Obsessed with Netflix (3): tips for reinventing Canadian TV

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What do [Canadians] think of this country’s ‘television’ system? Do they feel that the
public interest is being served? I speak of ‘television’ for lack of a better word, because technology has outpaced language.” –JP Blais on pending CRTC review of TV policy

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Blais pic(1)In his speech at the Banff Festival on June 12, Chairman Blais indicated the CRTC plans to undertake a top-to-bottom review of how to manage “television” in the digital age. The Chairman brings a tremendous amount of credibility to this exercise, which he’s earned in his first year at the CRTC helm (a Globe editorial called his speech “very promising” and “visionary”). But even this well-placed friend of the consumer is going to have a difficult time rescuing Canadian broadcasting from its current state of arrested development.

Here are a few of the challenges.

1 – There is no TV “system” any more. The difficulties begin with the very language we’ve used to talk about broadcasting policy since passage of the Broadcasting Act in 1968. Blais gets this when he says: “I speak of ‘television’ for lack of a better word, because technology has outpaced language.” Yet in the same breath he wonders aloud what Canadians might think of Canada’s television systemUnfortunately for progressive policy reform, while no such system exists any more in the real world, it lives on stubbornly as a legal fiction in the minds of policymakers and regulators. The concept as spelled out in the Act is even more far-fetched, referring to Canadian broadcasting as a “single system” – an idea that would baffle mainstream Canadians, living as we do in a 500-channel universe, not to mention a 200-million-website universe.

2 – Ottawa must come to grips with this invention called the Internet. If the Commission doesn’t make a serious effort to understand the public Internet as it is, rather than the faux-Internet of cultural policy, then any reinvention of Canadian “TV” is doomed. Some stakeholders, especially the cultural lobbies, will assail the TV proceeding with their preposterous argument that the Internet is just another delivery system – TV on downers – and that the regs should benefit a few thousand people who make movies and TV shows. An ideal way for Deciders to get up to speed would be to read Commissioner Denton’s concurring opinion in Broadcasting Regulatory Policy CRTC 2009-329, which upheld the so-called “new media exemption.” Denton makes a good case for innovation without permission on the Internet, a huge social benefit that’s been drowned out because of our obsession with Canadian “culture” and telling our own “stories.”

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From Commissioner Denton’s concurring opinion in CRTC 2009-329

3 – Sorry, technological neutrality does not apply to online content. Years ago, Ottawa stumbled on a great way to ensure no new technology would escape the warm embrace of content regulation. All delivery technologies were deemed “neutral,” be they used over-the-air, via wireline, in digital form, on pay-per-view, with conditional access, whatever. According to fine legal minds both outside the Commission (e.g. Cancon advocate Peter Grant), and inside (e.g. former CRTC chair Konrad von Finckenstein), the authorities were perfectly entitled to regulate online content, provided you first took away two “irrelevant” pieces of the puzzle, to wit, anything interactive and anything personal, and voilà! – you end up with a Canadian thing known as new media broadcasting. Here’s a previous comment on this self-fulfilling prophecy from a post I wrote exactly two years ago entitled, ahem, Get yer grimy paws off my Netflix (they didn’t make up that issue yesterday):

“The problem is that when you take away all that is personal and interactive from this transmission platform, what you’re left with is not the Internet. […] The sleight-of-hand invoked here may well fit what lawyers call questions of law (like the statutory definition of ‘broadcasting’ and ‘program’), but it certainly does not fit what they call questions of fact. To put that less charitably, it’s a piece of sophistry that rests on a serious misrepresentation of what the Internet is, as a matter of fact.”

4 – Stop protecting our TV “culture” and start protecting TV consumers. It has long been obvious that the cultural policies designed to bolster Canadian content have tangible benefits as industrial policy, e.g. in creating jobs for those who work in film and television. On the other hand, I have never seen any parallel empirical demonstration of concrete benefits to the millions of Canadian TV and Internet subscribers who pay for almost all of this support through levies and income tax. The Commission itself has made it clear where its priorities lie as between industry welfare and consumer welfare. Its annual Communications Monitoring Report, for example, is essentially a profile of the financial health of our media and telecom sectors. It contains no comprehensive, empirical data on what Canadian end-users are paying, doing or thinking – not even one annual, randomized and representative consumer survey, or a report like The Consumer Experience study undertaken every year by Ofcom.

If Chairman Blais wants his legacy to be that of the first-ever consumer advocate to chair the CRTC, then he has a duty to get back into the research game – and I don’t mean counting jobs in the TV industry or the EBIDTA posted by licensees.

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The CRTC must start seeing TV subcribers as the individual telecomm customers they are, not as an unwitting, mass target market for Cancon

Meanwhile, the incumbent service providers are screwing Canadians using weapons like data caps to accomplish what Time Warner is trying to accomplish: protect their legacy media businesses from innovators like Netflix. Chairman Blais must summon the courage to get out from under decades of obsession with making broadcasting an instrument of cultural policy, and make room for a new framework based on promoting the interests of end-users. If two million Canadians choose to watch un-Canadian content as Netflix subscribers, then so be it. Under the current regime, that choice is not only left unprotected in policy terms. It’s also a choice that the incumbents malign as part of their broader effort to squelch competition.

When Rogers lowered its data caps a few days after Netflix announced its Canadian launch, the CRTC did and said nothing (I wrote about this in October 2010). Today, the data cap problem needs to be seen as a crucial element in the battle over “new” television, part of the incumbents’ strategy for keeping out new entrants while they develop SVOD services of their own. The Americans face a similar set of problems in the clash between legacy and OTT operators, as I’ve been trying to explain in this series of posts.

xfinityLast December, the New America Foundation’s Open Technology Institute published a paper on the risks of caps to the entire US economy – “Capping the Nation’s Broadband Future? Dwindling competition is fueling the rise of increasingly costly and restrictive Internet usage caps” (pdf uploaded here). The paper documents some unsettling effects of this ISP weapon: caps can no longer be technically justified for traffic management or QoS; their purpose, apart from price-gouging, is largely to protect legacy video businesses; they are having a deleterious effect on innovation, especially given the growth of bandwidth-intensive applications like video; and they make bandwidth a scarce resource, while discouraging use of the Internet in crucial sectors like education, employment and healthcare.

All of the bad things predicted to happen in the US are going to happen in Canada, unless the Commission really does intend to throw away the old assumptions, as Chairman Blais has indicated. If he does get that far in the TV proceeding, then all we have to do is wait for Parliament to rewrite the enabling statutes. Another battle for another day.

D.E.