Digital technology, especially the Internet, has revolutionized media. As a result, the regulatory model that promotes Canadian broadcasting content is becoming increasingly outdated.
Technological changes do not reduce the potential importance of Canadian content in promoting a distinct national culture, but as the changes occur, policies become less effective in meeting this goal. The Canadian media industry must change radically for it to thrive and for the public to reap the benefits. To guide the regulatory revolution, the government should create an independent expert panel.
For almost 50 years, broadcasting was characterized by a handful of radio and television channels, later supplemented by cable TV offerings. To promote Canadian content, the federal government introduced various regulations. For example, broadcasters are required to show a certain percentage of Canadian programming in prime time. They are also compelled to spend a minimum amount on Canadian production, and foreign ownership is restricted.
These regulations are an anachronism from the 1950s, when the transmission spectrum was limited, a few media channels held market power and the government had some ability to regulate Canadian content.
With the development of the Internet, the media universe has evolved to a point where consumers have almost infinite choices of what to view, when to view it and on what medium to view it. Media that once faced limited competition and operated on business models driven by advertising revenue now find themselves in competition with an endless number of content providers.
In this new universe, most of the standard array of regulatory tools to promote Canadian content will be obsolete. Programming quotas lose meaning on a viewership model that does not relate to time. Spending and ownership requirements will become ineffective - and are simply impractical - as broadcasting moves from a discrete number of channels to thousands of websites offering video and other content.
Canadian-content policies are feasible only through direct subsidies to producers and to public broadcasters, the CBC in particular. Such financial support should ensure that Canadian content is produced, regardless of whether it is broadcast on cable TV, over the Internet or through over-the-air digital transmission.
Given the likely diminishment of profits for cable and satellite distributors because of the increasingly intense competition that the Internet will bring, the burden of funding such subsidies will eventually shift from broadcasters or distributors to Internet service providers (ISPs) or general revenues.
In addition, there may be a way to ensure that viewers have ready access to Canadian content by requiring that major distributors - that is, ISPs - do not unreasonably impede access in the management of their networks. In this respect, as broadcast distribution migrates to the Web, broadcasting policy will increasingly focus on access to networks and will increasingly resemble present-day market-oriented telecommunications policy.
Given the profound impact of technological change, we believe that an overhaul of Canadian-content policies is in order. Incremental changes, such as shifting the burden of supporting local TV, are at best temporary fixes that may impede the more sweeping transformation that will eventually be necessary. To that end, we believe that a more comprehensive public review of current communications policies needs to be undertaken.
The federal government should also consider the role of public broadcasting and the appropriate means of supporting the promotion and creation of Canadian content. To ensure that financial support is adequate, it will be important to assess the value of all current government programs, direct or indirect, used to promote Canadian culture and voices.
These are challenging issues. But if governments and the media industry accept the significance of the technological changes we describe, there is no choice but to develop an entirely new public-policy framework. Now is not the time for a reflexive defence of the status quo, but rather an opportunity to stand back, recognize where technological change is taking us and develop a set of policy goals and instruments that will ensure that Canada is positioned at the forefront of the digital economy.
Lawson A.W. Hunter, Edward Iacobucci and Michael J. Trebilcock are authors of a recent C.D. Howe Institute study, Scrambled Signals: Canadian Content Policies in a World of Technological Abundance, available at http://www.cdhowe.org.