Over the past few weeks, both the National Post and Reuters have reported that the Liberals plan to include lower Internet and wireless costs as part of the fall election campaign. The reports indicate that reforms could include price caps or a firm commitment to facilitating the entry of new competitors in the form of mobile virtual network operators (MVNOs). I’ve posted regularly on Canada’s high wireless prices and efforts to address the issue (here, here, here, here, and here), which remain uncompetitive relative to many other countries (some of the reasons why are discussed in this LawBytes podcast episode with Antonios Drossos of Rewheel Research).
While turning Internet and wireless pricing into a campaign issue is welcome news, the Liberals will need to reconcile their support for lower prices with the seeming shift in support toward new Internet and wireless taxes. The CRTC jumped on the Internet tax bandwagon last year and Canadian Heritage Minister Pablo Rodriguez has signalled his support for increased support for Cancon production from the Internet sector earlier in late June, opening the door to cultural groups calling for a wide range of new fees and taxes.
Their proposal views the Internet and Canadian consumers as little more than an ATM ripe for withdrawals. For example, the plan envisions mandated fees or taxes on all Internet and wireless providers, online video providers, smartphones, and other devices. Moreover, it seeks the shift in hundreds of millions of dollars in spectrum licensing away from general revenues to support Cancon production as “financial compensation” for technological change. In fact, it even calls for new mandated compensation for user generated content posted online.
To be clear, this is not about the imposition of sales taxes on online services, nor about broader income tax reforms that might be applied to global companies, notably from the tech sector. There is an inevitability to both issues which will come to fruition once global standards emerge. Rather, cultural groups are lobbying for cross-subsidization of an already successful creative market, which directly implicates the affordability and costs of Internet services and devices. That leaves the question of whether political parties that commit to addressing the longstanding consumer concerns with high wireless and Internet prices will be consistent in their approach by also rejecting unnecessary and costly new taxes and fees on Internet services.