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TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
FINAL PHASE OF THE PUBLIC HEARING
EXAMINING NEW MEDIA /
ÉTAPE FINALE DE L'AUDIENCE PUBLIQUE
PORTANT SUR L'EXAMEN DES NOUVEAUX MÉDIAS
HELD AT: TENUE À:
Conference Centre Centre des conférences
Outaouais Room Salle Outaouais
Place du Portage Place du Portage
Phase IV Phase IV
Hull, Quebec Hull (Québec)
February 8, 1999 8 février 1999
Volume 12
tel: 613-521-0703 StenoTran fax: 613-521-7668
Transcripts
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
Contents.
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
tel: 613-521-0703 StenoTran fax: 613-521-7668
Canadian Radio-television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Final Phase of Public Hearing
Examining New Media /
Étape finale de l'audience publique
portant sur l'examen des nouveaux médias
BEFORE / DEVANT:
David Colville Chairperson / Président
Vice-Chairperson,
Telecommunications /
Vice-président,
Télécommunications
Françoise Bertrand Chairperson of the
Commission / Présidente du
Conseil
Cindy Grauer Commissioner / Conseillère
Joan Pennefather Commissioner / Conseillère
David McKendry Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Carolyn Pinsky / Commission Counsel /
Karen Moore Avocates du Conseil
Ted Woodhead Hearing Manager / Gérant de
l'audience
Daphne Fry Manager of Convergence
Policy / Responsable de la
politique sur la
convergence
Carole Bénard / Secretaries/Secrétaires
Diane Santerre
HELD AT: TENUE À:
Conference Centre Centre des conférences
Outaouais Room Salle Outaouais
Place du Portage Place du Portage
Phase IV Phase IV
Hull, Quebec Hull (Québec)
February 8, 1999 8 février 1999
Volume 12
tel: 613-521-0703 StenoTran fax: 613-521-7668
ii
TABLE OF CONTENTS / TABLE DES MATIÈRES
PAGE
Presentation by / Présentation par:
Rogers Cablesystems Limited 3002
AOL Canada Services, Inc. and America Online, Inc. 3020
Fédération culturelle canadienne-française 3040
Astral Broadcasting Group 3058
Canadian Association of Internet Providers 3071
The Independent Internet Service Provider Group 3080
CATA Alliance 3092
Public Interest Advocacy Centre 3100
tel: 613-521-0703 StenoTran fax: 613-521-7668
2997
1 Hull, Quebec / Hull (Québec)
2 --- Upon resuming on Monday, February 8, 1999,
3 at 0903 / L'audience reprend le lundi
4 8 février 1999, à 0903
5 13187 THE CHAIRPERSON: Good morning,
6 ladies and gentlemen.
7 13188 Welcome to the oral final argument
8 phase of the Hearing on New Media. My name is David
9 Colville. I am the Vice-Chair, Telecommunications, for
10 the CRTC and I will be presiding over this final phase
11 of the hearing.
12 13189 With us this morning are Cindy
13 Grauer; our Chair, Françoise Bertrand; Joan Pennefather
14 and David McKendry.
15 13190 This is the final phase of a process
16 that began when we issued a public notice last July,
17 and we obviously captured the attention of all the
18 different players involved in the new media business.
19 I think with the attention we had on the hearing in
20 response to our public notice, the Commission received
21 several hundred written comments on the subject of new
22 media, and at the public hearing held over 11 days last
23 November and December close to 80 parties made oral
24 presentations.
25 13191 I opened the first oral phase of this
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1 hearing by identifying three themes that the Commission
2 wanted to address with respect to new media.
3 13192 First, we wanted to examine the
4 potential impact of the new media on regulation of
5 traditional media.
6 13193 Second, we wanted to explore the
7 extent to which some or any of the new media services
8 meet the statutory definitions of broadcasting or
9 telecommunications services and, if they do, how should
10 they be treated by the Commission.
11 13194 Third, we wanted to determine whether
12 we could use this public forum to provide information
13 and recommendations to the government on broader policy
14 issues regarding the new media.
15 13195 Over the course of this process you
16 have given us a substantial record of information and
17 viewpoints on these three themes, as well as on other
18 important areas. I should also tell you that this
19 hearing is unprecedented for the breadth of the range
20 of individuals, industries and interest groups from
21 which the Commission received comments. I might note,
22 I thought at the time of the hearing that it was sort
23 of unprecedented media coverage too for one of our
24 proceedings.
