Internet service providers large and small warned the CRTC against imposing regulations to promote the production of Canadian content for new media, arguing such measures would undermine the growth of the internet.

And echoing previous comments made by Rogers and Shaw, large carriers Bell Canada, Telus Corp., MTS Allstream Inc. and Quebecor Media Inc., all put forth the opinion that a levy on ISPs would be illegal under the Broadcasting Act.

It was the final day of scheduled hearings in the Canadian Radio-television and Telecommunications Commission's look into whether to continue to exempt new media communications from broadcasting regulations.

Artists groups and broadcasters had previously promoted the idea a three per cent levy on ISP revenues as a means of ensuring Canadian content has a home in new media, but ISPs appearing before the panel on Wednesday were unified in their opposition to the idea.

In a presentation reflecting the other large ISPs, Bell Canada senior vice-president of regulatory affairs Mirko Bibic said such measures would be illegal, a position first raised at the hearings by Rogers Communications yesterday.

Telus director of broadcast regulation Ann Mainville-Neeson agreed, saying new media broadcasting should not be considered under broadcasting regulations without the explicit direction from Parliament.

CRTC chairman Konrad von Finckenstein has said settling the issue, should the CRTC decide to impose a levy, would be up to the courts to decide, setting up a potential legal battle.

Bibic said the ISP levy proposal was also inefficient and unnecessary, and pointed to Heritage Minister James Moore's recent consolidation of two funds into the Canada Media Fund as an example of where Canadian artists are already served.

"There have never been more resources available," he told the CRTC panel.

What's Canadian?

Quebecor president and CEO Pierre Karl Peladeau agreed, telling the panel an ISP levy would be a tax on the consumer and would add more regulation, regulation that is at odds with an open internet.

One facet of the hearings has been the CRTC's quest to determine whether or not ISPs are capable of distinguishing content on the internet as "Canadian" for the purposes of tracking Canadian content. As with yesterday's submissions from Rogers, Shaw and Cogeco, ISPs told the panel today such methods were either beyond their means or wholly unreliable.

Representatives from MTS, Quebecor and Telus also cast their doubts on a business model Rogers Communications proposed yesterday as a means of ensuring Canadian broadcasting content has a home on the internet.

Rogers' proposed service for broadband video wouldn't require that a consumer have Rogers as an internet service provider, the company told a Canadian Radio-television and Telecommunications Commission panel Tuesday looking into whether to regulate new media broadcasting over the internet and wireless.

It would, however, require the consumer to be a Rogers' cable subscriber, although Rogers' head of regulatory affairs, Ken Engelhart, said the company was open to partnering with other cable providers on the service.

Hard on the small ISPs

Von Finckenstein likened the idea to a "cable PVR," but the three companies said they doubted such a model would thrive in an open internet where content was available to consumers without the use of a portal.

Bell Video Group president Gary Smith said the idea could have merit, and said it was similar to Bell's Bell TV and Bell Video Store, two services Bell is experimenting with.

Representatives from small internet service providers also appeared before the commission on Wednesday, arguing a three per cent levy would undermine the businesses of many small ISPs, most of whom have fewer than 20,000 customers.

"For our members, a three per cent levy on revenues represents the loss of a full-time job or the elimination of the marketing budget of a small ISP," said Thomas Copeland, the president of the Canadian Association of Internet Providers.

"A three per cent levy would be greater than the net profit of many small ISPs," said Copeland. He and representatives from small carriers RipNET Ltd and Barrett Xplore Inc. argued small ISPs should be exempt from any measures imposed on ISPs, a notion that seemed to carry weight with the CRTC panel.

Interested parties have until March 27 to make their final submissions to the CRTC.