Day three of the CRTC’s New Media hearings featured a series of speakers with varied perspectives on new media, old media, and the role of the public (day one, day two).  Presenters included GlassBOX Television, Friends of Canadian Broadcasting, Union des consommateurs, Independent Media Arts Alliance, S-Vox, and the Aboriginal Peoples Television Network. The following review was compiled by University of Ottawa student Graham Hood.

GlassBOX Television Inc.

According to its co-CEO, Jeffrey Elliott, GlassBOX was founded upon the principle that audiences will aggregate across multiple platforms, and, thus, the most successful media groups will be able to span multiple media simultaneously, in order to satisfy their users. Elliot explains that cable subscription, both in the U.S. and Canada, is down, and the future is in new media, and on the web. In his opinion, the content that is driving the audiovisual industry now and in the coming years is television content. Re-purposed content produced primarily for television is the lifeblood of online video right now.

To illustrate this point, his co-CEO, Raja Khanna, compared online video giant YouTube with Hulu, an up-and-coming streaming service available exclusively in the U.S. YouTube features user-generated videos, of both amateur and professional quality, while Hulu rebroadcasts and streams television content. In 2008, YouTube’s net income topped USD $200 million, while Hulu’s profits reached just over USD $100 million. YouTube’s viewership was upwards of 400 billion views last year, while start-up Hulu enjoyed 100 million hits. Still, Khanna expects Hulu to surpass YouTube in both visits and profits in the coming years.

Khanna argued that more government funds must be shored up for new media, but not new media alone. He explained that GlassBox.tv, which enjoys a large following from Canada and abroad, is ineligible for the Canadian Television Fund since the CTF does not take account of online viewership or revenues thereof.

He added that the absence of certain broadcasters at the hearings should not go unnoticed by the CRTC. If television-based new media is to develop and thrive in Canada, the CTF must adjust its funding framework accordingly. Failing this, the allocation of any new monies for new media projects should be overseen by another government agency, other than the CTF. Khanna recommended the TeleFilm new media fund, as the best vehicle for encouraging and fostering new media innovation in Canada. In other words, there would be no need to reconfigure the CTF funding framework were the CRTC to introduce new monies through the TeleFilm new media fund.

Khanna and Elliot then moved on to the topic of Internet and new media “shelf-space,” or programming quotas for new media and web-based content. So as to counteract the North American trend of doing away with cable subscriptions in favour of strict Internet services, Khanna and Elliot suggested that new media packages and subscriptions should be “tethered” to cable packages.

Such a course of action would be an “affordable, exclusive and simple” way to create “a compelling, self-sustaining ecosystem of Canadian content online,” said Khanna. Subscribers to Rogers Cable, for instance, could bundle or tether their cable subscription to their mobile phone contract, and in the process receive traditional Rogers cable shows on their handset. Khanna and Elliot were quick to add, however, that each of these services should be regulated by the CRTC, so as to provide “blanket” regulation of both traditional and new media, while respecting the Internet as an open and unregulated medium.

Before question period, the representatives of GlassBOX summarized their main points. They recommended that the CRTC:

1. increase access to television funds for television-based new media projects through such agencies as TeleFilm Canada; and
2. ensure that the Internet remains “open” and unregulated, while wireless services come under some form of regulation, as that technology is currently not as open.

CRTC Chair Konrad von Finckenstein asked the first question. Having gathered from their presentation that GlassBOX had interests in both television and new media he asked Khanna and Elliot whether the latter would ever extinguish the former. Elliot replied that the two mediums are not necessarily in opposition to one another, but are rather complementary platforms that enable companies like GlassBOX to create and distribute content on multiple platforms or on “whatever is available.”

Khanna added that one platform does not trump the other. Instead, new media groups like GlassBOX are looking to expand and gain “ubiquitous” coverage, no matter which device or platform consumers use to access the content that they want. He reminded the panel that television content is not viewed on television alone, and urged it to take that into account if and when it revises its new media regulations. According to Elliot, the challenge that the CRTC now faces is one of definition: “where does television end and online media begin?” he asked.

