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    Should Canadians Have to Pay For TV Channels They Don't Want?

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    Tuesday April 10, 2012
    Consumers have become accustomed to lots of choice for entertainment and information services. Music and movie services offer single downloads and a range of subscription models, while newspapers and magazines sell their content as individual issues or subscriptions on multiple platforms.

    Yet Canadian cable and satellite providers remain a stubborn holdout. The broadcast community has long resisted a market-oriented approach that would allow consumers to exercise real choice in their cable and satellite packages, instead demanding a corporate welfare regulatory framework that guarantees big profits and mediocre programming. My weekly technology law column (Toronto Star version, homepage version) notes that could have changed had the Canadian Radio-television and Telecommunications Commission pushed back against Bell Media in a major case involving the terms of broadcast distribution, but a ruling late last week indicated that it remains reluctant to do so.


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    Should Canadians have to pay for TV channels they don’t want?

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    Tuesday April 10, 2012
    Appeared in the Toronto Star on April 8, 2012 as Should Canadians have to pay for TV channels they don’t want?

    Consumers have become accustomed to lots of choice for entertainment and information services. Music and movie services offer single downloads and a range of subscription models, while newspapers and magazines sell their content as individual issues or subscriptions on multiple platforms.

    Yet Canadian cable and satellite providers remain a stubborn holdout. The broadcast community has long resisted a market-oriented approach that would allow consumers to exercise real choice in their cable and satellite packages, instead demanding a corporate welfare regulatory framework that guarantees big profits and mediocre programming. That could have changed had the Canadian Radio-television and Telecommunications Commission pushed back against Bell Media in a major case involving the terms of broadcast distribution, but a ruling late last week indicated that it remains reluctant to do so.

    The case pits Canada’s largest broadcaster and a major broadcast distributor against a group of cable and telecom providers including Telus, Cogeco, MTS Allstream, and Eastlink. The common link among this group is that unlike Bell, Rogers, and Shaw, who act as both broadcasters and broadcast distributors, these companies function as independents by only offering broadcast distribution through either cable or IPTV services.

    The independent providers want to be able to offer consumers the option to customize their own programming packages. While the prospect of a full pick-and-pay model for individual channels seems unlikely, tiered packages that would allow consumers to create their own package of 15 or 30 channels might be on the table. This model, which is available in Quebec and was used by Rogers in a trial earlier this year in London, Ontario, gives consumers the possibility of some cost savings along with far more flexibility in customizing a television package that meets their interests.

    Bell and Shaw strongly oppose the consumer choice model (Rogers is more open to the possibility). Kevin Crull, president of Bell Media, recently told Cartt.ca, an industry trade publication, that consumer choice is wielded with a television remote as consumer choose what to watch from among the myriad of channels they have effectively been forced to subscribe to as part of most cable and satellite packages.

    When asked about the possibility of extending the pick-a-pack model outside of Quebec, Bell said at a recent CRTC hearing that it is "dreadfully fearful of a penetration decline that would wipe out revenues that are necessary to support the obligations of these services." In case that wasn’t sufficiently clear, it added that "choice and flexibility shouldn't come at the expense of the regulated system for 30 or so services which are at the very heart of the specialty system." In other words, Bell does not believe consumers should have choice and flexibility if it results in lost revenues for its specialty channels.

    Broadcast distributors have grown fat over the years by forcing consumers to purchase expensive packages that include channels they may not want. In fact, the broadcast distributors became so profitable that they ultimately purchased the broadcasters themselves.

    With a vertically integrated marketplace now entrenched in Canada, Bell is well positioned to grant itself significant advantages. The twin goals of wide distribution of its specialty channels and the growth of its broadcast distribution services could result in lessening competition by offering packages that independent distributors can’t match, charging uneconomic rates for the distribution of individual channels, or forcing the independent providers to package unpopular Bell-owned specialty channels with high-demand channels. 

    It falls to the CRTC to ensure that there is real consumer choice by recognizing that choice does not come from clicking on a remote control. The current system rewards market power over innovative services or programs by guaranteeing broadcasters commercial success based on the inclusion within a popular package, rather than based on consumer interest. The time to prioritize competition and choice over broadcaster self-interest is long overdue.

