Amid fears that Canada's culture is being drowned in a sea of online video from around the world, federal regulators are looking at setting up a $100-million fund to support homegrown programming on the Internet.
The controversial proposal, which is aimed at staking out a more distinct national identity online, has pitted the television production community against Canada's Internet service providers, who may ultimately have to foot the bill, or pass those costs onto customers.
Traditionally, Ottawa has stayed away from treating online content as part of the broadcast industry. But under a scenario proposed yesterday, Internet service providers could be asked to surrender 3 per cent of their subscriber revenue – roughly $100-million – to a fund that would help produce Canadian programs for the Web.
“We must respect the principles of openness and individual choice that govern the Internet, while maintaining access to, and for, Canadian stories, opinions and ideas,” CRTC chairman Konrad Von Finckenstein said yesterday on the first day of hearings into the future of new media in Canada.
It is the first time in 10 years that the regulator has called hearings on the subject after deciding in 1999 to take a hands-off approach to new media on the Internet. While the move doesn't involve regulating how much Canadian content domestic websites such as those run by the TV networks must carry, it is potentially an attempt to encourage more homegrown Canadian programming online.
Members of the TV production community, including actors and directors, supported the idea at the hearings in Gatineau, Que., saying it would help carve a place, however small, for Canadian content in a borderless Internet world.
The Internet service providers (ISPs) criticized the idea as interventionist and suggested the CRTC lacks the legal clout to create such a fund.
“We don't think that the commission even has the jurisdiction to impose a new tax on ISPs and we certainly don't think that our customers or Internet users should be paying a tax to fund Canadian content,” said Pam Dinsmore, vice-president of regulatory affairs for Rogers' cable unit.
Though it's not certain the CRTC will adopt the idea in the end – the hearings are spread out over the next four weeks – the concept would be similar to the $242-million Canadian Television Fund. The CTF collects about half of its budget from cable and satellite TV companies and turns those dollars over to independent producers to help fund domestic comedies, dramas and documentaries.
Organizations representing Canadian artists told the CRTC yesterday that the evolution of the Internet in the past decade has rendered it no different from television, given the amount of online video being consumed. The average Canadian spends 46 hours a month online, and 83 per cent of people now watch video content, data from the regulator suggests.
“The Internet is just another media-distribution platform like any other that we've had,” said Stephen Waddell, executive director of the Alliance of Canadian Cinema, Television and Radio Artists. “And in our view, if the CRTC doesn't give some opportunity to Canadian content to have a place on that platform, we're going to be immersed in non-Canadian content.”
The debate for the CRTC will eventually hinge on whether to treat Internet service providers as broadcasters or as data pipes under federal laws. TV networks have responsibilities under the Broadcasting Act to support Canadian culture.
In 2007, the regulator decided to take a hands-off approach to mobile devices, such as cellphones that stream video content from the Internet.
In a sign of how bitter the fight could be, Shaw Communications Inc. has already sought opinions from two of Canada's largest law firms, Stikeman Elliott LLP and Torys LLP, that it says show the regulator may not have authority to install the levy.
“The introduction of a tax on Internet use or bureaucratic interference in access to content will not be acceptable and will be perceived as an unjustifiable restriction on freedom of Internet expression,” Ken Stein, Shaw's senior vice-president of regulatory affairs told the CRTC in a letter.
While the production community argued such a fund would support jobs across the country, Rogers warned the cost would be passed on to monthly bills, a statement echoed by other Internet providers.
“It would mean that the cost of an Internet subscription would go up because these costs, inevitably, are passed along to the consumer or to the customer,” Ms. Dinsmore said.
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