CIRPA on the ISP Business Model

Comments from the Canadian Independent Record Production Association, during the CRTC New Media hearing on Wednesday:

MR. McKIE:    Turning to the distribution issue and the role and responsibilities of ISPs when it comes to the dissemination and development of content on the Internet, it may be the worst kept secret ever that the value that consumers derive from their Internet connections is related to their ability to download materials, 90 per cent of which are not authorized.

. . .

THE CHAIRPERSON:  On page 6, in the second paragraph, you say:

"The future of ISP is dependent on further developing business models based on the distribution of authorized materials."  Are you saying the adverse: that the present business model depends on the distribution of unauthorized material?

MR. McKIE:  I agree

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  1. The rest of the quote
    2017 MR. McKIE: I agree ‑‑ I think we agree. And, Bernie, I hope you agree.

    2018 I agree with the French analysis and I think it should inform this debate in Canada that the roll‑out of networks ‑‑ and not even these networks but previous networks ‑‑ is always dependent on the distribution of unauthorized materials.

    2019 It’s a certain inevitability to this if you read Bomsel’s work, which is the economic basis for the Oliven(ph) Commission in France which recommended the three strikes rule.

    2020 So initially broadband networks depend upon the distribution of unauthorized materials in order to subsidize the rollout of their networks. This is an economic analysis.

    2021 Then once that rollout is complete, by force of the same economic analysis they must turn to authorize materials to extend their businesses, because the rollout is complete. There is no further prospect in using unauthorized materials in order to subsidize the rollout.

    2022 That is a strict economic analysis from that group. So that’s what I’m saying.

    2023 In terms of their willingness to do so, what has always baffled us is they have come to many of our conferences and talked about their willingness to engage with the music industry on the question of distribution of legitimate materials, and they have been very friendly. But we have on occasion taken them up on an offer and we have not had much discussion of that. Let’s put it that way.

  2. George Smiley says:

    What a load of ……
    Most people and business use the internet for mail, displaying their company websites and product/service information to prospective customers, accessing product/support information, news, internet banking, b2c sales, doing research, moving files from graphic designers to printers, sending architectural and engineering plans, and getting endless Microsoft operating system patches (sorry, had to throw that one in), as well as antivirus updates and the like…..

    Most people don’t download so-called ‘unauthorized materials’, so let’s not pollute the discussion with hearsay and Chicken Little forecasts.

  3. The depth of cluelesness is so profound that I really don’t see this being resolvable for a generation, when the dinasaurs and their businesses will have died out. Their only option, realistically, is to completely destroy the internet as we know it, by buying sufficient legislation to turn it into something that would have been recognizable in 1965. Ths will cause much pain, suffering, and slow the economy significantly, but it will inevitably fail since the world will NOT return to 1965.

    The reports from these hearings are depressing. One gets the feeling that nobody who’s made a presentation has ever actually used the internet as anything but a strange kind of TV.

  4. Who are the CRTC’s friends?
    What else is new? The entertainment cartels are trying to control the technologically uncontrollable distribution medium by buying their laws. Anything they say is irrelevant. However, everything they do should be scrutinized, like their “phone-home” DRM.

    All we really need is honest people with integrity acting on the behalf of the public. This is funny because I’m asking for way too much.

    The CRTC is a dinosaur. That is all there is to it. Quite frankly, the CRTC, if they want to save themselves should go back and make sure people are not being run over by the telecommunication companies (re: throttling) and protect net neutrality. Basically they are destroying Net Neutrality if they allow the regulation of the Internet.

  6. How long will this waste of public funds continue..?
    That the CRTC is even holding these hearings is testament as to just HOW technology-illiterate and A–Backwards some people still are. The idea the Net can be managed with rules (let alone policed..!) is as ridiculous as the the notion we all have wings and can FLY. Enough already. Send everyone home and bank the time, money and effort… and start putting the million$ of public funds into more PRODUCTIVE things – like medical breakthroughs, or reducing our carbon foot print, or who knows what great things might be done? Then Mr.McKie and his collegial copyright dictator chronies might go out and find a REAL job somewhere in the real world, and in 2009 perhaps. Geez, it’s no longer 1989 and there is no “record business” anymore. It is an entire decade already since Napster – get OVER it! What an expensive waste of time this hearing is. Just send them all AWAY…

  7. Why not authorize, the distribution of unauthorized materials? Put the 3% or so from ISP’s profits into a copyright pool, and essentially authorize or legalize file sharing. Everything you download is copyright protected, why not build the right to compensation into the networks. If you legalize file sharing, producers etc will have a mass audience to sell to. Sponsors will very much welcome that.

    You can’t create a system of control over a system that can’t be controlled. It’s not going to work, and what’s worse then that, is we have these creative “unions” who have not even done ANY market research on exactly who their audience is online, and have no clue that’s where their problem lies. Not with the “distribution of unauthorized material”.

    Well, I’m glad these guys had a humiliating week. We should now beat them over the head 500,000 times with what we heard in these hearings about asking for things with no evidence to back up their requests, and absolutely no understanding on how the digital marketplace works, or who their audience is, which is essential when doing any media project traditional or in new media.

    They had a “Homer Simpson” moment last week. Their credibility is shot now.

  8. So Incumbent ISPs are good and Startup ISPs are bad?
    Sounds like a argument that only incumbent ISPs are willing to / capable of legal activity. Or to put it another way, they will break the rules to gain a monopoly advantage and then change their business model when they have customer locked in?