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The CRTC’s make-or-break moment by Michael Geist

Jul 11, 2014

Source: Toronto Star

Consultations on the future of television see plenty of demands to hang onto the status quo.

When Canada’s broadcast regulator embarked on the third and final phase of its consultations on the future of television regulation earlier this year, it left little doubt that a total overhaul was on the table. The Canadian Radio-television and Telecommunications Commission (CRTC) raised the possibility of eliminating longstanding pillars of broadcast regulation by creating mandatory channel choice for consumers, dropping simultaneous substitution and genre protection, as well as allowing virtually any non-Canadian service into the market.

For the growing number of Canadians hooked on Netflix or accustomed to watching their favourite programs whenever they want from the device of their choosing, none of this seems particularly revolutionary. Indeed, policies that reduce options, increase costs, or add regulation run counter to a marketplace in which public choice determines winners and losers.

The CRTC seems to understand that this is a make-or-break moment, since policies that worked in a world of scarcity no longer make sense in a marketplace of abundance. Yet the first batch of responses from Canada’s broadcasters, broadcast distributors, and creator community suggests that most see the changing environment as a dire threat to their existence and hope to use regulation to delay future change.

Broadcast distributors such as Rogers, Bell and Telus, likely seeing the writing on the political wall, support variations on the pick-and-pay channel models. However, all are opposed to major changes such as the elimination of simultaneous substitution or relaxing the rules on the entry of new foreign services.

Opposition to pick-and-pay comes from both independent broadcasters and creator groups. For example, Corus Entertainment warns ominously that a mandatory pick-and-pay system “will eventually lead to the obliteration of the Canadian broadcasting system we know and enjoy today.”

Creator groups such as the Canadian Media Production Association (CMPA), ACTRA and the Directors Guild of Canada (DGC) issue similarly dire warnings about the impact of potential changes such as pick-and-pay, the elimination of simultaneous substitution, or open entry for foreign channels.

Not only are those groups seeking to retain existing regulations, they would like to add new requirements, fees or funding programs.

The CMPA leads the way with calls for the creation of Canadian content requirements for online video services and demands that all online video services — from Netflix to Rogers ShowMi service — face Canadian program funding obligations. ACTRA similarly wants Internet video companies to pay for the creation of Canadian programming, while the DGC wants to require Internet video companies to report on everything from revenues to expenditures on Canadian programming “in order to determine the appropriate contributions to the system.”

The creation of new funding programs is a common theme throughout the submissions. The DGC recommends increasing the current 5 per cent contribution from broadcast distributors, the Canadian Media Guild calls for the creation of a new fund from broadcast distributor revenues to support public and provincial education broadcasters, and the CBC envisions a new Local News Fund to support the production of local news with broadcast distributors handing over 1 per cent of their gross revenues (it also supports new requirements for Internet video services with revenues over $25 million to contribute 5 per cent of revenues toward the creation of Canadian programming).

Most tellingly, some established groups disdainfully dismiss the CRTC’s efforts to engage public participation in its television review process. The DGC says the consultation results are “flawed, biased and unreliable” since they are based on responses from whoever wished to participate.

For the CRTC, the opposition is likely unsurprising. Change may seem inevitable, but established groups will seek to use the regulatory system to preserve the status quo for as long as possible. The big question is whether the Commission stands ready to break with the past by embracing the change that threatens both the relevance of existing regulations and the regulator itself.

© Toronto Star