Bill C 10, the Amendment to the Broadcasting Act.
JUST MORE FOLLY
Bill C 10, the amendment of the Broadcasting Act. fails in any way to effectively address longstanding issues with the administration of media in Canada. The original purpose of the Broadcasting Act, at least the major rationale, was to protect Canadian culture by ensuring media space for Canadian content, thus forming a narrative that would be undominated by the US - it never worked of course - why you ask? - because the US content is more compelling than the Canadian content - just look at the numbers. The data below was published in 2013 and that was submitted to the government in 2009, the challenges it highlights are still in place in varying degrees. The fact is, because of the Broadcasting Act and the CRTC we pay more for services and we get a less diversified selection.
The CRTC and its related regulatory environment is emblematic of much of our regulatory reality in Canada. “Regulatory Capture” – is the buzzword for a circumstance where incumbent actors effect such control over the regulatory environment that regulation severs incumbents’ interests rather than the interests of the industry or the country – incumbents effectively close the door behind them. It is in this way that government becomes an obstruction to disruption, and often, by extension innovation. Regulations are necessary, the challenge is they are obstructive to a healthy marketplace or they can be, in Canada government regulation has reached such mass, I would submit regulations are the single biggest obstruction to new entrants and a dynamic marketplace.
We see the ills of regulation distorting the marketplace, effecting costly outcomes and yet somehow we still get trapped. The CRTC has NEVER fulfilled its mandate and nothing in this amendment will have it do so. If we just scrapped the CRTC and let the market work, we would be better off. The best solution, smart regulation has eluded us again.
Letter to Heritage Minister FOUR Years
Ago - WHAT HAS CHANGED
As
a function of some business obligations recently it was necessary for me to
consider interaction with the CRTC. As a part of the inquiry process, I took
under my examination a report commissioned by the CRTC in August 2007 entitled REVIEW
OF THE REGULATORY FRAMEWORK FOR BROADCASTING SERVICES IN CANADA. In the report
the authors Dunbar and Leblanc assessed the effectiveness of the CRTC and
offered recommendations on how to change regulations to make the CRTC more
effective. It was striking to me, upon review of the document and related
materials, how a relatively concise piece of legislation communicating a
limited mandate spawned an organization that morphed into a large bureaucracy; a bureaucracy that has
developed an extremely complex set of regulations and hosting its own extensive
body of jurisprudence. This complexity is perhaps evidenced by the fact the Mr.
von Finckenstein, presumably a competent Chairman, had a requirement to
solicit the services of lawyers familiar with this body of jurisprudence to offer
direction on how to reform the CRTC. As is often the case, and it appears to be
the case with the CRTC, a legislated mandate takes on a life of its own; as
well intended civil servants seek to serve us by attempting to manage an entire
industry, rather than allowing the desires of the populace to manifest in an
industry that serves them.
In
contemplating the CRTC and the media industry in Canada, in the context of the
present regulatory environment, one needs to reflect on the underlying
motivation for the creation of the legislation in the first place; indeed the
complexity the CRTC presently offers to the outside observer mutes this
underlying motivation. The written material related to the CRTC’s creation indicated
the spirit of the CRTC’s function is to ensure that Canadian content finds
expression to Canadians, by providing a regulatory framework that both allows for
fair operation of Canadian media companies and protects the overall industry
from overwhelming competition. The single most salient realization that emerges
when surveying the sheer mass of resources the CRTC requires and the complexity
it brings to the media industry, is that the very best and simplest way to
ensure the preservation and enhancement of a Canadian narrative is to
contribute to compelling Canadian content. When Canada’s message finds
embodiment in premium and compelling content, competition is welcome. Excellent
Canadian content has the potential to take the important elements of the
Canadian narrative outside just the realm of Canada to other jurisdictions transcending
boarders and influencing global culture. This prospect offers better security
for our culture than merrily utilizing legislation to block foreign content
from Canada. By elevating Canadian content through the redirection of CRTC
funding, to reward excellent Canadian content, the foreign content entering the
Canadian market elevates in competition, thereby enriching the whole media
experience. Successful, compelling, Canadian content on the world stage
provides for strong national confidence.
