Telecom by yum9me (CC BY-NC-ND 2.0) https://flic.kr/p/53jSy4
Canadian Heritage Minister Mélanie Joly travels to California this week with an agenda that includes meetings with Internet giants such as Google and Facebook. Given the recent announcement in the budget that the government plans to “review and modernize” the Broadcasting Act and Telecommunications Act, the discussions may help shape an issue that could have a profound impact on the Internet in Canada as there are concerns the government may attempt to shoehorn Canadian cultural policies into telecommunications law.
My Globe and Mail column notes that Ms. Joly’s consultation last year on Cancon in a digital world revealed there is a strong appetite within the traditional Canadian culture lobby for bringing policies such as cultural taxes and mandated Cancon requirements to the Internet. The groups claim the Internet is rapidly replacing the conventional broadcast system as a means of distributing cultural content and that the longstanding analog rules should be shifted into the digital environment.
Bains Gives Bell-MTS Merger a Pass Despite Competition Bureau Finding Serious Wireless Market Problems
The Canadian government has prioritized innovation as a marquee policy issue. There are signals that Innovation, Science and Economic Development Minister Navdeep Bains will use the upcoming budget to overhaul the myriad of innovation funding and support programs that have cost billions of dollars with only a limited return on investment. There is no reason to doubt the commitment to innovation, but a national strategy must involve more than changes to how the government doles out cash incentives.
Yet when presented with the opportunity to address a core component of any serious innovation strategy – the communications sector that provides the foundation for the digital economy – Mr. Bains last week took a look at a market that the Competition Bureau found suffers from coordinated behaviour among the three dominant providers and simply whiffed. The decision to approve the merger of BCE and Manitoba Telecom Services (MTS) with only minor tinkering seems certain to increase wireless pricing for Manitoba residents and eliminate one of the few competitive bright spots in Canada.
The National Post has a story today on a research note written by Maher Yaghi, a telecom analyst, warning about the “regulatory risks” of the CRTC’s review of the wireless code. The article focuses on a single analyst, but there is a long tradition in Canada of the industry saying one thing to the regulator and another to the business community (see, for example, Bell’s position on investing in fibre networks) so the comments likely reflect industry concerns. What regulatory risks might arise from changes to the wireless code?
Yaghi cites two concerns that lay plain why the industry has been fighting potential changes. The issue is not, as some would have you believe, increased regulatory costs. Rather, the fear is that changes would create better informed consumers who would seek cheaper pricing and be freer to take advantage of marketplace competition.
The release of the television ratings for the Super Bowl unsurprisingly sparked a wave of reports yesterday blaming the CRTC for a decline of viewers at CTV. The Hollywood Reporter claimed there was a ratings collapse, the National Post talked about a 39 percent drop, and Cartt.ca argued that the CRTC had failed Cancon with its decision. While CTV’s numbers may have dropped by 39 percent from the 2016 Super Bowl, that number on its own means as much as saying that Tom Brady’s quarterback rating dropped from his last Super Bowl appearance (it did).
When assessing the impact of the CRTC’s simultaneous substitution decision that opened the door to competing U.S. and Canadian feeds for the game (but not for the pre and post-game broadcasts), the far more important number is the Canadian audience for the U.S. feed. It tells the story of how many switched away from CTV to the newly available alternative. Although Bell indicated that this data is not available, that does not appear to be accurate. The Globe and Mail reports today that some Fox stations are measured in Canada, but that Numeris did not provide it with the numbers.
However, Richard Deitsch, the lead media reporter for Sports Illustrated, tweeted on Monday that the CTV feed drew 4.5 million viewers, while the U.S. Fox viewed garnered 803,000 in Canada. Deitsch’s source for the report was Sportnet’s John Shannon, a longstanding sports television producer, who discussed the issue on the Prime Time Sports program on Monday afternoon. The Fox number may involve some guesswork given that Numeris does not track all Fox affiliates in Canada, but I am reliably advised that its data showed low numbers for some U.S. affiliates, including the Buffalo Fox affiliate feed [update 2/9: new reports indicate that the Buffalo number may be in error, suggesting a higher number of Fox viewers in Canada that reported by Shannon/Deitsch. CTV still retained a majority of the Canadian audience].