Day Two at the CRTC’s new media hearings saw an escalation of demands with groups seeking broad regulations, Internet-based Canadian content requirements, and even reform to the Copyright Act. The following review was compiled by University of Ottawa student Frances Munn (Globe and Mail live blog of the hearing is here; Day One coverage here).  

Quebec Creator Unions

The hearing opened with several Quebec creator unions (L'Alliance québécoise des techniciens de l'image et du son, l’Association des réalisateurs et réalisatrices du Québec, la Guilde des musiciens et musiciennes du Québec, la Société des auteurs de radio, télévision et cinéma, la Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada, la Société professionnelle des auteurs et des compositeurs du Québec, et de l’Union des artistes), talking about the usefulness of new media in promoting Quebec culture and arts, while warning that the current model is threatened by those who do not believe the CRTC should regulate new media.

The Unions expressed particular concern with the CRTC’s 1999 decision to grant a new media exemption.  The Unions argued that things have changed since 1999 and that Internet broadcasting services are growing and will only continue to grow. Moreover, while Canadian companies are well represented in new media, they do not offer substantial Canadian content. The Canadian content will only lessen over the next few years due to foreign competition. Regulations are therefore necessary for the future of Canadian content and the CRTC should not renew the exemptions.

The Unions argued that new media regulations should be similar to the regulations for traditional television and radio broadcasts. Moreover, following the example of the Canadian television industry, licensing conditions should be set out for the specific obligations of Canadian content. The Unions argued there was no reason why ISPs should not be governed by the same regulations as satellite and cable companies.

Questions

CRTC Chair von Finckenstein opened the questioning by expressing scepticism at the idea that traditional regulations can be applied to new media. Given that new media can reach the entire world and create virtual communities, he did not see how current regulations that apply to the traditional system could simply be transferred to new media. The Unions responded that they believed broadcasting is increasingly done through the Internet, which allows for broadcasters to ignore Canadian content quotas.

Von Finckenstein asked what would keep Canadians from turning to foreign ISPs if the CRTC imposed regulations. The Unions admitted that they do not have all the answers, but that regulations would be a good start.

The Commission was particularly concerned that the Unions were looking for substantial funding. Further, they said that the Broadcasting Act is in opposition to the aims of the Telecommunications Act, which seeks to promote telecommunications access for all Canadians.  The Commission argued that a funding subsidy would likely fall as a burden on consumers, thus limiting their access to telecommunications. The Unions replied that Canadians are substituting television viewing with Internet viewing that the public should contribute to the content creation costs. Funds would provide incentives for artists to create content specifically for the Internet.

The CRTC asked about foreign competition and criticized creating a “Great Firewall of Canada” that would lead to two tiers in the Internet industry. The Unions said they welcomed competition with opens arms, and reiterated that similar regulations exist for TV and radio broadcasts.

The Commission recognized that Quebec has always had slightly different regulations than the rest of English speaking Canada and asked whether this should be carried over to the new media. The Union said that more studies had to be done, but that there was less French language new media available and would probably require different regulations.

L’Office des télécommunications éducatives de langue française de l’Ontario (TFO)

TFO acknowledged that there was no currently accepted business model for the Internet, but that one was needed. TFO emphasized that broadcasting is present in new media and the CRTC should find a way to ensure ISPs and wireless services contribute to the creation process. Consistent with the first presentation, they also criticized the CRTC exemptions, arguing that the CRTC should develop a new system to allow for regulations.

TFO argued that minority communities need equitable access to the new media. They said that the Broadcasting Act does not contain any minority provisions and that minority linguistic communities should be taken into account. They pointed out that s. 3 of the Broadcasting Act protects both Official Language communities including minorities in either language.

Questions

CRTC Chair von Finckenstein raised the issue of the lack of a business model to govern new media. The TFO argued that there should be a sustainable business model for emerging minority communities. However, they pointed to the têtes à claques model as an excellent cultural model. Further, von Finckenstien made a veiled criticism at the earlier group by saying that he liked the TFO approach of asking for changes to the exemptions rather than demanding an entirely new approach. The TFO director expressed admiration for têtes à claques, but went on to say that the Internet today is used for more than just email, and that the TFO aimed to promote minority media in Ontario as well as Quebec.

The Commission asked what the impact of new media is for TFO. The Director said that the aim was to allow creators to create high quality content strictly for the Internet. The Commission was interested in some way of measuring how many people are watching new media rather than traditional media. The TFO said that two studies are underway, but have yet to be completed.

