'If you profit, you contribute': Ottawa announces panel to review broadcasting, telecom laws for internet era by Emily Jackson

Jun 5, 2018

The government wants to update laws so any player that profits in Canada contributes to Canadian content – including internet giants like Netflix

Source: Edmonton Journal

The federal government wants to update the broadcasting and telecommunications laws so any player that profits in Canada contributes to Canadian content – including internet giants like Netflix that operate outside the traditional ecosystem.

On Tuesday, Canadian Heritage and Innovation, Science and Economic Development Canada announced a seven-member panel to review the Broadcasting Act, Telecommunications Act and Radiocommunication Act.

The Liberals, who first announced plans to update the acts in March 2017, selected Janet Yale to lead the panel. Yale is a former executive at Telus Corp. and the Canadian Cable Television Association. She also served at the Canadian Radio-television and Telecommunications Commission and the Consumers Association of Canada.

The goal is to modernize legislation so artists, businesses, consumers and broadcasters can “thrive” in an era where Canadians increasingly access content online, a shift that’s eating away at existing content funding models that rely on TV advertising and subscription revenue.

“The principle guiding this review is clear: if you profit, you contribute – there is no free ride,” Canadian Heritage Minister Mélanie Joly said in a news release.

The release does not rule out a tax on Netflix or internet service providers, which have profited handsomely as Canadians demand more data and faster speeds to stream video content. Joly and Prime Minister Justin Trudeau have previously said there will be no internet tax and no Netflix tax.

In the news release, the government said it plans to update the legislative framework “without increasing the cost of services to Canadians.” It also committed to net neutrality, the principle that internet service providers treat all content the same.

“We want to ensure that our laws keep pace with Canada’s rapidly evolving telecommunications landscape so that Canadians can continue to receive world-class services,” ISED Minister Navdeep Bains said in the release.

“The review will consider whether changes need to be made to support affordability and availability.”

The announcement comes a week after the Canadian Radio-television and Telecommunications Commission released a report that called on foreign players such as YouTube, Netflix and Facebook to contribute to Canada’s system. It refused to call this a tax and said contributions don’t necessarily have to be monetary. Rather, it said they would be equitable, but bespoke to individual players.

The CRTC also called for a shift in how content production is funded in Canada. It recommended a reduced levy on broadcasters and a 1 per cent levy on broadband service providers, a fee that companies would pass on to internet and wireless data consumers. It estimated the overall amount of money available would be the same.

Forcing internet providers to contribute to Canadian content would be a drastic shift. It’s controversial given the internet is used for more than content, although some see it as the best option to keep Canada’s production industry afloat.

At the Canadian Telecom Summit in Toronto on Tuesday, internet executives debated whether its reasonable to place a levy on internet providers in a panel discussion on regulations.

Bell’s regulatory senior vice president Robert Malcolmson said the proposal “makes sense” by spreading Canadian content funding across a wider base.

Rogers’ formal position is against the levy, but regulatory senior vice president David Watt said it would have a modest impact considering video consumes a lot of bandwidth.

“It’s not an extremely distortionary tax,” Watt said.

Telus Corp. regulatory senior vice president Ted Woodhead disagreed. Unlike Bell and Rogers, Telus doesn’t create media content. Woodhead said it doesn’t make sense for pure connectivity companies to fund legacy content companies that are struggling.

“I’m subsidizing a competitor who made apparently a poor strategy choice,” he said.
As for the legislative review, executives agreed it shouldn’t be too prescriptive given 5G networks could enable technologies that don’t yet exist.

The government didn’t address the CRTC’s report in its news release. It did note that Canadians pay an average $223 per month on communications services as of 2016.

The announcement comes eight months after Joly released its Creative Canada strategy, developed after a year of consultation. It emphasized the importance of investing in creative and cultural industries, and promoting the discovery and distribution of Canadian content.

The new panel includes Peter S. Grant, Hank Intven, Marina Pavlovic, Monique Simard, Monica Song and Pierre Trudel.

“The panel is expected to engage with the industry, creators, and Canadians — including those from Indigenous and official-language minority communities — in order to ensure that Canada’s communications legislation takes full advantage of the benefits that the digital age brings to our country,” the government stated.

The new panel’s review must be complete by Jan. 31, 2020, four months after the next federal election in October 2019.

© Edmonton Journal