The CRTC will release its latest decision in the TalkTV consultation later today as it announces much-anticipated plans to require cable and satellite companies to offer consumers the option of picking the television channels they want without requiring them to purchase expensive bundles. The decision, which builds on earlier rulings that focus on a more competitive marketplace, will fulfill the government’s promise to bring in consumer choice for television packages, which was a prominent part of its 2013 Speech from the Throne.
The specifics are yet to come, but the CRTC will likely require distributors to offer a basic service of Canadian and mandatory channels at a relatively low price (a 2014 working document suggested a cap of between $20 – $30/month), offer consumers a pick-and-pay option, and adjust the Canadian content requirement for bundles.
Consumers will emerge as the clear winners, benefiting from increased choice and the potential to lower their monthly bills. Yet the CRTC decision will undoubtedly be greeted by doomsayers who will argue that pick-and-pay will increase prices and decrease choice (because some channels will fold).
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In September 2007, I wrote a column titled “Canadian Broadcasting Policy for a World of Abundance”, which focused on a report commissioned for the CRTC that recognized that conventional broadcast regulations were crumbling in the face of new technologies and the Internet. As it turns out, the Dunbar-Leblanc report was ahead of its time as the CRTC was not ready for the regulatory overhaul it recommended.
Standing beside two giant screens proclaiming “Age of Abundance”, CRTC Chair Jean-Pierre Blais unveiled the latest round of decisions from the TalkTV hearing and left little doubt that the Commission is now ready to lead with changes that have been a long time in coming. For Canada’s broadcast regulator, it was time to admit that decades-old policies must adapt to a changing environment in which the viewer is in control (or the emperor, in Blais’ words). Those policies were largely built on creating a regulatory wall for the Canadian system with Cancon requirements, genre protection, foreign ownership rules, and simultaneous substitution. Like many walls, the rules shielded the Canadian market from competition, guaranteeing a place for Canadian content and limiting the impact of more popular U.S. programming.
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The prospect of a “Netflix tax” will be back in the spotlight this week as Canadian Radio-television and Telecommunications Commission chair Jean-Pierre Blais unveils the CRTC’s latest round of rulings stemming from its review of broadcast policy. While it is unlikely that the commission will impose a new fee on Netflix subscribers to support the creation of Canadian content, it will not be for lack of lobbying on the issue.
Despite the fact that a Netflix tax would yield less than one per cent of the annual expenditures on Canadian television financing (about $15 million dollars in support for a sector that spent $2.3 billion last year), most content groups called for mandatory Canadian content contribution funding from online video providers during the CRTC’s TalkTV hearings. My weekly technology law column (Toronto Star version, homepage version) notes that amidst the clamour for new funding, there was one voice that attracted the most attention – the Government of Ontario.
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Throughout the Canadian Radio-television and Telecommunications Commission TalkTV hearing, Canadian broadcasters such as Bell (CTV), Rogers (CITY), and Shaw (Global), tried to assure Canada’s regulator that they were ready to embrace the digital future and prepared for regulatory change. Yet in recent weeks, it has become increasingly apparent that Canadian broadcasters plan to fight change every step of the way.
The effort to keep core business models intact are sometimes obvious. For example, new services such as Shomi and CraveTV are often characterized as Netflix competitors, but given their linkage to a conventional cable or satellite television subscription, are a transparent attempt to persuade consumers to retain existing services and not cut the cord. The viability of those services remains to be seen, but more interesting are the regulatory and legal fights, where Canadian broadcasters are waging an ongoing battle against change.
Bell Media leads the way with the two legal challenges against recent CRTC decisions. Yesterday it asked the Federal Court of Appeal to overrule the CRTC on its decision to ban simultaneous substitution from Super Bowl broadcasts starting in 2017. The Bell motion for leave to appeal strikes me as weak:
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U.S. President Barack Obama yesterday came out strongly in favour of net neutrality, urging the U.S. Federal Communications Commission to uphold core net neutrality principles. Obama’s comments was unsurprisingly welcomed by net neutrality activists throughout the U.S., though some caution that the ultimate decision still lies with the regulatory agency. Obama focused on greater transparency along with rules to ensure no blocking, throttling, and paid prioritization. I wrote earlier this year on how Canada passed net neutrality regulations (termed Internet traffic management practices) in 2009, which address many of the issues raised by Obama and has not resulted in the horrors suggested by critics of net neutrality policy.
Obama’s decision to wade into the net neutrality debate highlights how politicians can no longer simply avoid telecom, broadcast, and Internet issues by claiming that the matter is solely for regulators to determine. Policy issues such as net neutrality and Internet regulation have profound importance for millions and we should not be content to leave the issue exclusively to unelected regulators (no matter transparent their processes).
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