The Commission asked about the possibility of the Internet replacing traditional broadcast services and whether the TFO might one day drop conventional broadcasting. The Director of TFO admitted that today she would not say that, but that they were trying to broaden their platform to reach as many people as possible. She was reluctant to make any firm predictions, but implied that one day the Internet may replace more traditional broadcast.

Canadian Independent Record Production Association (CIRPA)

CIRPA President Duncan McKie argued that Canadian musicians are finding it harder to produce music as anything more than a hobby because it is no longer easy to be a professional artist. McKie said that people are listening to more music than ever before, but downloading does a lot of damage to the industry. He argued that it is not just leading artists such as Madonna who are being downloaded, but smaller artists as well. McKie added that there are no business models that can compete with free online file sharing.

Despite the small gain in market share, CIRPA argued that profits continue to fall. They said Canadians are among the worst downloaders, reiterating that it is not just the big labels that are suffering, but the entire Canada’s music industry.   CIRPA went on to say that other countries such as Britain, France, and the U.S. have shown resolve in limiting free downloads and ensuring the survival of their music industries. They argued that Canada must show the same resolve in order to be seen as full partners.

Much like the first two presentations, McKie reiterated that the Internet can be used to broadcast media and should therefore be governed by similar rules. Internet broadcast channels provide an alternative to traditional broadcast channels, and since they are unregulated they pose potential harm to the distribution of Canadian content. CIRPA claimed that music artists are the main victims of new media, arguing that the ISPs receive a subsidy from their high-speed Internet services since part of why people purchase high speed Internet is to download music.

Questions

CRTC Chair Von Finckenstein opened the questions by asking if CIRPA had any numbers on the amount of music being downloaded, expressing scepticism about their conclusions since they were based on assumptions rather than real evidence. McKie said that some global studies were underway, but admitted that they did not have any numbers. They also said that the ISPs could measure downloads, but that the information was considered private.

The Commission recognized that the music industry was the first group that had suffered from the free download phenomenon. However, the Commission inquired into the possibility of new media bringing robust returns through advertising. CIRPA said that there were not any strong numbers in the Canadian context, but in the United States, new media was using advertising to generate profits. CIRPA also admitted that it was something that required further study.

The Commission then asked about what sorts of changes they wanted to implement. CIRPA referenced the earlier presentations, reiterating their point that ISPs were part of the broadcasting sphere, but not covered by the Broadcasting Act.  CIRPA added that ISPs should pay for their use and their benefit of Canadian music, though he admitted he did not yet know where and to whom that money should go. He emphasized that the Internet is just another way to broadcast media and that ISPs should not get a free ride.

Continuing this line of thought, the Commission talked about a hypothetical model where the CRTC implements everything CIRPA wants. They asked how they could prevent Canadians from simply visiting foreign websites. CIRPA pointed out that similar fears were raised when the Canadian television industry was initially regulated. They argued that it is not a punishment to listen to Canadian music, and that people want access to Canadian content.

The Commission emphasized that Internet media is different and presents infinite choices for Canadians, and that CIRPA was essentially asking them to constrain these choices. CIRPA became defensive at this accusation and argued that what they wanted was a healthy market for Canadians.
 
The Commission concluded by asking whether Apple iTunes would have entered the Canadian market if regulations had been in place. CIRPA argued that they would have, though CIRPA is not advocating regulating something like iTunes since it is essentially a store.

Society of Composers, Authors and Music Publishers of Canada (SOCAN)

SOCAN argued that regulating Canadian content is important and that leaving it up to the free market is not good enough. They want a Copyright Act that will allow them to share their works with the public. They said that legislation should provide rights for composers.

Their second argument focused on the Broadcasting Act. In order to fulfill the economic objectives, they argued that regulation was necessary. The Broadcasting Act promotes creating Canadian content and access to it. In order to fulfill these two objectives, they argued that we need regulations and incentives. In addition to incentives, they argued that there needed to be regulations that promote the visibility of Canadian creations in the media. Finally, they argued that the Broadcasting Act establishes that it is up to new media broadcasters to demonstrate that it is impossible for them to use predominantly Canadian broadcasting.