The
Canadian content requirements of 60% for prime time television, greatly limits
the Canadian media experience. By regulating Canadian content the CRTC has
created a circumstance where poor Canadian content is thrust upon the consuming
public, hurting the Canadian brand. Had the CRTC and its masters chosen a
different tact which included deregulating the industry and levying a
generalised media tax, thereby establishing a pool of funds to direct toward
investing in excellent Canadian content, our present state of media would very
likely be different now. As people are inclined to consume more of a good
thing, this suggested approach would allow foreign excellence to feed domestic
excellence, ultimately providing a generally rich media environment in Canada
and strengthening Canadian media’s ability to project our culture abroad.
The
present regulatory regime effects stagnation in the media industry ownership as
a result of regulation that extends advantage to incumbent companies. There is
clear reference in CRTC material to the fact that the CRTC passes judgement on
the appropriate number of media providers in a given market and then influences
the issuance of licences in a manner the restricts the volume of media
provision, essentially managing supply.
The CRTC’s rationale for this behaviour is that the CRTC needs to ensure the
profitability of a given operator so that the said operator has sufficient
resources to meet the requirements of CRTC regulations. This practice distorts
the market in many ways, the most damaging of which is retarding new entrants
and the innovation they may bring – creative destruction is curtailed as
incumbents are unduly supported by regulation. Additionally, the concentration of
ownership is bound to occur as incumbents hold privileged access to the market
and virtually “inside” information by virtue of their previous exposure to an
arcane regulatory environment. The CRTC should be compelled to refrain from
this practice and licenses should be issued freely to anybody who chooses to
service the market – limits on licenses should be the product of limitations of
available spectrum or other technological requirements. The financial requirements associated with
fulfilling licensing demands are a cost of doing business that all participants
are aware of upon entering a market and or having been in the market, as such,
the CRTC should let the operational realities decide who can satisfy the cost
of servicing a given market within regulatory parameters.
The
present media industry configuration has evolved in a manner that has siloed
various media types and their respective functionality. The CRTC’s present
regulatory framework has evolved in response to the existing siloed
environments. The combination of these two realities has created an inertia the
retards the absorptive capacity of the industry in its entirety. The media
industry is, at its base, in the business of collecting information and
redistributing it. Where historically this function took place on many
substrates from disparate sources, the modern media industry now has one
unifying digital substrate. The boundaries that produced siloing in the media
industry are now defunct for a number of reasons, yet CRTC regulation still
mandates, for example, that a company owning both a newspaper and television
station must send two reporters to the same story. Given that all media
emanates from a single digital medium that allows for seamless integration of
all information collection, while at the same time dispersing the information
through the full panoply of media, the established business models are failing
to bring all possible efficiency to the task. This effect diminishes the Canadian
media industry’s ability to provide maximal benefit to the consuming public,
retards profitability, impairs innovative utilization of new technology and
generally impoverishes the industry. While the writer recognizes the desire to
prevent concentration of ownership and that the CRTC views integration as a
modality of ownership concentration, there needs to be provision for the new
media reality to find expression. The CRTC should reconsider the present
constraints it places on media integration.
In
CRTC literature there is much use of the term “cross-media ownership” as a
modality for the concentration of ownership. The CRTC takes measures to prevent
“cross-media ownership” as a means to prevent ownership concentration and undue
influence falling into too few hands. The irony is that the challenges the CRTC
regulations have thrown in front of new entrants have contributed to the present
situation of ever-increasing ownership concentration. The institutional
measures exercised to limit “cross-media ownership” also inhibit more
appropriate and less capital intensive business models from being accessed. The
recent advances and low capital requirements of digital media technologies lend
themselves to small nimble multimedia companies to enter the market and
challenge the incumbents, with the desired effect of dispersing ownership and
hence influence. Recognition needs to be given by the CRTC that due to
technological advancement there is no logical barrier between media types
anymore. When the CRTC seeks input on these matters from industry and persons,
such as Dunbar and Leblanc, they are accessing the opinion of the media
establishment who may be unaware of, or even threatened by the unfettered
access to the market by disruptive technologies. Your ministry needs to address
the reality that, inherent in the actions of the CRTC, is an ever-strengthening
of incumbent influence both on the regulatory regime itself and also by virtue
of preferred treatment – distorted market influence, more and more concentrated influence
over the market. Here again, as in all CRTC action, there needs to be a
paradigm shift that moves government action away from media control
and toward supporting excellent Canadian content; as the Canadian content
emerges in the market, unfettered by government intervention, and finds
approval in the market place.
