Industry Canada's Report on Plans and Priorities for 2014-15 includes a notable paragraph on priorities for the digital economy. The report states:
In 2014–15, Industry Canada will deliver the telecommunications
consumer commitments included in the 2013 Speech from the Throne. These
include taking legislative action to amend the Telecommunications Act to
reduce roaming costs and prevent wireless providers from charging other
companies more than they charge their own customers for mobile
services. The Department will also protect consumer interests by
encouraging compliance and adopting more effective remedies, including
administrative monetary penalties, when violations occur. Industry
Canada will continue to promote investment in high-speed broadband
networks for rural Canadians.
These priorities are an important part of a robust digital economy. Other elements will include: modernizing the privacy regime to better protect consumer privacy online;
monitoring the implementation of Canada's anti-spam legislation; and
deepening analysis of Canada's communications infrastructure.
While the telecom actions were expected, the commitment to modernizing
Canadian privacy laws is new (albeit long overdue). Previous privacy
reform bills died on last year, leaving the government years behind in
addressing PIPEDA reform. The Industry Canada report suggests that some
legislative action may finally be on the way.TagsShareFriday March 07, 2014
The federal government released its Report on Plans and Priorities for
2014-15 today with departments and agencies identifying spending
estimates and work priorities. The CRTC's report offers some interesting insights into its main activities and targets, particularly with respect to broadband access.
The latest CRTC broadband target is for 100% of Canadian households to
have access to broadband speeds of 5 Mbps download and 1 Mbps upload by
December 31, 2014. That target is a year ahead of schedule as last year's report
set the 100% target for the end of 2015. The new target is also
difficult to reconcile with the government's announcement that it plans
to spend $305 million over the next five years to extend broadband to
rural and remote areas. In fact, last week reports
suggested that Industry Minister James Moore and the government had
established a target of 2019 for universal access to broadband. If the
CRTC target is achieved, the government's broadband plans and targets
would appear already outdated. Interestingly, Industry Canada's report
includes a target of 77% of the population with broadband subscriptions
(not access) by March 2015, but broadband is defined is only 1.5 Mbps
Read More ...
TagsShareThursday March 06, 2014
The CRTC has also become more aggressive about its targets for
broadband competition. Last year, it set a target of 50% of
households having access to three or more broadband providers with a
5% annual increase thereafter. This year, it has set a target of 95%
of households by March 2015 (oddly, it has scaled back its target
for competitive access to broadcast distribution undertakings having
targeted four or more last year, but only three or more this year).
In addition to broadband targets, the report features targets for
everything from spam reduction to viewership of Canadian content.
With the new anti-spam law set to take effect in July, the CRTC
hopes to reduce spam by 10% over the next 12 months. The Canadian
content targets have changed completely with the CRTC now focused on
the viewership or listeners to Canadian content. By March 2015, the
Commission target is 48% of total television viewing is to Canadian
programming, while it wants 50% of radio listening to Canadian
content. The CRTC targets differ slightly from those of Canadian
, which set a target of 50% Canadian programming
viewing by August 2015.
Last month, I blogged about the CRTC's Talk TV consultation and concerns that the questions were framed in a lopsided manner. CRTC Chair Jean Pierre Blais was asked about those concerns in Twitter chat and he responded that the questions and answers "were intended to be provocative." I address that response in my weekly technology law column (Toronto Star version, homepage version)
highlighting both the concerns with the survey and offering some
additional provocative questions that the Commission excluded.
The column begins by noting that regulation of Internet video services and the prospect of
pick-and-pay television channels headline the second phase of the
Canadian Radio-television and Telecommunications Commission's future of
television consultation which launched late last month. The "TalkTV"
initiative is designed to make it easy for Canadians to participate,
featuring six short scenarios followed by a limited number of choices
Read More ...
While the consultation quickly attracted considerable participation
- the commission said thousands of Canadians responded in the first
week alone - its content raises serious concerns about future plans
for CRTC regulation. Indeed, if the consultation is a signal of
where the commission is headed, not only is the notion of true
pick-and-pay channels dead and the much-disliked simultaneous
substitution alive, but regulation of Internet video services may be
just around the corner.