Further, they argued that the exemption measures are not appropriate because they violate the principle of technological freedom. They argued that the CRTC should focus on what is being broadcast rather than technology doing the broadcasting.  In summary, they believed that the CRTC should end the exemption orders and instead use incentives and regulations to meet the objectives of the Broadcasting Act.

SOCAN General Counsel Paul Spurgeon then addressed two questions:

1). Who should the Commission regulate? SOCAN argued that they should regulate Canadian commercial websites or websites made in Canada.

2). What regulatory measures should the Commission apply? He argued that there are two kinds of Internet programming. First, there is “linear non-interactive programming” that a consumer has no control over and can only get at a specific time. The Commission all ready applies traditional regulations to these programmes. The second is “pull programming” where consumers can pull what they want when they want off the Internet. SOCAN argued that on-demand “pull programming” should also be regulated by the CRTC in the same way as traditional media.

Further, he argued that SOCAN did not wish to exclude foreign content in the regulations. Their aim is to improve access to Canadian content, not to constrain Canadians’ choices. Though there is no way to control what Canadians are downloading, he argued that new media broadcasters must provide substantial access to Canadian content so that it does not become buried in the Internet.

Questions

CRTC Chair Von Finckenstein opened the questioning and asked Spurgeon how they can control foreign competitors because they provide choices for Canadians in ways that technology has never done before. He wanted to know what there is to be gained from putting restrictions when it is so easy for Canadians to circumvent them. Spurgeon argued that there are studies that show Canadians want Canadian content and access. He further pointed out that these are not too different from the debate held in the late 1960s when the CRTC first instituted regulations. Von Finckenstein was sceptical of this argument and said that he was in a different position than his predecessors because the Internet is different than traditional media.

The Commission asked what turned a site into a “commercial” one and whether a blogger would count. Spurgeon implied that a blogger would not be covered by the SOCAN proposed regulations, but that the Internet was always evolving. The Commission asked whether Spurgeon was trying to control what people could and could not say since it was worried that people who use blogs to communicate freely with the world might be constrained since they are technically “broadcasting” and should be regulated. Spurgeon denied this aim. The Commission asked whether regulations would lead Canadian broadcasters to leave the country and broadcast from elsewhere. Spurgeon believed that most people would want to stay in Canada and would find a way to do so.

Panel – Communications, Energy and Paperworkers Union of Canada & CaleyWray Labour/Employment Lawyers

Peter Murdoch – Communications, Energy, and Paperworkers Union of Canada

Murdoch claimed that ISPs made 6 billion dollars from Internet services last year. He argued that ISPs benefit from their broadcasting abilities to attract new customers and that these capabilities are putting local television news in danger because online news is an increasing part of news sources. Further, he said there are currently no statistics on just how many people rely on online news as opposed to local news. Murdoch also criticized the idea of “unlimited shelf space” on the news. He pointed out that if the content is poorly made, it will not be popular and that Canadian content deserved more than that.

Jesse Kugler – CaleyWray Labour/Employment Lawyers

Kugler argued that there has been a shift toward new media broadcasting and that it has led to a heavy investment in Internet broadcasting. As such, content that used to be available in traditional forms and regulated by the government is now available online and on-demand and is not subject to regulations. He pointed out that this is part of larger trends stemming from technologies that enable high-speed broadcasts. Like the previous presentations, he argued that Canadian broadcasting regulations should be extended to these new broadcasters.

Questions

CRTC Chair Von Finckenstein sought clarification of the panel’s position on local news and asked if they wanted a fund for local news. Murdoch said that if the ISPs are asked to contribute to the broadcasting system, they should also contribute to local news.  Further, von Finckenstein asked why they felt that new media should be regulated. Murdoch replied that regulations had contributed to the broadcast system over the years and that it would perform the same function in the Internet.

The Commission then asked whether regulations handcuff new media. Murdoch replied that it did not and that guidance helps achieve goals that are not possible through the free market. Moreover, he pointed out that Parliament has said that broadcasters have to meet certain goals and that those goals should also apply to broadcasting through the Internet. If there is a fundamental shift towards the Internet and it is not accompanied by regulation, we will have free market principles at work.

The Commission inquired into online content. A representative from CTV said that there were about 60 employees who work exclusively on the online broadcasts. The Commission again inquired into the news angle, asking whether what they wanted was for the web to provide competition for more traditional news sources. There was some discussion on this issue, but Murdoch concluded that a diversity of news was unlikely because broadcasters have so far attempted to converge their news operations.