25 13196 While we received comments on many
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1 issues during the first phase, a few major themes
2 emerged. Some of you recommended that there be no
3 regulatory involvement in new media, as its global
4 nature makes domestic regulation impractical or
5 unnecessary for the development and marketing of
6 Canadian products.
7 13197 Others believe that funds, tax
8 credits or other financial incentives should be
9 established, either through the government or through
10 the imposition of a contribution towards Canadian
11 content on Internet Service Providers or other
12 distributors.
13 13198 Another recommendation was for more
14 "shelf-space" for Canadian content and methods to draw
15 viewers to this content. Some of the proponents of
16 this idea suggested that Canada establish a
17 super-Canadian Web site.
18 13199 Some of you argued we need to address
19 offensive content, and others, on the same topic,
20 maintained that existing laws, self-regulatory measures
21 by ISPs and existing content control tools provide
22 sufficient protections.
23 13200 At the close of the first phase of
24 the public hearing examining new media we asked that if
25 you were planning on participating in this final oral
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1 argument phase you consider addressing a number of
2 questions which included, among others:
3 13201 Which types of new media would be
4 defined as programs or broadcasting under the scope of
5 the Broadcasting Act?
6 13202 If you made a recommendation on this
7 issue, what specific classes of new media undertakings
8 should be either licensed or exempted under the
9 Broadcasting Act?
10 13203 What would be the characteristics of
11 these services?
12 13204 What are the implications of the new
13 media for digital television and digital audio?
14 13205 This oral final argument phase is an
15 opportunity for you to emphasize your concerns and to
16 offer us more specific recommendations on these issues,
17 now, while we are still digesting all this information.
18 13206 Sixteen parties have asked for the
19 opportunity to present their views orally to the panel
20 this morning and tomorrow, and all have been invited to
21 do so.
22 13207 I am very pleased to welcome back
23 those of you we have already heard from. I am also
24 very pleased to welcome some new participants -- and, I
25 would guess, welcome a class of students that I think I
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1 have seen come in this morning -- and we look forward
2 to hearing from the participants over the next two
3 days.
4 13208 Several other parties have filed
5 written comments, and I would like to assure them that
6 these submissions will also be considered in our
7 decision-making process.
8 13209 So that we can further explore the
9 issues and information identified at the oral public
10 hearing, you will be able to present summaries of your
11 written final arguments, and there may be a few
12 questions of clarification from Panel Members as well.
13 13210 On that theme, I would like to remind
14 you that the oral final argument phase is for the
15 purpose of allowing you to present a summary of your
16 written final arguments, and not to reply to the filed
17 written arguments of other parties.
18 13211 CRTC staff who will be assisting us
19 during this hearing are our Hearing Manager, Ted
20 Woodhead, from Broadcasting; Daphne Fry, Manager of
21 Convergence Policy; Legal Counsel Carolyn Pinsky and
22 Karen Moore; and Carol Bénard, our Hearing Secretary
23 for today.
24 13212 Our hearing will run for two days.
25 We will sit to about five o'clock, although I suspect
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1 from the agenda we will probably finish somewhat before
2 that both today and tomorrow. Tomorrow we will start
3 at 9:00 a.m.
4 13213 I will now turn to counsel Pinsky for
5 any logistics matters.
6 13214 MS PINSKY: Thank you, Mr. Chairman.
7 13215 I would just like to note that
8 translation services are available and that
9 translations devices are available in the front room
10 from the Commissaire.
11 13216 We have a public examination room
12 where all the documents from the record of this
13 proceeding can be reviewed in the Papineau Room just to
14 the right outside in the hall.
15 13217 Thank you.
16 13218 THE CHAIRPERSON: So, with that,
17 Madam Secretary, the first party, please.
18 13219 MS BÉNARD: Thank you, Mr. Chairman.
19 13220 The first presentation will be by
20 Rogers Cablesystems Limited.
21 PRESENTATION / PRÉSENTATION
22 13221 MR. ENGELHART: Thank you.
23 13222 Mr. Chairman, Members of the
24 Commission, I am Ken Engelhart, Vice-President
25 Regulatory, Rogers Communications Inc. With me today
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1 is Hugh Stuart, Managing Director, @Home Canada. @Home
2 Canada, as you know, is jointly owned by Rogers, Shaw
3 and Cogeco.
4 13223 We are pleased to appear before you
5 today to present our final argument in response to
6 Broadcasting Public Notice CRTC 1998-82 and Telecom
7 Public Notice CRTC 98-20.
8 13224 We will address four broad issues:
9 13225 i) the competitive impact of new
10 media;
11 13226 ii) economies of scope and scale;
12 13227 iii) the regulation of new media
13 services under the Broadcasting Act and the
14 Telecommunications Act; and
15 13228 iv) support for the development of
16 Canadian new media content.
17 13229 In addition, we will briefly address
18 comments made by various parties with respect to four
19 specific issues.