The Internet video discussion in the survey focuses almost
exclusively on new regulatory fees for services such as Netflix.
After asking respondents whether online services should be required
to contribute to funding for Canadian content, provide
closed-captioning, and adhere to regulated programming standards,
the CRTC poses a series of follow-up questions that all involve
Respondents are asked whether they would pay an extra 50 cents per
month for Canadian-made programming (presumably the additional cost
for a Canadian content contribution fund) or a few cents each month
for closed captioning. The commission also inquires whether
Canadians would be willing to pay $5 more each month for increased
Internet usage costs. The CRTC floats the possibility that such
usage would not count against monthly data caps, suggesting that it
may be willing to violate net neutrality principles as part of a new
Internet regulatory regime.
The consultation delves into other controversial issues, but often
offers a lopsided perspective. Signal substitution, the longstanding
practice that swaps a U.S. feed with the Canadian equivalent (with
Canadian commercials) when the same program is being aired at the
same time, was raised during an earlier part of the consultation as
a policy ripe for reform. Once the issue is explained in the survey,
respondents are offered just three choices: keep the policy
unchanged, black out U.S. signals, or require Canadians to pay extra
fees to compensate stations for lost revenues.
Similarly, the consultation asks whether Canadians would like access
to more U.S. and international programming. The Commission seemingly
pre-judges the issue by framing the ramifications of new programming
as increasing cable and satellite fees, creating lost Canadian jobs,
or developing new channel packages with additional Canadian content
to offset the foreign programming.
When asked about the apparently skewed approach during a recent
Twitter chat, CRTC Chair Jean-Pierre Blais responded that the
consultation was meant to be provocative. Few would object to a
provocative approach that generates interest in broadcast policy,
however, these provocations are entirely one-sided.
For government regulators, it is seemingly provocative to ask about
Internet regulation and the implementation of new fees that could
almost double the effective cost of services such as Netflix. It is
also provocative to equate more consumer choice with lost Canadian
jobs or to propose compensation for Canadian television stations if
simultaneous substitution is removed.
Yet the commission does not offer up similarly provocative options
such as the elimination of many broadcast regulations in order to
create a level playing field with Internet services or removing the
requirement that Canadians purchase basic television services with
all cable and satellite packages. It also does not provoke
respondents with the possibility of new rules to eliminate
simultaneous substitution by forcing Canadian broadcasters to adjust
to a more competitive marketplace or to re-imagine the role of
public broadcasting in Canada.
Given that the CRTC rightly or wrongly often attracts the ire of
Canadians, the survey also avoids the biggest provocation of all -
does Canada still need the CRTC to regulate broadcasting? The
answer to that question might depend upon the final results of its
future of television consultation.
TagsShareWednesday March 05, 2014
As Meera Nair noted last week, today marks the tenth anniversary the Supreme Court of Canada's landmark CCH Canadian v. Law Society of Upper Canada.
A decade after its release, the case has grown in stature as the
leading the users' rights copyright decision by a high court in the world.
Writing for a unanimous court, Chief Justice McLachlin stated:
the fair dealing exception is perhaps more properly understood as an
integral part of the Copyright Act than simply a defence. Any act
falling within the fair dealing exception will not be an infringement of
copyright. The fair dealing exception, like other exceptions in the
Copyright Act, is a user's right. In order to maintain the proper
balance between the rights of a copyright owner and users' interests, it
must not be interpreted restrictively. As Professor Vaver, supra, has
explained, at p. 171: 'User rights are not just loopholes. Both owner
rights and user rights should therefore be given the fair and balanced
reading that befits remedial legislation.'
The articulation of fair dealing as a users' right represented a
remarkable shift, emphasizing the need for a copyright balance between
the rights of creators and the rights of users. While this approach
unquestionably strengthened fair dealing, the immediate reaction to the
CCH was somewhat mixed.
Read More ...
