Appeared in the Toronto Star on April 24, 2006 as Web Dealing a One-Two to Industry Associations
Industry associations, which have played a prominent role on the Canadian business landscape for decades, are widely regarded as among the most effective and well-heeled lobbyists on Parliament Hill. In recent weeks, however, the situation has begun to shift for several associations whose members are confronting new challenges from both the Internet and new technologies. At least one association has called it quits, another has lost several of its most important members, and a third is facing growing internal pressure after a series of regulatory setbacks.
In early February the Canadian Cable Telecommunications Association, a national organization representing 75 cable television companies, announced that it was ceasing operations.
A key player in telecommunications, broadcast, and Internet fields, the CCTA' s chair acknowledged that the convergence of these fields had changed the cable business to such an extent that there was "no longer a ‘one size fits all’ solution." Faced with an inability to develop consensus on regulatory and policy matters, the CCTA board decided, after fifty years of operations, to disband the organization effective April 1st. Industry watchers anticipate that the large cable companies such as Rogers and Shaw will develop their own advocacy strategies, while smaller cable companies will coalesce into the Canadian Cable Systems Alliance (CCSA), a far smaller association.
Just days later, the Canadian Recording Industry Association faced a major setback of its own. Six of Canada' s leading independent record labels, including Anthem Records, Aquarius Records, The Children’s Group, Linus Entertainment, Nettwerk Records, and True North Records, jointly announced that they were pulling out of CRIA.
The six companies, who represent a veritable who’s who of Canadian music, advised that "it has become increasingly clear over the past few months that CRIA’s position on several important music industry issues are not aligned with our best interests as independent recording companies."
They therefore concluded that they could no longer remain members of the association "given CRIA’s decision to advocate solely on behalf of the four major foreign multi-national labels" on a series of issues involving Canadian content regulations and support for Canadian artists. The companies indicated that they would instead rely on the Canadian Independent Record Production Association (CIRPA).
In response to the resignations, CRIA President Graham Henderson acknowledged that "life in Canada for the music industry used to be a lot simpler, and it was possible for CRIA to have both major and indie members."
The Canadian Association of Broadcasters, which this year celebrates its 80th anniversary, is likely looking at the changes elsewhere with considerable concern. The CAB has also struggled to develop consensus policies on critical issues. For example, it was largely silent during the contentious satellite radio proceedings since its members were split on the issue.
More recently, the association suffered a string of regulatory and policy defeats, including a Copyright Board of Canada decision to substantially increase music royalties owed by commercial radio stations as well as this month’s CRTC ruling that exempts regulation of television broadcasts to mobile devices.
The common link behind these developments seems to be the Internet and new technologies. Both have complicated businesses in many arenas by rendering it virtually impossible to garner industry-wide consensus on policy matters.
The Internet has also made it far easier for smaller companies to foster networks and to develop ad-hoc coalitions that bring together like-minded companies for single-issue advocacy campaigns.
Other industries have already gone through similar changes. In the telecommunications sector, giants such as Bell and Telus have large regulatory and government relations departments focused on the same issues that used to fall within the CCTA’s mandate. These companies have presumably determined that they are their own best advocates, as evidenced by the enormous submissions that each company delivered to the Telecommunications Policy Review Panel.
Looking ahead, it seems likely that this upheaval will lead to the formation of three types of business advocacy groups in Canada. The largest Canadian companies will "go it alone" employing independent lobby firms and adopting company-specific policy positions.
Foreign companies will form associations with little pretense of representing a Canadian perspective. This is typified by the Canadian Motion Pictures Distributors Association, which bills itself as the voice and advocate of the U.S. studios, and now CRIA, whose board of directors is comprised exclusively of its president and executives representing the four major foreign multi-national labels.
The third group will be made up of smaller Canadian companies that cannot afford expensive lobby campaigns. They will form issue-specific coalitions and rally around smaller associations such as the CCSA and the Canadian Independent Recording Industry Association (CIRPA). The danger, as always, is that the interests of this third group, which best represents small and medium sized Canadian businesses, will be lost amid the noise from industry giants and foreign-backed associations.
As industries change, it is apparent that their associations will follow suit as the voices of Canadian business in the next fifty years will be far different from those of the past half-century.
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.
