‘Everybody knows, nobody can regulate the Internet,’ von Finckenstein says

TORONTO--CRTC chair Konrad von Finckenstein said Wednesday that he doesn’t know whether over-the-top services represent “the globalization of broadcasting” but acknowledged that nobody can regulate the Internet. Following a keynote discussion at the Canadian Telecom Summit, von Finckenstein told reporters that the commission will be gathering information on over-the-top services like Netflix Inc. in a public consultation before determining how to proceed. “Over-the-top is a very fast-moving phenomenon. It’s got people very frightened. Nobody really knows where it goes,” he said. “We’ll get the data by the end of June and then we’ll have to decide, you know, is this part of the constant flux affecting the broadcasting industry or is this really a paradigm shift?” If it is the latter, the chair said he isn’t sure what would happen from a legislative or regulatory standpoint, or whether it will be simply chalked up to the “globalization of broadcasting” with no effective measures to counteract it. “As everybody knows, nobody can regulate the Internet … unless you wanted to use the Chinese model,” he said. A CRTC-commissioned report released Monday warned that over-the-top services could lead American networks to bypass the Canadian system by withholding rights to programming from Canadian broadcasters and offering the content directly online. Von Finckenstein said vertical integration is the corporate world’s reaction to convergence, ensuring that they own all platforms as well as content “so that you have a bargaining chip and you can’t be excluded.” Services like Netflix, he said, complicate that calculation: vertically integrated companies continue to earn revenue as Internet providers, but it’s “not at all commensurate” for cable providers. He suggested a readjustment would be necessary, but didn’t say whether it would happen or when. Von Finckenstein told the conference it would be “a bit dirigiste” to audit companies’ compliance with the commission’s Internet traffic management practices policy, and that it would suggest the implication of wrong-doing. He defended the current approach of responding to consumer complaints. Von Finckenstein also called functional separation—when a provider establishes operationally separate business entities to divide the control of network elements from the provision of service—contentious and costly where it’s been employed. “It’s just not needed and it would be a very costly, unnecessary intervention,” he said. When asked about former industry minister Tony Clement’s public tweeting of his disagreement with the commission’s usage-based billing decision, von Finckenstein said it wasn’t “helpful” but that politicians have the same rights as everybody else. “Sometimes you get them wrong, sometimes you may have unintended consequences,” he said of the commission’s initial decision. “The best thing is to step in early and fix them, so we said let’s review it.” The commission will hold hearings on the review of its wholesale usage-based billing decision this summer. mburgess@thewirereport.ca

‘Everybody knows, nobody can regulate the Internet,’ von Finckenstein says

Broadcast | June 2, 2011

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