20 13230 First, The Competitive Impact of New
21 Media Services
22 13231 Throughout this proceeding Rogers has
23 taken the position that new media services currently
24 are not direct substitutes for regulated broadcasting
25 services and, therefore, are unlikely to be directly
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1 competitive with regulated broadcasting services in the
2 near future. Most parties to this proceeding share
3 that view.
4 13232 There are a variety of technical,
5 economic and marketing reasons why the two media will
6 not compete directly in the near term.
7 13233 For example, the CAB described the
8 developments that would be necessary before the
9 Internet would be able to effectively deliver broadcast
10 video. First, compression technology must improve to
11 reduce bandwidth requirements. Second, modem speeds
12 must improve. The CAB also identified IP multicasting
13 as another technical development that could make the
14 Internet a mass entertainment medium.
15 13234 The CAB estimated that somewhere
16 between 2001 and 2004 a critical mass of Internet users
17 could have the technical capacity to download video
18 programming with quality better than that currently
19 provided by a VCR. Based on this, the CAB concluded
20 that Internet-delivered video-on-demand could be one of
21 the earliest examples of the convergence of traditional
22 and new media.
23 13235 In addition, while new media services
24 may not, for some time, become perfect substitutes for
25 the most regulated broadcasting services, the record of
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1 this proceeding indicates that new media services are
2 already having an indirect competitive impact.
3 13236 For example, at the public hearing
4 some providers of regulated Canadian broadcasting
5 services indicated that they expect the indirect
6 competitive impact of new media services to reduce
7 growth in their core broadcasting business. In
8 response to this, they intend to enter the new media
9 market with services that complement their current
10 broadcasting services.
11 13237 The development of new media services
12 also may lead to increased competition in conventional
13 media markets as the providers of new media services
14 use their base in that market to backward integrate
15 into conventional media.
16 13238 We believe that the record of this
17 proceeding supports Rogers' view that new media
18 services are unlikely in the near term to have a direct
19 competitive impact on real-time or "appointment"
20 broadcasting services. However, the Internet is
21 already well-suited to download content. As such, we
22 agree with the CAB that services such as
23 video-on-demand may be early examples of convergence
24 between traditional and new media.
25 13239 In light of this, Rogers believes
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1 that it would be appropriate for the Commission to
2 review the current policy and regulatory framework to
3 ensure that it provides maximum scope for members of
4 the regulated Canadian broadcasting system to respond
5 to direct and indirect competition from new media
6 services.
7 13240 Economies of Scale and Scope
8 13241 Rogers has submitted throughout this
9 proceeding that there are few barriers to entry into
10 the new media market and, therefore, it is reasonable
11 to expect that there will continue to be a wide variety
12 of Canadian new media content and services available to
13 consumers. This view was widely shared by the parties
14 to this proceeding, including members of the Canadian
15 new media content production industry. At the same
16 time, Rogers has stated that Canada needs players of
17 all sizes, including large integrated providers to
18 compete in the new media marketplace.
19 13242 Integrated media companies can
20 achieve significant economies of scope by re-purposing
21 content across the distribution value chain. The
22 ability to capture such economies is likely to play an
23 important role in determining whether a conventional
24 Canadian broadcasting or media company can compete
25 successfully with large, fully integrated,
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1 international information and entertainment companies.
2 0915
3 13243 This issue was most clearly set out
4 at the hearing by the CCTA. In this regard, the CCTA
5 expressed concern that the current policy and
6 regulatory framework does not provide sufficient scope
7 for members of the regulated Canadian broadcasting
8 system to capture the operating economies necessary to
9 respond effectively to increasing competition.
10 13244 Rogers shares the concerns expressed
11 by the CCTA with respect to any policies of the
12 Commission that may preclude cable television companies
13 and their affiliates from entering some segments of the
14 broadcasting industry. Such policies could prevent
15 members of the regulated Canadian broadcasting system
16 from developing the ownership and operating structure
17 necessary to succeed in an increasingly competitive
18 environment. As such, Rogers supports the
19 recommendation by the CCTA that the Commission consider
20 non-structural approaches to achieve its policy and
21 regulatory objectives. In this regard, we are pleased
22 to see that the Commission, in Public Notice CRTC
23 1999-19, is proposing to re-examine its current
24 policies relating to distributor equity in cable
25 programming services and other cross-ownership issues.
