The man who won't do lunch

Stuart Langford's refusal to cozy up to the media industry strikes a rare note in a CRTC cursed by institutionalized corruption, says Matthew Fraser

Financial Post
June 10, 2000
By Matthew Fraser

Stuart Langford is a maverick in the closed world of Canadian broadcasting regulation. When appointed to the Canadian Radio-television and Telecommunications Commission 18 months ago, he made it known he wasn't going to play by the old rules based on backroom deals, furtively dispensed favours and institutionalized cronyism.

Those who condemn the CRTC as out-dated, corrupt and hostile to the public interest would likely regard Mr. Langford as a hero. Those who defend it for taking a pragmatic approach to protecting Canada's cultural industries might view him as a well-intended nuisance.

Mr. Langford arrived at the CRTC with an intriguing curriculum vitae. While he doubtless owed his appointment to Liberal connections from his days as an Ottawa political aide, he is a lawyer and former legal correspondent for CBC TV's national news. He's also, incidentally, the uncle of Matthew Perry, the US$1million-per-episode co-star of the hit U.S. sitcom Friends.

At the CRTC, Mr. Langford is known as a rigorous, no-nonsense commissioner. The most interesting line in his biographical synopsis reveals he's not without a sense of humour. "He has published two novels that did not sell well," it says, followed by a stern warning: "Mr. Langford does not do lunch."

It's Mr. Langford's refusal to "do lunch" that baffles and irritates so many CRTC colleagues and lobbyists in the cozy world of Canadian communications regulation. Doing lunch, after all, is what lubricates the system by establishing "good will" between CRTC commissioners and the industry players who come before them. What's wrong with that? Mr. Langford believes socializing with industry players -- he calls it "viva voce contact over a bon Chablis" -- corrupts the regulatory process.

Mr. Langford publicly clarified his position at a recent Ottawa conference organized by the Law Society of Upper Canada. The annual legal powwow, which brings together a few hundred communications lawyers, lobbyists and CRTC officials, is usually a polite affair. But this year's event broke with the traditional code of silence and addressed some touchy subjects, including the controversial matter of ex parte contacts between lobbyists and CRTC officials.

"Can I, or can I not, do lunch with the folks from Bell Canada?" asked Mr. Langford. "If the Cable Association invites me to its annual convention, waives the registration fee and lays on a hospitality agenda that looks like it had been drawn up by the editors of Gourmet magazine, may I attend? Should I attend?"

Mr. Langford's answer is an unequivocal no. He noted, however, that most of his CRTC colleagues see nothing wrong with schmoozing with industry players. Their usual justification is that they're "learning" about the industries they regulate. "I disagree with that approach," he said. For him, innocently sharing a bottle of Chablis with a cable lobbyist "just isn't worth" exposing himself to the possible accusation of bias.

Inside the CRTC, Mr. Langford is dismissed by some as an officious purist. Outside the commission, industry players have given up trying to co-opt him. Morally celibate to a fault, he even politely returns corporate annual reports in the mail. It's doubtful he will be seen schmoozing next week at the annual Banff Television Festival, where high-ranking CRTC officials show up to mingle with industry heavyweights and lobbyists in a resort setting.

Mr. Langford's by-the-book professionalism is subversive because it constitutes an indirect indictment of a regulatory system that, in many instances, has become scandalously compromised over the years. Evidence of the CRTC's indifference to the public interest is pervasive -- from its condoning of cable TV's negative-option billing to its aggressive hostility toward Power DirecTV as a competitive alternative to the cable monopoly.

The CRTC's detractors often argue, correctly, that new technologies, market globalization, trade liberalization and the erosion of state powers have made such heavy-handed, paternalistic bodies increasingly irrelevant. Yet regulators -- in Canada and elsewhere -- not only persist, they stubbornly continue to affirm their legitimacy.

