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CRTC Chairman Konrad von Finckenstein pauses while speaking to the Canadian Press in an interview at the CRTC headquarters in Hull, Quebec on Monday, March 22, 2010. The CRTC is blocking companies from offering television programs exclusively to their mobile or Internet subscribers in new rules for cable and telecom operators that also own TV networks. (Pawel Dwulit/Pawel Dwulit/THE CANADIAN PRESS)
CRTC Chairman Konrad von Finckenstein pauses while speaking to the Canadian Press in an interview at the CRTC headquarters in Hull, Quebec on Monday, March 22, 2010. The CRTC is blocking companies from offering television programs exclusively to their mobile or Internet subscribers in new rules for cable and telecom operators that also own TV networks. (Pawel Dwulit/Pawel Dwulit/THE CANADIAN PRESS)

Winners, losers and opportunities lost in the CRTC vertical-integration ruling Add to ...

The second big elephant in the room is that there’s nothing in the new rules establishing parity of treatment for rival online video distributors (OVDS) such as Netflix, AppleTV and GoogleTV versus the big four’s own online “TV everywhere” initiatives and IPTV offerings. With the “common carrier” principles apparently in hibernation, perhaps this is not surprising.

What this means is that when Bell, Shaw, Rogers and QMI stuff TV programming/video down their pipes, it won’t count against the bandwidth caps that characterize almost all Internet access offerings in Canada. For Netflix and other OVDs, the caps apply and bandwidth measured bit by bit. Call this the Netflix choke-hold, and the CRTC seems to have done nothing about it.

This element of the decision is a lost opportunity and one can’t help wonder if its a byproduct of all the fuss being made about how OVDs like Netflix are supposedly ravaging the foundations of the incumbents’ TV operations (and yet somehow accounting for less than 1 per cent of industry revenues) and the strong push by Shaw, Astral, the Senate Committee of Canadian Heritage and the incumbent industry-driven Over the Top Services Working Group to have such entities regulated as broadcasters. For anyone thinking of setting up a similar OVD operation in Canada, this element of the decision seems like bad news.

The extent of this loss can be seen by comparing it to the model adopted by the FCC and Department of Justice when they approved the Comcast-NBC/Universal amalgamation in January this year. They required that Comcast not give preferential treatment to its own online TV services over those of rival OVDs nor withhold NBC-Universal programming rights from OVD companies. The CRTC’s decision address the latter point, but does nothing with respect to the first. A half victory?

Just how far the CRTC’s approach falls short can be further realized once we remember the incomparably stricter FCC-DOJ conditions in the Comcast-NBC case are modest compared to such steps as structural separation and alternative network build-outs imposed in the U.K., N.Z., Australia, Sweden, Chile and Romania.

These measures were simply off-limits in the current proceedings.

Of course, the big four argued all along that need to regulate them was always speculative and groundless. But that is simply not borne out be the evidence provided during the hearing by Telus, Access, MTS Allstream, SaskTel, Channel Zero, Wind, etc., wall of which argued the problems are all too real and the gaining access to CTV content, for instance, became a whole lot harder once Bell acquired it earlier this year. The historical record, as I’ve also argued, is also quite unequivocal on the folly of allowing those who own the medium to control the message.

At the very least, the CRTC does seem to have disagreed with the big four’s Panglossian view of the world, where nothing needs to be done, and at least taken baby steps to deal with a real issue.

And just to point out one thing that you won’t find in the CRTC’s decision is the we bit underpinning all of this, and that is the heavily concentrated state of the telecom-media-Internet industries in Canada. Yes, I state these numbers regularly, but it’s worth repeating that when you allow those who control the medium to control the messages as well, predatory behaviour and choke points on the free flow of information will arise as sure as night follows day.

So, again, just as a reminder, here was the picture in 2010 of Bell, Shaw, Rogers and QMI’s share of the entire TMI industries in 2010:

  • 84 per cent of cable and satellite distribution
  • 78 per cent of all television revenues
  • 66 per cent of wireless revenues
  • 54 per cent of Internet Service Provider revenues
  • 53 per cent of the wired telephone market
  • 39 per cent of radio

That is, ultimately, the source of the issues at hand, and unfortunately, the CRTC’s decision today seems mostly to be tiny pin pricks in the side of the real elephant-in-the-room.

Dwayne Winseck is a communications professor at the School of Journalism and Communication, Carleton University in Ottawa. Prof. Winseck been researching and writing about media, telecoms and the Internet in one way or another for nearly 20 years. He most recently edited The Political Economies of Media. You can read more comment on his blog, Mediamorphis. His column will appear every second Tuesday.

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