Over the past couple of weeks, there have been a myriad of posts and articles criticizing Canada's anti-spam legislation. According to some posts - primarily those by Barry Sookman - the legislation will stop family members from sending commercial email to each other, parents from promoting their children's lemonade stands, and discriminate against charities and schools.
Is this true? In a word, no. While there is little point in unpacking
each of the many outrageous claims, over the next few days I'll offer up
a few posts on some of the crazier ones.
Today's post focuses on the suggestion that families will be
stopped from sending commercial messages to other family members.
Sookman writes:
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Canadians frustrated with ever-increasing cable and satellite bills
received bad news last week with the announcement that the Canadian
Radio-television and Telecommunications Commission will consider whether
to require cable and satellite companies to include nearly two-dozen
niche channels as part of their basic service packages. If approved,
the new broadcast distribution rules would significantly increase
monthly cable bills with consumers forced to pay for channels they may
not want.
My weekly technology law column (Toronto Star version, homepage version) notes that two issues sit at the heart of the broadcast distribution rules. First,
whether the CRTC should grant any broadcaster mandatory distribution
across all cable and satellite providers such that all subscribers are
required to pay for them as part of their basic packages. Second, in the
absence of mandatory distribution, whether broadcast distributors
should be required to at least offer the services so that consumers have
the option of subscribing.
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Appeared in the Toronto Star on January 27, 2013 as CRTC Should Put Consumers First and Drop 'Must Carry' Requirements
Canadians frustrated with ever-increasing cable and satellite bills
received bad news last week with the announcement that the Canadian
Radio-television and Telecommunications Commission will consider whether
to require cable and satellite companies to include nearly two-dozen
niche channels as part of their basic service packages. If approved,
the new broadcast distribution rules would significantly increase
monthly cable bills with consumers forced to pay for channels they may
not want.
Two issues sit at the heart of the broadcast distribution rules. First,
whether the CRTC should grant any broadcaster mandatory distribution
across all cable and satellite providers such that all subscribers are
required to pay for them as part of their basic packages. Second, in the
absence of mandatory distribution, whether broadcast distributors
should be required to at least offer the services so that consumers have
the option of subscribing.
Twenty-two channels are vying for mandatory distribution status as part
of the current review, which includes a comment period and a hearing
scheduled for late April. Some have likened the process to winning the
lottery, since mandatory distribution guarantees broadcasters millions
in revenues. For example, 25 cents per subscriber - the amount the
Aboriginal Peoples Television Network currently receives - generates $30
million in revenue in each year for the broadcaster (it wants the fee
to increase to 40 cents per subscriber).
These proposed cash grabs could add hundreds of dollars to cable and
satellite bills if approved. Sun TV News, which previously disavowed
mandatory distribution by likening it to a tax on all cable and
satellite subscribers, now wants the CRTC to require those subscribers
to pay it 18 cents per month until 2017. Starlight, a proposed new
Canadian film channel, hopes to generate hundreds of millions in
revenues from mandatory distribution, much of which would be used fund
the creation of new Canadian films.
While the financial benefits for broadcasters are enormous, the policy
represents a near-complete elimination of consumer choice for the
channels at issue. Rather than convincing millions of Canadian consumers
that their services are worth buying, the broadcasters need only
convince a handful of CRTC commissioners that their service meets
criteria such as making "an exceptional contribution to Canadian
expression." That is supposedly a high bar, yet it is surely far easier
than convincing millions of people to pay for your service each month.
Last year, CRTC chair Jean Pierre Blais emphasized that the Commission's
top priority was to "put Canadians at the centre of their
communications system." The mandatory distribution rules do the
opposite. Rather than focusing on consumer interests and choice, the
rules place broadcasters at the centre of the communications system by
offering up the prospect of millions in revenue without regard for what
consumers actually want.
There are few, if any, broadcasters that can be considered so essential
as to merit mandatory distribution. Niche cultural broadcasters have a
myriad of distribution possibilities and should be forced to compete
like any other content creator or distributor. In fact, even
broadcasters that position themselves as "public services" can often be
replicated by Internet-based alternatives.
While the anti-consumer mandatory distribution rules should be scrapped,
the Commission can enhance consumer choice by making "must offer" the
default for broadcast services.
Cable and satellite companies should theoretically welcome the chance to
offer more options to subscribers, but the vertical integration between
broadcasters and broadcast distributors may create anti-competitive
incentives. With Bell, Rogers, Shaw, and Videotron each controlling a
major broadcaster, it may make economic sense for those distributors to
prioritize their own channels while offering their customers less
choice.
The role for a CRTC that places Canadians at the centre of their
communications system is obvious - stop treating Canadians as ATMs for
the broadcasters by dropping mandatory distribution altogether, while
requiring broadcast distributors to offer all licensed channels to their
subscribers in a pick-and-pay format so that at long last consumers get
to decide what they want to watch and pay for.
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.
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