New media content to fall under regulatory lens in February

It's déjà vous all over again for regulating Internet broadcasting. Nearly a decade after ruling to exempt new media from regulation, the CRTC will hold a public hearing February 17 to determine whether new media and mobile broadcasting should continue to be unregulated, or subject to similar access and funding requirements that apply to conventional television broadcasters and broadcast distribution undertakings.In 1999, then CRTC vice-chair David Colville told Canadian New Media, "we have no intention of regulating anything on the Internet." When asked if this is the final word on the Internet , even as it evolves to include full-motion video, he replied, "That's correct".Never say never when it comes to federal regulation. The commission's 1999 report did leave open the door for reviewing this issue in the future, if certain preconditions arose:  insufficient levels of Canadian content on the Internet;  evidence that the new media environment is having an impact on various aspects of the business model of traditional broadcasters; and  increased availability of high-quality video programming on the Internet.The February hearing (2008-11) will be different from the one a decade ago. Then, Internet broadcasting was in its infancy: only 26% of Canadians reported using the web (it's now 73% according to Statistics Canada), there was no YouTube, no Facebook and no video streaming.Since that time, the divide between conventional broadcasting and receiving television and radio over a computer or mobile device has narrowed significantly. As such, there is a very real possibility the CRTC will decide that regulatory intervention is needed to increase funding for new media content creation, and perhaps, to give some type of priority carriage status to Canadian content on certain Internet platforms.The business environment for video and audio on the Internet has evolved considerably over the past decade. For example, in 2007, Canadian online advertising revenues climbed to $1.2 billion, 38% over 2006 levels, and quadrupling in just over five years. The Interactive Advertising Bureau of Canada predicts online advertising will hit $1.5 billion this year, a fully 25% more than in 2007.In comparison, conventional radio and television revenues (including the CBC), earned $3.45 billion in 2007, according to Statistics Canada (television, radio). Interestingly, in the 1999 proceeding, the Canadian Association of Broadcasters said the new media exemption should be reviewed once Internet advertising revenues equal 10% of total advertising in traditional broadcast media - it is now at about one-third. However, other preconditions recommended by the CAB haven't happened, including: a rapid decline in TV viewing and radio listening, breakdown of the Canadian rights market, and widespread availability in new media of US broadcast or cable services that are not authorized for distribution in Canada.While the commission says it's open minded to new interpretations, it is going into this hearing with the preliminary view that the definition of broadcasting should be technology neutral, meaning it doesn't matter if content is downloaded, streamed or transmitted peer-to-peer.The CRTC also stresses that it isn't concerned with user-generated content, which will be a relief to many consumer groups and bloggers who have strongly advocated against sweeping regulations that infringe on the rights of individual Canadians. However, the commission does ask whether a distinction should be drawn between other types of Internet broadcasting, such as professional versus non-profession or content aimed at commercial versus non-commercial use.Net neutrality not on the table yetOne issue the CRTC isn't likely to reconsider is its conclusion in 1999 that it does have the power under the Broadcasting Act to regulate certain types of new media. It reiterated that view last year when it exempted broadcasting services received on mobile devices. What this hearing will decide, however, is whether circumstances have changed significantly to warrant an end to exemptions and the beginning of Internet regulation. And if so, what type of regulation should it be?Its options include: licensing and foreign ownership limitations as well as Canadian content quotas or contributions to Canadian programming.The CRTC also won't be dealing with net neutrality in this hearing. A separate telecom hearing is expected sometime next year on that issue.Other issues it won't deal directly with, but has said it will consider as part of broader policy deliberations include copyright, direct government subsidies and amendments to the federal Income Tax Act.The CRTC received 65 submissions in response to its call for comments related to the scope of its anticipated new media hearing. Interventions for the February hearing - due December 5 - will likely yield even more interest. In 1999, about 1000 individuals and companies appeared at the public hearing or submitted briefs, and although there were conflicting recommendations, they generally agreed that the CRTC should not take a heavy-handed approach to regulating new media.There will likely be less agreement this time around. Several groups, including private broadcasters, Internet service providers and the Canadian Chamber of Commerce, are already calling for a hands-off approach to regulating online broadcasting, saying new media is still in its early stages of development and that regulation will stifle Canada's competitiveness.Content producers are expected to argue for more regulatory intervention. The Aboriginal Peoples Television Network, for example, says the "assumption that the Internet is beyond regulatory control" is incorrect and has been pedalled to serve the interests of large new media companies. APTN calls for an "appropriate" regulation that would serve the public interest.

New media content to fall under regulatory lens in February

Broadcast | October 16, 2008

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