Commissioner Leonard Katz considered the consumers. Regardless of whether we are in the midst of a transition from platform A to B, or instead evolving into a multiplatform consumer culture, Katz asked whether Canadians would be willing to pay for these additional, new media services. Elliot responded positively. Nowadays, the consumer is more powerful than ever, and can consume whenever and wherever he or she chooses. So as to survive, new media creators like GlassBOX must expand and follow the audience’s lead. “The audience is in the driver’s seat,” Khanna added. However, Elliot repeated that tethering new media to existing cable packages is just one way to keep consumers glued to screens both large and small.

If companies like Bell or Rogers built Canada’s answer to Hulu, Khanna explained, it would be immensely popular. It would be of benefit to the user, the industry and most importantly, the country—one portal, or platform, for Canadian content.

Commissioner Katz then asked if ISPs should follow in the footsteps of the BDU community in Canada. Both Elliot and Khanna were quick to point out that the CRTC and TeleFilm should not pigeonhole new media groups with a “new media-only” fund, which would in turn give rise to a false, new media economy.

Instead, the TeleFilm fund should be expanded to encompass all new media projects. The idea behind this proposition is that “[i]t should not matter where you get your content” so the funds for all new media platforms should derive from the same sources as traditional media, such as television. What matters is that the consumer has options.

Commissioner Katz inquired as to the economics of new media. Khanna replied that the basic economics of new media are more or less the same as that of traditional television broadcasting. But tech costs have come down, and these days, it is easier than ever to develop new media, be it websites, movie clips, etc. Both Elliot and Khanna made it clear that GlassBOX was not looking for money. Instead they explained that new media, which is still in its infancy, calls for an entrepreneurial or innovative approach, and that GlassBOX could teach the new media industry a “few new tricks” if the CRTC was willing to cooperate.

When asked what they thought of wireless regulation, Elliot and Khanna welcomed it, so as to protect Canadian business interests. Canadian content must stretch far and wide if it is to compete on a global level. The same rules and regulations that apply to one medium should apply to another. Wireless media services should not be the exception.

Commissioner Michel Morin then stepped in, and asked about deep-packet inspection, as a means of prioritizing Canadian content on the web. Khanna replied that it was simply too early to answer that question. The industry is still developing a definition of web-based media, television-based media, and so on. He added that once those definitions are clear, the industry would begin to examine the best means of ensuring that Canadian content is front and centre on the web. “Front-of-aisle shelf space is ultimately more important than general shelf space,” he said. “Our goal,” said Khanna, “is to build a profitable industry. Period.” Thus he encouraged the CRTC to take a “cautious and conservative” approach to developing the appropriate funding and regulatory frameworks, so as to not waste time and money.

Friends of Canadian Broadcasting

Ian Morrison, the spokesperson of Friends of Canadian Broadcasting spoke next.

Friends is an independent watchdog for Canadian programming in the English-language audiovisual system, and is supported by 100,000 Canadians from coast-to-coast. Morrison shared with the panel the results of a cross-Canada survey, recently conducted by Friends, of 175 Canadians. The recommendations of these 175 people, he explained, are reflected in his submissions. Overall, Canadians are looking to build a strong broadcasting presence both on the web and in the news media while, at the same time, supporting Canada’s arts industry in the television business.

According to the sample, 93% use high speed Internet; and 47% regularly (and a further 21% occasionally) read newspapers on the web. Among those web newspaper readers, 37% read exclusively Canadian newspapers, 46% read mostly Canadian papers, and 17% read mostly foreign newspapers. 3% regularly watch TV shows or movies on the web, 19% do so occasionally, and 78% never do so. Among these web viewers, 11% view only Canadian shows; 18% view predominantly Canadian shows; 24% view predominantly non-Canadian shows; and 47% watch only non-Canadian shows.

He suggested that the CRTC focus primarily on commercial content, get rid of obsolete and outdated broadcasting regulations and implement the regulations that would ensure that the Canadian public interest is not subordinated to the interests of the geographical monopolies of some BDUs. “A Canadian presence,” he explained, “should be an integral, positive and creative part of new media.” Otherwise, we risk a more costly retroactive system re-fit, one that might more readily be opposed as a ‘tax' if Canadian content rules were to be imposed after the fact.

He added that Friends considers it critical that commercial Internet broadcasters of audio and visual content maintain a level of Canadian content consistent with the expectations of the Broadcasting Act. For Friends, fair commercial practices depend upon a balance of strength between the creators and distributors of television broadcasting and new media. Market forces will not ensure a predominant Canadian presence in new media programming on the web.

