The government unveiled the members of its telecom and broadcast review panel this morning setting the stage for Internet access taxes, Netflix regulation, and the imposition of cultural policies on telecommunications to emerge as a 2019 election issue. The new panel will be chaired by Janet Yale, who brings experience from both telecommunications and broadcasting to the role. The remaining six panel members line up nicely as telecom nominees (Hank Intven, my colleague Marina Pavlovic, and Monica Song) or broadcast nominees (Peter Grant, Monique Simard, and Pierre Trudel).
The leaked coverage this morning paints the panel as an effort to redraft broadcasting regulation with Internet companies such as Netflix and Facebook firmly in the government sights. Yet the reality is far more complex with terms of reference that touch on a wide range of telecom and broadcast issues. The Canadian Heritage perspective may be focused on broadcast and Internet regulation (despite repeated assurances that there is no support for new Internet taxes), but the ISED view will be focused on competition, consumer issues, and net neutrality. Last week’s CRTC report provides momentum for Internet taxes and regulation, however, the government has yet to provide much of a response. Indeed, the instructions to the panel reflect the departmental tensions with language that supports both sides and questions that touch on everything from consumer protection to the CBC.
Given the timelines – the panel is expected to release an interim report in a year – there will be no legislative changes during the current government. However, the timing virtually guarantees that this will be an election issue in the fall of 2019. With the CRTC report and the panel’s interim recommendations, the government will have to take a position on Internet taxation and regulation. While the digital sales tax issue is relatively easy to address, the broader recommendations of widespread Internet regulation and taxation on Internet access will require all parties to adopt a clear policy position.
My general perspective on the potential combination of the two statutues was articulated in an April 2017 op-ed in the Globe and Mail, namely that broadcasting and telecom policy serve different purposes and objectives. The key section in the op-ed:
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 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. 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.
Given the seemingly endless reviews and reports, there is considerable fatigue on this issue. Yet given what is at stake, Canadians will need to pay attention and speak out in the months ahead.