Canada urged to follow Australia’s lead, eliminate broadcast licences

Canada should follow Australia’s lead and consider getting rid of “anachronistic” broadcasting licences, Malcolm Long, a member of the Australian Convergence Review Committee, told The Wire Report in an email interview. “I think it is definitely worth considering,” Long, also a principal consultant with Australian firm Malcolm Long Associates Pty Ltd., said in an emailed statement to The Wire Report this week. “It seems to us that the licensing of communications activities that do not require spectrum is one of those broken concepts that will not survive convergence,” he said. The Australian Department of Broadband, Communication and Digital Economy in 2011 established the Convergence Review Committee, a panel of experts, to examine media and communications regulation “and assess its effectiveness in achieving appropriate policy objectives for the convergent era,” the committee’s final report, released at the end of April, said. The committee held consultations and public forums throughout 2011 that produced more than 340 submissions and more than 28,000 general comments for review, according to the report. The report concluded that industry players and the public feel the Australian broadcasting sector is over-regulated in an era of online distribution and abundant, accessible content. The government and industry could save money if Australia abandoned broadcasting licences and initiated a “market-based approach to pricing broadcasting spectrum,” the report said. “This would replace the existing approach of charging commercial free-to-air broadcasters licence fees, which are calculated as a percentage of revenues,” it said. “Instead, existing holders of commercial broadcasting licences should be issued with spectrum licences planned for the supply of broadcasting services.” Long said government efforts to save industry players financial and other regulatory burdens could pay dividends for consumers in the long run. “Content and communications suppliers on the Internet do not need licences and having them for legacy services, apart from spectrum use, will become increasingly anachronistic,” he told The Wire Report. “There are other ways to regulate activities, through registration and class licences, for example, which do not require the issuance of a licence to perform a communications function that should be freely available to citizens,” the report said. Broadcasters would save money under a spectrum licensing model, the report said, without providing figures. Jay Thomson, vice-president of broadcasting policy and regulatory affairs at the Canadian Media Production Association (CMPA), said Canada would need to conduct a review of similar scale before it could consider abolishing broadcast licences. “Whether that is the right solution for Canada remains to be seen, but I think we need to undertake the exercise,” he said in an interview. “We have not had any kind of comprehensive look at the future of the broadcasting-communications industry, the future of regulation, the future of Canadian content support mechanisms for a very long time,” he said. Thomson said any Canadian effort to do away with broad licences would have to replace the regulatory support mechanisms for content production built into Canada's licensing system. Under the Broadcasting Act and CRTC broadcasting regulations, broadcast distributors must contribute a percentage of their revenues into Canadian content funds. Broadcasters are also required to spend a portion of their programming funds on Canadian content and fulfill Canadian content quotas during prime time. “If there’s an alternative approach to licensing that’s more efficient and equally effective, then that’s fine, but we can’t just get rid of licensing without recognizing that there are these support mechanisms that licensing ensures are followed,” he said. “They’ll need to be replaced with something.” David Ellis, a communications instructor at York University, said Canada should consider following Australia’s lead. He said the current Canadian system has created “a complicated bargain” in which broadcasters are required to produce or license unprofitable Canadian programming as a condition of licence. “In return, they have protections that have allowed them to make more money than they would have in a competitive marketplace,” he said. Ellis said broadcasters would be forced to operate under a more market-driven approach if Canada eliminated the current licensing regime. He said this would benefit consumers. Ellis said the rise of over-the-top, online content services have precipitated a need to re-examine Canada's broadcasting system. “It’s time for us to do a real cost-benefit analysis,” he said. “How many in this current system are benefiting, and is the rest of the population being left out in the cold, unprotected from unreasonable service terms and rates for high-speed access to the Internet?” He added: “That affects the welfare of a lot more Canadians and would have a lot more direct tangible benefits than protecting and subsidizing Canadian content on television.” Michel Arpin, former CRTC vice-chair of broadcasting, said Canadian broadcasters would likely welcome a less costly licensing regime, which is burdensome for companies and regulators. “I could assure you that broadcasters will be happy with that,” Arpin wrote in an email. He said a market-based approach to spectrum licensing would cause problems for over-the-air broadcasters in remote and rural areas. “Generally speaking, the licences that cover large regions have a sparse population to serve, and it is these broadcasters that have the greatest number of retransmitters to cover that territory … A system based on spectrum consumption will be not affordable for such a broadcaster,” he wrote. “The licence fee structure based on a percentage of revenues is more equitable and has proven to be working.” While the Australian convergence review report generally leans towards deregulation of the broadcasting sector, it calls for continued regulation in four areas: media ownership, basic content standards, and the production and distribution of local Australian content. Long said it is now up to the Australian government to consider the committee’s report and to respond to its recommendations in public. “The government has not put any timing on this,” he said. “Work is currently happening in the Department of Broadband, Communications and the Digital Economy on the report, which will provide material for the Government’s response.” news@thewirereport.ca

Canada urged to follow Australia’s lead, eliminate broadcast licences

Broadcast | June 1, 2012

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