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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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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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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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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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