Fast-track OTT review, clock ticking on CMF ‘top-up’: CMPA

The Canadian Media Producers Association (CMPA) wants the government to immediately launch a review of the CRTC’s enforcement powers when it comes to regulating over-the-top (OTT) streaming services like Netflix Inc., according to its submission to a government-appointed blue-ribbon panel reviewing Canada’s communications laws. It’s calling for the federal government to “fast-track” a review, just like it recently did for the Copyright Board of Canada reforms, of the CRTC’s jurisdiction over “domestic and foreign online broadcasting undertakings” to manage new players not covered by the same regulations as traditional broadcasters. That would pull OTT streaming services out of the current Broadcasting and Telecommunications Legislative Review panel review process and put them on a separate review track. It’s the latest in a long line of groups calling for Ottawa to bring in new OTT regulations, but the CMPA is asking for a rush-order review so that CanCon contributions can “start flowing,” citing concerns the current review panel process could take longer than the Liberal government’s five-year Canadian Media Fund “top-up” will last. The association that represents independent producers is worried the clock will tick down and the Liberal government’s $172 million boost to the CMF from the 2018 budget will expire before the review is done -- the same year that Netflix Inc.’s promised $500 million in Canadian investment will expire. “Both of these measures were put in place as interim measures to help stem the growing deficits of the Canadian broadcasting system due to the digital shift. While they are very welcome, useful stopgaps for the immediate future, there is little possibility that a full review, complete legislative reform of the acts, and regulatory proceedings applying the new laws will be achieved before these interim measures terminate,” reads the CMPA’s submission. “If concrete steps are not taken before they expire, the government may need to again buttress the losses, or the industry will surely contract.” Industry insiders have suggested the review could be a lengthy process taking somewhere in the range of a decade before it results in legislative changes and new regulations. The CMPA submission also asks that, as the TV broadcast sector declines and consumers continue to cut the cord, internet and wireless service providers be required to make financial contributions into Canadian programming content because they’ve become integral to distributing programming content online. That echoes calls from groups including CBC/Radio-Canada, Unifor, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), and the Directors Guild of Canada among others, warning that without doing so the current content funding model is “unsustainable.” The CRTC’s landmark Harnessing Change report also floated such an idea. CMPA’s submission included a December 2018 PricewaterhouseCoopers study it commissioned, alongside ACTRA, the Association Québécoise de la Production Médiatique (AQPM) and the Directors Guild of Canada (DGC), which mapped out how that could work. That report modelled six different ways the government could change the funding system to include telecoms, using either inflation-based funding targets or market growth-based targets. One fixes a 1.8 per cent contribution from broadcasters, residential internet and wireless gross revenues, “designed to allocate the funding targets between the three funding segments in proportion to their relative market share of revenue.” The point of that exercise was to show a range of options where the CRTC’s Harnessing Change suggestion could work and be “revenue-neutral across the entire system, while ensuring continued support for Canadian programming and keeping costs down for, at least, lower-income consumers,” the submission said, where low-income households would have access to a “basic package at affordable rates.” It argued such a move would have “little or no impact on prices for consumers attributable to the new contribution approaches.” Big Canadian telecom companies have argued the contrary, staunchly opposing proposals for ISP content contributions. Telus Corp. called an ISP tax, in its panel submission, an “unsustainable policy recommendation” which would “blur the distinction between common carriers and content aggregators” and hinder broadband investments. It even rhetorically suggested it could lead to them subsidizing other sectors. “If ISPs are to finance the production of Canadian content because their networks are used to distribute programming, then what prevents government from subsidizing any sector of the Canadian economy via ISP taxes in the coming “Internet of Everything” era? Should ISPs subsidize Canada’s auto industry because their networks are used to enable driverless cars?” Quebecor Inc. warned such a fee could be directly passed on to consumers. Stakeholders and interested parties submitted more than 2,000 written reports to the panel review, all of which are expected to be published online by end of June. — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Fast-track OTT review, clock ticking on CMF ‘top-up’: CMPA

Broadcast | January 18, 2019

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Fast-track OTT review, clock ticking on CMF ‘top-up’: CMPA

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