He added that the Canadian media market cannot, and will not, function without the proper regulatory regime; government regulations must ensure that the Internet is in essence used to the benefit of all Canadians, and not just to that of the for-profit and commercial sectors. The same CRTC regulations that apply to Canadian content on television must also apply to the web.

The public is becoming used to an inter-mingling of traditional and new media. Their choices to tune in, or to view online content, are driven largely by either convenience
or by economic factors, and also by the relevance of the content to their passions and interests. In light of the increasing presence of all forms of media on an equal footing in public consumption habits, Morrison claimed that it is reasonable to extend the same public policy and Broadcasting Act support for Canadian content to all types of media.

Accordingly, Friends recommends that the existing exemption rules be terminated and replaced with rules which ensure a predominant use of Canadian programming in new media. The ability to listen or view programming on-line provides enormous flexibility. Well aware that the Internet-based delivery of television services to both television sets and computers will eventually become the norm, BDUs are already beginning to replicate this flexibility and convenience. The CRTC should thus envision a distribution policy for the Internet which shares the goals and objectives of the recent BDU review.
 
On the topic of Canadian ISPs, Morrison recommended that the CRTC step in to curb the high bandwidth charges that ISPs like Bell, Rogers and Telus are charging their customer base for increased streaming, and surfing. It is the job of the CRTC to open up the market to new competitors, so as to drive charges down. Furthermore, ISPs should stream a portion of their revenues to new media creators, who furnish those ISPs with the downloadable and streaming content from which they gather that revenue in the first place.

“We have referenced evidence and anecdotes that younger viewers are moving to the web,” he said. One implication of this shift is that the value of programming rights to
top U.S. shows will diminish in Canada as a result of “multiple viewing options” and
that, in turn, will have an impact on Canadian broadcasters.

Morrison added that the 1999 CRTC New Media exemption order should be reneged. It made sense at the time, he explained, but not now when the Internet competes with both over-the-air and BDU-delivered radio and television broadcasters. Online programming content that meets the definition of broadcasting should be subject to the same “CanCon” requirements as today's conventional and specialty broadcasters. Friends fully supports the Commission's view that Canada's broadcasting policy should be technology-neutral.

With respect to the mobile service providers, Friends was not in support of the CRTC’s decision to exempt mobile services since it believed that Canadian programming should be an inherent part of any programming content offered and not imposed after the fact. Friends asked that the CRTC ensure that commercial broadcasting by Canadians on the Internet contain an appropriate level of homegrown content consistent with the existing rules for both radio and television stations.

Following a question from von Finckenstein, Morrison replied that the CRTC should address questions of content in new media in parallel with other media like television broadcasting. And online broadcasting programs that meet the CRTC definition of broadcasting should be subject to the same regulations as traditional television broadcasters under the proviso that “substantial” broadcasters should be better regulated than “niche” broadcasters.

Commissioner Michel Morin asked Morrison if there was a substantial demand for Canadian content on an international level. He replied that indeed there was, and that that demand was just one of the reasons behind government regulation; because if Canadian broadcasters are to survive internationally, it is imperative that the correct “CanCon” regulations are in place so as to ensure that those broadcasters stay competitive on a global scale.

Union des consommateurs

Next, Marcel Boucher and Anthony Hémond of the Union des consommateurs addressed the panel. The Union encourages the CRTC to apply and enforce the principles of technological neutrality. The Union is staunchly opposed to any and all restrictions to the use of the Internet and is in strong support of an “open” Internet.

During its presentation, the Union recommended the following courses of action:

• The CRTC should make no exceptions for wireless service providers Bell, Rogers and Telus—these and other providers do not enable users equal access to bilingual content and in the absence of regulation, the majority of the content provided is English-only.
• The CRTC must instill the principle of technological neutrality across all mediums and platforms, including new media like mobile media; complete and unrestricted access to Canadian content—both French and English—on all platforms is crucial. This must be addressed now. It is the mandate of the CRTC to ensure that all available media programming are available to consumers in both official languages. Section 301 (k) of the CRTC Act provides that services offered in one language must also be made available in the other.

