Cable industry launches campaign to bolster federal support for new media

The Canadian cable industry is taking advantage of a digital policy vacuum in the federal government to lobby for a radical change in Ottawa's communications framework, one that stimulates development of digital content and lightens the regulatory load for cable operators. The industry's proposed policy framework is outlined in a 34-page report released April 3 by the Canadian Cable Television Association (CCTA) at its annual convention in Toronto. Designed to be both visionary and provocative, the document dares to challenge industry "taxes", subsidies and other protectionist measures that have fostered the rise of a strong Canadian broadcasting industry, including a dominant cable industry. The preferred approach in today's global information economy, according to the CCTA, is one that provides incentives to "encourage integration, build advanced infrastructure, fund research and development and drive new media". THE FACES BEHIND THE E-TV REPORT Janet Yale: President and CEO of the CCTAFormer VP at AT&T Canada.Former CRTC director general of the Cable, Pay and Specialty Services Branch,and the Telecommunications Policy Branch.Michael Hennessy, Senior VP policy & planning, CCTAFormer VP, government & regulatory Affairs for Bell Mobility and Mobility CanadaFormer director general of Competition, Convergence and Social Policy, CRTCSuzanne Blackwell, VP economic research, CCTAFormer senior VP, AT&T CanadaFormer chief of regulatory policy, Telecommunications Branch, CRTCTo achieve this goal, the document calls on Industry Canada, Canadian Heritage, the Canadian Radio-television and Telecommunications Commission and the Competition Bureau to work together to formulate a new policy approach to technology, culture and commerce. "This new framework should provide an integrated approach to issues associated with information technology, communications, media, copyright, competition and culture," states the document, entitled, E-TV, The Integration of Culture and Commerce. The association also wants the government departments to form a working group that would work within the public and private sectors to deal with targeted issues. Critics of the cable industry will view the report as decidedly self-serving. For example, the CCTA says that cablecos and other broadcast distributors should be allowed to own more TV channels, foreign investment levels should be raised, and small cable operators should be free from regulation. To its credit, however, the CCTA has attempted to look beyond its industry's immediate interests and recommend solutions that would bring about a more coordinated approach to how this country deals with digital content, regardless of network infrastructure. (The paper credits Adam Froman and Sam Punnett from MultiMediator Strategy Group Inc, a Toronto-based consulting company, with helping the CCTA to "think outside our regulated industry box". Sharing TV funding with new mediaOn the funding side, the CCTA suggests that new media producers be granted a larger slice of television and film production funds, such as the $200-million Canadian Television Fund (CTF) and Telefilm Canada. The CCTA also wants the CRTC to permit broadcasters and broadcast distributors to divert part of their mandated content payment - described by some as a "culture tax" - to equity in new media companies. Under the current system, cablecos are required to contribute five per cent of their gross revenues to production funds like the CTF. "New media players are often orphans when it comes to cultural policies - the majority of funds are still targeted to film and television production," the document states. A lack of funding for new media research and development has been another longstanding complaint of application developers and digital content creators. The CCTA says this is partly because Canada has taken an "uncoordinated" approach to investing in intellectual property. The document also takes aim at Industry Canada?s bountiful portfolio of R&D funding programs, saying they should be broadened to include new media applications. "Government, as a first step, has to reintegrate culture into its economic strategy and broaden R&D policies to capture the development of multimedia applications", the association states. "At the same time, funding for R&D often focuses on hard product or applied research rather than the development of new media applications." Access to financial capital is another growing issue of concern, more among network builders than digital content creators. The CCTA says the government needs to shift industry's capital reliance from public hybrid funds to privately managed venture capital funds. Foreign ownership restrictions, as they apply to broadcasting and telecommunications, also appear to be on the CCTA's radar screen. A new report by Wall Communications Inc, cited in the CCTA's paper, concludes that foreign ownership restrictions reduce infrastructure development, result in higher costs for capital, and depress stock values. The association argues that without a financial incentive to build out broadband networks, Canada's new information economy will lag behind other countries, particularly the U.S. The CCTA's next moveThe association emphasizes that its discussion paper is "stage 1 of a process for public policy change". Its next step will be to meet with representatives from various industry sectors, including broadcasters, producers, creators and the IT sector, to flesh out a more detailed strategy. The CCTA hopes to produce more detailed structural proposals for government consideration by the end of the year.

Cable industry launches campaign to bolster federal support for new media

Broadcast | April 6, 2000

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