If
you believe as I do that liberty should be the paramount focus of government
and that liberty can be defined as the absence of coercion and the presence of
choice, then you will share my dismay at the spectre of the CRTC impairing my ability to view the content of my choice. “There
are also restrictions placed on the distribution of Playboy TV, because of the adult nature of its content, and Al
Jazeera, because of the politically controversial nature of its programming:
these restrictions are incorporated by
reference into the BDU Regulations via the Lists.” While the playboy TV may
hold little interest for me, Al Jazeera does. I find it grossly offensive that
there is a willingness in the CRTC, as evidenced by the above quote, to regulate
my exposure to whatever programming I want, in whatever portion of my
consumption I want. We have a rating system for movie content that transfers
well to all content and media types, we should ensure the government
intervention restricts its actions to inform the public and avoid
paternalistic judgement on what Canadians choose to watch.
The
present approach of the CRTC of attempting to regulate every aspect of the
industry, from the percentage of Canadian content to which reporter chases a
story, may well be overtaken by events.
“Obviously if Canadians start watching more programming services on the
Internet, and less on conventional television, advertising dollars will
continue to follow the viewing audience and the underpinnings of the Canadian
content regulation in Canada will be threatened. The question arises whether
there are measures that can be taken to decrease this threat, or whether the
whole system needs to be rethought.” This quote from the document REVIEW OF
THE REGULATORY FRAMEWORK FOR BROADCASTING SERVICES IN CANADA, makes explicit
what tacitly has been affecting the conduct of the CRTC and its industry
partners, they view as a threat the democratising effect that the internet and
digitised media brings to the overall media reality. One takes solace that to
date the CRTC’s ambivalence to the internet has resulted in a benign atmosphere
from a regulatory perspective. It seems clear to the writer that “the whole system needs to be rethought”.
What is perplexing is that the CRTC and its advisers view the massive opportunity as
a “threat”. The beautiful thing that emerges from digitally based media is that
the distinction between the generator of content and consumer is no longer
there. “Broadcasting” is now possible for us all, as is exemplified everywhere
we turn on the internet.
There
is a role for government at a strategic level to ensure a neutral
infrastructure on which digitised media can travel. Internet Service Providers
and carriers such as cable companies and telephone companies have begun to
challenge competitive content providers by interfering with competitor’s data
flow. These sorts of anti-competitive actions are sure to intensify absent some
“arms-length” direction. By way of example, websites that provide streaming
video should be allowed equal access to the consumer as cable providers, under
a provision that sees cable providers being fairly remunerated for the bandwidth utilized by such content providers.
When
one reads the CRTC literature it becomes apparent that the CRTC has delved too deeply
into the operational aspects of the media industry. The complexity of the
present CRTC function has reached epic proportions, as with every passing day
another piece for regulation is added to address another eventuality. The
complexity of the media forum precludes effective regulation, except in the
most strategic realm. As the CRTC attempts to control Canadian media, it serves
to distort and constrain effective access to innovation and generally retards
access to the rich potential modern media holds for us all. The CRTC as it is
now configured and its resultant operation, is antagonistic to the free flow of
information, to the public, across medias and generally. Clearly, another
approach is needed, and given the progress and nature of new technology, the
only viable point of influence is at the level of content – content that flows
from the creativity of Canadians and finds acceptance by demonstrated success
in the marketplace. Content is now the domain of the Canadian citizen, if
government intervention is required at all to facilitate our Canadian story can
being told, then the intervention needs to be directed to enable Canadians to
create compelling content.