Moreover, as media begins to converge, and the lines between “traditional” and so-called new media are blurred, we need to rethink regulatory regimes; there are certain obstacles put in place by distributors and suppliers that must be remedied. ISP-imposed bandwidth caps or speed limits are but a couple of examples. Section III of the CRTC Act explains that radio, television, and telecommunications must be used to archive, cultivate, and enrich the cultural, economic and social roles that media play in Canada. It is up to the CRTC, then, to adapt to achieve these objects.

The bandwidth limits imposed by ISPs is another issue altogether. Canadian ISPs like Bell and Rogers are charging their consumers extra for each additional GB consumed while online. And, as television programming infiltrates the web, and more and more users spend more and more time watching television online, these charges will surely increase. This, in turn, restricts viewership, which means that less Canadian content—both French and English—is making its way into Canadian homes. CRTC regulations, however, may result in higher speeds, greater demand for Canadian content and technical upgrades.

The Union expressed concern that service providers are playing around with their customers’ service packages to maximize profits, and that this problem could not be solved by implementing deep-packet inspections. The Union made itself clear that it was not at all pleased with the industry-imposed restrictions to Internet access (such as bandwidth caps); the Union does not support any restrictions to web access. Rather, it is in total favour of an “open” Internet.

Von Finckenstein then asked, “If we do adopt your recommendations, what is to stop consumers from moving to unregulated sources to get their video media?” Boucher replied that cable and television service providers are at a crossroads, and do not want their customers to cancel their television or satellite packages, and put the emphasis on high speed Internet, since P-2-P programs can now re-transmit television and satellite content online, and television service providers like Bell and Rogers earn greater revenue on a per customer basis with cable than they do with Internet services.

Commissioner Louise Poirier raised the following question to the Union: what are you doing to make sure that you reflect the concerns of Canadians and Quebeckers? Boucher explained that the information and recommendations provided by him and his co-representative, Mr. Hémond, reflect the concerns and views of the Union’s member base, and its subscribers. Commissioner Poirier then asked whether the CRTC should first ensure that all Canadians have access to high-speed Internet before it proceed any further. Boucher again expressed concerned with the notion of Internet regulations. He explained that the Union is against any barriers that may encumber Canadians’ access to the web.

According to the Union, the Internet should remain “open” and unregulated. Hémond recommended, too, that the CRTC needed to increase access to high speed Internet in rural and out-of-the-way places across the country. At this point, Boucher recommended that the CRTC take a stand and ensure that all Canadians have access to high speed Internet as soon as possible. Canada is ranked eighteenth among the thirty OECD countries surveyed, in terms of average Internet bandwidth. The Union is convinced that Canada can do better than that, but, before it can, the government must step in to encourage technological development.

Commissioner Morin then asked whether two bandwidth caps—one Canadian and one foreign—would meet the needs of the Union. Boucher replied that he would prefer to see no caps at all, as these industry-imposed limits are restricting Canadians’ access to homegrown content on the web, which he claimed was contrary to the mandate and spirit of the CRTC.

Independent Media Arts Alliance

At this point, François-Xavier Tremblay of the Independent Media Arts Alliance was asked to deliver his presentation. Comprised of more than 80 independent media organizations throughout Canada, the IMAA represents some 12000 artists from coast-to-coast. Tremblay echoed the sentiments of some of the other intervenors, and said that the 1999 exemption orders are no longer appropriate.

“These orders are no longer applicable to the modern media platform, and we believe that adequate financing and regulations should be provided by the government to ensure equal and free access to these platforms and their content.” He conceded that, at the present time, government regulation of wireless platforms and media would be difficult, if not impossible, to implement, but emphasized that his first concern lay with the government’s interest in regulating the Internet.

Tremblay set out several reasons why the Internet should not be regulated:

1. To do so would be both technically challenging, and contrary to its true nature;
2. It could well stunt the growth of new media, and with it, its funding procedure;
3. New media groups and projects could benefit from an ISP tax.

He explained that “the Canadian media system” should foster and promote the freedom of expression of the large library of artists and artistic mediums that the IMAA happens to represent. He encouraged the CRTC to create a new fund dedicated solely to new media artists and the platforms and mediums with which they work. He suggested that the new monies be streamed from the revenue pools of Canadian ISPs, which play a huge role in the access to, and provision of, online video and new media.

Tremblay reasoned that, because Canadian ISPs make a great deal of their revenues from customers who spend lots of time streaming new media (at a per GB cost), it is then only fair that those ISPs contribute 3% of their revenues to fund new media projects.

