Canadian regulator to re-examine its hands-off Internet policy

Until now, Canada’s broadcast regulator has kept its hands off the Internet and whether providers such as telecommunications and cable companies give room for Canadian content.

However, the Canadian Radio-television and Telecommunications Commission said Thursday it will re-examine its relationship over new media by holding hearings next year, including whether Internet traffic-management by providers could impair Canadian programming on the Web.

In a press release commission chair Konrad von Finckenstein was quick to say the intent is not to regulate new media, as it does now with content rules for television. But he added, “if necessary” hearings may show justification “to propose new measures” that would support the goals of the federal Broadcasting Act, which sets Canadian content rules.

In a background paper the commission noted there are a number of Canadian funds to support the creation of new media, although it called them “minimal” compared to funding available for traditional TV and movies.

Exactly what measures von Finckenstein has in mind isn’t clear, but Ken Englehart, Rogers Communications’ vice-president of regulatory affairs, swifty made clear what it shouldn’t: a tax on Internet service providers to pay for Canadian content.

The notion is floating around Ottawa, he said in an interview, adding, “I think that would be a terrible idea.”

“There’s no evidence new media content can’t be produced in Canada without a subsidy. People can make this stuff sitting in their garage wearing a backwards baseball cap.”

Asked if there’s a difference between producing content and getting it on the Web, he said: “I’m not aware that Canadians have problems getting new media content on the Internet.”

Iain Grant, managing director of the SeaBoard Group, which advises telecommunications companies, said its a good idea for the CRTC to look at the issue because it’s been almost 10 years since the commission decided to exempt new media from its scrutiny.

However, he said, “unless you regulate the Internet like Saudi Arabia or China, it’s very difficult for them to do anything to stimulate Canadian content by fiat. The only way of really stimulating Canadian content is by offering money, and that isn’t the commission’s role.”

Through the Broadcast Act, the commission has encouraged Canadian TV, film and radio production with content minimums imposed on traditional television, FM and AM broadcasters.

Internet service providers who merely buy and resell landline and wireless access have been untouched by the CRTC, but major providers such as Bell Canada, Rogers Communications, Shaw Cable, Telus and others are controlled by the commission in varying ways. It oversees telco phone rates and controls the number of Canadian channels offered by cablecos and whether they can insert Canadian ads into U.S. network programs. But the Canadian content on their Internet services, such as the number of Canadian news and entertainment programs, is left alone.

Complicating the picture, however, is that increasingly carriers are content providers as well. For example, Bell holds a share of the Globe and Mail newspaper and the CTV television network through CTVglobemedia. It also assembles content for its Sympatico Internet service subscribers. While the number of Canadian channels carried by its ExpressVu satellite TV service is regulated by the CRTC, ExpressVu programming delivered over Sympatico – so-called IPTV, which Bell is piloting and is already being done by Telus and other landline providers – is not. Nor are IPTV signals delivered to cellphones by wireless providers including Bell, Rogers and Telus.

What also has the CRTC’s interest is that in today’s wireless world content providers may directly send their material to consumers rather than through traditional providers. That may or may not allow more Canadian content to reach the world.

So consider the fact that John Bitove, who owns the XM Canada satellite radio franchise – which is governed by the CRTC – heads a consortium bidding for a cellphone licence in this month’s spectrum auction.

As the commission notes in a background paper, Canadians are spending more time accessing broadcast content over the Internet and on mobile devices. At the same time, the pace at which professionally-produced international content is accelerating. However, it says Canadians are “lagging” in the amount of shows and similar content reaching new media, as is the level of early stage investment by Canadians in the new media broadcasting environment.

Still, it noted that Canadian content on mobile TV is in fair shape. At least 42 per cent of the channels Bell, Rogers and Telus offer wireless subscribers are Canadian, while the number of Canadian radio channels these three carriers offer mobile users ranges from between 14 and 22 per cent.

The commission’s inclusion of traffic management in the hearings, coming in the middle of a fight between Bell and the Canadian Association of Internet Providers, will attract attention.

The CRTC says its interest in the technology relates to whether providers will use it to impair access to Canadian content, perhaps in favor of content they directly have a piece of. Traffic-shaping is what Bell says it does to slow peer-to-peer applications, which it says hog bandwidth at the expense of the majority of Internet users. Bell says it doesn’t look at the content of the traffic, just the headers so it can identify P2P apps.

Giving preference to some content over others – say, if carrier that owns a soccer team gave preference to a team broadcast on its Internet service –would be a violation of so-called net neutrality.

Carriers, who are not big fans of regulation, are expected to give a cool reception to the CRTC’s interest in looking again at new media. A spokesman for Bell said Thursday it is too early for the telco to comment.