New technologies and market forces are external challenges to state regulators. But less attention is given to the sociological phenomenon that has corrupted regulators from within -- namely, a creeping complicity between quasi-judicial tribunals and the industry interests they are supposed to regulate.

According to the theory of "regulatory capture", bodies such as the CRTC go through successive stages toward their own inevitable corruption. In their infancy, regulators show youthful activism. By middle age, they have succumbed to subtle co-option by industry interests. In their final stage of bureaucratic senility, they degenerate into passive instruments of the corporate interests under their purview.

It would take formidable powers of self-delusion to deny that the CRTC's evolution has followed the capture theory with alarming fidelity. Created in 1968, the commission was already slipping into complicity with industry interests by the late 1970s. A decade later, it was totally captured. This was especially true in broadcasting. The telephone industry, over which the commission wasn't given authority until the mid-1970s, has been regulated with more rational instruments such as rate-of-return calculations -- though telephone executives are no strangers to regulatory politics.

Most accusations of regulatory compromise are anecdotal, though some have been leveled in the courts. But few succeed in exposing unethical conduct. Such things as bias and cronyism are difficult to prove. When a CRTC commissioner has breakfast with a cable executive, the currency they are exchanging is good will. Good will has a value. But does it constitute an indirect form of bribery?

The question is debatable. Most major industry players will tell you, however, that CRTC officials often welcome the exchange. Few industry players do not have an anecdote about getting lobbied over lunch by a CRTC commissioner looking for a job down the road. Indeed, the most effective way to corrupt a regulatory official is through an implied offer of future employment.

Within the commission itself, the most coveted promotion is a job offer from outside -- preferably from one of the big TV networks, cable companies or telephone giants. The one-way door between the CRTC and the big industries it regulates has been swinging for so long there's no longer any distinction between state and market. So thoroughly has the CRTC been captured, its corporate culture puts a premium on defection: the best and brightest leave.

Should the government simply abolish the CRTC and throw the rascals out? Some argue that competition law suffices to police market behaviour in the media industries. Australia has moved toward a competition law approach. And in the United States, antitrust laws have long proven effective -- even if you disagree with their outcomes -- at breaking up combinations and conspiracies deemed not to be in the public interest.

In Canada, however, the Competition Bureau has weak statutory power, takes a myopic case-by-case approach, and is generally considered excessively permissive toward market failures. There is, moreover, evidence the bureau is just as compromised as the CRTC. According to a recent Democracy Watch report called Revolving Doors, many lawyers working for the bureau also lobby the watchdog on behalf of corporate clients.

One solution might be to give the Competition Bureau a new statute, stronger powers and the mandate to clean up internal conflicts of interest. Then the CRTC could be declared redundant and abolished.

In the meantime, Stuart Langford is left alone with his clean conscience. Don't expect him to land a big job at Rogers or Bell Canada when he leaves the CRTC in 2002. His legal rectitude is probably best suited to the bench. Perhaps that's his problem -- or, rather, the problem with the CRTC. Mr. Langford is one of the few commissioners who take seriously the commission's status as a quasi-judicial administrative tribunal.

"Regulators do wield enormous power," he says. "A simple yes or no may spell the difference for a party before them between huge wealth and dashed dreams… A judge does not know from one day to the next who might appear on his or her court docket. Not so a regulator. We know for a fact that, sooner or later, our tribunal will deal with each and every industry within our jurisdiction. Surely we owe it to Canadians to avoid any source of taint by socializing with those who will surely come before us."

It's doubtful Mr. Langford's CRTC colleagues will rally to his cause. The moveable feast of schmoosing, blandishments and cronyism is a mutually enjoyable cost of doing business. No whisper campaign, media expose or even finger-pointing court case is likely to put a stop to it.

In the short term, governments may lack the courage to abolish regulators for their institutionalized corruption. In the longer term, however, new technologies and market forces will succeed where public policy has failed.

(Matthew Fraser is professor of communications at Ryerson Polytechnic University.)