Big telecoms fight calls for an ‘ISP tax’, pitch new OTT rules

Some of Canada’s biggest telecom companies rejected calls to force ISPs to contribute to Canadian programming in their submissions to the Liberal government’s panel reviewing the country’s communications laws, warning it would make internet access more expensive for Canadians. Quebecor Inc., Telus Corp. and Rogers Communications Inc. each rejected proposals to add internet service providers or wireless carriers into the Broadcasting Act and require them to contribute to producing Canadian programming, a proposal some have called an “ISP tax.” “Imposing a tax on ISPs to fund Canadian content production would be counterproductive and inappropriately blur the distinction between common carriers and content aggregators,” Telus’ submission said. “Not only would such a policy conflict with the principle of affordable access; it would also create market distortions that would hinder future investments in broadband networks.” Quebecor said it could ultimately result in higher subscriber bills. ISP levies were pitched during Parliament’s statutory Copyright Act review, it noted, while the CRTC’s Harnessing Change report floated extending the Canadian content contribution regime to other distribution networks like ISPs as a potential policy option. CBC’s panel submission had called for ISPs and wireless providers to pay a “small fixed percentage” of their revenues into Canadian content production. It’s a notable line of attack against such proposals. Heritage Minister Pablo Rodriguez’s briefing binder notes on the Harnessing Change report, obtained by The Wire Report through Access to Information, state that while it’s important to find a way to support content creation, the government is “not interested in an approach that increases the costs of services to Canadians.” Telecom companies also raised issue with foreign over-the-top (OTT) providers such as Netflix Inc. for not paying their fair share, in one way or another. Rogers Communications Inc. requested new rules make OTT providers contribute to Canadian content, something that could be done through a Governor in Council policy direction to the CRTC stating they should “make contributions to furthering Canada’s broadcasting policy objectives.” “In order to contribute to furthering the objectives of the Broadcasting Act and to foster an equitable competitive marketplace, each undertaking should be required to fund, exhibit and provide access to Canadian programming,” the executive summary reads. “This would include OTT services, such as Netflix, Google, YouTube, Facebook, Amazon, DAZN and CBS, all of which are delivering their audiovisual content directly to Canadian consumers.” Telus, meanwhile, rolled out fresh blueprints and took a sharpie to the Broadcasting Act. It’s proposing the new players in the broadcasting sector -- Netflix Inc. and so on -- should be defined based on whether they have control over their programs (for example, through exclusive rights over the programming they offer), and said it’s “high time” foreign content services are acknowledged in broadcast law. It suggested new categories for companies in the Broadcasting Act: ‘Programming Services’, which control program availability in Canada -- services such as Netflix, Amazon.com Inc.’s Prime, and Facebook Inc.’s Watch -- and ‘Content Aggregators’, like BDUs, which “aggregate and curate content by licensing it on a non-exclusive basis,” who under this new system would not need licenses to operate. “The fact is that traditional distribution undertakings are no longer ‘gatekeepers’ standing between programming services and consumers, as broadcasters today can reach consumers directly over the Internet. These facts support a significantly different treatment under a new Act.” The system would still have the private sector invest in Canadian content, but it says it should be streamlined to “focus on the production of content that can compete for the attention of audiences and attain commercial success.” It would cut private broadcasters loose from “obligations to meet extensive social and cultural objectives” with their “home grown” content, in exchange for no longer receiving support from the rest of the broadcasting system, “financial or otherwise.” That would push much of the cultural objectives “currently strewn across so many parts of the industry” over to CBC/Radio-Canada, while ‘foreign’ services would face “obligations commensurate to their access to the Canadian market.” Its proposal also makes a case for why the CRTC should be able to “address anti-competitive concerns stemming from vertical integration” by allowing it to ”issue conditions of licence and make regulations generally which govern the wholesale relationship between programming services and content aggregators.” Quebecor’s submission meanwhile calls for federal and provincial sales taxes to be levied on all Canadian online video subscribers, regardless of whether the companies are domestic or foreign-based. Its submission, written in French, railed against CBC’s past pitches to be released from the shackles of the softening TV ad market. Quebecor argued that advertising troubles the Canadian broadcasting system faces would be exacerbated by withdrawing public broadcaster ad spending from the market -- money it believes would probably just go to foreign digital companies, while an ad-free broadcaster would hurt channels like TVA, who wouldn’t be able to eliminate their commercials. Among the many other big ideas from Telus is removing “substantive Canadian ownership and control requirements” in the Telecommunications Act, transferring spectrum regulations from ISED and and the Governor in Council to the CRTC, mashing the telecom and radiocommunication acts together and removing the Governor in Council’s authority over rescinding CRTC decisions. Quebecor meanwhile opposed changes to who regulates spectrum management and said it wants the three communications acts to remain separate. For its part, BCE Inc. said it is not sharing its submission publicly at this time. The Broadcasting and Telecommunications Legislative Review Panel received more than 2,000 written submissions, some of which have been made public by stakeholders, while the panel has said it doesn’t plan to publish full cache until its report on its consultations is released -- a move that elicited transparency concerns from a number of critics. — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Big telecoms fight calls for an ‘ISP tax’, pitch new OTT rules

News | January 16, 2019

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Big telecoms fight calls for an ‘ISP tax’, pitch new OTT rules

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