Rogers, Shaw argue against ISP levy
Cable and internet service providers oppose regulation of new media
Cable and internet service providers Rogers and Shaw told a CRTC hearing Tuesday they were strongly against proposals to impose levies on ISPs to support Canadian content online.
The two companies, however, presented very different views on how to meet the needs of Canadian content providers in promoting their programming in a wide open internet or wireless world.
Rogers proposed an online video platform similar to Hulu in the U.S. as a means of ensuring Canadian broadcasting content has a home on the internet, a move it says would eliminate the need for the CRTC to impose regulations on new media in Canada.
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.
In that sense, the service might resemble the video site Hulu, which is backed by News Corp. and NBC Universal and consists mainly of network-produced shows, such as NBC's The Office and Fox's The Simpsons.
"This would solve many of the problems addressed during these hearings," said Rogers vice-chairman Philip B. Lind.
CRTC commissioner Leonard Katz questioned whether such a service would be legal under provisions in Canada designed to restrict "tied selling," or making one service available only if another service is purchased.
Engelhart said online services tied to other broadcasting services "is not an uncommon model," citing Sirius Radio's online services available only to Sirius satellite radio customers as an example.
But Shaw Communications Inc. president Jim Shaw told the CRTC panel Tuesday he didn't believe Rogers' plan of a specialized site would work as a business model in the wide open internet.
Shaw said he was fundamentally opposed to the idea of setting aside funding for Canadian content providers, either through a levy or any other tax.
"The internet is about the World Wide Web, not the Canadian Wide Web," Shaw told the hearing.
Courts to decide legality of ISP levy: CRTC commissioner
The CRTC panel has for eight days heard a number of proposals on how to ensure Canadian content is given a prominent place on new media platforms, including imposing a levy on internet service providers and forcing ISPs to give preference to Canadian content.
Rogers, Shaw and Cogeco Cable Inc. all told the commission on Tuesday that these measures are impractical.
"The barriers to broadcasting on the internet cannot be remedied by an ISP levy," said Rogers vice-chairman Lind in his opening remarks. "Our position is the imposition of an ISP levy would be harmful to the growth of the internet."
The company said any extra costs to ISPs would cost consumers as well.
Rogers also argued an ISP levy was unlawful under the Broadcasting Act, but CRTC chair Konrad von Finckenstein disagreed, and said settling that issue, should the CRTC decide to impose a levy, would be up to the courts to decide.
Engelhart argued that ISPs function as telecommunications providers and are not broadcasters, and therefore shouldn't be subject to broadcasting regulations.
"ISPs are pipes, not broadcasters," Engelhart told the commission. He likened their role to that of a Telesat satellite that transmits satellite signals. A company like Starchoice is the broadcaster in this case, he said, not Telesat.
Shaw agreed, saying his company doesn't look at the content.
"Internet traffic is doubling every 14 months, but we have no idea what it is people are watching," he said.
Tracking Cancon difficult, Rogers says
As for other measures designed to track and give prominence to Canadian content, Rogers said such measures were either beyond the ability of the company or impractical.
Engelhart said it is technically possible for an ISP like Rogers to give prominence to certain websites using a "white list," in much the same way pornography filters are used to block websites that are blacklisted. The challenge, he says, is coming up with a list of which sites represent "Canadian" content.
But University of Ottawa professor Michael Geist pointed out in his blog Tuesday that a ".ca" domain makes "a very poor metric for identifying Canadian content" as foreign companies can obtain a .ca website as long as they acquire a Canadian trademark, while many Canadian companies choose to use ".com" domains.
Rogers' chief strategy officer Mike Lee also told the commission that tracking Canadian content by server is also impractical, as content Rogers packages for broadcasters such as the CBC can come to Canada via U.S. servers.
With measures designed to regulate ISPs lacking or beyond the scope of the Broadcasting Act, Rogers told the commission it feels the best way to address concerns is through its role as a broadcaster.
While Rogers had previously outlined its opposition to a levy on ISPs, it's the first time it proposed its planned broadband video streaming service as an alternative solution to the issue of how to get Canadian content on the internet.
The company also dismissed claims made Monday that wireless carriers were creating "walled gardens" for mobile devices that prevented real competition in the wireless arena.
'Big wide-open pipe'
Score Media Inc. and Pelmorex Media Inc., which owns The Weather Network, both expressed concerns about carriers giving programs preferential treatment to some services over others on mobile devices.
But Engelhart said closed mobile devices are becoming an obsolete business model.
"It has all been a flop," he said. "We're not gatekeepers keeping them out, we're standing at the gate begging people to come through the gate and they're not coming.
"We're moving away from the thing Pelmorex was concerned about and moving to a big wide-open pipe, so a lot of these things people are complaining about won't be a problem," he said.
In an earlier presentation, advertiser Astral Media Inc. called for the new media exemption to remain, arguing new regulations would hinder progress in accessing Canadian content.