internet by j f grossen (CC BY-NC 2.0) https://flic.kr/p/4obWYe

internet by j f grossen (CC BY-NC 2.0) https://flic.kr/p/4obWYe

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All About the Internet: My Submission to the Broadcasting and Telecommunications Legislative Review Panel on the Future of Canadian Communications Law

The deadline for submissions to the Broadcasting and Telecommunications Legislative Review Panel closed on Friday with a handful of organizations such as the CRTC, CBC, and Friends of Canadian Broadcasting posting their submissions online. My full submission can be found here.  I argue that Canada’s regulatory approach should be guided by a single, core principle: communications policy, whether telecommunications or broadcasting, is now – or will soon become –  Internet policy. This emerging communications world is mediated through the Internet and communications regulatory choices are therefore fundamentally about regulating or governing the Internet. My submission identifies four goals that should guide Canadian communications law and regulation:

1.    Universal, affordable access to the network
2.    Level regulatory playing field
3.    Regulatory humility
4.    Fostering competitiveness in the communications sector

The executive summary on each of the four issue is posted below, followed by a list of 23 recommendations contained in the submission. In the coming days, I’ll have posts that unpack some of the key issues.

Executive Summary

Universal Affordable Access to the Network

In a world in which Internet access is the gateway to communications, culture, commerce, education, and community participation, the single most important policy goal of communications legislation is universal, affordable Internet access. This submission discusses five issues central to a developing a legislative framework premised on universal, affordable Internet access.

The challenge associated with the Canadian access issue is well-known: a large geographic footprint that makes providing access to some rural and remote communities challenging, competitive shortcomings that have left Canada with an intractable digital divide that results in adoption rates that lag behind access rates, and regulatory and government policies that have consistently failed to achieve the goal of universal, affordable access. The panel should deliver a clear statement in support of universal access at the more ambitious speeds. Moreover, it should recommend mandated broadband obligations in support of affordability, limits on data caps, prioritization of adoption rates to close the digital divide, and establish a clear timeline for all stakeholders on achieving the universal, affordable access goal.

New policy measures to enhance Canadian wireless competition are also needed. The panel should recommend policies that support greater wireless competition. These include encouraging foreign investment, continuing to set aside spectrum for new entrants and smaller providers, and opposition to further marketplace consolidation on competition grounds. Moreover, a mandated MVNO policy, which would support nimble, low-cost competitors leading to more innovative pricing and services, is long overdue.

The panel should also recommend the implementation of a new policy direction that requires all decisions be assessed through the lens of their impact on affordable access. Policies that are likely to increase consumer costs on Internet access should be reviewed with goal of amendment to develop cost-neutral alternatives. Moreover, the Commission should be required to develop an Internet access impact assessment, akin to a privacy impact assessment, to fully explain the implications of decisions on the foundational goal of affordable access.

The panel should recommend binding consumer protection rules, truth in advertising requirements, safeguards against unfair charges or above-market roaming fees, mandated service disclosure requirements, and clear options for redress for aggrieved consumers. Transparency and a complaints mechanism are important, but the communications law framework should strengthen current consumer protections.

Ensuring that the affordability issue is an integral part of the policy process should not be limited to the policy direction. Effective and fair regulatory and consultative processes depend upon a myriad of perspectives and voices, particularly for those groups who often find themselves under-resourced and under-represented. The panel should recommend the establishment of consistent, stable funding for public interest participation in regulatory and policy proceedings. This should include the possibility of multi-year support for established organizations and proceeding-specific support for all eligible groups.

Level Playing Field for Policy: Equality Of Opportunity And Access

The Internet offers remarkable opportunities for all Canadians to create, communicate, and engage in civic activities. While Canadian communications law has long sought to identify “policy objectives” for the broadcast or telecom system, the Internet is far bigger than either of those systems. The panel should instead ensure that Canadian law offers a level playing field from a policy perspective thereby prioritizing equality of opportunity and access for all.

Despite the political affirmations of support for net neutrality, the panel should recommend an unequivocal legislative direction to support and enforce net neutrality.

