A potential Netflix tax may garner the lion share of media attention, but the more harmful tax proposal comes from those advocating for a tax on Internet service providers that would have a real impact on all Internet use (earlier posts in the series include digital sales tax and Netflix tax). As far back as 1998, the CRTC conducted hearings on “new media” in which groups argued that the dial-up Internet was little different than conventional broadcasting and should be regulated and taxed as such. In other words, groups have been arguing for new Internet taxes since before Google, Facebook, or Netflix.
Post Tagged with: "internet access"
The government launched its telecom/broadcast review yesterday and the discussion immediately turned to Internet and Netflix taxes. Despite the wide array of issues ranging from net neutrality to the CBC before the newly established panel, for many the focus of its recommendations and the government response will ultimately come down to whether there are new Internet regulations and taxes established to support the creation of Canadian content.
Canadian Heritage Minister Melanie Joly and Innovation, Science, and Economic Development Minister Navdeep Bains both commented on the issue, suggesting divergent priorities.
Canadian Internet Providers Warn of Site Blocking Consequences: Threat to Affordable Internet Access and Market Competition
Given that Canadian consumers pay some of the highest fees among peer countries for Internet and wireless access, the federal government has increasingly emphasized the need to address Internet affordability. Prime Minister Justin Trudeau has told the House of Commons that “Canadians pay enough for their Internet” and Innovation, Science and Economic Development Minister Navdeep Bains echoed the same concerns in a speech last year, noting that high costs create a digital divide that represents a barrier to continued prosperity for Canadians.
The Internet access cost concerns seems likely to emerge as a key issue in response to the Bell coalition website blocking plan. While some have tried to deflect the cost concern by pointing to the purported anti-piracy benefits of blocking (a claim that is subject to considerable dispute in the CRTC submissions), the clear position of the majority of Canadian providers – whether independent ISPs, cable companies, or satellite-based providers – is that the costs associated with blocking are likely to lead to increased consumer costs, reduced competition, and risks to extending broadband services to under-served areas.
The Case Against the Bell Coalition’s Website Blocking Plan, Part 11: Higher Internet Access Costs for All
The Bell website blocking coalition includes several Internet providers, but there are no smaller, independent ISPs. The absence of smaller ISPs that are essential to the government’s aspiration for greater Internet access competition is unsurprising given the costs associated with site blocking that can run into the millions of dollars with significant investments in blocking technologies and services, employee time to implement blocking mandates, and associated service issues. A mandated blocking system applied to all ISPs in Canada would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems (some already block child pornography images), whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness. In fact, larger ISPs might ultimately benefit from higher fees passed along to subscribers and reduced competition.
The release of today’s federal budget is expected to include a significant emphasis on innovation, with the government revealing how it plans to spend (or re-allocate) hundreds of millions of dollars that is intended to support innovation. Canada’s dismal innovation record needs attention, but spending our way to a more innovative economy is unlikely to yield the desired results. While Navdeep Bains, the Innovation, Science and Economic Development Minister, has talked for months about the importance of innovation, Toronto Star columnist Paul Wells today delivers a cutting but accurate assessment of those efforts: