasting, telecommunications, and computer communications not only erodes previously distinct industry demarcations, but as well makes anachronous regulatory policies premised on such distinctions. Bell has argued further that telephone companies should now be permitted to enter directly the cable television industry, whether by leasing bandwidth from cable companies or by interconnecting their own coaxial or fibre optic facilities with those of cable companies, in order to receive signals for retransmission from cable head-ends. Telephone companies have argued further that cable systems, if they should choose so to do, should be permitted to enter the domain of the telephone companies in the provisioning of two-way, point-to-point telecommunications services. Telephone companies wish also to engage in video program creation, distribution, storage and related activities, for example the sale of advertising, long associated with broadcasting, and as well to enter emerging interactive, multimedia services.

Allowing telephone companies to enter cable TV and other content services would appear to be the likely next step in the CRTC's "pro-competitive" policy stance toward telecommunications. Indeed in September 1994 the Commission published its "Review of Regulatory Framework" decision, wherein it announced its intention to promote "open entry and open access" to the greatest extent possible for "all telecommunications services." In March 1995, in response to a request from the Canadian federal government, the CRTC held public hearings concerning, in part, the terms under which telephone companies should be allowed to enter cable and content services.

As competition increasingly penetrates more and more areas of communication, venerable regulatory techniques, principles and goals are threatened. The principle of common carriage and the separation of content from carriage, for example, will be undermined if and when telephone companies are allowed to enter cable TV and other content creation markets. Likewise, the historical goal of safeguarding and promoting Canadian culture through broadcasting will prove to be increasingly illusive as internationally interconnected information highways are put in place. Information highway is the apotheosis of convergence, and hence of deregulation, but in Canada market forces historically have militated against indigenous program production and distribution. A deregulated information highway, whether controlled or not by erstwhile telephone companies enhances the power of those who would further commoditize information, as opposed to formulating information policy for social, political and cultural purposes.

- Robert E. Babe