Moving on to the matter of traffic management, Tremblay emphasized that the Internet is by its very nature an extension of the public domain, and thus, should be used as the public so wishes. The CBC’s recent experience with BitTorrent providers is one such example. Users should be able to use the platforms that they want most, and access the media that they want most. New technologies like P-2-P software, BitTorrent and others should not be cast away or ruled out simply because of their illegal origin. If the public wants to use them (legally, of course) they should be able to do just that.

Commissioner Von Finckenstein acknowledged the contrast between the IMAA’s recommendations and those of GlassBOX. He asked Tremblay to explain why the differences are so drastic. Tremblay replied that the IMAA and its members enjoy limited access to the television medium. GlassBOX, on the other hand, has direct access. Such is the reason why artist groups and organizations like the IMAA need access to new media funds. Were the CRTC to design a new fund, it would allow artists, creators and producers who work exclusively with new media to compete with other groups.

Commissioner Stephen Simpson asked how might the IMAA put the revenue from the proposed ISP tax to use. Tremblay replied that the nature of the IMAA is such that its works reflect the individual voices of its artists. It is only an organizational collective and thus its members adhere to no other mandate than their own. This means that new revenue streams would allow its members to express themselves through new media in new ways that were once financially prohibitive: “we are at the bottom of the food chain, in terms of what we are producing, and so we need the fund to grow, to expand and try new things.”

Finally, it was added that independent Canadian artwork needs to be funded by the government in order to compete on a global scale—he explained that the members of the IMAA are “not in the business of making money,” which is why it is now in need of help from the CRTC.

S-Vox

Next, Monique LaFontaine, Vice-President of Regulatory Affairs at S-Vox, and Mark Prasuhn, Chief Content Officer, were called upon to deliver their presentation. S-VOX is Canada's leading provider of multi-faith and multicultural programming. Its broadcast properties include: VisionTV; ONE: the Body, Mind and Spirit Channel; the Christian Channel and the conventional service Joytv, of Vancouver and Winnipeg. Its flagship property, VisionTV, was launched in 1988.

LaFontaine explained that her and Prasuhn’s presentation would address the following points:

• the need for strong licensed broadcasting services in the digital age;
• the need for regulatory flexibility and enhanced investment; and
• the types of Canadian programming that should be supported in the new media environment.

She then turned the floor over to Prasuhn, who explained that in the recent years, S-Vox has enthusiastically embraced new media to the extent that its resources permit. He also mentioned that the websites for each of its television channels showcase a range of both traditional Canadian and non-Canadian programming, as well as some new media.

In 2007, S-Vox launched VisionTV on Demand, an online service that allows viewers to stream hours of program previews, exclusive clips and original content. And this year, S-Vox stepped into the world of online community gaming. It teamed up with a social media platform company to create an online multiplayer game community for the TV show “I Prophesy,” a documentary series that it is currently running. S-Vox has also begun experimenting with advertising and promotions on social networks like Facebook and MySpace, and through the placement of video clips on YouTube.

“The CRTC's 1999 New Media Exemption Order,” he said, “has been instrumental in allowing us to achieve this outcome. “The regulatory flexibility [of the Exemption Order] allowed us to innovate and respond to the needs of existing and new audience members.”
Prasuhn urged that strong Canadian television services would be very important to ensure the presence of Canadian content on the online, wireless and other digital platforms in the coming years. These television services would also be crucial to allow Canadian licensees to compete effectively with unlicensed Canadian and foreign competitors.  “The regulatory framework for traditional broadcasters should therefore allow Canadian broadcasters to thrive,” he said.

LaFontaine also recommended that the CRTC take the following steps for broadcasting and content creation in new media:One, adopt a flexible approach to Canadian program expenditure requirements, and also permit a portion of CPE to be used for new media. This would in turn help to establish a stronger Canadian voice online, and would give broadcasters, like S-VOX, the ability to reallocate their programming dollars in response to changes in the new media landscape. Two, examine the possibility of requiring Internet and wireless service providers to invest in new media content. Section 3(1)(e) of the Broadcasting Act provides that each element of our broadcasting system shall contribute to the creation and presentation of CanCon. Three, earmark a portion of transfer benefits to be dedicated to new media similar to the transfer policy for radio. Four, refrain from regulating licensed broadcaster websites. To do so would be to put Canadian broadcasters on an uneven playing field with other new media broadcasters
in Canada and around the world. Moreover, it would limit their ability to adjust to the fast-changing communications landscape.