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1 13245 The regulation of new media services
2 under the Broadcasting Act or the Telecommunications
3 Act.
4 13246 This proceeding has considered
5 whether new media activities should be governed under
6 the Broadcasting Act or the Telecommunications Act.
7 13247 With respect to the
8 Telecommunications Act, the parties generally agreed
9 that the Act does not regulate services. The Act
10 regulates telecommunications carriers that own
11 transmission facilities. The servers and leased lines
12 used by new media producers and indeed by most Internet
13 service providers do not constitute transmission
14 facilities under the Telecommunications Act.
15 Accordingly, the Telecommunications Act can only govern
16 the providers of transmission facilities used in
17 provisioning the Internet. Many of these providers are
18 already deregulated.
19 13248 With respect to broadcasting, the
20 parties generally agreed that there are three issues to
21 be considered.
22 13249 The first issue is whether new media
23 services are programs. Programs do not include
24 services that consist predominantly of alphanumeric
25 text. The Commission has defined predominance in terms
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1 of where the eye is drawn. Since the Internet is more
2 about reading than it is about viewing, most new media
3 services are predominantly alphanumeric text and
4 therefore are not programs.
5 13250 The second issue is whether programs
6 on the Internet are "transmitted". Certainly,
7 downloading a computer file is not the same as
8 transmission in the usual sense of a broadcast
9 transmission.
10 13251 Finally, there is the issues as to
11 whether the programs are transmitted for reception by
12 the public. When a television program is broadcast,
13 everyone watches the same program. However, it is
14 unlikely that any two Internet users will have the same
15 experience. Each will see different pages and
16 therefore see a different program. In that sense, the
17 programs are not transmitted to the public.
18 13252 If the Commission does find that some
19 of the new media services delivered over the Internet
20 are "broadcasting" as defined under the Act, most
21 parties to this proceeding agreed it would be desirable
22 for it to issue an exemption order. In that case, it
23 would be necessary to distinguish traditional
24 broadcasting from new media.
25 13253 Traditional broadcasting services
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1 are, as the name suggests, broadcast. The transmission
2 is broadcast to all viewers simultaneously and they all
3 get the same signal at the same time.
4 13254 On the Internet, an individual
5 receives a unique stream of packets destined just for
6 them.
7 13255 Accordingly, if the Commission wishes
8 to issue an exemption order, it could exempt
9 individually receivable transmissions of programs.
10 13256 In this regard, it may be appropriate
11 for the Commission to clearly define what is meant by
12 "individually receivable transmissions of programs."
13 13257 For example, it may be the case that
14 a consumer who uses an antenna will receive a
15 television program a micro-second before a consumer who
16 uses cable since the program delivered over cable must
17 pass through various pieces of electronic equipment on
18 its way to the consumer. This particular type of
19 non-simultaneity would not, in Rogers' view, make that
20 television program an individually receivable
21 transmission.
22 13258 Similarly, a program such as the
23 broadcast of a sporting event that allows the viewer to
24 select camera angles probably should not be considered
25 to be an individually receivable transmission.
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1 However, a new media service that allows viewers to
2 control the timing and nature of their interaction with
3 the content could be considered to be an individually
4 receivable transmission.
5 13259 Support for the development of
6 Canadian new media content.
7 13260 There was general agreement among the
8 parties to this proceeding that there is a substantial
9 quantity of Canadian new media content available on the
10 Internet from an increasing number of Canadian creators
11 and Canadian new media service providers. Based on
12 this, Rogers does not believe that there is a
13 compelling public policy rationale for the
14 establishment of a new media content production fund in
15 addition to the fund that has already been established
16 by the federal government.
17 13261 If such a fund were to be created,
18 Rogers does not believe that it should be financed by
19 contributions from ISPs. Like many parties to this
20 proceeding, Rogers is concerned that a "tax" on ISPs
21 would prove to be damaging by slowing the dissemination
22 of Internet access throughout Canada.
23 13262 A number of parties to this
24 proceeding suggested that a portion of the funding
25 contributed by programming and broadcasting
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1 distribution undertakings to support the creation of
2 conventional Canadian television programming should be
3 made available to finance the development of Canadian
4 new media content. Rogers does not believe that the
5 record of this proceeding demonstrates that funding
6 specifically earmarked for traditional broadcasting
7 should be diverted to the development, production and
8 promotion of new media.
9 13263 I would now like to turn to a number
10 of specific comments made by various parties to the new
11 media proceeding.
