Dialing for digital dollars: inside the Cancon sausage factory

sausage-factory

~~~

A little sympathy for Mélanie Joly, please.

melanie-jolyImagine if your job was to save the purveyors of Canadian content from the ravishes of American cultural imperialists, cord-cutters, cord-shavers, cord-nevers, millennials in general, digerati, incumbent ISPs, Reed Hastings, VPN developers, Jeff Bezos, Chicken Little, Hulu, cloud computing vendors, Henny Penny and Reed Hastings. It’s harder than it looks.

Contrary to popular belief, Ms Joly is doing exactly what the Minister of Canadian Heritage should be doing these days: looking for money to put into the pockets of Canada’s network content providers so they can make bigger and better Webisodes for the digital age. Yet her ideas for accomplishing this daunting task have drawn vociferous criticism. Many criticisms have focused on issues outside the Minister’s mandate and are based on little appreciation of how things actually work in her department.

So let’s head on over to the sausage factory where the sausage mandarins have been cooking up our Cancon policy for the last half-century.

We’ll start with Minister Joly’s least popular trial balloon: slapping an “Internet tax” on everyone’s ISP bill. My friends at OpenMedia have been pointing out with alarm that such a tax would only serve to raise the price of Internet access, when Canadians already pay high prices for mediocre service (you can sign their petition here).

2304x1196_blogpost_internettax_0

OpenMedia: Joly’s tax would make us as bad as Hungary

Could there be anything worse than this tax “on the Internet”? Yes! A tax on Netflix, an idea that just won’t die, thanks to Joly’s alleged plan to bring the streaming giant “into the system” – Ottawa code for we’re gonna tax the daylights outta Netflix.  Continue reading

CRTC’s code of conduct for TV providers: too little, too late?

coax-1

The CRTC is moving ahead with its Code of Conduct for TV service providers (TVSPs). The Code was initially announced on March 26, as a by-product of the Let’s Talk TV proceeding (Broadcasting Notice of Consultation CRTC 2015-105). Now, in its best populist spirit, the Commission is asking for public comment on its TV Code:

“Canadians sent us a strong message that they were encountering problems with their television service providers. The CRTC is acting on these comments and has prepared a draft version of a TV Code that reflects what Canadians told us. I invite them to take an active part in the discussions. Now is the time to shape your TV Code.”–CRTC Chair JP Blais, May 12, 2015 (emphasis original)

Less consulting, more research

The Commission may have the substance right, but it has the timing and execution all wrong. The idea that TVSPs provide lousy service isn’t exactly new. Much of the evidence has been anecdotal. A public consultation, however, will not make up for that shortcoming. Worse still, the idea of holding this public consultation arose from the earlier public consultation that was part of Let’s Talk TV. They’re breeding. Continue reading

Canada’s outmoded communications laws: a 21st-century reality check

parliament_hill_as_viewed_from_the_gates

Next week, a group of conferees (including me) will meet in Ottawa to discuss an important and difficult question: Is it time to overhaul Canada’s communications legislation? Two bedrock pieces of legislation are at issue: the Broadcasting Act of 1991 and the Telecommunications Act of 1993. The two-day event has been organized by the Forum on Research and Policy in Communications (FRPC), through the efforts of Monica Auer and Sharon Jeannotte. They’ve headlined it Rebooting Canada’s Communications Legislation.

Monica and Sharon have done something very unusual in planning this confab. They’ve sent out lengthy, detailed instructions to all the participants to manage everyone’s expections – on the substantive issues, not food allergies and room rates. (On the strength of this attention to quality alone, I’d recommend Rebooting highly.)

~~~

tv-flag-4Canadian families spend an average of roughly $200 a month on communications services, a figure that keeps rising. Our federal and provincial governments are also heavy spenders in this sector, across a range of programs that include cultural agencies (e.g. CBC, Telefilm); direct subsidies (e.g. the Canada Media Fund); indirect subsidies (e.g. tax credits); and other periodic expenditures (e.g. broadband infrastructure). The money certainly matters. But Canadians also invest a great deal of time, faith and social equity in our broadcast media, especially television, as well as the telecom networks that power our smartphones and home Internet access.

Behind all the hours we spend with electronic media, there’s an overarching set of policy goals enshrined in our broadcasting and telecom legislation. The Rebooting conference is designed to examine those goals with a critical eye, in light of new developments on the ground, as the journalists say. The panel I’m on is called “Window to the world, mirror for ourselves: socio‐cultural objectives of communications legislation.” The organizers are particularly interested in hearing from us whether these objectives are still relevant. The initial puzzle, of course, is relevant to what? Beyond that, another difficulty looms.

The objectives of the Broadcasting Act in particular are deeply woven through regulatory policymaking, forming what the legislation calls the Broadcasting Policy for Canada. It stipulates that the broadcasting system should, for example, “serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.” Among many other things, the system should also:

“serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society…” [emphasis added: see below].

And so on, for a grand total of 1,100 words.

