Category Archives: FCC

Must-carry TV: putting viewers last in the US and Canada (2)

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HomeTheatre1_midrezArtist’s rendering of pentup demand for 22 more mandatory TV channels

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Update (Apr 11). In citing Michael Geist’s post below, I neglected to point out the suggestion he makes to replace must-carry in the service of viewer interests. A must-offer policy would require “broadcast distributors to offer all licensed channels to their subscribers in a pick-and-pay format.” That idea seems sensible, although it’s difficult to see how it could be implemented across the board without a) confronting capacity and delivery issues, especially for smaller BDUs; and b) having the Commission set demand thresholds for very marginal broadcast services. What happens if 50 people request a service on a system with 5,000 subscribers? Whatever the merits, the big distributors are not exactly enthusiastic about pick-and-pay, if only because of the money they would have to leave on the table. But these are all yesterday’s battles and they demonstrate clearly what’s wrong with Canada’s broadcasting system: it’s 20 years out of date, based on outmoded assumptions about infrastructure scarcity, the need to “protect” our sovereignty and the passive role of the TV audience. If only we had a technology that offered a more economic, personal and interactive way to communicate. Wait. We do. It’s called the Internet.

In my previous post, I concentrated on channel-bundling in the US and how the market has been reacting to the pros and cons. Today I want to talk about the CRTC’s must-carry proceeding, an event that has triggered a lot of debate (see Broadcasting Notice of Consultation CRTC 2013-19).

Right after it was announced in January, Michael Geist tore into the CRTC, referring to the announcement as bad news for Canadians frustrated by ever-increasing cable and satellite bills (CRTC Should Put Consumers First and Drop ‘Must Carry’ Requirements):

Rather than convincing millions of Canadian consumers that their services are worth buying, the broadcasters need only convince a handful of CRTC commissioners that their service meets criteria such as making “an exceptional contribution to Canadian expression.” That is supposedly a high bar, yet it is surely far easier than convincing millions of people to pay for your service each month. Continue reading →

Must-carry TV: putting viewers last in the US and Canada (1)

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57_Channels_(And_Nothin'_On)Highlights The CRTC is moving ahead with its must-carry decisions for 22 niche TV channels on the basis of whether they are of “exceptional” importance to Canadian culture (public hearing begins April 23). Canadian TV subscribers will be forced to pay for all of the services that succeed, without any regard for their viewing preferences. This approach suits the old media guard perfectly, because it guarantees a revenue stream even for channels few people are watching. While American consumers are being subjected to the same abuse, their TV world is being revolutionized from two directions. 

First, OVD upstarts like Netflix are demolishing the idea that broadcasters should control viewing. Netflix is enhancing viewer choice by e.g. posting an entire season’s episodes all at once, in some cases of shows it has financed. Second, a backlash is under way in the US against the market power that limits choice and picks consumers’ pockets. Even US pay-TV distributors are fighting program providers that bundle their popular fare with channels nobody wants. Meanwhile, Canada is clinging to an outmoded cultural ideology that will bring about exactly the opposite of the intended effect, by chasing viewers out of the regulated broadcasting system and into the waiting arms of Netflix, YouTube and the Pirate Bay.

house-of-cards

The absurdity of force-fed bundling: follow the money

Before I get to the CRTC’s must-carry proceeding, I want to touch on the debate raging in the US over whether TV subscribers have a right to “à la carte” service – the ability to choose only the channels they want from their service provider, as opposed to being obliged to take bundles of channels they don’t want but have to pay for anyway. Channel bundling is the subject of an article that appeared in the Wall Street Journal in late February, entitled “New Attack on TV Bundles” (here, pay wall). Continue reading →

A consumer’s guide to CRTC rulings on Internet pricing (1)

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blackbox-2

I’ve been gathering reactions to last week’s CRTC decisions on wholesale rates for Internet access. My takeaway is a lot of people are having trouble understanding what the hell it all means. So in this series of posts I’m going to provide some plain-language context.

Today, I’m covering broadband competition, and the unusual structure of Canada’s wholesale and retail Internet access market. In the next post, I’ll look at how the CRTC arrives at wholesale costs and what that will mean for your residential bill. Finally, I’m going to focus in the third post on the UBB controversy of two years ago and how that relates to the recent rulings.

A pig in a poke

Communications services play an increasingly important role in our lives. Yet the evidence is that awareness among consumers about what they’re getting when they buy broadband is stunningly low. Continue reading →

A better CRTC: educate us, poll us, don’t consult us (2)

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(Continues from previous post.)

Last time, I took the Commission to task for trying to build excitement over the level of cellphone penetration in Canada in their consultation video. Why? Because the only metric that really counts in 2012 is the takeup of smartphones: smartphones do data, feature phones don’t. Let’s consider penetration in a more meaningful context.