12 13264 First, access to high-speed
13 distribution facilities by third party ISPs.
14 13265 A number of parties commented at the
15 hearing on the issue of third party access to high
16 speed Internet access through cable television
17 distribution facilities. As the Commission knows, a
18 separate proceeding currently is under way to deal with
19 this issue initiated by Telecommunications Public
20 Notice 98-14. In light of this, we believe that it is
21 not appropriate for the parties or the Commission to
22 consider the issue of third party access in the context
23 of this proceeding.
24 13266 Accordingly, in this proceeding we
25 wish to note only that the Internet access market
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1 currently is very competitive. Rogers and the other
2 Canadian partners in @Home Canada have made great
3 strides in introducing the @Home service to Canada, but
4 still have only a very small share of the Internet
5 access market. The record of this proceeding
6 demonstrates that Canada's phone companies and other
7 service providers also are offering a number of high
8 speed Internet access services.
9 13267 In our view, any determinations
10 regarding third party access to high speed Internet
11 access facilities must take into account the
12 competitive nature of the Internet market in Canada.
13 13268 The proposed Super-Canadian Web Ring.
14 13269 The Specialty and Pay Television
15 Association has proposed the creation of a
16 "Super-Canadian Web Ring". Rogers submits that this
17 proposal would constitute an unwarranted intrusion into
18 the market and has the potential to become an
19 embarrassingly ineffective use of public funds and
20 industry energies.
21 13270 The record of this proceeding
22 indicates that Canadian Internet users already have at
23 their disposal powerful Internet search tools. Various
24 companies and organizations have made substantial
25 investments to provide effective platforms for the vast
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1 amounts of Canadian content on the Internet. Canadian
2 content providers such as Rogers, Canoe and others
3 already do a commendable job of bringing Canadian
4 content to the attention of Canadians surfing the Web.
5 13271 Rogers finds it difficult to believe
6 that a central planning solution will provide more
7 effective search tools than a competitive marketplace
8 in which media companies are actively seeking to
9 increase their audience size by providing more
10 effective and more innovative access to Canadian new
11 media content.
12 13272 Nature of the content provided by
13 @Home Canada.
14 13273 Several parties to this proceeding
15 suggested that the Rogers@Home service is largely based
16 on American content. These statements are not
17 supported by the facts. In our Phase I submission, we
18 described in detail the high level of Canadian content
19 provided to Canadian @Home customers.
20 13274 In this regard, we believe that it is
21 important to note that @Home Canada is first and
22 foremost an open, high speed gateway to all of the new
23 media content and services available on the Internet.
24 As part of its high speed Internet access service
25 @Home Canada provides consumers with an attractive
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1 Canadian user interface. That user interface includes
2 various channels or packages of Canadian information
3 that consumers may find useful and interesting.
4 @Home Canada currently devotes substantial time and
5 attention to ensuring that it offers Canadian consumers
6 a high quality and distinctly Canadian experience.
7 13275 Access by Canadian new media content
8 and services to Internet search engines and portal
9 services.
10 13276 At the hearing, some parties
11 suggested that Canadian Web sites may not be listed on
12 Canadian portal or aggregator sites unless they are
13 paying advertisers or that there may be other
14 commercial reasons for not listing Canadian new media
15 services or content.
16 13277 In fact, as Rogers noted at the
17 hearing, the opposite is true.
18 0925
19 13278 Given the rapid growth of the new
20 media industry and the increasing level of demand for
21 Canadian new media products and services, portals and
22 search engines must constantly update their listings to
23 include all new Canadian Web sites or Canadian users
24 will go elsewhere.
25 13279 If a search engine, for example, only
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1 gave the name of one hotel chain in response to queries
2 about travel, users would soon recognize this
3 development. Users would stop accessing that search
4 engine and the site would get less hits.
5 13280 Soon the portal would not be used or
6 would be used much less as users migrated to
7 competitive search engines. So it would be folly for a
8 search engine to charge for access.
9 13281 In fact, Rogers is making substantial
10 expenditures to acquire Canadian content to ensure that
11 its new media services, including search engines, offer
12 consumers the widest possible choice and diversity of
13 Canadian information.
14 13282 The Commission should not be misled
15 by unsubstantiated allegations in its consideration of
16 the issues arising from this proceeding.
17 13283 Mr. Chairman, Members of the
18 Commission, I would like to conclude our presentation
19 today by commending you for convening this proceeding.
20 It has been an interesting and stimulating process and
21 we have all learned a great deal.
