Phase 2 of CRTC TV review asks about OTT regulation

The CRTC is asking Canadians for feedback about Canadian content in online television services and their adherence to programming standards in an online questionnaire released Tuesday as part of Phase 2 of its review of television services in Canada. In a section about online programming, the CRTC asks respondents whether they would be willing to pay extra to have more Canadian programming available within online services, and in order to have online services provide closed-captioning and adhere to programming standards. The questions imply the regulator is reconsidering its previous stance not to regulate over-the-top services like that provided by Netflix Inc., said Barry Kiefl, president of research group Canadian Media Research Inc. “It seems to me that is certainly something they must be wanting to consider,” he said in a phone interview. “I’m sure they must be, with the reported penetration now of Netflix and all of the various services that are available,” he added. Netflix’s penetration in Canada is growing — consulting firm Solutions Research Group said last month the service reaches three million Canadian homes — while services like Crackle, which is ad-supported and allows viewers to watch movies for free, are also competitors to traditional TV channels. In its questionnaire, the CRTC asks respondents whether they would be willing to pay an online service an additional 50 cents per month to have access to more Canadian programming, as well as whether online services should be required to adhere to programming standards and provide closed-captioning, and whether respondents would be willing to pay “a few additional cents per month” for them to do so. In the section on online services, the CRTC also asks “if streaming content from online services that meet the above requirements didn’t count against your Internet access data cap, would you be willing to pay a small flat fee of $5 per month to cover increased usage costs?” The questionnaire, called “Choicebook,” also has sections covering pick-and-pay options, sports programming and signal substitution, among others. It follows a report released last month following the first phase of consultation. The consultation, called “Let's Talk TV: A Conversation with Canadians,” will have three phases, ending with a launch of a public proceeding starting in the spring of 2014 to review any proposed changes to the TV broadcasting system. Kiefl said the only way the CRTC could mandate that over-the-top services provide closed captioning is if it licenses them. Alan Breznick, a media, telecom and technology analyst at research group Heavy Reading, said he doesn’t think it’s likely the CRTC would regulate online services. “I wouldn’t put it beyond them to reconsider it, but I would still tend to doubt they would do that because they have stayed away from regulating Internet content and regulating the Internet, and this would be a big step for them to do something like that,” he said in a phone interview. He noted that the CRTC has been consistent in its position that “it wasn’t their place, it wasn’t their role; they wanted to see how the Internet developed first before deciding on anything like that.” Breznick said he found the question about whether viewers would be willing to pay an extra 50 cents for more Canadian programming interesting, and added that he wonders, if the CRTC is considering regulation, whether it would do so by “requiring online services to have a certain percentage of Canadian programming, just like they regulate broadcasters and cable operators now.” Under Canada's broadcasting regulatory framework, over-the-top services benefit from the CRTC’s exemption on new media requiring broadcasting licences. In 2009, the CRTC upheld that exemption, though it said at the time it would review its regulatory exemption for new media in 2014. In 2011, it opened a “watching brief” on the issue following a consultation about OTT TV services, which concluded regulation was not necessary. CRTC Chair Jean-Pierre Blais said last fall that he does not foresee any changes to the regulatory exemption for online media platforms, telling CBC Radio that "Netflix benefits from an exemption, and therefore we've decided, on two occasions, not to require Netflix to have a licence, and I don't see that changing for the foreseeable future." The CRTC did not return requests for comment for this story Tuesday. Breznick said that, from the questions the CRTC asks in the questionnaire, “it sounds like they want to know what the market is and … how much revenue these services they could generate.” “I think they’re still in the gathering-information phase,” he said. “I think right now they’re probably more in a data-gathering mode and seeing whether there’s any cause for regulating and seeing what the impact is on the businesses they already do regulate.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Phase 2 of CRTC TV review asks about OTT regulation

Broadcast | February 18, 2014

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Phase 2 of CRTC TV review asks about OTT regulation

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