I’m not giving much away if I say here I find that the section 3 objectives are not merely unrealistic and unworkable, but have militated against the public interest by promoting the success of a small number of firms and industry personnel at the expense of consumer welfare. I base this bold claim on the possibly unconvincing observation that I’ve had a long-time interest in how the objectives for broadcasting fit the realities of audience, marketplace and political behavior. By way of illustration, I once wrote the following to sum up my opinion on the merits of section 3:

“Little can be gained from debating whether certain objectives of the system and the national service [read: CBC] are appropriate, when many technical and cultural realities of the system and the national service are simply not addressed by the major institutional provisions of the Broadcasting Act.”

Not to say I told you so, but I wrote this passage in the summer of 1978. I’d been asked by the late, lamented Dept of Communications to write a potted history of the first few decades of our system. What emerged a year later (1979) was a publication entitled Evolution of the Canadian Broadcasting System: Objectives and Realities, 1928-1968. Even in those days, the then Broadcasting Act, dating from 1968, had a section 3, devoted to the Broadcasting Policy for Canada. The tenor hasn’t changed much since, except it’s become much longer – almost four times longer.

That means our current policy framework is almost a quarter-century old, measured against the current statute. But if we measure from the real starting point, the 1968 version, the policy is 47 years old. Consider that the 1991 Act came into force a few months before the very first Web page became available on the public Internet (February 1991 vs August 1991: contrary to widespread belief, the Web and the Internet are two entirely different animals).

radio-crtc-aboriginal-vs-commercial-1

The special legislative place accorded aboriginals is not reflected in available resources

SOME problems with the goals are intrinsic, like provisions without substance or import. The illustration I’ll discuss in a later post concerns the identification of “the special place of aboriginal peoples” in Canadian society and Ottawa’s failure to give that special place any practical meaning (see chart above). Many other problems arise from a disconnect between objectives and the changing realities of the marketplace. To illustrate that idea, I’ll look at the predicament of conventional broadcasters, whose audiences and revenues are fleeing, while the legislation and regulations still enshrine TV as the cornerstone of our culture (see chart below).

crtc-conv-tv-finance-1

D.E.

Cancon redux: Canada’s TV “system” battles the Internet

netflix-browser-jan2015

~~~

“Somebody called me a protectionist this week. I’ve been called far worse, but the term rankled because I had not argued that Canadian television should be protected from foreign competition.”

Kate Taylor, Jan 18: A contemporary argument for Canadian content

~~~

The ball’s in somebody’s court and needs to be lobbed back.

Let’s start with who or what is protectionist. The only such reference I made was to  the policy regime we’ve had in Canada since the 1970s:

“Bell and Rogers (plus Shaw and QMI) have made fabulous amounts of money thanks to the vast protectionist apparatus they’ve enjoyed for decades.”

While life may be tougher now, it would be hard to argue that our broadcasters aren’t still benefitting from protectionism: foreign ownership restrictions, simultaneous substitution and restriction of US satellite signals to the approved list are three current examples. Simsub is also a good example of a policy designed to help our TV business rather than TV viewers, who hate it – as in, where are the Super Bowl ads? Continue reading

The Netflix boogeyman and a 21st-century role for the CRTC

hastings-comic-b

~~~

“Though some intervenors think this proceeding is all about Netflix, it’s not.” –Corie Wright of Netflix

“If the Commission fails to act swiftly after this proceeding, a service such as Netflix will become … one of the largest broadcasters in this country in the near future.” –Pierre Dion, CEO, Quebecor

“Canadian consumers can rest assured that our government will continue to stand up for them. We will not allow any moves to impose new regulations and taxes on Internet video that would create a Netflix and YouTube tax.” –Shelly Glover, Minister of Canadian Heritage

~~~

The thesis: Netflix has handed the CRTC a new lease on life

CRTC ordered Netflix to share its highly sensitive Canadian customer data. Netflix demurred (“stonewalled” by some accounts). The Commission has responded by making Netflix disappear from the history books, expunging its official testimony. Does that mean, as we read recently, that “It’s over, CRTC, Netflix and globalization have won”? Continue reading

Just like cable-TV, broadband is still way too expensive in Canada

point-topic-may-2014

Point Topic releases 2014-Q1 global survey of broadband prices

Research consultancy Point Topic has another set of broadband data to add to the dismal news about Canada. Using USD adjusted by the purchasing power parity formula (PPP), they find that of the 90 countries surveyed, Canada ranks in 58th place on the price for a monthly standalone broadband subscription. We’re just under the global mean of $76.61, one step ahead of Mexico. Continue reading

The CRTC tries to drag our TV “system” into the 21st century

tv-flag-big2***

The public hearing announced by the CRTC last week (Broadcasting Notice of Consultation CRTC 2014-190) came with two other newsworthy documents.

One is the Commission’s trial balloon on instituting a pick-and-pay system for TV subscribers, which takes the official form of the CRTC’s Response to Order in Council P.C 2013-1167 (“Maximizing the ability of Canadian consumers to subscribe to discretionary services on a service by service basis” – here). This document contains the seeds of what might be a significant reform to the channel-bundling model. Continue reading