A level playing field for policy should also include measures to enhance competition in the provision of access services. Given the enormous advantages wielded by incumbent providers, Canada suffers from insufficient competition, which leads to high prices, low usage rates relative to other developed countries, and affordability concerns for consumers with low household income. The panel should recommend a mandated MVNO system and an enhanced third-party access model that seeks to eliminate delays, establishes benchmarks for access, and features independent reviews of reported problems in facilitating consumer access.

The emergence of new online audio and video services has sparked considerable debate over whether or how to regulate services that typically fall outside the current regulatory framework. The panel should ensure that like is treated as like, with sufficient differentiation to treat similar services in an equivalent manner for regulatory purposes.

Humility In Regulation: Recognize The Limits Of Communications Law And Regulation

The Internet is not the equivalent of the broadcasting system and efforts to cast it as such for regulatory purposes are enormously problematic. Indeed, this submission argues that the panel should recognize the importance of regulatory humility as a fundamental principle, guided by the view that communications law should not be used as a regulatory mechanism when other, more appropriate regulatory or legal tools are available nor should it be relied upon as a critical funding mechanism to support other policy objectives.

Humility in regulation touches on numerous issues, but this submission is limited to two types: (i) overlapping regulation that engages issues such as freedom of expression, copyright and privacy; and (ii) cross-subsidization, in which communications law is used to subsidize policy goals in other sectors such as the sustainability of the media and support for Canadian cultural production.

There is unquestionably a need for laws that address expression online that are consistent with the Canadian Charter of Rights and Freedoms. However, speech regulation through communications law licensing or other mandated requirements cannot be easily justified when there are other, more appropriate and less invasive avenues to address online expression. The panel should therefore recommend that communications law defers to generally applicable laws to the maximum extent possible when addressing expression online.

The panel should reject any effort to revive a site blocking system within Canadian communications law, leaving the issue to copyright policy makers. Consistent with the benefits of reducing overlapping regulation, the panel should also recommend the elimination of privacy rules within Canadian communications law accompanied by a more robust, enforceable PIPEDA that could be used to address privacy safeguards within the sector.

Cultural cross-subsidization has been a hallmark of the Canadian communications system, with mandated contributions from broadcasters and broadcast distributors (BDUs) used to support the creation of Cancon. Rather than expanding the cross-subsidization approach, however, the panel should recommend its gradual elimination. This does not mean that there should not be public support for Cancon. Cancon support remains an important ingredient in a vibrant Canadian cultural sector. Rather, public support such as grants, tax benefits, and other measures should come from general revenues as a matter of public policy, not through cross-subsidization.

The panel should recommend emulating the government’s support for the media sector, which rightly adopts the position that if the media needs public support and the government believes it is in the public interest to do so, funding should come from general revenues as part of broader government policy, not through cross-subsidization and a myriad of levies that run counter to other policy goals such as affordable Internet access and marketplace innovation.

With respect to film and television production, the panel should recommend implementing a level playing field with regard to taxation by supporting the application of sales taxes and general income taxes to Internet services. These taxes of general application should be applied to all businesses doing business in Canada with the resulting revenues available to help fund support programs for Canadian content creation. While supporting the application of general taxes, the panel should reject the implementation of new taxes or mandated contributions on OTT services and Internet providers, the latter of which would increase the costs of access counter the foundational policy of affordable, universal access. Extending the cross-subsidization model to the Internet raises significant concerns associated with both over-regulation and increased Internet access costs.

Fostering Competitiveness in the Communications Sector

When the Broadcasting Act was crafted, broadcasters occupied a privileged position, since the creation of video was expensive and the spectrum needed to distribute it scarce. As a result, the government established a licensing system complete with content requirements and cultural contributions designed to further a myriad of policy goals. Yet among the more than 40 policy goals found in the current law, the word “competition” does not appear once. The absence of competition may have made sense when there was little of it, but in today’s world of abundance featuring a seemingly unlimited array of content and distribution possibilities, fostering competition among broadcasters and BDUs is essential to long-term marketplace success.

