Google says no to online regulations as CRTC starts hearings

Services such as Netflix and YouTube would be harmed if Canadian broadcast regulations extended to digital world, Google Canada says

GATINEAU, Que. – Online delivery services such as Netflix and YouTube would be harmed — as would consumers — if regulations for Canada’s broadcast industry are extended to the digital world, says Google Canada.

The content driver issued the warning Monday at the start of two weeks of Canadian Radio-television and Telecommunications Commission hearings looking at how consumers view and pay for TV programming.

Some of Canada’s conventional broadcasters and distribution firms argue that online platforms should be forced somehow to make mandatory contributions to the country’s television programming system.

The CBC, as one example, argues that the CRTC should require unlicensed content providers and distributors with over $25 million in annual revenues to pay into the Canada Media Fund.

Others, including the media fund itself, along with Ontario’s culture ministry, have questioned whether online services should be exempt from licensing and regulation.

But legitimate online services do, in fact, contribute to the broadcasting system through licensing of content, said Jason Kee, Google’s public policy and government relations counsel.

Asking digital companies to contribute to Canadian-content funds, while at the same time not allowing them to benefit from them, would stifle innovation, he said.

And, he added, any forced contributions would in the end result in added costs for consumers, if a contribution mechanism could even be devised and enforced.

“Mandatory contributions would likely increase costs to consumers in the form of increased subscription fees and creators in form of diminished license fees or revenue share for them,” Kee told the hearing.

In his presentation, Kee suggested that instituting an online content contribution system would also face “practical challenges.”

The CRTC opened the hearings, dubbed “Let’s Talk TV,” with the aim of developing new regulations to tackle the dramatic, technology-driven changes that have taken place in the television industry.

Companies including Google and Netflix are now in the mix, offering TV programs streamed online.

Their presence has put the conventional television industry under pressure, straining revenues as advertising dollars move to other media.

The big cable companies are also feeling the effects of change, particularly with a desire voiced by the federal government to move to a so-called pick-and-pay system that would require an unbundling of TV channel choices.

In its submission at the hearing Monday, the Competition Bureau said it supported pick-and-pay, but could not say whether consumers would benefit.

“Prices could go down, they could go up,” said the bureau’s Renee Duplantis.

The bureau also had not come to any conclusion, said Duplantis, on whether consumers would benefit most from a strictly pay-per-channel model, or whether it would be best to go with a proposal from the CRTC that would see a flat-fee bundling of local-only channels, with consumers picking channels one at a time beyond that.

In August, the regulator proposed that Canadians be allowed to choose individual channels on top of what CRTC chairman Jean-Pierre Blais called a “skinny basic” service, with monthly prices capped at between $20 and $30.

The CRTC has also proposed allowing local TV stations to shut down their transmitters, which would require consumers of free, over-the-air programming to pay for TV through one of many service providers.

In opening Monday’s hearing, Blais suggested that rules protecting some channels or broadcasters could be thrown out in favour of new regulations that empower Canadians to get TV programming the way they want it, when they want it.

“Rather than protect specific channels or broadcasters or a particular way of doing business, we must ensure that the television system meets the needs and interests of Canadians, both today and in the years ahead,” said Blais.

But the regulatory changes proposed by the CRTC would harm local TV stations and would not help consumers, says the group Friends of Canadian Broadcasting.

“Pick-and-pay along with the other significant changes on the table … will likely harm local broadcasting, especially local news, which is the kind of programming Canadians think is most important,” the group said in a statement.

“In fact, local, independent broadcasters-stations in small- and medium-sized markets are blunt that the changes could force them off the air.”

The hearings, scheduled until Sept. 19, are expected to hear directly from 118 contributors invited by the CRTC to give presentations.

© The Canadian Press, 2014