She offered that a more favourable approach might be to put in place an incentive for broadcasters to promote and present Canadian programming on new media platforms.
For instance, if minimum CanCon quotas were fulfilled online, then a broadcaster could use a portion of its CPE for new media content. Finally, LaFontaine added a fifth recommendation: She urged the CRTC to continue to monitor new media broadcasting, so as to ensure that it is able to act when necessary to help licensed broadcasters make the adjustment to new challenges in the system.

Prasuhn then explained that, should the CRTC introduce a “new media fund,” it should support innovative and leading edge professionally-produced content. He added that it should also fund content for new media and traditional television platforms, since a significant portion of the content viewed online originates from traditional media.
To conclude, Prasuhn emphasized the need for strong Canadian programming services as well as enough resources to ensure that original Canadian programming is made for linear and new media platforms.

Aboriginal Peoples Television Network

Jean LaRose, CEO of APTN, was next to speak The first issue that he raised before the panel was that of accessibility (or lack thereof) to high-speed Internet service on Aboriginal reserves across the country. He noted that the availability of high speed Internet access was poor in rural Canada, but was especially dismal on Aboriginal reserves. He explained that good data about Internet access in these communities was hard to come by and acknowledged a 2004 survey from Aboriginal Portal Canada as the source of his statistics. According to the study, 51 percent of Aboriginal communities did not have access to any means of Internet access beyond dial-up in 2004. In remote Aboriginal communities, the lack of access was greater than 64%. He explained that Aboriginal Portal Canada was presently working on a new study.

Access, he claimed, was simply too expensive, and although Internet access holds “great promise” for Aboriginal peoples in Canada, there is just too little of it to make any major differences in the lives of Aboriginals across Canada; he repeated the need for good data in order to shape better Internet access-related policies in Canada.

On the issue of impact, LaRose mentioned that new media broadcasting has not yet had an impact on APTN’s ability as a network to fulfill its mandate. “We do not take our position within the mainstream television broadcasting system for granted,” he said, “we’ll continue to focus most of our energy on our core broadcasting activities.”

At the same time, LaRose expressed concern with the APTN’s role in the new media. “We have to be present,” he said. APTN streams its proprietary programming (mostly news and public affairs) online, and much of that programming is archived. It has recently created a new online workspace, DigitalDrum.ca, for emerging content producers. DigitalDrum.ca is designed to promote APTN and Aboriginal artists, and build an online community of interest in both the network itself and other Aboriginal concerns.

LaRose explained that as the television and web-based mediums begin to intersect, his network will need to remain accessible in that environment if the advances that APTN has made in building a media presence for Aboriginal peoples are to be preserved and promoted. He mentioned that “without the resources, skills, experience, and quality programming made possible by our television base, Aboriginal peoples’ role in new media would be significantly diminished. “Here I am talking about the presence of high quality, professionally produced Aboriginal content.”

LaRose expressed concern that too much policy attention to “new media” in its own right has the potential to undermine the foothold that APTN and Aboriginal peoples now have in the broadcasting landscape. Should the CRTC introduce initiatives that support new media, for example, the diversion of funding from the CTF to new media projects will likely weaken the ability of APTN to meet the challenges of the new media environment.
“I don’t think we do the broadcasting system much good if we divert resources from broadcasting activities and spend them instead on new media activities,” he said. But “allocating incremental, new resources to new media is a different story.”

Over the next five years the objective of APTN will be to serve all Canadians as the primary source for high-quality Aboriginal audiovisual content, both online, as well
as in the traditional broadcasting environment.  He reasoned that because the online world will increasingly become the natural extension of APTN’s broadcasting activities, and that those activities are what make the new media content possible in the first place, it follows that “by being a stronger broadcaster we will have a stronger presence online and will meet our objective.”

He turned next to the issue of contribution. He said that it is entirely appropriate for the Commission to expect that Canadian broadcasters, who have benefited for so long from the very existence of a Canadian broadcasting system, should play a direct role to bring Canadian content to new media. LaRose explained that, for APTN, new media is simply an extension of broadcasting. The manner in which the broadcasting system is regulated should encourage that extension, in as seamless a manner as possible.

