CRTC's dilemma: balance consumer and telecom's feelings on broadcast's future

[Len]

TORONTO — A warning from Canada’s biggest media companies that their survival is under threat from unregulated foreign rivals and illicit content pirates has sparked a massive influx of submissions to the federal telecommunications regulator from consumers with little sympathy for their cause.

Midway through a 30-day public consultation that is open until March 1, more than 5,440 responses have been posted with the Canadian Radio-television and Telecommunications Commission — predominantly focused on one issue.

There’s been a huge outpouring of criticism against an anti-piracy proposal launched last month by a coalition led by BCE Inc., the owner of the CTV television network and specialty channels such as TSN.

“Those numbers are pretty remarkable,” said University of Ottawa law professor Michael Geist, an outspoken critic of the industry’s calls for increased protections.

FairPlay Canada, which also includes Rogers Communications Inc., Cineplex Inc., the Canadian Broadcasting Corp. and others, are calling for a new federal agency to locate and shut down websites that are portals for pirated content.

But the organization shouldn’t be surprised that the public is actively interested in how the internet is run, Geist said.

“I think they realize that we’re all dependent on the internet for so many aspects of our lives.”

In fact, many of Canada’s major media companies have said that the life-blood of their industry — money — is flowing through the internet to unregulated foreign rivals and to illegal websites that haven’t paid for content rights.

For BCE, which owns the Bell Canada telecommunications business in addition to its media holdings, the problem is multi-pronged.

Not only must BCE help pay for Canadian content, it wrote, but its deep-pocketed foreign rivals like Netflix are bidding up the price of Canadian rights to foreign programs — primarily popular American television shows.

“We rely on this content to bring in audiences and advertising dollars, which then supports the production of Canadian content,” Bell said.

And while the Trudeau government seems determined to support Canadian content as a cultural imperative, there’s little consensus on how to accomplish that goal.

Heritage Minister Melanie Joly has given the CRTC until June 1 to submit a report to cabinet that outlines the possible future of the broadcast distribution system, including how it can support Canadian content.

But many of the public submissions about the future form of the industry, like those about content piracy, are unsympathetic to the domestic industry’s concerns about being required to fund Canadian content as they have in the past.

“Yes, some of these program choices would perish without such imposition,” replied Peter Adler of Edmonton. “This begs the question: so what?”

The industry’s answer: there’s a lot of money and potentially thousands of jobs at stake.

In one of its submissions, BCE points to statistics that show Canada’s private conventional television industry had $121 million in pre-tax losses in 2016, according to the most figures compiled for the CRTC.

BCE also pointed to statistics that show Canada’s conventional TV broadcasters employed about 5,300 staff people in 2016 — about 16 per cent fewer than in 2012.

Other big regulated Canadian media companies — which include Rogers Communications Ltd., Corus Entertainment Inc. and the Canadian Broadcasting Corp. — also complained about the erosion of their businesses from foreign interlopers.

When it comes to solutions, however, unity is harder to come by.

Bell has asked for a simplified regulatory environment so it can compete both domestically and globally.

Rogers said that “over-the-top” services such as Netflix and app-based television can’t continue to get a “free ride” and calls for a regulatory framework that applies rules equally to similar distribution platforms.

Corus would like to see an eventual deregulation of Canada’s broadcasting industry but, in the meantime, calls for incentives, rather than legislative obligations, for private-sector broadcasters.

For its part, the CBC proposed increasing its funding from government so it can be ad-free — thus making more of Canada’s television advertising pie available to its private-sector cousins.

Content piracy was one of the few areas where the domestic companies have spoken with one voice, through the FairPlay coalition.

But Geist — an advocate of net neutrality that doesn’t give preference to one content provider over another — said anti-piracy coalition hasn’t made a convincing case for giving the CRTC a mandate to block websites.

For one thing, Geist said, Canada’s copyright law provides some of the strongest anti-piracy rules in the world.

For another, he added, the CRTC and the proposed Independent Piracy Review Agency shouldn’t be empowered to order internet service providers to block websites that are alleged to be content pirates.

In Geist’s opinion, the regulator doesn’t have the expertise to make judgement calls about the legality of content online because that invariably involves disputes over copyright, intellectual property, hate crimes and defamation.

“It’s courts that are far better suited to be able to weigh the evidence and make those decisions,” he said.

And as for the survival of Canadian content in the digital age, Geist said that there has been actually “massive growth” thanks largely to what Netflix has spent because it needs original content.

“The experience to date is that this represents an tremendous opportunity, not a risk.”