Penetration. Data released by the OECD in December 2011 says Canada is 24th out of the 34 member countries in terrestrial mobile wireless broadband subscriptions, as indicated in this chart (OECD broadband portal, spreadsheet 1d):

OECD: wireless broadband subscriptions per 100 inhabitants

Notice this dataset covers mobile devices like laptops using a dongle for Internet access. As it has done elsewhere with wireline broadband, the Commission has cherry-picked a more inclusive number (cellphones in general), rather than a more meaningful number (data-capable mobile devices). And that’s not the only way the Commission is glossing over problems… Continue reading →

CRTC as consumer advocate: 4 reasons not to celebrate (part 2)

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Don’t break out the Veuve Clicquot just yet

I think the CRTC’s decision to get the incumbents’ financials out of the closet is very positive – another demonstration of Chairman Blais’s public-spirited philosophy. But even Chairman Blais has a corporate history to live with, and that’s not going to be a cakewalk. So before we start counting our chickens, let me outline four factors working against consumer-friendly broadband in this country:

  • Canada’s market share failure
  • misgivings about switching providers
  • the unfulfilled goals of the Telecommunications Act
  • the 2006 Direction to the CRTC on market forces.

1 – Market share failure. The long-standing failure of Canada’s broadband competition policy is summed up in the time series above, which I concocted from data in the CRTC’s latest Communications Monitoring Report (pdf uploaded here; see Table 5.3.2, p.150). The graph contrasts total market share for the independent ISPs, in blue, with that of the incumbents, in green (both exclude business services and dialup). For all the pontificating over the years from the von Finckenstein CRTC and Tory politicians about how super-duper competitive everything is in Canadian telecoms, the data tell a very different story. Continue reading →

Shock! Outrage! And other cool facts about the Bell fiasco

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[Was supposed to continue from Oct 15 post on Ms Motzney...] 

What you’ll find in this post instead:

  1. The Bell/Astral decision is (virtually) unprecedented
  2. “Public” benefits now refers to “we the public” – not just dudes who make TV shows
  3. Cabinet won’t intervene
  4. Consumer-loving Bell shocked and outraged

CRTC watchers eat crow. Don’t you hate it when the world changes faster than you can write about it? Thursday’s triumph over Bell is wonderful for consumers; for the thesis I was developing here, not so much. The comments I’ve read – Geist (This Is Not Your Parent’s CRTC); Cartt (CRTC says “Non!”); the Globe (Ottawa says it can’t intervene in CRTC’s BCE-Astral decision); etc – all indicate the Astral decision shows Chairman Blais really does intend to build a consumer-oriented CRTC. I trust he will understand why industry watchers, present company included, had been pretty much unanimous in predicting he’d never, ever turn down Bell on this acquisition. Continue reading →

Net neutrality and the CRTC: what M. Blais needs to know (2)

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[This continues Monday's post, which began the list of issues with 1) No neutrality, 2) No teeth, 3) No transparency.]

ITMP failing #4 – No congestion. To understand the CRTC’s ITMP policy, you have to understand the alleged problem for which it was the putative solution: traffic congestion. The incumbents pushed the congestion story relentlessly, until they finally convinced the Commission that Canada’s net neutrality framework had to address not opportunity or innovation or freedom of choice, but the problem engineers have in many walks of life – load-levelling.

The incumbents asked for the Commission’s help and got it, despite the fact they never offered any convincing empirical evidence that traffic congestion on their networks was getting out of hand. Never mind the convenient but entirely untrue fairy-tale that congestion was being caused by evil bandwidth hogs – a fairy-tale the prior CRTC chair swallowed hook, line and sinker. KvF stood by the incumbents’ version of the truth in the face of evidence that congestion occurs not because of individual anti-social behavior, but because of traffic peaks created by large numbers of users at certain times of the day – very much like vehicular traffic peaks on the 401 during rush hours. Continue reading →

Digitally divided: the DC haves vs the Ottawa have-nots (1)

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>> Updated with correction on CIUS

As noted below, I sent an inquiry to Industry Canada about whether or not the Canadian Internet Use Survey had been cancelled. The question was passed on to Stats Can, and yesterday their media relations office got back with this message:

“Statistics Canada will conduct the Canadian Internet Use Survey in 2012.  Collection will take place in October and November.”

I stand corrected – though if you look below under what was “2 – Industry Canada has cut off funding for the CIUS” (now with strikethrough), I’m sticking by my guns on the other comments.

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FCC’s Genachowski in San Diego to declare war on the digital divide

In my last two posts I took Genachowski to task for his retrograde stand on data caps. Today I come to praise him. Genachowski gave a pep talk last Thursday at San Diego’s Horace Mann Middle School. He was there to promote a Connect2Compete pilot program. San Diego is one of 20 school districts in the country “participating in the FCC’s Learning-on-the-Go program, which is helping schools implement mobile learning solutions like interactive digital textbooks” (transcript of JG’s talk here).

Connect2Compete is an ambitious outreach program, designed to close the digital divide by helping millions of disenfranchised Americans become onliners. The offer is a smart one-two punch: 1) get folks the gear they need, free or cheap; then 2) help them learn the many things they need to know to use the gear comfortably and become engaged, real-life onliners.

C2C tackles the tough social policy issues surrounding Internet adoption and requires unaccustomed behavior for bureaucrats: escaping the Beltway, meeting citizens on their own turf, and dispelling the belief held by millions, especially low-income families, that they have no reason or right to be on the Internet. Moreover, the cost to taxpayers is pretty much zero. This bargain is made possible by a public-private collaboration that brings together a number of non-profits, plus some big IT firms, working hand-in-hand with officials from the FCC. The agency has released a 5-page brief outlining the details (I’ve uploaded the pdf here). Continue reading →