Media providers pushing CRTC to add more charges to Internet users
ISPs should contribute to new-media fund, CBC tells CRTC
February 26, 2009
Canada's public broadcaster said ISPs should be required to contribute to a fund to bring more Canadian content online, but priority for these funds should be given to those that produce the bulk of the content.
Speaking during a presentation to the CRTC's hearings on whether to regulate new media, CBC/Radio-Canada chief regulatory officer Steven Guiton said that since broadcasting distribution plays an increasingly important role for internet service providers, it makes sense that they make a contribution to new-media funding.
In its submission to the Canadian Radio-television and Telecommunications Commission in advance of the presentation, CBC/Radio-Canada had called for money to be set aside for a new-media broadcasting fund. Prior to Thursday's presentation, however, it had yet to suggest a funding model.
Guiton said that after considering other methods and regulatory approaches, CBC/Radio-Canada concluded "the only reasonable and effective funding approach is to require a contribution from ISPs."
Guiton said that the CRTC could require ISPs to contribute to the fund on an interim basis as it conducts reviews on a new-media broadcasting business model.
Representatives from CBC/Radio-Canada said funds to support new-media initiatives are needed because while the public wants more content to be distributed online, the revenue generated from online content isn't substantial enough to cover the costs.
In calling for contributions from ISPs, the public broadcaster echoed the sentiments of several cultural groups, such as ACTRA and the Canadian Conference of the Arts who have called for a levy on ISP revenues to go towards a new media fund.
A spokesperson for CBC/Radio-Canada said the broadcaster has not suggested a specific amount of money, but acknowledged that numbers discussed at the hearing range from 2.5 to 3 per cent of ISP revenues, or about $5 billion.
CBC digital programming executive director Steve Billinger said online broadcasting isn't a replacement for radio and television, but rather as complementary to those traditional broadcasting outlets. He said the challenge for broadcasters is to find a way to generate online revenue for content such as online video, he said, which made up less than one per cent of online ad revenue in Canada in 2007, according to the Interactive Advertising Bureau of Canada.
Most advertising revenue generated online comes from search and banner advertising, he said.
Since advertising does not the cost of putting video online, new funding models need to be considered, said Guiton.
In its submission, CBC/Radio-Canada said the CRTC should earmark a substantial portion of any new-media fund because of the "pivotal role" conventional broadcasters play in promoting Canadian content.
"The best way to promote the production of Canadian content across all delivery platforms, including new-media ones, is to guarantee that the broadcasting system supports the involvement of conventional media, more specifically conventional broadcasters," said Guiton.
The CRTC new media hearings are expected to continue Friday before taking a short break and reconvening the week of March 9, when many ISPs are expected to speak.
Communication industry giants Rogers and Bell have already voiced their displeasure at proposed levies — which they have said they would pass on to consumers via increased fees.
Speaking before the hearings began, Rogers senior vice-president of regulatory affairs Ken Engelhart likened the levy to an unnecessary tax.
"People [already] visit Canadian websites," he told CBC News. "We don't see a reason why it needs a subsidy."
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Make ISPs, wireless carriers pay for broadcasting rights: Sirius
February 27, 2009
Internet service providers and wireless carriers should be forced to pay fees to support Canadian artists just like traditional broadcasters, since they make money off internet radio, Canada's broadcast regulator has been told.
'Internet radio is a category killer and the category that it would kill would be ours.'
— Sherry Kerr, Sirius Canada Inc."They are benefiting from the privilege of being able to broadcast to Canadians, but unlike traditional broadcasters, they currently have no obligations commensurate to that benefit," Sherry Kerr, vice-president and general counsel for the satellite radio company Sirius Canada Inc. Friday told a hearing in Gatineau, Que.
The hearing is one of a series being held by the Canadian Radio-television and Telecommunications Commission to determine whether broadcasting over the internet should be subject to federal regulations.
Kerr argued that internet radio is a direct competitor and a serious threat to satellite radio, especially now that it is becoming increasingly available on portable wireless devices and even some devices that can be built into the dashboard of a car.
"This view is supported by an increasing number of articles in the press opining that internet radio is a category killer and the category that it would kill would be ours," she said.
That would be bad for Canadian artists, as satellite radio broadcasters are required by the CRTC to offer significant support for Canadian artists by ensuring a certain percentage of their content is Canadian — specifically supporting emerging artists and contributing money to a fund to support Canadian artists.
Other broadcasters have similar obligations, which also indirectly force them to exclude certain non-Canadian content, Kerr said.
At the same time, wireless and ISPs now have revenues in the billions per year, some of that driven by audio broadcasting, and some are increasingly behaving like broadcasters.
For example, Kerr said, Bell Mobility provides a service that gives customers access to 60 internet radio stations for $8 a month.
Geoblocking suggested as solution
Kerr said one way to level the playing field would be requiring ISPs to geoblock — make unavailable to Canadians — audio content that doesn't comply with Canadian content requirements.
That move would thrill satellite radio companies, Kerr added.
"We would actually throw a party for you. Nothing else would level the playing field for us from a regulatory perspective," she said. "However, we recognize that this approach flies in face of the principles of openness and freedom of choice that governs the internet."
She suggested that an alternative would be to require wireless carriers and ISPs to pay a levy proportional to their revenues related to broadcasting.
That wouldn't completely level the playing field, as broadcasters are still bound by Canadian content rules that internet radio is not, Kerr said. Because of that, she said, new media should pay a higher levy while the levy should be lowered for her own company.
She acknowledged that some people would be opposed to the new fee and consider it a tax that could boost internet fees for wireless and broadband internet customers, and discourage them from buying those services.
However, she said, given that people are willing to pay much higher fees for faster internet and the fact that it is becoming a necessity, it's unlikely the levy would cost the companies customers.
"Customers are highly unlikely to cancel their service because they're paying an extra dollar a month," she said.