Published in The National Post - September 28, 2006

The line between policymaking and public administration is often hard to draw, especially during the first months of a new government as the public service adjusts to new styles of leadership and new approaches to the issues of the day. And, as Donald Savoie, an expert in public administration, has pointed out, public servants have increasingly become "public actors," further blurring that line.

But draw it we must, and it is in this context that we must weigh the CRTC's Sept. 1 announcements concerning VoIP and local telephone service regulation. On that day, the CRTC went too far down a path of its own choosing without regard for those who have the legitimate responsibility to set public policy: the elected government.

On VoIP, the Cabinet had responded to appeals of the CRTC's May, 2005, decision to regulate VoIP when offered by incumbent telephone companies by ordering the commission to reconsider it. In so doing, Cabinet specifically noted the competitive transformation VoIP has caused in the telecommunications market, as well as the report of the Telecom Policy Review (TPR) panel, which recommended reliance on market forces to the maximum extent possible. For good measure, Industry Minister Maxime Bernier signalled very clearly his preference for competitive market forces over intrusive regulatory measures.

But, after taking 120 days to conduct the review, the CRTC did not change a word of the VoIP decision. One suspects the commission knew full well what it was doing since it sent its own signal right back to the Cabinet by launching a review of one aspect of its five-month-old decision on local service regulation, also the subject of appeals to Cabinet.

Its message seemed to be, "Don't even bother trying to tell us what to do about local service either, we'll decide for ourselves."

The CRTC has chosen to turn a blind eye to the advice of the TPR expert panel and its highly respected blueprint for telecom reform. It has also chosen to ignore important lessons from our past.

When the last Conservative government was first elected in 1984, transport regulations were a mess -- passengers, shippers, truckers, manufacturers and farmers were all angry. Regulation of the sector was stuck in the post-Second World War era. Market entry was strictly controlled. Route-by-route and rate-by-rate tariff and fare approvals were required. And federal and provincial authorities overlapped.

In response, the government put transportation deregulation at the top of its agenda. The newly elected government wanted a total package of reform. What followed was Freedom to Move, a "green paper" that became the game plan for the rail, truck, maritime and air transportation sectors, and that led to three bills that deregulated the national transportation market in Canada and opened it up to competition.

Choice increased, prices decreased. Today, most Canadians enjoy rates and levels of service on par with those of any other country.

The potential for similar benefits exists in the telecom industry today. But when the government deregulated transport, it did not leave it in the hands of the regulators to do it one burdensome bit at a time -- it did a comprehensive overhaul, knowing that the real issue was the need to release market forces and innovation from the hands of regulators stuck in a time warp, and to do it fast.

Minister Bernier has already demonstrated leadership by publicly embracing the recommendations of the TPR panel and taking quick action to start the reform process. On June 13, he took the unprecedented step of issuing a draft policy direction for the commission that would require it to place greater reliance on market forces.

There is a problem, however, and it is fundamental to the line between policy and administration: The policy direction will not take effect until after a period of public consultation and, in the meantime, the commission has shown by its actions that it will apply its own interpretation to anything but the most prescriptive of instruction.

This has all the appearance of a standoff. That must not, and should not, be allowed to happen. It is not how policy reform should come about. Nor is it how government should work.

The government must seize the agenda from an intransigent regulator to show it is serious about making the changes necessary to keep Canada competitive.

It has the tools at its disposal in the form of finalizing a policy direction and ruling on the appeals of the commission's local forbearance decision, not to mention legislation. Indeed, even the CRTC's "reconsidered" VoIP decision can still be changed by Cabinet.

It also has the policy guidance in the form of the TPR report.

The CRTC is fast becoming the poster child for inertia. To paraphrase Churchill, if you want nothing done, ask them, they have no equal. It is now time for government to act.