Canada’s analog broadcasting policy makes no sense in a digital world

Theglobeandmail.com
April 18, 2017
By Michael Giest

Canadian Heritage Minister Melanie Joly travels to California this week with an agenda that includes meetings with Internet giants such as Google and Facebook. Given the recent announcement in the budget that the government plans to “review and modernize” the Broadcasting Act and Telecommunications Act, the discussions may help shape an issue that could have a profound impact on the Internet in Canada as there are concerns the government may attempt to shoehorn Canadian cultural policies into telecommunications law.

Ms. Joly’s consultation last year on Cancon in a digital world revealed there is a strong appetite within the traditional Canadian culture lobby for bringing policies such as cultural taxes and mandated Cancon requirements to the Internet. The groups claim the Internet is rapidly replacing the conventional broadcast system as a means of distributing cultural content and that the long-standing analog rules should be shifted into the digital environment.

Revisiting Canada’s twin communications laws is regarded by the cultural lobby as the opening to treat telecommunications regulation as a matter of cultural policy in what would amount to the Broadcasting Act taking over the Telecommunications Act, with the Internet treated as little more than a giant cable-television system.

Few Canadians would view their wireless or Internet connections as a matter for cultural regulation, but that is precisely what the cultural groups envision. Indeed, in light of an earlier Supreme Court of Canada decision that rejected attempts to impose cultural taxes on Internet service providers owing to the separation of the two statutes, creating a combined culture-focused Communications Act would establish a fundamental change in Canadian Internet regulation.

Yet, the reality is the policy objectives of telecommunications and broadcast do not mesh well, making it difficult to craft a single communications statute. Telecommunications regulation is fundamentally about competition and consumer protection. The rules are designed to foster affordable network access, effective consumer rights through transparency and redress and to prevent the temptation of vertically integrated telecom giants to grant their own content preferential treatment.

Those rules must be adapted for the Internet - decisions scheduled for release this week by the Canadian Radio-television and Telecommunications Commission on net neutrality that address equal access for Canadian content and applications are the Internet’s version of old battles over common carriage - but the twin policy goals of competition and consumer protection remain largely unchanged.

Broadcast policy, on the other hand, is primarily a cultural policy document designed to maximize the benefits of broadcast spectrum in a world of scarcity. In that analog world, the “broadcast system” features policies such as licensing requirements, Cancon contribution mandates, public-broadcaster support and simultaneous substitution policies as a means to encourage the creation of Canadian content and to safeguard broadcast space for domestic content.

The broadcast world of scarcity has given way to a world of abundance, however, with no channel limits nor restrictions on the ability for anyone to “broadcast” or distribute their content to a national or international audience. Instead, the key ingredients to encourage cultural choice and to provide incentives for creativity include equality of network access, marketing, distribution and ease of discovery in a world of seemingly unlimited content.

Ms. Joly appears to intuitively understand the success of the Canadian industry does not lie in new regulations. She has emerged as a champion for the export potential of Cancon, foreign investment and Internet-based distribution offering the opportunity for greater commercial and cultural success.

Support for Canadian content remains important, but neither the broadcasting system nor the Internet should be viewed as the primary source of funding. In fact, change is already happening with foreign financing now the largest source of support for Canadian English-language production, exceeding revenues generated through regulatory policies such as mandated contributions.

The importance of global markets for Canadian content is certain to increase in the digital world. As Ms. Joly meets with the Internet giants, their pitch should focus on a confident, culturally relevant country producing content the world wants to see in a market committed to affordable broadband Internet access, net neutrality and modernized digital communications laws in which content and contribution requirements are no longer the focus.