APTN does not have a regulated Canadian programming expenditure obligation, but for other broadcasters it would be reasonable for new media expenditures that are related to broadcast content to be counted towards their CPE obligations. LaRose told the panel that, though APTN does not have a CPE obligation, it does have a regulated wholesale fee, and as a result of its public mandate, nearly all of its production and programming costs are Canadian. It is appropriate, then, that APTN's new media activities be reflected in, and supported by, its regulated wholesale fee. “Our new media content wouldn’t exist without our broadcasting base.”

He recommended, too, that new media funding that originates from within the regulated broadcasting system (such as the production funds and benefits expenditures) should be redirected back into the regulated broadcasting system. Otherwise we would be flowing funding from expensive, subsidized high quality production and those entities that have important regulatory obligations, to relatively inexpensive, unregulated, and unlicensed new media activities and entities with no regulatory obligations. “I think we need to give as much support as we can to the traditional regulated broadcasting system and the productions that system makes possible to ensure that the highest value content and those that support this content make it in the online world.” He added that the CRTC needs to facilitate the acquisition by broadcasters of ancillary broadcasting rights to programming in new media platforms.

On another note, LaRose welcomed the CRTC's involvement in license and trade discussions so as to make sure that the Canadian rights market develops in a way that supports broadcasting objectives and Canadian broadcasters of all kinds and sizes. Finally, LaRose explained that “the regulation of the open Internet would probably not even be a last resort for the CRTC to consider; the benefit to Canada, to all of us of the free flow of information, ideas and, yes, broadcasting content on the web is too great. “On the other hand, it must be kept in mind that the Internet at its most fundamental level is merely a means of communication.” LaRose suggested that the CRTC implement appropriate, well-crafted regulations to the benefit of the broadcasting system as, over time, ISPs and BDUs gradually blur together and traditional and new media platforms converge.

He made it clear that he was not suggesting regulation of the Internet as such, but rather that the CRTC keep a watchful eye on new media as the aggregators of content become indistinguishable from the existing content distributors upon which we rely to distribute our Canadian content.

As an illustration of just one possible type of regulation, he suggested that the CRTC impose “CanCon” quotas on Internet BDUs, if and when those distributors make the jump to full television services online. At this point, the panel was invited to ask questions of both S-Vox and APTN.

Chair von Finckenstein asked about something LaRose called “ancillary” rights, or the rights that the creators of television content would be able to sell when that content becomes accessible online. In his written submission, LaRose wrote that “the Commission needs to support, within its mandate, the acquisition and full exploitation of ‘ancillary’ broadcasting rights” in a move to ensure that traditional television broadcasters (like APTN) remain competitive within the new media sphere. But von Finckenstein, unsure of what, exactly, LaRose was getting at, said that such support does not fall under the mandate of the CRTC.  LaRose explained that if such support does not come under its mandate now, then it will in several years, if and when ISPs begin to aggregate their own content.

Commissioner Simpson asked LaRose if specialty broadcasters would fare better than conventional OTAs going down the road, into the new media sphere. LaRose responded positively, and acknowledged that specialty broadcasters like APTN have the potential to fare better if only because a lot of its programming is catered to an individual or specialized mandate. He added that where APTN and others like it have an opportunity as specialty networks is in the constant re-definition of its content, to ensure that it meets the needs of its core and broader audiences. Simpson asked both companies if advocating an unregulated Internet is truly a wise move. “Are you willing to take that chance?” he asked.

LaFontaine of S-Vox explained her company’s position. Should the CRTC decide to impose regulations on new media outlets such as S-Vox, growth and innovation will suffer. However, LaFontaine did include in her submission the caveat that, should an ISP like Bell or Rogers begin to operate as an “aggregator” of new media, the CRTC should be quick to step in to breakup its control over the Canadian new media market. She added that at present, S-Vox was in no position to monetize content, and so, as it develops an inclusive (and profitable) business model, it will require the space that non- regulation affords. She recommended that the CRTC keep a close eye on ISPs, to ensure that Bell and others do not start to aggregate content to the detriment of traditional broadcasters.

Prasuhn added that S-Vox was opposed to the formal regulation of Canadian broadcaster websites and explained that regulating the broadcaster websites asymmetrically from the rest of the system could cause some unintended, damaging consequences.