Reg­u­lat­ing the In­ter­net is an ob­so­lete plan

Over the top video providers al­ready of­fer Cana­dian con­tent here and around the world

The Hamilton Spectator - - COMMENT - Howard Rabb is a Hamil­ton-based en­tre­pre­neur who pre­vi­ously ran a Cana­dian startup at­tempt­ing to start a true OTT ca­ble com­pany in Canada. The CRTC de­ci­sion that ended this project was 2014-486.

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.

HOWARD RABB

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