Throttling – Sent to Heritage Minister
The
internet has provided Canadians access to information in a manner unprecedented
in our history. The internets free access and utilization as a platform has
been an excellent forum for exchange and newly created commerce to flourish.
The democratizing effects of the internet have been dramatic; the whole human
interest has been enhanced by this amazing resource. The internet has now emerged as a critical
piece of infrastructure foundational to many people’s livelihoods. Free and
open access to this infrastructure is absolutely imperative as a provision for
existing activities on the internet and the enthusiastic utilization by start-up entities. Net Neutrality ensures a fertile place for new wealth to be
generated and further democratization to emerge. The government must be wary of
any attempt to curtail the unfettered and open use by all parties of this
valuable resource.
The
internet should be viewed as one entity, Internet Service Providers and other
companies contribute and utilize this single entity as a part of it. The recent CRTC ruling allowing Bell to use “throttling”
to control high volume users threatens the essence of the internet's success to
date. Certainly, Bell and companies like them are affected by high volume users,
but throttling is a poor way to manage volume. Throttling can be introduced as
a seemingly logical means to manage volume now, but it is far too easily utilized
as a means to curtail competitors, or worse control the free and unfettered
access to certain sets of data. Throttling is simply an unacceptable practice
that should be avoided at all costs.
The
issue that companies claim gives rise to the utilization of throttling is
inadequate internet capacity to service the desired level of use by the public.
Rather than ration use, it is in everyone’s interest to expand capacity.
Clearly, there must be some scalability issues preventing the ISPs to respond
with more capacity. Rather than the CRTC giving credence to a practice fraught
with risk in terms of potential abuse, the government should provide an
atmosphere that permits and encourages greater capacity. Greater capital cost
allowance for new internet infrastructure or some other tax benefit to
encourage more capacity is a better response than regulations that permit
predatory practices and put at risk a whole segment of new business.
The
CRTC has taken us down the wrong track with their recent ruling related to Bell
and throttling. It is imperative that the internet remains the bastion of free
exchange, if greater capacity in required, then greater capacity needs to be
sought. We have a wonderful source of exchange in the internet; we need to keep
it in a liberated state.
Sincerely
Neil
E. Thomson
RE: CRTC regulation of the internet
There
has been discussion in the press of late around the control of Internet Service
Providers (ISP). The advocates of
licensing seem to be people such as the Canadian Actor’s gilds, producers and
the like. They state a fear that “Canadian stories will stop being told” as
foreign content flows over the net. They advocate licensing ISPs and enforcing
Canadian content rules. In essence, they want to force us (Canadian citizens)
to watch their productions whether we like it or not. This modality of action
has been applied to other media forums in Canada for decades. Ask yourself, how
Canadian content is fairing now, what are the most popular shows on television
and where are the most popular movies made. The force-feeding of substandard
content in an attempt to build a common Canadian narrative was ludicrous at the
inception of the CRTC and it is still errant. The very creation of the CRTC was
a product of a cultural inferiority complex and Canada needs to take aggressive
and bold measures now to take our stories to the world – we need to stop
defending insipid weak Canadian media content and generate a circumstance where
our stories are presented in a compelling fashion.
We
need to allow all media to flow into the Canadian market; levy a moderate tax
on ALL media and earmark the
proceeds for the creation of compelling Canadian content. Access to these funds
should be determined by performance, that is to say, that content should only
receive support if it is compelling enough to compete in the media marketplace
and then only 50% of production costs – as determined by success at the box
office or advertising support. In this way, over time, the strength of foreign
media will serve to strengthen our media offering. Over time then, Canada will
be taking its narrative and national values, much needed in the world, to the
world. Compelling content is “King” as opposed to more regulations that
constrain access to markets, retard new entry into various media forums and
threaten the great strides in the democratization of media that the internet
has been a catalyst for.
The
present legislation intended to “protect” Canadian media is actually impairing
and impoverishing the Canadian media environment. Give creative Canadians the
capital they need and get out of their way, and watch the Canadian story
prosper. The government needs to stop attempting to control with regulation,
and direct government action toward providing an open and accessible
environment for Canadians to create and compete.
