ISPs are “broadcasters”; should kick in $72 million a year for online Cancon: Grant

ISPs are no different than BDUs under the Broadcasting Act and, as such, should be mandated to support Canadian new media content, a leading communications lawyer told delegates at the Canadian Film and Television Production Association's(CFTPA) Prime Time conference in Ottawa last week. In his presentation Reinventing the Cultural Tool Kit: Canadian Content on New Media, McCarthy Tétrault LLP senior counsel Peter Grant drew comparisons between ISPs and BDUs, and noted therefore that a contribution regime similar to the Canadian Television Fund could be warranted from the ISPs. " states that ‘each element of the broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming,'" said Grant. "Since, as we have seen, about 50% of the traffic on the Internet may be broadcasting, it's hard not to acknowledge that the Internet is now ‘an element' of the Canadian broadcasting system. And when ISPs distribute broadcasting, in that sense they are acting as broadcasting distribution undertakings." Using the same rationale that only 50% of Internet traffic is broadcasting, Grant sets his proposed levy at 2.5% of ISP revenues, or half of 5% BDUs contribute to the CTF. Last year ISPs had residential broadband revenue of $2.9 billion, so a levy would produce $72.8 million a year. Grant also notes that Canadian content on the Internet is divided into three categories; user-generated; inexpensive, commercial content such as news and sports; and high-quality, relatively expensive programming such as drama and documentary. It's this latter category that he says should be financed by the ISP levy. Of course, the CRTC would first have to amend its New Media Exemption Order before it could impose such a levy, but Grant believes the regulator could do this and still exempt websites and ISPs from other regulation. In addition to the ISP levy, Grant said there are other tools in the kit to stimulate Canadian content on new media. The following 10 components together comprise his regulatory action plan for new media: Focus on high-quality, relatively expensive audiovisual programming. It is the hardest to finance and could include a wide cast of independent producers. The CRTC needs to acknowledge that ISPs and cell phone companies are now acting as BDUs. The commission should support and encourage involvement by the CBC in new media; a proactive role for the public broadcaster is a crucial part of any new media strategy. The CRTC should introduce or maintain expenditure requirements as a percentage of revenue for Canadian priority programming on all private sector television platforms. Revenue on affiliated television websites should be included as part of the regulated revenue for the purpose of expenditure requirements on over-the-air television, pay and specialty services. The commission should impose the aforementioned ISP levy to support new media Canadian content. The majority of money from an ISP levy should be allocated to independently administered new media funds. ISPs should be permitted to spend a small portion of the levy on Canadian content themselves if they commit to enhanced promotion and placement of Canadian sites and content. The CRTC should maintain a watching brief on cell phone audiovisual subscriptions. The commission should support the creation of new or augmented websites by broadcasters and producers to promote Canadian content. Poll shows Canadians support ISP contributions Also on Friday, the CFTPA, Alliance of Canadian Cinema, Television and Radio Artists, the Directors Guild of Canada and the Writers Guild of Canada (WGC) released results of a Harris/Decima poll showing that 69% of Canadians believe that ISPs should be required to help fund the production of Canadian digital media content. Also, 73% of Canadians agree that wireless service providers should be required to help fund the production of Canadian digital media content and 84% agree that the federal government should work to ensure that Canadians have Canadian content choices available to them on all media platforms. "Though Internet advertising revenues continue to grow, Canada is falling behind in the development of new media content," said Maureen Parker, executive director of the WGC. "New media providers must invest in content development in Canada. This is the only way to differentiation in the marketplace, and will help secure Canada's place in the digital age." Harris/Decima surveyed 2,038 people between January 10 and January 21, 2008. A sample of the same size has a margin of error of 2.2%, 19 times out of 20.

ISPs are “broadcasters”; should kick in $72 million a year for online Cancon: Grant

Broadcast | February 25, 2008

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