Broadcast content producers propose levy on ISPs

As the CRTC reviews submissions on regulating new media, broadcast content producers are calling on the Commission to impose a levy—similar to what BDUs contribute to the Canadian Television Fund—to support Canadian content on the Internet. As the CRTC reviews submissions on regulating new media, broadcast content producers are calling on the Commission to impose a levy—similar to what BDUs contribute to the Canadian Television Fund—to support Canadian content on the Internet.In a move that calls into question whether ISPs are increasingly functioning as BDUs, broadcast content producers under the aegis of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), say such a levy is necessary as broadcasting migrates to the Internet with advances in technology.“We believe not only does there need to be shelf space for Canadian content in broadcasting, but there has to be incentives for that production,” says Stephen Waddell, ACTRA’s national executive director.In its submission, ACTRA claims that since 50% of traffic on the Internet is composed of broadcast content, it’s time the CRTC recognizes that the Internet now constitutes an “element” of the broadcasting system.“And when ISPs distribute broadcasting, in that sense, they are acting as broadcasting distribution undertakings.”Waddell says a fund to which ISPs contribute an annual fee should only be 2.5% of total revenues, which would raise $70-80 million a year. In its submission, ACTRA defends this amount, saying it is not likely to add an extra financial burden on BDUs, which already contribute 5% of their revenues to the CTF, since profits have been on the rise. Last year residential broadband revenues for ISPs amounted to $2.912 billion, according to ACTRA.However, the Canadian ISP Alliance, which was formed to respond to the CRTC call for input on the future of broadcasting in new media, opposes a mandatory contribution regime, arguing that it contravenes the Broadcasting Act as well as the Telecommunications Act. The Alliance, which represents Rogers, Bell Canada, Bell Alliant, TELUS, EastLink, Cogeco, MTS Allstream, Quebecor Media, Shaw and SaskTel, argues that ISPs do not engage in “broadcasting” or operate as “broadcast undertakings” as outlined in the Broadcast Act. “ISPs are telecommunications service providers that have been, and continue to be, appropriately regulated under the Telecommunications Act,” said the submission by the Alliance.In a move that could hint at a willingness to challenge the CRTC should it proceed with imposing a mandatory regime, the Alliance has employed the law firm Fasken Martineau Du Moulin to review the question of a levy and attached a legal opinion to its submission.“Our view is reflected in the document, but to elaborate we oppose the idea that the CRTC should—or even can—impose a new tax to somehow support new media,” says Jason Laszlo, associate director of media relations, Bell Canada.“The current environment does not justify regulatory interference of any kind and the Commission does not have the authority to impose such an ISP levy based on existing legislation.” However, Waddell says a mandatory levy will not contravene the Broadcasting Act. In the past, ACTRA and other like-minded organizations have released poll results that show that 69% of Canadians support a levy on ISPs to fund production of Canadian content on the Internet. Michael Geist, an Internet law professor at the University of Ottawa, says the responsibility of Canadian content on the Internet rests with the government, adding that there is no need for a mandatory levy. “Frankly, I am not sure if it is needed. It also raises a lot of legal questions under the Broadcasting Act,” he says.

Broadcast content producers propose levy on ISPs

News | 07/16/2008 7:09 pm EDT

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