TagsShareTuesday March 04, 2014
The academic community responded with articles by professors such as
that focused on the important change in copyright. More
common were arguments that users' rights was simply a metaphor and
that little had changed. For example, Access Copyright's responded
publicly that "this ruling does not change the fact that most
copying of copyright protected works does not fall under fair
dealing. The Supreme Court stated definitively that copyright does
exist in original works, and that is why organizations must sign an
Access Copyright licence or risk breaking the law."
Incredibly, many educational institutions were similarly skeptical
about the decision. In the months after the decision, few adjusted
and even the Council of Ministers of Education,
that more clarity on fair dealing was needed.
Five years after the decision, some groups began to work to roll
back the CCH decision. In 2009, Access Copyright urged the
government to establish limits on the ruling in its submission
to the national copyright consultation:
Rather than an expansion of fair dealing, Access Copyright
believes that it may be necessary to qualify the fair dealing
provision as set out by the Supreme Court of Canada in the CCH
decision, in order to ensure that Canada is compliant with the
three-step test. Access Copyright contends that the fair dealing
provision as interpreted by the Supreme Court of Canada conflicts
with the normal exploitation of a work and causes an unreasonable
loss of income to creators and publishers.
The government rejected the calls to limit fair dealing, however,
instead expanding the provision with several new purposes including
education, parody, and satire in its 2010 copyright reform bill.
With the government siding with users on the issue, the same groups
hoped the Supreme Court of Canada would rethink its CCH ruling in
the 2012 copyright cases. The Canadian Publishers' Council argued
that the meaning of "users' rights" was overstated:
The Appellants and other Intervenors rely extensively on the
concept of "users' rights" to promote a view of fair dealing that
would substantially curtail copyright holders' rights and permit
extensive copying of behalf of others. Their use of the term to
justify this severe curtailment of exclusive rights illustrates
the dangers of treating the word 'user rights' literally, rather
than as a metaphor to express the importance of user interests.
Access Copyright emphasized
the same concern:
In CCH this Court raised expectations when it held that fair
dealing is a "user's right". Those raised expectations have led
users like the appellants to ask that the right be clarified and
made more predictable. However, this should not come at the
expense of upsetting the balance between users' and creators'
rights under the Act.
Yet the Supreme Court of Canada rejected those arguments, choosing
instead in 2012 to re-affirm the importance
of users' rights
CCH confirmed that users' rights are an essential part of
furthering the public interest objectives of the Copyright Act.
One of the tools employed to achieve the proper balance between
protection and access in the Act is the concept of fair dealing,
which allows users to engage in some activities that might
otherwise amount to copyright infringement. In order to maintain
the proper balance between these interests, the fair dealing
provision 'must not be interpreted restrictively'.
While some groups still seek to downplay the importance of fair
dealing, ten years after CCH it is clear that users' rights are here
to stay. The Supreme Court has continued its emphasis on a copyright
balance that prominently features users' rights, the government has
adopted copyright reform with a significant user-oriented component
(expanded fair dealing, user generated content provision, Internet
exceptions, format shifting, device shifting, backup copies), and
the World Intellectual Property Organization reached agreement
on its first users' rights copyright treaty last year with the
Marrakesh Treaty for the blind and visually impaired. There is
still much work to be done, but the progress over the past decade
owes a great deal to the battle between legal publishers and the Law
Society of Upper Canada that culminated in the March 4, 2004 CCH
decision that firmly placed copyright users' rights on the map.
Over the past couple of days, there has been mounting attention on the application of Quebec language laws to a Facebook page.
The issue arose when the OQLF advised a Chelsea boutique that they had
received a complaint about its English-only Facebook page. While many
are reacting with alarm, the reality is that Quebec's language enforcement body has applied the law to websites for many years.
