Internet providers must give financial data to CRTC

In a move that is certain to make more work for some telecommunications carriers, the Canadian Radio-television and Telecommunications (CRTC) has ordered certain Internet media firms to start reporting their revenues and expenditures to the federal regulatory body next year.

This, the CRTC said, “constitutes an important first step in fulfilling its objective to understand the growing importance and significance of broadcasting in new media.”

A Rogers Communications Inc. executive is concerned the policy, published Friday, will create extra work and is aimed at a non-existent problem. However, the president of a group representing independent record labels says we need to start tracking Canadian content and revenues from “new media” broadcasting in order to ensure artists are compensated for their works.

Broadcasting Regulatory Policy CRTC 2010-582 stipulates new media firms whose owners are also broadcasters will have to start reporting their revenues (including advertising and subscriptions) and expenditures to the CRTC. The commission would keep each firm’s data confidential and only publish aggregate data.

The policy would affect firms such as Toronto-based Rogers, which was initially founded 50 years ago by the late Ted Rogers as a radio station but now includes City TV, Rogers’ cable television and Internet services, a cellular wireless carrier, the fiber optic network originally built by Sprint Canada, Maclean’s magazine plus a plethora of industry-specific and consumer periodicals.

A senior Rogers official had some concerns about the CRTC order.

“It would present an administrative burden when there really is no proven benefit to getting that information,” said Susan Wheeler, vice-president of regulatory affairs for Rogers Media, the group that includes the firm’s radio and television stations plus its magazines. “We question the relevance of that information.”

The policy raises questions as to whether the federal government will eventually succumb to lobbying efforts from artists’ groups who want Internet providers regulated in a similar manner to the owners of television and radio stations.

Right now, “new media” is exempt from those regulations. Last month, the Federal Court ruled Internet Service Providers right now are not broadcasters subject to the same regulations as TV and radio stations, such as Canadian content quotas and taxes the government re-distributes to groups such as Radio Starmaker Fund and music industry associations, in what is known as Canadian Content Development, or CCD investments.

Last year, in Broadcasting Regulatory Policy CRTC 2009-329, the CRTC extended a ruling it made in 1999 which essentially made Internet providers exempt from the Broadcasting Act. But that ruling also stipulated that new media includes all “point to point” broadcasting, broadcasts “delivered an accessed over the Internet” and content sent to wireless devices.

In its report, the CRTC noted that lobby groups such as the Canadian Independent Music Association (CIMA) and the Alliance of Canadian Cinema, Television & Radio Artists (ACTRA) asked for reporting based on the type, origin, genre, accessibility and language of the content, but did not offer specifics on defining the metrics or how to collect the information.

But it’s not up to groups such as ACTRA and CIMA to make suggestions on how exactly to obtain content information, CIMA president Duncan McKie said in an interview Monday.

“We think we need this information,” he said. “We don’t know how these Web sites and operations are organized. It’s up to operators to decide how to do that.”

New media firms will not be required to immediately report those statistics, the CRTC stated Friday, but “the Commission considers that it may become necessary in the future for NMBUs to file reports providing information regarding the availability and consumption of broadcasting content in new media.”

The exact mechanism for collecting those statistics will be developed by a New Media Reporting Working Group, which would develop definitions, metrics and reporting standards. Anyone who wants to belong to this group must apply to the secretary-general of the CRTC by August 31.

Bell Canada officials were not immediately available for a phone interview but a spokesperson for the Montreal-based carrier e-mailed a statement to Network World Canada.


Bell stated that instead of requiring individual firms to report statistics, the CRTC should instead collect and analyze data from third party firms to track overall trends.


“While we don’t object to reporting a few basic statistics, it will not be possible to collect a sufficient amount of valid data to draw informed conclusions concerning the new media environment,” she wrote. “Canadians’ new media viewing activities simply extend too far beyond the entities regulated by the CRTC.”

“I’m not suggesting it would be easy,” to develop such metrics, McKie said.  “On the other hand, it’s not something you give up on, because the ultimate outcome is no contribution to Canadian Content Development.”

The CRTC expects the working group would meet over the course of a year, beginning in the first quarter of 2011.

McKie said he hadn’t read the decision in its entirety but was willing to comment in general on CIMA’s concerns about Internet content in Canada.

“Canadian content can compete with international content,” he said. “Let’s see how much it’s being used.”

He cited as one example the music site, owned by CTVGlobemedia Inc., which also owns the CTV television stations and the Globe and Mail newspaper. While a TV station plays music recorded by Canadian artists in a regulated environment, a Web site from which fans can watch the same music is unregulated, he said.

A major concern for CIMA, which represents Canadian independent recording companies, is the fact that some companies own cable, wireless, Internet and media firms, McKie said. So a company that is losing revenue through “traditional” means of broadcasting could offset those losses through their Internet properties.

“Increasingly, you’re going to see revenue move to that new channel,” he said

“They operate the conventional channels that are suffering, but they also operate Internet channels that are not regulated so we have no idea whether gains there are making up for the losses in the conventional systems.”

McKie did not specifically mention either Rogers or Bell Canada Enterprises Inc., but both firms are obvious examples of the conglomerates he has in mind.

For its part, Bell operates the Sympatico portal, which includes Canadian news and other links.

“If they’re going to operate the Internet channels as if they were broadcast undertakings, they should be regulated at least in principle in the same way” as radio and TV stations, he said.

McKie also addressed the concern that it’s more difficult to measure content delivered over the Internet.

“I know all the arguments. The Internet is interactive,” McKie said.  “We also know that for the most part when (users) hook up to an ISP, generally, they tend for the life of that relationship to go to that ISP’s home page which contains content. So there are ways of ensuring there is going to be a Canadian presence.”

But Wheeler said Canadian content will be delivered regardless whether the CRTC imposes it on Internet providers.

“More and more media companies ensure content is on the platform that consumers are most interested in consuming it,” she said. “Canadian content will find its way online.”



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