The Canadian Radio-Television and Telecommunications Commission last week wrapped up hearings that it called "Let's Talk TV." We're not trying to be flippant here, but regulatory hearings into the communications industry in 2014 called "Let's Talk TV" are akin to highway regulation hearings in 1920 called "Let's Talk Horses." Or hearings in 1996 on the music industry called "Let's Talk Vinyl." The CRTC is one entire technology revolution behind the wheel of history. It needs to start thinking outside the idiot box if it wants to play a meaningful role in Canadians' lives.
Watching CRTC commissioners questioning cable-company executives and other stakeholders about whether Canadians should be able to choose which channels they pay for made it painfully clear that the commission's usefulness is being outstripped by technology. The CRTC's regulations are the constitution of a landscape that no longer exists, written back in the 1950s when the airwaves – a public good and a scarce commodity – were the sole broadcasting option. The dial could handle only a limited number of channels. Somebody had to decide who would get to own the scarce resource, who would have access and how it would be used. In a world with over-the-air broadcasting on a 13-channel dial, we really did need a regulator. But that dial is gone – so long gone, in fact, that the CRTC is considering dropping the licensing condition that obliges broadcasters to operate costly vestigial over-the-air services.
The new scarce resource is not bandwidth, but viewers. Broadcasters and cable carriers that once had captive markets now compete with Netflix, Youtube and other Internet-based services that exist outside CRTC regulations. These newcomers, including millions of people producing and posting their own content, from Vines to videos, are stealing viewers and changing Canadians' habits. Never in human history has there been more programming for viewers to watch. But watching is not the same as watching TV. Because more and more of that programming is not being watched on television.
It is completely feasible in 2014 to live without cable TV but next-to-impossible to go without a high-speed home Internet service capable of providing constant nourishment to smartphones, computers and tablets. Binge-watching the final season of Mad Men on a laptop in bed is ever more common; sitting on the sofa watching single episodes of Hollywood sitcoms at prescribed times of the TV broadcaster's choosing, not so much.
The incumbent cable companies, which are also the incumbent Internet providers (not to mention the incumbent wireless and home-phone providers) are watching the world turn in favour of their Internet business at the expense of their television services. Canadian broadcasters that have relied on mandatory carriage and basic cable packages as a guaranteed source of viewers, and therefore ratings, see the industry rapidly reshaping itself in a way that doesn't bode well for their advertising-based business model.
Which is why, in a way, the CRTC is still talking television – it is the only avenue for Canada's heavily regulated broadcasters and cable companies to hold onto their current revenue streams while they buy time and figure out what their next move should be. The CRTC's most critical role – ensuring Canada's stories are told, as required under the Broadcasting Act – has lately transmogrified from obliging broadcasters to produce Canadian content, and making sure the cable companies prioritize it, to something a little less noble: namely, temporarily protecting Canadian companies from the stateless, unregulated, market-driven onslaught of the Internet. The incumbents want the CRTC to either grant them the same freedoms as Netflix or start regulating the Internet. They are happy to entertain the CRTC as it dickers over the merits of pick-and-pay options, but their eye is on the longer game: how to make money in a world of unlimited choice and ruthless market demand.
You have to think that CRTC commissioners look at Netflix and see something that feels like anarchy to them – a bizarro world where choice parties in the streets and regulators stay home. They probably cannot even imagine it. Perhaps many Canadians can't either.
But it is where we are headed, and quickly. There are significant advances coming down the pipe that are going to get here faster than the end of your next two-year cable contract. This is where the CRTC should be focusing its energies. The future is not "pick-and-pay"; the future is fibre-optic Internet in every home that is magnitudes faster than the current co-axial standard, and which will become the backbone of the digital economy as it develops exciting new online technologies – in-home medical monitoring, remote education, glitch-free telecommuting, high-definition video-sharing and more. The future is not limiting access or enforcing nationalistic content rules; the future is more border-ignoring services with more content than ever, some of which will inevitably be Canadian. The future is asking the question, Do we need a national television broadcaster, or would we be better off subsidizing a national content producer that sells its programming to the highest bidder? Or produces it with a taxpayer subsidy – and then instead of broadcasting via a traditional TV channel, simply posts it online for anyone to watch on Youtube and other sites?
Talking about TV – about pick-and-pay and basic packages and Canadian content – is at best a distraction while the future barrels down on us. The CRTC shouldn't be talking TV. It should be talking about the world we live in.