Complaints about the issue date back at least 15 years, when a complaint was filed against an English-only photography website. While a Montreal lawyer claims the issue has not been challenged in court, the issue was in fact litigated in Reid v. Court of Quebec,
a case involving the online sale of maple syrup. The Quebec Superior
Court upheld the application of the language laws to the Internet ruling
that the law applied to commercial publications and that included
websites. Further complaints seem to pop up every few years (presumably because the system is complaints-based), but the legal analysis
is pretty straightforward. The law applies to all commercial
publications - including websites - involving a business with a Quebec
location or address that is selling goods or services. The location of
the server or even the intended audience is irrelevant - what matters is
the real-space location of the business.
Read More ...
A Facebook page may be more nuanced than a commercial website, since
some Facebook pages may not involve any commercial activity (though
some businesses may use social media in lieu of a website including
offering goods for sale). If there is no commercial activity,
there is a plausible argument that the law does not apply. With
commercial activity, however, Quebec's law has been clear for more
than a decade: the language laws apply.
Leaving aside discomfort with language laws altogether, the
application of language laws to the Internet strikes me as wholly
unnecessary since it is very easy for anyone to translate any
webpage into the language of their choice. Yet absent a change in
the law, the only surprise about the application of the law is that
anyone is surprised.
TagsShareFriday February 28, 2014
The Copyright Board of Canada has issued a series of questions to Access Copyright in the tariff proceedings involving Canadian
post-secondary institutions. Once Canada universities and colleges quit
the proceedings, the Board was left to play a more aggressive role in
questioning Access Copyright's claims. Its questions focus on several
important issues (discussed further below), but perhaps most noteworthy
is its preliminary conclusion on what constitutes insubstantial or de
In establishing the scope of copyright rights, the law
refers to "the sole right to produce or reproduce the work or any
substantial part thereof." Since the rights only arise once the full
work or a substantial part of it are used, anything less than that - ie.
an insubstantial part - is not subject to the rights identified in the
Copyright Act. While some rights holders have argued that the standard
for a substantial is very low (the National Post recently argued
in a case that "even the reproduction of a small number of words in a
newspaper article can be an impermissible reproduction"), the Copyright
that its preliminary view is that "copying of a few pages or a small
percentage from a book that is not a collection of short works, such as
poems, is not substantial." With respect to the tariff application, the
Board says this excludes more than 2.5% of coursepack copying.
Read More ...
TagsShareWednesday February 26, 2014
More importantly, if a few pages or a small percentage is
unsubstantial, fair dealing will unquestionably constitute a much
larger amount of copying. By definition, fair dealing involves
copying of a substantial part of the work that is not subject to
compensation nor require further permission from the rights holder.
, determining whether the copying in question meets
the fair dealing standard is subject to a two-part test established
by the Supreme Court of Canada. Moreover, the Court has ruled
that fair dealing is a user's right that "must not be interpreted
restrictively." Since a few pages or a small percentage is
insubstantial, fair dealing that is consistent with the Supreme
Court of Canada's emphasis on user rights must involve a
significantly larger percentage of the work. This suggests that the
Canadian education approach of a single chapter or ten percent of a
work is consistent with the law and might be too low (the consensus
Israeli fair dealing guidelines that involved both education groups
and publishers uses a 20% standard).
Beyond the de minimus copying issue, the Board poses several other
important issues to Access Copyright. For example, it asks for the
collective to provide a legal justification for including linking in
its tariff, particularly in light of the Supreme Court of Canada
decision of Crookes v. Newton (I discuss
. It also seeks analysis of the university fair
dealing guidelines and asks Access Copyright to describe its view of
the impact of adding education to the fair dealing provision as part
of Bill C-11 and of the Supreme Court of Canada fair dealing cases.
The Board also asks Access Copyright to explain:
the basis for asserting that all copying carried out
under the educational institutions' policies is compensable and
subject to the tariff to be certified by the Board. Is it Access'
position that there is no fair dealing at all in
The Board has posed some important questions and staked out a
notable position on de minimus copying. Access Copyright's responses
are due by March 18, 2014.
The Canadian media featured extensive coverage over the weekend of the federal court decision
that opens the door to TekSavvy disclosing the names and addresses of
thousands of subscribers and establishes new safeguards against
copyright trolling in Canada. While some focused on the copyright trolling issues, others emphasized the disclosure of the names and the possibility of lawsuits.
