CRTC to examine TV’s new connections

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The last time Canada's broadcast regulator took a deep look at the country's television industry, Cheers was the top-rated show on television and the most common way to access the Internet was via a dial-up connection that took as long as five minutes to download a single photograph.

That's about to change. The Canadian Radio-television and Telecommunications Commission is launching a major review of the rules governing the rapidly-changing TV business, as consumers turn to alternative devices to watch programming and the companies that sell television subscriptions face online competitors nobody could have imagined during the last review, in 1993.

"It's time to ask if the assumptions that lie beneath our current regulatory policies still hold true," said CRTC chairman Jean-Pierre Blais. "Broadcasting as we once knew it is no longer and will never again be the same."

The CRTC will launch consultations in the fall to ask Canadians how the broadcast system should be changed to serve their needs. That will be followed by broader discussions with industry representatives to consider how they deliver content into more than 12 million Canadian homes.

There are several flashpoints that are likely to arise. One is the way television providers require consumers to pay for channels they don't want in order to get the ones they do. The commission could also revisit the rules that dictate which channels are included in basic television packages – rules that are designed to ensure a diversity of programming, but which seem dated in an environment in which any person or organization can distribute video over the Internet.

Broadcasters also want to see reforms. They say newer online competitors such as Netflix are allowed to operate with more regulatory freedom in this country than incumbents, who must meet minimum targets for Canadian programming. They argue that the playing field should be levelled – either by imposing Canadian content regulations on online services or lifting the quotas for everyone in the industry.

The commission hasn't shied away from changing the way Canada's largest companies interact with consumers: It just released a code of conduct for wireless companies that effectively killed restrictive three-year cellphone contracts and forced them to make contracts easier to understand.

While consumers flooded social media sites with suggestions on how to improve their television packages, the executives listening to Mr. Blais's speech at the Banff World Media Festival said they welcomed the review at a time of massive change in their industry.

"As a stakeholder in the system, we welcome looking at all aspects of the regulatory framework," said Scott Moore, president of broadcasting at Rogers Media. "There are lots of things that we all like about it, there are lots of things we would change if we could."

Like Mr. Moore, Barbara Williams, Shaw Media's senior vice-president of content, said there is a need for change at the regulatory level.

"I believe that it's more important than ever that we get it right. There's not a lot of room for error in this lightning speed time," she said.

Netflix has doubled its Canadian subscribers to two million in the past year and other unregulated services are also gaining market share against traditional sellers of programming. Unlike domestic broadcasters, these services do not have licences that require them to fund Canadian content.

In response, the traditional providers have started offering more content online and on mobile devices, with several planning their own competing products to take on those competitors. The regulator will need to determine whether the rules the broadcasters follow in the traditional broadcast world will apply to these new online services.

Canadian television providers directed $3-billion toward Canadian productions last year. But Mr. Blais warned TV producers that there's no reason to think that funding will last forever, adding that the changes bring new opportunities to finance their projects outside of Canada's broadcast system.

The head of the Canadian Media Production Association, representing Canadian producers that provide that content, said the exercise could be a good idea, but needs to be focused.

"Why don't we just accept [that] people want more programming on demand and they want to choose more of the channels they want to watch and they don't want to pay for a whole bunch of things they don't want to watch. I think we should just start from that premise."

The review will launch in the fall with an official invitation for comments. There are no further timelines set yet, though Mr. Blais said he didn't want the process to drag out too long, given the pace of change in the industry.