    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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    Crystal Ball Gazing at the Year Ahead in Tech Law and Policy

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    Tuesday January 03, 2012
    Technology law and policy is notoriously unpredictable but 2012 promises to be a busy year. My weekly technology law column (Toronto Star version, homepage version) offers some guesses for the coming months:

    January. The Supreme Court of Canada holds a hearing on whether Internet service providers can be treated as broadcasters under the Broadcasting Act. The case, which arises from a CRTC reference to the courts on the issue, represents the last possibility for an ISP levy similar to the one paid by broadcasters under the current rules.

    February. Industry Minister Christian Paradis unveils proposed spectrum auction rules along with changes to Canadian restrictions on foreign ownership of telecom companies. After the earlier trial balloon of opening up the market to companies with less than 10 percent market share generated a tepid response, the government jumps in with both feet by announcing plans to remove foreign investment limits for telecom companies starting in 2013 in conjunction with the next spectrum auction.


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    Crystal Ball Gazing at the Year Ahead in Tech Law and Policy

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    Tuesday January 03, 2012
    Appeared in the Toronto Star on January 1, 201 as 2012 could be busy year for Internet technology law and policy in Canada

    Technology law and policy is notoriously unpredictable but 2012 promises to be a busy year. My best guess for the coming months:

    January. The Supreme Court of Canada holds a hearing on whether Internet service providers can be treated as broadcasters under the Broadcasting Act. The case, which arises from a CRTC reference to the courts on the issue, represents the last possibility for an ISP levy similar to the one paid by broadcasters under the current rules.

    February. Industry Minister Christian Paradis unveils proposed spectrum auction rules along with changes to Canadian restrictions on foreign ownership of telecom companies. After the earlier trial balloon of opening up the market to companies with less than 10 percent market share generated a tepid response, the government jumps in with both feet by announcing plans to remove foreign investment limits for telecom companies starting in 2013 in conjunction with the next spectrum auction.

    March. Canada and the European Union reach a preliminary agreement on a major new trade agreement. While much of the attention is directed toward the implications for the agricultural sector, Canada quietly caves on patent issues that may add billions to pharmaceutical costs. Meanwhile, Canada formalizes its open government commitment at a global meeting in Brazil.

    April. After months of delays, lawful access legislation is introduced. The new bill consolidates the three earlier lawful access bills but leaves the substance unchanged, rejecting widespread criticism over plans to mandate new surveillance technologies and mandated disclosure of personal information.

    May. The CRTC conducts another fact-finding exercise on the impact of over-the-top video services such as Netflix. The exercise fuels hope among some groups of new regulatory requirements for online video providers, but the CRTC ultimately decides to delay any new action until the conclusion of the next round of new media hearings planned for 2013.

    June. Bill C-11, the copyright reform bill, passes the House of Commons with few changes from its original form. All opposition parties vote against the legislation. The bill still requires Senate approval, but stakeholders begin thinking about the courts as copyright holders explore enforcement lawsuits, consumer groups consider a constitutional challenge to the digital lock rules, and some creator groups entertain legal action on the limits on fair dealing.

    July. Nearly one year after proposing anti-spam regulations, the government unveils modified regulations and seeks further public comment before the law takes effect. The new regulations establish a series of new exceptions to the law consistent with the demands of several marketing groups.

    August. Rogers Communications, the last major Canadian ISP to use traffic shaping tools to restrict the use of peer-to-peer technologies, drops its approach several months after a CRTC net neutrality enforcement action concludes it is violating Internet traffic management regulations.

    September. Canada gains entry to the Trans Pacific Partnership trade negotiations after it signals its willingness to consider reforms to all sectors of the economy. The TPP negotiations raise the possibility of a massive overhaul of Canadian intellectual property rules.

    October. The Supreme Court of Canada releases its much-anticipated set of five copyright rulings. The court sides with Apple and Canadian telecom companies in concluding that music previews may be treated as consumer research for the purposes of fair dealing, rejects SOCAN’s bid for compensation for the music found in downloaded video games, and confirms Access Copyright’s demand for payment for classroom copies.

    November. Bill C-11 receives Senate approval, becoming the first major copyright bill passed in Canada in nearly 15 years. The decision immediately renders some of the new Supreme Court copyright decisions moot.

    December. The constitutionality of PIPEDA, Canada’s private sector privacy law, receives its stiffest test as companies facing tougher enforcement demands by Canadian Privacy Commissioner Jennifer Stoddart opt to challenge the validity of the law in light of the Supreme Court’s December 2011 decision on a national securities regulator.
     

    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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