What comes next is anyone's guess - Voltage indicates that it plans to
pursue the case - but the economics of suing thousands of Canadians for
downloading a movie for personal purposes may not make sense given
current Canadian law. This post examines the law and estimated costs of
pursuing file sharing litigation against individuals, concluding that
the combination of copyright reform, the Voltage decision, likely damage
awards, and litigation costs will force would-be plaintiffs to
reconsider their strategies.Read More ...
TagsShareMonday February 24, 2014
Start with the likely damage award if a case went to court. The
maximum liability for an individual for non-commercial infringement
in Canada is $5,000 for all infringements. With nothing more than IP
addresses, there is unlikely to be any evidence of commercial intent
or benefits (going for a commercial claim would require far more
evidence and expensive litigation). While $5,000 is the cap, the
actual number is likely to be far lower as the law sets a minimum
award of $100. The law provides some additional guidance for judges:
in the case of infringements for noncommercial purposes, the need
for an award to be proportionate to the infringements, in
consideration of the hardship the award may cause to the
defendant, whether the infringement was for private purposes or
not, and the impact of the infringements on the plaintiff.
I would argue that the actual number is likely to be at the low-end
of the scale for a first-time case. These are non-commercial cases
involving movies with a market value for consumers of around $15 to $25
with some selling for under $10
Moreover, the impact of the infringements on the plaintiff are also
low since Voltage chose relatively low-profile
(see page 9)
, some of which had minimal earnings (for example, Puncture
). Contrary to some reports, the Hurt
Locker is not one of the films in this case.
Perhaps the best comparable is the New Zealand copyright
three strikes cases
which have awarded actual market
value for the copyright work (eg. $2.39 for a song) and added
tribunal and application fees, a deterrence fee, and a portion of
the cost of obtaining the user's information. Tribunal and
application fees would not apply to a demand letter in Canada. The
deterrent fee has been as low
with others around $100
. There is often also a fee for obtaining the
name and address, typically
at about $50 for three notices.
Since Canadian demand letters would not involve tribunal or
application fees, a reasonable number is going to be very close to
the $100 minimum for a first-time, non-commercial infringement with no other warnings or notices. The federal court
hinted at this last week, noting that "damages against individual
subscribers even on a generous consideration of the Copyright Act
damage provisions may be miniscule compared to the cost, time and
effort in pursuing a claim against the subscriber."
As discussed in my post
on the case
, the decision establishes a system of court
oversight for the demand letters as the contents will be approved by
the parties (including CIPPIC) and the case management judge. The
letter must also "clearly state in bold type that no court has yet
made a determination that such subscriber has infringed or is liable
in any way for payment of damages." With a full review of the
letter, a court is unlikely to grant its approval if the demands are
viewed as excessive. Indeed, it seems likely that the court will
require settlement demands that are consistent with likely damage
Even if Voltage were successful in convincing a court to award ten
times the marketplace value of a $15 movie - $150 - the
economics do not make sense. Assuming Voltage manages to
convince 75% of recipients to settle for the $150 demand, the
campaign would generate $225,000 in revenue. Yet that must be offset
by paying the TekSavvy costs before any names are released (which
alone were estimated at $200,000 at the federal court hearing),
their own costs (assume a matching $200,000 to collect the IP
addresses, retain experts, and fund the litigation), and dealing
with thousands of demand letter recipients (if each letter costs $30
in time and money that adds another $45,000).