The panel should recommend several reforms that would help solidify the competitiveness of the sector. These include the removal of foreign ownership restrictions, enhancing consumer choice, the gradual elimination of simultaneous substitution, and limitations on the CBC’s acceptance of digital advertising to decrease overlap with the private sector advertising-based models. The submission does not recommend the elimination of mandated contributions by broadcasters and BDUs given the ongoing benefits those sectors enjoy, though it recognizes that the impact of those contributions is likely to diminish over time.

Summary of Recommendations

Universal, Affordable Internet Access

1.    The panel should deliver a clear statement in support of universal access at the more ambitious speeds.

2.    The panel should recommend mandated broadband obligations in support of affordability, limits on data caps, prioritization of adoption rates to close the digital divide, and establish a clear timeline for all stakeholders on achieving the universal, affordable access goal.

3.    The panel should recommend policies that support greater wireless competition. These include encouraging foreign investment, continuing to set aside spectrum for new entrants and smaller providers, and oppose further marketplace consolidation on competition grounds. Moreover, a mandated MVNO policy, which would support nimble, low-cost competitors leading to more innovative pricing and services, is long overdue.

4.    The panel should recommend the implementation of a new policy direction that require all decisions to be assessed through the lens of their impact on affordable access.

5.    The panel should recommend binding consumer protection rules, truth in advertising requirements, safeguards against unfair charges or above-market roaming fees, mandated service disclosure requirements, and clear options for redress for aggrieved consumers.

6.    The panel should recommend the establishment of consistent, stable funding for public interest participation in regulatory and policy proceedings

Level Playing Field for Policy: Equality Of Opportunity And Access

7.    The panel should ensure that Canadian law offers a level playing field from a policy perspective.

8.    The panel should recommend an unequivocal legislative direction to support and enforce net neutrality.

9.    The panel should recommend an enhanced third-party access model that seeks to eliminate delays, establishes benchmarks for access, and features independent reviews of reported problems in facilitating consumer access.

10.    The panel should ensure that like is treated as like, with sufficient differentiation to treat similar services in an equivalent manner for regulatory purposes.

Humility In Regulation: Recognize The Limits Of Communications Law And Regulation

11.    The panel should recognize the importance of regulatory humility as a fundamental principle, guided by the view that communications law should not be used as a regulatory mechanism when other, more appropriate regulatory or legal tools are available nor should it be relied upon as a critical funding mechanism to support other policy objectives.

12.    The panel should recommend that communications law defers to generally applicable laws to the maximum extent possible when addressing expression online.

13.    The panel should reject any effort to revive a site blocking system within Canadian communications law, leaving the issue to copyright policy makers.

14.    The panel should recommend the elimination of privacy rules within Canadian communications law accompanied by a more robust, enforceable PIPEDA that could be used to address privacy safeguards within the sector.

15.    Rather than expanding the cross-subsidization approach, the panel should recommend its gradual elimination.

16.    The panel should recommend emulating the government’s approach to assistance to the media sector as funding should come from general revenues as part of broader government policy, not through cross-subsidization and a myriad of levies that run counter to other policy goals such as affordable Internet access and marketplace innovation.

17.    The panel should recommend implementing a level playing field with regard to taxation by supporting the application of sales taxes and general income taxes to Internet services.

18.    The panel should reject the implementation of new taxes or mandated contributions on OTT services and Internet providers

Fostering Competitiveness in the Communications Sector

19.    The panel should recommend the elimination of foreign ownership restrictions in the licensed broadcasting sector.

20.    The panel should recommend establishing more robust, mandated options to enhance consumer choice and drive increased competitiveness in the sector.

21.    The panel should recommend the gradual elimination of simultaneous substitution policies.

22.    The panel should recommend requiring the public broadcaster to adopt an ad-free approach to its online news presence.

23.    The panel should recommend an even bigger goal for the CBC to capture the public’s imagination. That could include requiring the CBC to open its content for public reuse or embarking on a comprehensive digitization initiative that provides the foundation for a national digital library.

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