GATINEAU – The implications of imposing old-style TV regulations on new age digital media providers was front and centre during the first day of the CRTC’s Let’s Talk TV policy hearing today. While Google Canada suggested that other countries could follow Canada’s lead if the commission forced traditional TV regulations on digital providers, the Ontario government argued that greater regulation of online providers is critical to the long-term health of the broadcasting system and the production industry it feeds.
Kevin Finnerty, assistant deputy minister of tourism, culture and sport for the Ontario government, spoke Monday afternoon about the need for a balanced response to the changing broadcast environment. Rather than relaxing regulations on conventional TV providers, the commission should take steps to impose greater oversight over digital media companies such as Netflix.
Specifically, he said the CRTC should “put thresholds in place now” governing Cancon financial obligations on foreign over-the-top providers. “All broadcasting undertakings that benefit – financially or otherwise – from delivering programming to Canadians should contribute – financially or otherwise – to the Canadian broadcasting system and to achieving our broadcasting policy objectives,” Finnerty said.
Not surprisingly Google Canada argued earlier in the day that imposing conventional TV regulations such as mandatory financial contributions for Canadian content creation or exhibition requirements on digital media providers are unnecessary. Jason Kee, public policy and government relations counsel at the Internet giant, even suggested that Canada could incite other nations to follow its lead if exempt digital media distributors were subjected to TV-type regulations.
“It’s not difficult to imagine that other jurisdictions would quickly follow suit,” he said in response to a question from CRTC chair Jean-Pierre Blais.
During his remarks, Kee pointed to the success that Canadian content creators have had with YouTube and how they are leveraging the online platform to adjust to the changing broadcast landscape. One is Mitchell Moffit and Greg Brown’s AsapSCIENCE, a channel that provides scientific explanations through animated videos. The success of the online service has led to the commissioning of programming from CBC/Radio-Canada and others.
Even established broadcast players are getting into the YouTube game, added Kee.
Corus Entertainment, DHX Media, and OutTV were among the first providers to launch a subscription-based service on YouTube where they could offer popular TV programs commercial free. BlueAnt Media and Temple Street are also engaging more directly with digital content creators.
“In an open competitive environment, [online program providers are] actually just competing on the strength of their own content. If other jurisdictions started looking to implement a similar regime – in each case the content of domestic creators being privileged over that of non domestic creators – then that would start adversely impacting them,” said Kee. “That is the kind of long-term impact it could have.”
Johanne Lemay, co-president of Lemay-Yates Associates, noted during her appearance before the commissioners that technological advancements, growth in broadband and other elements have led to “a major discontinuity” and extending the linear TV regulatory framework into the online world “would thwart the objectives of fostering innovation and maximizing consumer benefits.”
Asked why this change is different than those brought by household video viewing of the 1980s or direct to home satellite in the 1990s, she said it’s more than just bringing added choice to consumers. Today’s broadcast environment allows consumers to take content with them, and watch it when and where they want.
“So I think it’s a fairly different paradigm that we’re seeing compared to the previous [technology changes],” said Lemay, whose company did research for the hearing on behalf of Netflix and Google.
She also added that there aren’t any technical barriers for existing TV providers to do what YouTube and Netflix have done, which is build domestically and then expand into international markets. Rather it’s one of ensuring all rights associated with a program are acquired.
“By eliminating bundles and moving to a system with increased consumer choice and flexibility, discretionary services will be forced to compete through innovative offerings, which will benefit consumers.” – Renée Duplantis, Competition Bureau
“On the contrary I think Canadian networks – the networks of telcos and BDUs are very much up to speed if not better than what we find in many countries and have the ability to deliver there,” she said.
THE COMPETITION BUREAU OF CANADA also appeared on the first day of the TV policy hearing delving into a number of matters including consumer choice (pick and pay vs. bundling). Renée Duplantis, the TD MacDonald chair in industrial economics at the bureau argued that bundling can reduce or even remove competition between discretionary services.
“By eliminating bundles and moving to a system with increased consumer choice and flexibility, discretionary services will be forced to compete through innovative offerings, which will benefit consumers,” she said during her opening remarks. “In our view, programming undertakings should compete on their merits and not, in effect, be subsidized through what could be considered a form of tied selling.”
The Competition Bureau pointed to Quebec and Atlantic Canada as examples of what may happen if an a la carte channel regime was available across the country. But Tom Pentefountas, vice-chair of broadcasting, questioned the merits of using the small Quebec market as the basis for the consumer choice argument.
Duplantis said it’s better to use Quebec than attempt to make comparisons with the U.S. market.
“We feel that the Quebec model, while yes it is maybe a more limited number of channels, it’s still subject to the same regulatory controls,” she said. “So we believe that that comparison is probably more appropriate than the ones to the United States where they have a very different regulatory regime.”
The CRTC’s Let’s Talk TV hearing continues tomorrow with Quebecor Media, Corus Entertainment and a number of consumer oriented organizations, led by the Public Interest Advocacy Centre, among others.
