Regulating the Internet is an obsolete plan
Over the top video providers already offer Canadian content here and around the world
A recent study from the Canadian Centre for Policy Alternatives called for the CRTC to end the Digital Media Exemption Order (DMEO) and begin regulating over the top (OTT) video providers such as YouTube and Netflix.
The author called for the companies to collect and remit HST and to contribute five per cent of their gross revenues to a Canadian production fund as traditional cable companies presently do.
While I agree that some of the concerns are valid, chiefly that Netflix is receiving a cost advantage over Canadian services because they do not charge HST, the solution that “the CRTC must remove the New Media Exemption Order for all OTT services” is where we part ways.
In 1999, the CRTC released decision 99-14 wherein they decided to: “not regulate new media activities on the Internet under the Broadcasting Act.” This is important because the CRTC had previously decided not to regulate the Internet itself. That exemption underwent modifications and changes as the landscape changed in 2007 and 2009 before updating them again in 2012.
Each time the regulator decided that there were not compelling reasons to regulate this space and often alluded to what would be real difficulties in attempting to do this at all.
The CRTC, that oft-derided regulator that has earned a reputation (albeit unfairly) as being overly controlling of the media landscape in Canada and not allowing Canadians choice in their media consumption, is now being criticized for allowing Canadians a choice in their media consumption.
Let’s assume for a moment that both the regulator and the government wanted to fully regulate video and audio content on the Internet, what would such a regulation look like?
Internet providers in Canada would be forced to install filtering hardware and software to prevent users from going to sites that were unauthorized.
Netflix, YouTube, Spotify, Google, Apple, Microsoft, Facebook, Twitter and any number of sites would become inaccessible until they submitted to the will of the regulator and began their remittances.
International Internet companies would ignore Canada and instead focus on easier markets leaving Canadians out in the cold once again. After 25 years of consolidation in the Canadian media industry there are far fewer media companies than there once were. All of this would be in the name of preserving Canadian content and ensuring Canadians are represented in the media that we consume.
But that’s happening already! Netflix has purchased series from production companies around the world including Canada.
Wikipedia has a list of more than 230 programs that have been produced or are being produced now in Vancouver with another 220 in Toronto. This winter “Star Trek” fans from around the world will watch the first new series in 11 years produced in Toronto.
What about new and emerging talent? YouTube has helped launch some of Canada’s biggest success stories from Stratford’s Justin Bieber to Burlington’s Walk off the Earth. See for yourself how many entertainers Canada has exported to the United States and around the world!
We even have entertainers that are completely unknown in Canada but have millions of fans in Brazil, South Korea and China. YouTube and other sites give these performers a direct, unfiltered way of connecting with fans around the world.
The report is also heavily concerned at the drop in contributions to Canada’s media production funds that come from our cable and satellite providers. As Canadians drop their cable subscriptions and shift to OTT services these companies may have less money to contribute to these funds that fuel the creation of some Canadian content.
Twenty years ago without access to those funds a performer would have great difficulty producing something in Canada and getting it to market. Today I could produce a program with a couple of cellphones and a tripod and it can be available to millions of people around the world in seconds.
The world of 2016 is very different from the world of 1996. Ending the DMEO and attempting to fully regulate the Internet would be an attempt to roll the clock back 20 years.
It’s not practical, it’s not a good idea, and it’s probably not even possible.