Canadian Content Policies In A World Of Technological Abundance


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Lawson Hunter argues changes needed for the policy environment particularly as regards broadcasting in an environment which has changed from over the air to wired IP archictecture and applications

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Canadian Content Policies In A World Of Technological Abundance

  1. 1. CANADIAN CONTENT POLICIES IN A WORLD OF TECHNOLOGICAL ABUNDANCE C.D. Howe Institute Draft paper October 28, 2009 Lawson A.W. Hunter, Q.C. Counsel, Competition Law Group, Stikeman Elliott LLP Edward Iacobucci Osler Chair in Business Law & Professor of Law, Faculty of Law, University of Toronto Michael J. Trebilcock Chair in Law and Economics & Professor of Law, Faculty of Law, University of Toronto
  2. 2. Current Instruments of Canadian Content Policy <ul><li>Exhibition Quotas </li></ul><ul><ul><li>Broadcasters required to devote prescribed minimum percentage of viewing time to “Canadian”-produced content </li></ul></ul><ul><li>Expenditure Quotas </li></ul><ul><ul><li>Pay and specialty broadcasters (but not conventional broadcasters) required to spend prescribed amount (typically tied to revenue) on “Canadian”-produced content </li></ul></ul><ul><li>Production Subsidies </li></ul><ul><ul><li>Direct subsidies (financed from government revenues and industry (subscriber) contribution to production funds) and indirect subsidies (tax relief) </li></ul></ul><ul><li>Foreign Ownership Restrictions </li></ul><ul><ul><li>Canadian broadcasting system statutorily required to be “effectively owned and controlled by Canadians” </li></ul></ul><ul><li>Public Ownership </li></ul><ul><ul><li>Nationally and provincially owned and funded broadcasters </li></ul></ul><ul><li>Access Rules </li></ul><ul><ul><li>Must-carry requirements and channel bundling restrictions </li></ul></ul>
  3. 3. Technological Change – The “Four Eras” <ul><li>Over-the-Air Era </li></ul><ul><ul><li>Broadcasting “pushed” to consumers using scarce UHF and VHF spectrum </li></ul></ul><ul><li>500 Channel Era </li></ul><ul><ul><li>Broadcasting primarily “pushed” to consumers by cable and satellite BDUs </li></ul></ul><ul><li>Wired IP Era </li></ul><ul><ul><li>Broadcasting increasingly “pulled” by consumers using IP technology on converged networks and devices </li></ul></ul><ul><li>Wireless IP Era </li></ul><ul><ul><li>Broadcasting “pulled” by consumers using wireless (and wired) IP technology </li></ul></ul>Spectrum scarcity essentially non-existent, but potential “scarcity” of distribution medium Potential spectrum scarcity, but reduced “scarcity” of distribution medium
  4. 4. Effect of Technological Change on Efficacy of Regulatory Instruments N/A   N/A Access rules     Public broadcasting X X   Foreign ownership restrictions     Production subsidies X X   Expenditure quotas X X   Exhibition quotas Wireless IP Wired IP 500 Channel Over-the-air
  5. 5. Principal Conclusions <ul><ul><li>Although the timing of the impact of technological change on consumer viewing behaviour is uncertain, the inevitable impact requires a fundamental change to the current regulatory system with respect to Canadian content (and most likely other regulatory policies as well). </li></ul></ul><ul><ul><li>The current quota-based system relating to time and expenditure allocations will increasingly become ineffective as technological change advances. </li></ul></ul><ul><ul><li>In substitution for the current quota system, funding programs and sources of revenue need to be identified which would provide direct support for the creation and promotion of Canadian cultural content. </li></ul></ul><ul><ul><li>The impact of technological change will have important implications for public broadcasting, including increased competition for viewers, but public broadcasting will remain an important potential source of Canadian content.. Regulating Canadian ownership of private broadcasters, in contrast, will become increasingly impractical. </li></ul></ul><ul><ul><li>In the near term, broadcast distributors, whether cablecos or telcos, should be subject to ongoing oversight with respect to access and discrimination issues to prevent any market power abuses. </li></ul></ul><ul><ul><li>A transition period is necessary to move from the current regulatory framework as we progress towards Stages III and IV identified in Part IV. During this transition period, a more comprehensive review of current communications policies needs to be undertaken. </li></ul></ul>