Carriers likely to bear brunt of content regulation in future: CRTC-commissioned report

Content providers in Canada could see a future with stable public subsidies and little or no regulation, while telephone, cable, ISPs and other carriers are likely to become established “tax collectors” for content production. It’s a prediction infrastructure providers won’t like, but a leading U.S. economist and media expert warns could be inevitable.In a report commissioned by the CRTC for its 2009 hearings into the future of new media in Canada, Eli Noam, a professor from Columbia University recommends that the commission adopt a two-tier model for regulating television that differentiates between the content and the conduit. For companies that distribute their content via a conventional broadcast network, the Internet or a mobile platform, he recommends a model based on Canada’s film and film distribution industries – one that doesn’t regulate content, but provides direct support through public funding. “If the proverbial level playing field is desired for reasons of competitive equity, this should not be achieved by extending broadcast content regulation to the other two screens, but rather by extending to television content the same substantial absence of regulation that is exists in the content fields of books, newspapers, music, film, and internet,” Noam writes in the report, titled TV or Not TV: Three Screens, One Regulation? He also anticipates that Canadian content requirements for commercial broadcast TV will be eventually replaced by direct content production support and incentives, meaning that “television-specific regulation would have largely disappeared in content." Not so, however, for content carriers who Noam predicts would be subject to ongoing regulation. He recommends that Canadian content be funded from an excise tax on ISPs and carriers that would bhe harmonized with the existing level on cable and satellite TV providers, as well as the use of spectrum sales revenues into a special trust fund.“Thus, for better or worse, over time the political system will increasingly use the infrastructure providers as, in effect, the tax collector for societal information policy goals such as content production, digital divide issues, etc. This will be an unwelcome message to the infrastructure companies, but it seems likely,” the report states.The regulation of television content as it migrates to non-traditional formats—like computers and mobile devices—has been a contentious issue which will feature prominently at the CRTC hearing early next year. A May call for stakeholders’ input in on the future of new media, elicited various opinions, with a majority of broadcasters and ISP companies opposing regulation of television content on the Internet or any fees to subsidize content production. The report outlines that television is “caught in the cross-currents of change,” which is driven by agents like the broadbanding of networks, wireless ubiquity and digital convergence. Tracing the development and emergence of television formats on the Internet and comparing its regulatory and financial regimes in other countries, the report recommends that Canada adopt a single set of rules for regulating television content on televisions, computer screens and hand-held mobile devices.While the CRTC is not bound to accept Noam’s conclusions, they could sway senior policy officials familiar with the economist’s international reputation. Noam, who is director of the Columbia Institute for Tele-Information, is considered a leading expert on media and communications, and among the few economists specializing on the importance of media, communications and the Internet. He has published over 400 journal articles and 19 books, including ones examining telecom and television regulation in countries around the world. Other highlights of the report -While harmonization of regulation is a positive value, inconsistencies arising from too many goals and too many industries are unavoidable.- To solve problems associated with net neutrality, consumers should have the option of paying for quality service to their households, choosing the type of provider they desire and the kind of service. Noam calls this option “enduser sovereignity.”

Carriers likely to bear brunt of content regulation in future: CRTC-commissioned report

Broadcast | September 12, 2008

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