What is on Television Tonight by Trey Ratcliff (CC BY-NC-SA 2.0) https://flic.kr/p/t1pU6

What is on Television Tonight by Trey Ratcliff (CC BY-NC-SA 2.0) https://flic.kr/p/t1pU6


The Internet as Cable: The Risk of Treating Telecommunications as Cultural Policy

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.

Revisiting Canada’s twin communications laws is regarded by the cultural lobby as the opening to treat telecommunications regulation as a matter of cultural policy in what would amount to the Broadcasting Act taking over the Telecommunications Act with the Internet treated as little more than a giant cable television system.

Few Canadians would view their wireless or Internet connections as a matter for cultural regulation, but that is precisely what the cultural groups envision. Indeed, in light of an earlier Supreme Court of Canada decision that rejected attempts to impose cultural taxes on Internet service providers owing to the separation of the two statutes, creating a combined culture-focused Communications Act would establish a fundamental change in Canadian Internet regulation.

Yet the reality is that the policy objectives of telecommunications and broadcast do not mesh well, making it difficult to craft a single communications statute. Telecommunications regulation is fundamentally about competition and consumer protection. The rules are designed to foster affordable network access, effective consumer rights through transparency and redress, and to prevent the temptation of vertically-integrated telecom giants to grant their own content preferential treatment.

Those rules must be adapted for the Internet – decisions scheduled for release this week by the Canadian Radio-television and Telecommunications Commission on net neutrality that address equal access for Canadian content and applications are the Internet’s version of old battles over common carriage – but the twin policy goals of competition and consumer protection remain largely unchanged.

Broadcast policy, on the other hand, is primarily a cultural policy document designed to maximize the benefits of broadcast spectrum in a world of scarcity. In that analog world, the “broadcast system” features policies such as licensing requirements, Cancon contribution mandates, public broadcaster support, and simultaneous substitution policies as a means to encourage the creation of Canadian content and to safeguard broadcast space for domestic content.

The broadcast world of scarcity has given way to a world of abundance, however, with no channel limits nor restrictions on the ability for anyone to “broadcast” or distribute their content to a national or international audience. The regulatory world therefore no longer needs to rely on the policies of scarcity. Instead, the key ingredients to encourage cultural choice and to provide incentives for creativity include equality of network access, marketing, distribution, and ease of discovery in a world of seemingly unlimited content.

Ms. Joly appears to intuitively understand the success of the Canadian industry does not lie in new regulations. She has emerged as a champion for the export potential of Cancon with new markets, foreign investment, and Internet-based distribution offering the opportunity for greater commercial and cultural success.

Support for Canadian content remains important, but neither the broadcasting system nor the Internet should be viewed as the primary source of funding. In fact, change is already happening with foreign financing now the largest source of support for Canadian English-language production, exceeding revenues generated through regulatory policies such as mandated contributions.

The importance of global markets for Canadian content is certain to increase in the digital world. As Ms. Joly meets with the Internet giants, their pitch should focus on a confident, culturally relevant country producing content the world wants to see in a market committed to affordable broadband Internet access, net neutrality, and modernized digital communications laws in which content and contribution requirements are no longer the focus.


  1. Devil's Advocate says:

    “Ms. Joly appears to intuitively understand the success of the Canadian industry does not lie in new regulations… ”

    …Yet, her previous comments seem to suggest she equates the Internet with broadcast television. We need to watch her. I wouldn’t be surprised if she tries to sell our network freedom away.

  2. Fortinbras says:

    The greater risk than what is suggested by the headline of this article is that Madame Joly will treat broadcasting policy as telecommunications policy and, in any eventual rewrite of the Broadcasting Act, submit broadcasting to telecommunications policy objectives. ((This is the the path Chairman Blais has chosen.) The main focus of the Telecommunications Act is on the affordability and efficiency of content carriers. The Broadcasting Act mentions an overtly economic objective only once. Broadcasting and Telecommunications legislation should remain separate… Unlicensed television channels, such as Netflix, should be brought to heel by the government revenue agences (CRA and ARQ) and the Broadcasting Act. This can be done without recourse to the Telecommunications Act…

    • Devil's Advocate says:

      “Unlicensed television channels, such as Netflix…”

      On what planet is Netflix a “television channel”??

      (Good going, in separating “broadcasting” and “telecommunications”, eh?!)

  3. In the context of his former positions and ambitions, the Chairman of the CRTC, Jean-Pierre Blais, deserves the civil service equivalent of the Victoria Cross for his recent decision on net neutrality (differential pricing practices) for ensuring that the Broadcasting Act cannot be used to defend discriminatory practices, as it has been used from time immemorial. This decision was way better than we might reasonably have expected.

  4. Fortinbras says:

    Yes, the policy objectives of telecommunications and broadcasting do not mesh well. Telecommunications policy is fundamentally about the economic efficiency and affordability of common carriers. The Broadcasting Act is about Canadian content and access to broadcasting services; overtly economic objectives are only mentioned once therein. Whatever adjustments need to be made, the two pieces of legislation should remain separate.

    The Broadcasting Act and pursuant cultural policies no longer turn on spectrum scarcity, but rather on Canadian cultural sovereignty (see section 3 of the Act). Much like spending on national defense, spending on cultural sovereignty is necessary to defend Canadian institutions and identity.

    The success of the Canadian industry relies on creating a level playing field in which licensed and unlicensed broadcasting programming undertakings are treated equitably. This means extending sales taxes to unlicensed (subscription video) television channels such as Netflix, but also considering an obligation for them to contribute to Canadian television programming. The can be done without reference to Internet service providers (ISPs) or the Telecommunications Act.

    Foreign financing is not the largest source of revenue for Canadian English-language production. Provincial tax credits provide more. But in any case, the foreign financing of Canadian television programs consists almost exclusively of pre-sales to foreign broadcasters and sales agents – not equity investment.

    Affordable broadband Internet access and net neutrality are laudable goals, but so is the integration of unlicensed television services, such as Netflix, into the Canadian communications environment.