22 13284 While a variety of views were
23 expressed, Rogers submits that the record of the
24 proceeding supports the following five key conclusions.
25 13285 i. New media services are not likely
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1 to compete with conventional or appointment-based
2 broadcasting services in the short or medium term.
3 However, services such as video-on-demand may face
4 competition from new media before other licensed
5 broadcasting services.
6 13286 ii. The Commission should allow
7 Canadian media companies to expand into all areas of
8 content creation to ensure cost-effective production of
9 competitive Canadian new media content.
10 13287 The Commission could assist this
11 process by developing a regime to permit the affiliates
12 of Canadian cable operators to obtain licences to
13 operate cable programming services.
14 13288 iii. Much if not all of the content
15 on the Internet can be regarded as outside the scope of
16 the Broadcasting Act.
17 13289 iv. Applying taxes to ISPs will slow
18 the penetration of Internet access to Canadian homes
19 and businesses at a time when this penetration should
20 be stimulated.
21 13290 v. The concerns expressed by some
22 parties about access to various facilities and services
23 fail to recognize the highly competitive nature of the
24 Internet and its rapid and dynamic evolution.
25 13291 We appreciate this opportunity to
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1 present our final arguments to the Commission and look
2 forward to your findings as a result of this
3 proceeding. We would be pleased to answer any
4 questions that you may have.
5 13292 THE CHAIRPERSON: Thank you, Mr.
6 Engelhart.
7 13293 Just a question or two of
8 clarification. On page 8 of your oral presentation
9 this morning, you were talking about this whole issue
10 of how new media would fit into definitions of the
11 Broadcasting Act and whether or not we should exempt
12 some aspects of new media from the provisions of the
13 Act.
14 13294 You talk here about individually
15 receivable transmissions of programs. At the bottom of
16 the page, your last sentence says "However, a new media
17 service that allows viewers to control the timing and
18 nature of their interaction with the content could be
19 considered to be an individually receivable
20 transmission".
21 13295 If I back up through your logic here,
22 you would suggest that we should exempt that. I take
23 it your view is that that would still constitute
24 broadcasting. The reason I ask this is because other
25 parties during the hearing in December were commenting
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1 that this sort of interaction wouldn't even constitute
2 broadcasting.
3 13296 MR. ENGELHART: Yes. We think the
4 Commission could safely conclude that all of the
5 content on the Internet is not broadcasting, but what
6 we are saying is, I guess, if the Commission takes a
7 different view and they are looking for some sort of
8 line to draw in the sand, how are they going to do it?
9 How are we going to exempt it?
10 13297 I guess the only thing we were able
11 to come up with was this idea of an individually
12 receivable transmission. It's not so much that we are
13 saying that programs like that are broadcasting, but if
14 you go that way, this may be a useful device.
15 13298 THE CHAIRPERSON: What do you think?
16 13299 MR. ENGELHART: I think a court would
17 agree with you if you found that all of the programming
18 content on the Internet today is not broadcasting. I
19 think between the three arguments -- transmission,
20 program and receivable by the public -- I think a court
21 would support that.
22 13300 I think in an area like this the
23 court is going to grant a huge amount of deference to
24 the Commission in the way that it interprets the
25 Broadcasting Act. I think the Broadcasting Act gives
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1 you a fair bit of wiggle room.
2 13301 On first blush, the Broadcasting Act
3 definition is very broad. You can look at it and say
4 "Pictures going over a wire. That's broadcasting", you
5 know. On first blush that's what it looks like, but
6 when you start to parse and examine it, I think the
7 three areas of definition -- I think if the Commission
8 scoped to make a finding that the Internet is not
9 broadcasting, a court would support that.
10 13302 THE CHAIRPERSON: Okay. Thank you,
11 Mr. Engelhart. I think those are all our questions.
12 13303 Madam Secretary.
13 13304 MS BÉNARD: Thank you, Mr. Chairman.
14 13305 The next presentation will be made by
15 AOL Canada Services Inc. and America Online Inc.
16 13306 THE CHAIRPERSON: Good morning, Mr.
17 Kane.
18 PRESENTATION / PRÉSENTATION
19 13307 MR. KANE: Good morning.
20 13308 My name is Greg Kane and I am
21 appearing on behalf of AOL Canada and America Online
22 which we will collectively refer to as AOL. Appearing
23 with me this morning is Julia Garcia who is senior
24 counsel and Director of Canadian Policy for American
25 Online.
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1 13309 We are pleased to appear in order to
2 provide you with a summary of our detailed written
3 final argument which is being filed with the Commission
4 today. For the record, we would ask that these oral
5 submissions this morning, and the filed written
6 document, be considered together as the AOL final
7 argument in this proceeding.
