Lose focus on CanCon, say think tank authors

Technological changes to the broadcasting and communications landscape require a similar shift in the regulatory environment, according to authors of a pair of new think-tank reports released Wednesday, both of which call for less focus from the CRTC on Canadian content. According to both Steven Globerman, who authored the Fraser Institute report, and Benjamin Dachis and Daniel Schwanen, who wrote the C.D. Howe Institute report, the requirements for conventional broadcast distributors (BDUs) to make financial contributions and meet programming quotas are too restrictive in an environment where over-the-top (OTT) services like the one offered by Netflix Inc. aren’t beholden to the same rules. Given that Canadians can access a variety of material online, “a model for content-promotion in which Canada’s broadcasters are differently saddled with content quotas or contributions to media funds only penalizes certain Canadian-based conduits,” the C.D. Howe report said. Globerman, who wrote a similar-themed commentary for the Fraser Institute in 2014, called the difference a “regulatory asymmetry that provides an inefficient implicit subsidy to OTT services.” He added that the idea of CanCon needing subsidies and protection is “simplistic,” and that “a more acceptable argument is that specific Canadian producers are likely to benefit from continued subsidies and protection, while others would do better commercially if market forces were allowed freer reign.” Neither report recommended imposing regulations on foreign OTT offerings. Instead, Globerman suggested “eliminating existing obligations of non-exempt programming services and BDUs” as an option. Both reports also recommended that if the federal government wants to promote Canadian content creation and programming, it should support it more directly, through tax revenue instead of the current subsidy regime where BDUs have to contribute a percentage of their revenues. “If policymakers believe that Canadian content is a general public good, contributions to Canadian programming should be most appropriately funded from general revenues, making the size of the subsidy transparent to taxpayers and compelling conversations about the value of Canadian content,” said the C.D. Howe report, adding that this funding would be handled by Canadian Heritage. In fact, the CRTC should hand over all cultural promotion to the heritage department, Dachis and Schwanen said, also calling for the commission to step back and defer to the Competition Bureau on issues of consumer protection, mergers and “specific anti-competitive conduct.” Dachis and Schwanen said that Canada's current legislation reflects an "out-dated structural separation between broadcasting and communications," and called for a "unified legislative framework, noting that the current fragmentation is incompatible with current technology.” CLARIFICATION: A previous version of this article started that the authors called for the Telecommunications and Broadcasting Acts to be merged. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Lose focus on CanCon, say think tank authors

Broadcast | May 25, 2016

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Lose focus on CanCon, say think tank authors

Broadcast | May 25, 2016

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