Under this scenario, Voltage will have settled three quarters of its cases for
ten times the market value of a $15 movie and will have lost hundreds of
thousands of dollars in the process. In fact, even if the demands were doubled to $300 per subscriber, the case will still just break even. Moreover, there are still the remaining 25% of
have not responded, many of whom may believe they have (in the words
of the federal court) "perfectly good defences to the alleged
infringement." If Voltage pursues them in court, the costs of
the litigation (the federal court ruled all follow-on cases will be
subject to case management) will far outstrip any likely award as
every court case is a money loser. If Voltage does not fight in
court, the decision to only send demand letters will be used as
evidence of copyright trolling in any future case and the federal
court ruled that "improper motive" (ie. demand letters without
intent to litigate) could be enough to deny future motions for
In sum, file sharing lawsuits against individuals in Canada do not
make economic sense if the goal is to profit from the litigation
(the Voltage case is different from earlier industry-backed lawsuits
that were geared toward deterring file sharing). First, since
Canadian law points to very low damage awards and court oversight
will make it difficult to demand anything beyond the likely damage
awards, settlements may not even cover costs. Second, some cases
require litigation and every case that goes to court will result in
losses for the rights holder. Third, failure to litigate those cases
will make it difficult to obtain future court orders for subscriber
information since those litigants will be suspected of copyright
The federal court has released its much anticipated decision in Voltage Pictures v. Does,
a case involving demands that TekSavvy, a leading independent ISP,
disclose the identities of roughly 2,000 subscribers alleged to have
downloaded movies without authorization. The case attracted significant
attention for several reasons: it is the first major "copyright troll"
case in Canada involving Internet downloading (the recording industry
previously tried unsuccessfully to sue 29 alleged file sharers), the
government sought to discourage these file sharing lawsuits against
individuals by creating a $5,000 liability cap for non-commercial infringement,
TekSavvy ensured that affected subscribers were made aware of the case
and CIPPIC intervened to ensure the privacy issues were considered by
the court. Copies of all the case documents can be found here.
The court set the tone for the decision by opening with the following quote from a U.S. copyright case:
"the rise of so-called 'copyright trolls' - plaintiffs who file
multitudes of lawsuits solely to extort quick settlements - requires
courts to ensure that the litigation process and their scarce resources
are not being abused."
The court was clearly sensitive to the copyright troll concern, noting
that "given the issues in play the answers require a delicate balancing
of privacy rights versus the rights of copyright holders. This is
especially so in the context of modern day technology and users of the
So how did the court strike the balance?
Read More ...
TagsShareThursday February 20, 2014
In short, by issuing a split decision. The court ruled that Voltage
Pictures had met the legal standard for an order to disclose
subscriber names and addresses, but it established a series of
conditions and protections that extend far beyond previous cases.
The conditions include court oversight of the "demand letter" that
will be sent to subscribers, with a Case Management Judge assigned
to review and approve its contents before being sent to any
subscriber. Moreover, the letter must include a message in bold type
that "no Court has yet made a determination that such subscriber has
infringed or is liable in any way for payment of damages."
The win for Voltage Pictures is the order to disclose the subscriber
names and addresses. The court felt bound by the Federal Court of
which established that a "bona fide" claim is
the standard needed for a court order (CIPPIC had argued for a
higher "prima facie" standard). The court found that Voltage met the
bona fide standard based on its statement of claim.
While Voltage argued that should be the end of the issue and privacy
issues should not be a concern, the court was extremely troubled by
the prospect of copyright trolling. It stated:
"This [Voltage's position] would be an acceptable position but
for the spectre raised of the 'copyright troll' as it applies to
these cases and the mischief that is created by compelling the
TekSavvy's of the world to reveal private information about their
customers. There is also the very real spectre of flooding the
Court with an enormous number of cases involving the subscribers
many of whom have perfectly good defences to the alleged
infringement. Finally, the damages against individual subscribers
even on a generous consideration of the Copyright Act damage
provisions may be miniscule compared to the cost, time and effort
in pursuing a claim against the subscriber."