8 13310 Also for the record, Mr. Chairperson,
9 we would acknowledge the Commission's direction, which
10 you have repeated this morning, that this phase is not
11 an opportunity to reply to the written arguments of
12 other parties and we certainly hope that no one who
13 follows us will be afforded any opportunity to reply to
14 our oral or written final arguments.
15 13311 As an aside, Chairperson, we noted
16 your comment on December 7 that the hearing room was
17 empty. We wish to assure you that throughout this
18 hearing we have only been a transcript away and that we
19 have followed the proceeding closely.
20 13312 In this respect, we wish to
21 congratulate the Commission for putting the transcripts
22 on to the Commission's Web site. This measure has
23 contributed a great deal to making this hearing an open
24 and very public process.
25 13313 Let me now summarize our final
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1 argument. Consistent with our position throughout,
2 interactive new media does not amount to broadcasting
3 under the Broadcasting Act and Internet service
4 providers such as AOL are not captured under the
5 Telecommunications Act.
6 13314 Julie Garcia will submit that there
7 are adequate levels of Canadian content available
8 today, that there is no issue with respect to access
9 for producers of Canadian content, that Canadian
10 content is given prominent display and is easily
11 accessed.
12 13315 In addition, Julie will submit there
13 is a serious issue outstanding with respect to the lack
14 of access by third party Internet service providers to
15 the higher speed facilities of broadcast and
16 telecommunications common carriers.
17 13316 With the benefit of that summary, I
18 will turn to the issues which relate to jurisdiction
19 under the Broadcasting Act. This will be the focal
20 point of our final argument as it was during the
21 hearing itself.
22 13317 Chairperson, in your concluding
23 comments on December 7, you indicated that perhaps we
24 should refer to the whole issue of new media as "the
25 stuff" of this business.
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1 13318 Your comment reminded me of a
2 statement in the book "Road Warriors -- Dreams and
3 Nightmares along the Information Highway". In that
4 book the authors captured the evolution from POTs
5 which, as the Commission knows, is the acronym for
6 "plain old telephone service", to the future by adding
7 the acronym PANS, which stands for "pretty amazing new
8 stuff".
9 13319 In the context of this proceeding,
10 the issue is whether this pretty amazing new stuff
11 amounts to broadcasting under the Broadcasting Act.
12 0935
13 13320 As the Commission is aware AOL has
14 taken the position in all phases of this hearing that
15 the "stuff" does not amount to broadcasting under the
16 Broadcasting Act. Based upon our review of the record
17 in this hearing, we maintain our position.
18 13321 A very important introductory point
19 is that appeal courts, recognizing legislation has been
20 drafted in general language, will explore the
21 relationship between the apparent purpose of
22 legislation and the general words themselves in order
23 to arrive at the meaning of particular terms. A
24 reading of the entire Broadcasting Act leads to a
25 conclusion that Parliament clearly had in mind a
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1 regulatory system designed to address the distribution
2 of programming acceptable to all Canadians, as a mass
3 audience, in circumstances where the programs were
4 clearly pushed out to them.
5 13322 As we discussed during our
6 appearance, the entire dynamic of broadcasting as
7 envisaged in the Broadcasting Act is fundamentally
8 different from the dynamic which is applicable with
9 respect to interactive new media.
10 13323 Turning to specific definitions
11 within the Broadcasting Act, and starting with the
12 definition of "broadcasting" itself, our review of the
13 record leads to the conclusion that there is a clear
14 consensus broadcasting does not exist at this time.
15 13324 A helpful discussion the Commission
16 had with those who advocate jurisdiction under the
17 Broadcasting Act occurred during the appearances by the
18 Astral Broadcasting and the Directors Guild of Canada.
19 During these exchanges, there were key concessions that
20 most of the material today is alphanumeric text which
21 is clearly not broadcasting. The issue, therefore,
22 focused on what Astral described -- and I'm quoting --
23 as "a long form television program, a movie". I might
24 indicate, I have inserted some transcript references in
25 both the text of the oral and the written, which I
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1 won't repeat for the purpose of the transcript.
2 13325 So what Astral described, then, as "a
3 long form television program, a movie", which others
4 have described as video quality broadcasting. The
5 discussion then became one of the degree of
6 customization, a discussion which is necessary because
7 of the requirement that broadcasting is intended "for
8 reception by the public".
9 13326 I would ask you to keep that in mind.
