By Jay Thomson
THE CCSA WAS FORMED in the early 1990s, around the same time as the current Broadcasting Act came into force. Like the Act back then, our members at the time did not contemplate the growth in size and influence of the “foreign digital giants”.
But also like the Act back then, our members did not contemplate the massive consolidation that would take place in the Canadian broadcasting industry.
Neither the Act nor our members contemplated that just three domestic companies – Bell, Rogers and Quebecor – would come to dominate Canada’s communications marketplace; that, through ownership of most of Canada’s TV services, and of Canada’s largest BDUs, Internet and wireless providers, those three companies would become Canada’s own vertically-integrated “domestic giants”.
In fact, those domestic giants have since become so big and influential the CRTC recognized that it had a major problem: namely, that the giants now have both the incentive and ability to engage in anti-competitive behaviour that could harm other broadcasters and Canadian consumers.
To address that problem, the CRTC has established various safeguards to preclude the domestic giants from favouring themselves in ways that would increase costs and reduce choice for TV consumers.
Those consumer safeguards include a code that, among other things, ensures you don’t have to subscribe to the giant’s unpopular TV channels to get their popular ones. The safeguards also include provisions in the Digital Media Exemption Order that ensure you can subscribe to your Internet provider of choice – and not just the giants’ Internet services – to access the giants’ online services like Sportsnet Now and TSN Direct.
In its current form, Bill C-10 puts those consumer safeguards at risk.
When we first reviewed the bill, our concern was, in focusing on the foreign digital giants, it ignored the growth in size and influence of our domestic giants.
We’ve come to realize, however, that the bill does the exact opposite. Instead of ignoring our domestic giants, it actually embraces them – but not all to the good. Specifically, our concern is that, as written, the Bill will enable those giants to favour themselves in ways that will serve to increase costs and reduce choice in our broadcasting system. It will enable them to do exactly what the CRTC warned they would do if left unchecked.
“It would be easy to assume the relief they seek relates solely to their Canadian content spending and exhibition obligations but make no mistake, they will also aggressively pursue relief from the consumer safeguards the CRTC has imposed on them.”
Much has been said in these hearings about how the Bill will “level the playing field”. That’s true. But the field it will level is the one that the giants play on, and by leveling the field of the giants, it will tilt even further in the giants’ favour the other fields in the system, the fields where smaller and independent players go up against those giants.
Bill C-10 and the draft direction contemplate imposing regulatory obligations on Netflix and others and relaxing existing obligations for Canadian broadcasters. Notably, it’s the domestic giants who seem to have focused the most on supporting such regulatory relief. It would be easy to assume the relief they seek relates solely to their Canadian content spending and exhibition obligations but make no mistake, they will also aggressively pursue relief from the consumer safeguards the CRTC has imposed on them.
This isn’t speculation: the giants are already using the courts to challenge the CRTC’s jurisdiction to establish and enforce those safeguards.
If left as is, Bill C-10 will embolden the giants in their efforts to escape the CRTC’s consumer safeguards.
To prevent these clearly unintended consequences, and to protect consumer choice and affordability – particularly in smaller and rural communities
– the bill needs to confirm the CRTC’s jurisdiction to establish and enforce its safeguards against the giants, including those contained in the Digital Media Exemption Order.
Jay Thomson (right) is CEO of the Canadian Communication Systems Alliance, which represents about 100 independent communications companies across the country which provide bundled TV, internet and telephone services to Canadians mostly living in smaller communities and rural areas.
This is an edited version of his opening speech to the Standing Committee on Canadian Heritage March 22 as it studied Bill C-10, the act to amend the Broadcasting Act.
