Any CanCon ISP tax should consider ‘economic consequences’: CNOC lawyer

TORONTO — The heritage ministry and the CRTC should engage in a more balanced discussion on what to do about taxes in support of cultural content, as both seem to be moving in different directions, the crowd on the final day of the Canadian ISP Summit in Toronto heard Wednesday. The fact that there even is discussion by the heritage ministry about the possibility of taxes on carriers, such as one on ISPs, is “indicative of a structural problem that we have, and that is the divided nature of the CRTC’s mandate” and the ministry’s approach to it, Christian Tacit, counsel to the Canadian Network Operators Consortium (CNOC), said on a panel discussing regulatory issues. The heritage ministry approaches such questions “from the point of view of cultural support and they are not as focused on the economic consequences,” he said. Heritage Minister Mélanie Joly is consulting on ways to support Canadian content in a digital age, and the idea of taxing ISPs to support content has come up in the context of that discussion. In April, the CRTC held a hearing on basic telecom services, which included discussions about ensuring affordable telecommunications services are available to all Canadians. Though he acknowledged that the heritage ministry would understandably have a content-focused bias, Tacit concluded: “I think what we need is to have a little more balanced dialogue, where both of those entities are maybe consulting together going forward and thinking about both sides of that.” Tacit said looking at it from the Innovation, Science and Economic Development (ISED) ministry, “which also has responsibility…in the area of telecommunications policy, this notion doesn’t really pass the smell test because it creates a significant amount of economic and market distortion.” University of Ottawa law professor Michael Geist, who was also on the panel, has previously argued that a move to tax ISPs could make affordability a problem and could undermine ISED’s innovation agenda, part of which includes a rural broadband program. He said Wednesday ISPs also have a role to play in ensuring affordability. “Many of our Canadian telecom providers haven’t done enough to meet, what I would see as their responsibility, that there is affordable access to the communities that they serve,” Geist said, noting that the CRTC’s basic telecom services “succeeded in pushing some of the larger telcos to finally move forward with more community programs to try to find ways to address some of the access and affordability issues.” Both Telus Corp. and Rogers Communications Inc. have announced such initiatives this year. But Tacit said he found even the concept of an ISP tax difficult to grasp. “Why you would impose a tax on common carriage to support content? It’s just not something we’ve typically done,” he said. “We’ve imposed obligations on broadcasters…to support content, and I think that should pretty much stay that way and let’s not mix the two in creating economic distortions in the process.” Another panelist posed the question of what the benefits of supporting such cultural content are. “Ultimately all the money that is collected is to fund cultural production in Montreal and Toronto,” former CRTC commissioner Timothy Denton said. “One of the great advantages of the Internet is to liberate us from the closed universe of broadcasting and … a domestically controlled, tightly controlled, infinitely controlled market,” Denton said. He added that the Internet has loosened the grip on Canadians of “broadcast television as a technology and as a regulatory regime … and I don’t want to see anything that sacrifices the gains we have made.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Any CanCon ISP tax should consider ‘economic consequences’: CNOC lawyer

Broadcast | November 9, 2016

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Any CanCon ISP tax should consider ‘economic consequences’: CNOC lawyer

Broadcast | November 9, 2016

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