Conspicuous by its absence in TV review: OTT services

In a little more than a week, the people who make and produce, broadcast and distribute, analyze and report on the Canadian television industry will gather in Gatineau, Que., to spend two weeks talking about its future. The CRTC’s Let's Talk TV hearing will cover many topics, from pick-and-pay TV to simultaneous substitution to the future of over-the-air television. In an attempt to narrow down the discussion from the 80 questions the commission asked back in April, the CRTC released a working document last week that focuses on four broad areas: consumer choice in TV service; relationships between service providers and those that provide programming; ways to foster local content; and ways to foster "compelling" Canadian content. That's broken down further into 29 specific issues. Notably absent is any mention of over-the-top (OTT) services. “The consultation is really designed to keep people within the broadcasting system, as opposed to expanding or breaking out the broadcasting system,” Jean-Francois Mezei, a telecom consultant with Vaxination Informatique, said in a phone interview. “Instead, the CRTC is moving to keep the dependency on the old business model.” Mezei added that when the CRTC “first pitched it, it was supposed to be about the future of television in Canada. And now it’s just: ‘How can we just tweak the current BDU system to give it another few years of life?' ” Currently, the largest three TV providers — BCE Inc., Shaw Communications Inc. and Rogers Communications Inc. —are a big source of funding for Canadian content, which will take a hit if customers are encouraged to leave those companies for alternatives, he said. Mezei said the CRTC needs to discuss issues like how to fund Canadian content, given the changing reality of the TV industry, and how to give producers the ability to sell to both traditional TV platforms and new media. The idea of regulating OTT services, like those offered by Netflix Inc., to ensure they contribute to the Canada Media Fund or make other Canadian content contributions came up earlier in the consultation process, but wasn’t included in the CRTC’s most recent consultation document. Barry Kiefl, president of Canadian Media Research Inc., said in a phone interview that the launch of an OTT platform by Rogers and Shaw, as announced on Tuesday, puts pressure on the CRTC to deal with idea of regulating over-the-top and online services. Kiefl said it would be one of the “key issues” of the hearing, and one that companies like Netflix and Google Inc. are bound to bring up during their appearances. It’s not an issue that the CRTC can ignore, he added. “I can't see how it won't be a main focus at the hearing,” Kiefl added in a later email. Mezei noted that the CRTC is currently looking at an undue-preference complaint brought forward by telecom blogger Ben Klass against mobile-TV services offered by Bell, Rogers and Quebecor Inc.’s Videotron. They had allowed customers to pay a fixed amount for a certain number of viewing hours without it counting against their regular data caps. The proceeding has centered around whether that is a violation of net neutrality and whether mobile-TV services should be considered as broadcasting or telecom activities. “One possibility is that the CRTC will render a decision strictly on the telecom side, of the net neutrality rules, but as part of that decision, will initiate a consultation on the broadcasting aspect,” he said. “They probably want to wait for the Talk TV hearing to be done to see what people want to say,” he said. “The CRTC understands the issues … and they would know that there are decisions that need to be made in terms of where TV is going in the future.” In response to a question asking whether the CRTC is planning to deal with OTT issues separately from the TV review, such as by reconsidering its exemption of digital media undertakings from regulation, CRTC spokesman Denis Carmel said in an email that the CRTC “deliberately not include the Ben Klass application on Mobile TV in the Let’s Talk TV proceeding.” The CRTC did consider the question early on; in an online questionnaire in March released as part of Phase 2 of the consultation, it asked a question about the issue at the centre of the undue preference complaint. Carmel added that “a review of the new media exemption order is not in the three-year plan.” Independent broadcast consultant Kelly Lynne Ashton pointed out in a phone interview that when the CRTC released its latest document, it noted that it would not limit those appearing from bringing up other topics. “It’s still going to be a topic of conversation,” she said. Ashton said that “there’s a definite problem with the financing model for Canadian programming, with subscribers shifting to OTT, revenues going down, therefore less money going to the CMF. … We’ve got to look at it as an integrated system and find some way of including OTT in that system.” The CRTC’s move to steer discussion away from OTT, Ashton said, is “a signal from the CRTC that we can’t expect a decision on OTT at this point.” She noted that the digital media exemption order was previously set to be reviewed in 2014 after five years and that a decision by the CRTC to do so would be “a positive step forward.” One of the CRTC’s proposals that was included in the latest document, she added, was to allow broadcasters to include their spending on original online programming in their Canadian programming expenditures (CPE), and to count revenues from online programming in the definition of broadcasting revenues. “I think that may be the commission’s, sort of, baby steps,” she said. “We have to get into including the digital platforms within the regulated system, but let’s not go whole-hog.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Conspicuous by its absence in TV review: OTT services

Broadcast | August 28, 2014

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Conspicuous by its absence in TV review: OTT services

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