Regulation would hurt nascent mobile video market: CWTA

The Canadian Wireless Telecommunications Association argued before the CRTC this week that imposing a levy on wireless operators to support the development of Canadian content online is nothing more than a cash grab. Bernard Lord, president and CEO of the CWTA, told commissioners mobile broadcasting and video services are complementary to traditional broadcasting and that imposing an ISP levy for wireless operators would stunt the development of these services. “In proposing a contribution tax calculated as a flat percentage of overall gross revenues, the levy amounts to a little more than a cash grab for revenues wholly unrelated to broadcasting,” Lord said in his opening remarks. “We echo the view of the Competition Bureau that ‘an ISP contribution regime is not the desirable instrument.’ We submit that this is equally true for a contribution regime applied to the wireless industry.” It has been 10 years since the New Media Exemption Order was issued and two years since the CRTC gave wireless carriers a pass on regulating their mobile TV services. In that time, according to Lord, mobile broadcasting services have remained a niche application without any evidence to suggest they are having a detrimental impact on traditional broadcasters. Citing the CRTC’s own 2008 communications monitoring report, he said only 2% of wireless subscribers have watched a video on their handset and only 1% have used mobile TV. “In our view it is crucial that the commission maintain the mobile broadcasting exemption order so that the market and consumer demand can shape the service offering,” he said. Under questioning from the commissioners, Lord stuck to his key messages that mobile video and mobile broadcasting are still at a nascent stage and regulation would only stunt their development. Commission chair Konrad von Finckenstein wondered why the association and its members would be opposed to a levy if the revenues generated from mobile broadcasting are low, meaning their contribution would be low as well. Lord said it’s the principle. “That this is at such early stage in the industry, adding any fee is sending the wrong signal,” he said. Len Katz, vice-chair of telecommunications at the CRTC, put the same question to Lord in a different way. “The converse holds as well. If we are here five years later and the industry is generating 50% of its revenue coming from professional video, my guess is you would be sitting there saying it’s too late to do it now; the horse is out of the barn,” he said. “It’s not because the tax is perceived to be a small amount that that is sufficient reason to say, well, let’s tag it on,” Lord responded. “I submit that would not be proper public policy to simply a tax because it doesn't amount to a lot of money. Because this is a nascent, infant new industry we have to make sure that we don’t put any barriers at all to reduce its capacity to innovate, to create, to evolve.” Katz pressed the CWTA chief executive on the issue of mobile broadcasting being complementary or a substitute. Content creators, he said, argue mobile broadcasting should be subject to a levy because it’s contributing to the overall broadcasting system, regardless of whether the service is complementary or a substitute. Should a levy only apply to services that are a substitute to traditional broadcasting?, Katz asked. Lord said the evolution of mobile video has been one to complement existing broadcasting services. “If anything it’s providing new venues for traditional broadcasters to create brand loyalty, to provide additional content but in a different way,” said. “And we have not seen in Canada so far and, frankly, I don’t think we have seen anywhere around the world, a substitution for the traditional broadcasting methods for these new mobile devices. The technology is not there.”

Regulation would hurt nascent mobile video market: CWTA

News | 02/26/2009 8:46 pm EST

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