Having cited the dangers of copyright trolling (and noted the
limited damages available in these cases), the court canvassed the
caselaw in the U.S. and the U.K. and identified principles that go
beyond prior Canadian caselaw. First, where there is
compelling evidence of "improper motive" of a plaintiff, the court
might consider denying the motion entirely. Second, if such
evidence is unavailable, there are numerous safeguards that can be
In this case, the court ruled that there is some evidence that
Voltage has been engaged in litigation which may have an improper
purposes, but not enough to deny the motion altogether. Instead, the
court ordered release of the subscriber names and addresses with the
- the case will be managed by a Case Management Judge
- TekSavvy will only disclose subscriber name and address
- Voltage will pay all reasonable legal costs incurred by
TekSavvy before the release of any information
- the demand letter to subscribers will include a copy of the
court order and "clearly state in bold type that no court has
yet made a determination that such subscriber has infringed or
is liable in any way for payment of damages"
- the contents of the demand letter will be approved by the
parties (including CIPPIC) and the Case Management Judge
- any further cases brought against subscribers will also be
- the information released by TekSavvy will remain confidential,
will not be disclosed to other parties, and will not be used for
other purposes. The information will not be disclosed to the
general public or the media.
The safeguards are significant, since they ensure the active
involvement of the courts in the sending of demand letters and
likely eliminate unwarranted scare tactics about potential
liability. Moreover, given the cap on liability and the increased
legal costs the court involvement will create (not to mention paying legal fees for the ISP), it calls into
question whether copyright trolling litigation is economically
viable in Canada. The federal court was clearly anxious to
discourage such tactics and its safeguards certainly make such
actions less likely.
The old adage in real estate that it only takes one buyer held true in
the Canadian 700 MHz spectrum auction. After potential new entrants such
as Verizon declined to enter the Canadian market and Wind Mobile
dropped out of the bidding at the last minute, many declared the
spectrum auction a failure. Industry Minister James Moore and the
government got the last laugh, however, with the auction generating $5.3 billion
and the emergence of potential new national wireless player - Videotron
(parent company is Quebecor). There had been some speculation that
Quebecor might make a move outside of Quebec (Nowak, Corcoran) and seeing the company scoop up prime spectrum in Ontario, Alberta, and
British Columbia offers renewed hope for a more competitive
Read More ...
TagsShareThursday February 20, 2014
Quebecor's national wireless strategy remains a bit of a mystery.
The arguments that this could lead to more competition are obvious:
2013 Communications Monitoring Report
notes that Quebec's
average revenue per user (ARPU), one of the wireless industry's key
metrics, is easily the lowest in Canada. In 2012, Quebec ARPU was
$51.95, compared to $61.87 in Ontario, $63.56 in B.C., and $73.50 in
Alberta. Moreover, Quebec had the highest percentage of population
with access to four or more facilities-based wireless providers at
82 percent of the population (Ontario was next closest at 63%). The
Media Concentration Research Project
finds that Quebec is the
least concentrated market in Canada (though still highly
concentrated), leading to the conclusion that "if there is any
vindication of the viability of the '4th mobile wireless carrier'
strategy in Canada, Quebec is it." In short, Quebec is the most
competitive wireless market in Canada with four viable competitors
and the prospect of extending that approach to Ontario, B.C., and
Alberta would represent a significant change in the wireless
The possibility of Quebecor becoming a national player does not end
there. The government's move to regulate domestic wireless roaming
creates the possibility of more competitive new entrants who can
piece together national networks comprised of their own spectrum
plus roaming on competitor networks in markets where they do not
operate. There is also the possibility of Quebecor accelerating a
national move by acquiring Mobilicity or even making a play for Wind
Yet despite the optimism, there is still some lingering doubts about
Quebecor's plans. The company's press
states "given the way the auction unfolded, Quebecor
Media could not pass up the opportunity to invest in licences of
such great intrinsic value in the rest of Canada. We now have a
number of options available to us to maximize the value of our
investment." In other words, this was relatively cheap spectrum
given bidding restrictions on incumbents and the limited number
other bidders that was too inexpensive to pass up ($233 million for
seven licences in Quebec, Ontario, BC, and Alberta).
Moreover, the company's success in Quebec may stem in part from its
ability to offer bundled services that include wireless, Internet,
cable television, and home phone. Quebecor will be hard pressed to
match the bundled approach outside its home province. If the company
is a wireless-only player in Ontario, B.C., and Alberta, it may face
many of the same challenges as the other 2008 new entrants.
