The very public fight over ride sharing services such as Uber was in the spotlight again last week as taxi drivers took to the streets in Toronto to protest against the ongoing availability of unregulated services. The result was a public relations nightmare: drivers comparing Uber to ISIS, engaging in dangerous activity with cars on the road, slowing the ability for an ambulance to arrive at its destination, and even injuring a police officer riding a bicycle.
My weekly technology law column (Toronto Star version, homepage version) notes that the hysterics are unlikely to generate much support from the public, but they do point to the need for local municipalities to address the festering policy issue. Uber and other ride sharing services are too popular among consumers to be banned. Nor should they be. The injection of new competition and innovation is good for the public, offering more consumer choice and new economic opportunities for drivers. Indeed, much of the demand for alternatives reflects frustration with poor service that can emerge in an artificially closed market.
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This afternoon, the Ontario government appeared before the CRTC as part of its future of television hearing. The Ontario government issued a clear call for new regulation of so-called new media companies such as Netflix and Google. The government states:
In order to create a more level playing field, the ministry recommends decreasing this regulatory imbalance. The ministry believes the best way to accomplish this is to expand the regulation of new media TV, rather than by lightening the current regulation of traditional TV.
What does the expansion of regulation involve?
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The Broadcasting Act is a complex statute that lists more than twenty broadcasting policy goals. Yet for decades, Canadian policy has largely boiled down to a single objective: Maximizing the benefits from the broadcasting system for creators, broadcasters, and broadcast distributors such as cable and satellite companies.
Consumers were nowhere to be found in that objective and it showed. Creators benefited from Canadian content requirements and financial contributions that guaranteed the creation of Canadian broadcast content. Broadcasters flourished in a market that permitted simultaneous substitution (thereby enabling big profits from licensing U.S. content) and that kept U.S. giants such as HBO, ESPN, and MTV out of the market for years in favour of Canadian alternatives. Cable and satellite companies became dominant media companies by requiring consumers to purchase large packages filled with channels they did not want in order to access the few they did.
Canadians may have been frustrated with the broadcast system, but there were no obvious alternatives and their views hardly mattered in a regulatory system dominated by the established players. My weekly technology law column (Toronto Star version, homepage version) notes that last week, the Canadian Radio-television and Telecommunications Commission sent an unmistakable signal that these longstanding rules are about to change.
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The CRTC launched the second phase of its Talk TV consultation with a series of questions that place the big regulatory issues squarely on the table. After asking some basic data questions, the consultation addresses a series of issues with scenarios that are framed in a lopsided manner. The consultation addresses hot button issues such as online video, pick-and-pay channels, and simultaneous substitution, but the options presented to respondents are limited and skewed toward Internet regulation for online video or supporting the status quo for conventional broadcast. For example, access to more U.S. programming is presented as a choice between increased fees, lost Canadian jobs, or larger television packages with Canadian channels. The online video discussion is premised on new CRTC regulations that with a series of increased fee options presented.
If this consultation is a signal of where the CRTC is headed, not only is the notion of true pick-and-pay channels dead and simultaneous substitution alive, but the Commission may be willing to toss out net neutrality in a race to regulate online video services. The issues raised in the consultation:
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Canadians love Internet success stories such as Netflix and Google as recent data indicates that millions now subscribe to the online video service and Google is the undisputed leader in search and online advertising. The changing marketplace may be a boon to consumers, but my weekly technology law column (Toronto Star version, homepage version) notes that it also breeds calls for increased Internet regulation. That is particularly true in the content industry, with the film and music sectors recently calling for rules that would target online video services, Internet providers, and search engines.
The Canadian Media Production Association, which represents independent producers of English films and television shows, recently told a Senate committee that new rules are needed to address the threat posed by popular Internet video services such as Netflix. The CMPA argued that a “level playing field” is needed to ensure that there is “choice, diversity and growth in a more open market place.”
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