From a consumer perspective, the possibility of more choice is
great, however Quebecor is another large vertically integrated
company with incentives to favour its own content. For example, in
2011, the CRTC ruled
that it violated undue preference rules when it gave its
video-on-demand service exclusive rights to some of its broadcaster
programs. The Commission ordered the company to provide the programs
to Telus and Bell.
For the moment, Canada is still dominated by the big three, who
unsurprisingly bought the majority of available spectrum. But the
spectrum auction outcome offers a ray of hope to those seeking a
national wireless player who could shake up the Ontario, BC, and
Alberta markets. Quebecor has a footprint of 500,000 wireless
customers in Quebec and it just acquired prime spectrum on the
cheap. If the government maintains its commitment of regulating
wholesale domestic roaming and tower sharing, there may be the
necessary ingredients to entice Quebecor to take a shot at becoming
a viable fourth player in Canada's largest provinces.
The CRTC launched the second phase of its Talk TV
consultation with a series of questions that place the big
regulatory issues squarely on the table. After asking some basic
data questions, the consultation addresses a series of issues with
scenarios that are framed in a lopsided manner. The consultation
addresses hot button issues such as online video, pick-and-pay channels,
and simultaneous substitution, but the options presented to respondents
are limited and skewed toward Internet regulation for online video or supporting the status quo for conventional broadcast. For example, access to more U.S. programming
is presented as a choice between increased fees, lost Canadian jobs, or
larger television packages with Canadian channels. The online video
discussion is premised on new CRTC regulations that with a series of
increased fee options presented.
consultation is a signal of where the CRTC is headed, not only is
the notion of true pick-and-pay channels dead and simultaneous
substitution alive, but the Commission may be willing to toss out
net neutrality in a race to regulate online video services. The issues raised in the consultation:Read More ...
TagsShareWednesday February 19, 2014
- Basic service: There are four scenarios presented,
three of which support the ongoing need for mandatory basic
services and one that envisions a very basic service. None of
the scenarios raise the possibility of eliminating basic service
altogether in favour of a full pick-and-pay model. Respondents
are asked whether they support a broader basic service or one
that is more limited.
- Local news: Two people in one scenario enjoy local news
and a single person relies on Internet services. Respondents are
asked which they think local news requirements should remain in
- Pick-and-Pay: There are three scenarios: one
pick-and-pay and the other two maintaining packages (one the
current system and the other involving choice on packages).
Respondents are asked which they prefer.
- Sports: This is the first issue that is presented with
two people in two scenarios - important sports programming for
free to all or some on fee-based networks. Respondents are asked
which they prefer.
- U.S. and international programming: Three scenarios on
access to U.S. and international programming with two suggesting
that Canadians get a good deal right now. Respondents are
asked if they want direct access to U.S. and international
channels if that means paying more, results in lost Canadian
jobs, or comes packaged with Canadian channels.
- Signal Substitution: There are no scenarios in this
section. Instead, after providing some historical context,
respondents are provided with three choices: maintaining signal
substitutions, blackouts, or paying extra fees to compensate for
lost revenue. No other choices are offered.
- Online Programming: This section features two yes or no
questions: (1) should online services be required to pay to
create Canadian programming and (2) should they provide
closed-captioning and adhere to programming standards.
Remarkably, the follow-up questions all involve further payments
with respondents asked if they would pay an extra 50 cents per
month for Canadian-made programming, a few cents for closed
captioning, and $5 per month for increased usage costs of
While virtually the entire questionnaire is lopsided (the framing of
U.S. programming as resulting in lost Canadian jobs, the
pick-and-pay discussion, and the limited choice for signal substitution is
striking), the online programming discussion is particularly
problematic since it raises the prospect of regulating online video
services, increasing the cost of the services through contributions
programs, and institutionalizing net neutrality violations by
permitting regulated services that do not count against a user's
data cap. The inclusion of the net neutrality violation is shocking
since a variation on that scenario is currently the subject of a
complaint before the Commission that is unresolved. The consultation
until March 14, 2014. Concerned Canadians should take 15 minutes to complete the survey and tell the CRTC what they think.