10 Keeping it mind the other significant evidence received
11 by the Commission in this proceeding is that broadcast
12 quality video is not currently available through
13 interactive new media, for a variety of reasons,
14 principally technical, and will not be available for
15 some five to ten years.
16 13327 Therefore, putting all of this
17 evidence together, the record in this proceeding
18 clearly demonstrates that there is no broadcasting
19 through interactive new media. As a result, it is
20 premature to talk about issues such as "customization"
21 because the long form television programs and movies
22 are not available for customization.
23 13328 This leads us to the issue of a
24 possible exemption order. During our appearance we put
25 forward the position, and we were not alone, that the
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1 Commission should consider the legal issue of not being
2 able to exempt what it cannot licence. In discussion
3 with parties which followed us we noted that this
4 position was interpreted as being founded upon the
5 assumed broadcasting activity being undertaken by
6 foreign enterprises.
7 13329 To be clear, while this is one aspect
8 of the matter, the more important aspect is the
9 existence or otherwise of a broadcasting undertaking.
10 We submit that the record in this proceeding is clear
11 that the "stuff" available through interactive new
12 media does not today constitute "broadcasting". What
13 this means is that the Commission does not have a
14 factual basis on which to make a finding that someone
15 is carrying on a broadcasting undertaking which, in
16 turn, would lead to the Commission being able to issue
17 an exemption order.
18 13330 Simply stated, the Commission cannot
19 assert an anticipatory jurisdiction which, we submit,
20 you would be doing if you were to issue an exemption
21 order as a result of this proceeding.
22 13331 Let me conclude this part of the
23 argument by examining the question of "broadcasting
24 undertakings". The reason we must do this is that even
25 if there is a finding of "broadcasting", a further
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1 finding must be made that some entity is one of either
2 a "distribution undertaking", a "programming
3 undertaking" or a "network". Of relevance to AOL
4 Canada is the suggestion by some parties that Internet
5 service providers can be considered as distribution
6 undertakings. In our view, this is wrong.
7 13332 Those who have suggested that there
8 may be an analogy between an ISP and a distribution
9 undertaking argue they both would appear, at first
10 blush, to serve as intermediaries between the source of
11 information and its ultimate consumers.
12 13333 However, the record of this
13 proceeding demonstrates that unlike a conventional
14 distribution undertaking, an ISP simply provides a
15 conduit through which information travels in a
16 bidirectional manner at the initiation of a subscriber
17 who pulls the information. Furthermore, what is
18 received by the ISP, and what is pulled in an active
19 manner by an ISP subscriber, is constantly changing and
20 often from sources other than the ISP with which the
21 subscriber has initial access.
22 13334 The fact is that any one server may
23 not even host all of the packets necessary to convey
24 any particular content. Therefore, a particular server
25 would never receive a "program" because it is only the
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1 conduit for a portion of the packets that need to
2 arrive at the end-user's computer. The dynamics are
3 fundamentally different and the two systems,
4 conventional distribution undertakings and the ISPs,
5 are the exact opposite of each other.
6 13335 However, as the Chairperson observed,
7 even if the Commission was to consider that some entity
8 within the Internet system was a BDU, virtually all of
9 the rules which the Commission has in place relative to
10 BDUs such as rate regulation, simultaneous substitution
11 for advertising, as well as tiering and linkage, are,
12 to use your words, Chairperson, "probably not
13 applicable".
14 13336 Consequently, all that would be left
15 when these other matters are stripped away would be,
16 again as you indicated, Chairperson, Commission
17 consideration that it might levy a fee. It was
18 interesting that when this proposition was put to
19 counsel for the Directors Guild of Canada he did not
20 consider that a fee would be appropriate -- and I am
21 now quoting him -- "unless there was a pretty high
22 threshold passed in terms of broadcast quality
23 distribution". As we have discussed, the record
24 clearly demonstrates that such a threshold, if ever
25 met, is some five to ten years away and clearly not
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1 present today.
2 13337 Therefore, for all of these reasons,
3 and reasons set out in much greater detail in our
4 written argument, it is our submission the "stuff"
5 available through interactive new media does not
6 constitute "broadcasting" as that term is defined in
7 the Broadcasting Act, nor is the scheme and purpose of
8 the Broadcasting Act intended to capture interactive
9 new media activity.
10 13338 I will now ask Julie Garcia to
11 address issues relating to Canadian content and access
12 to higher speed facilities.
13 13339 MS GARCIA: Chairperson and Members
14 of the Commission, as I trust was evident to the
15 Commission in our written filings and in our appearance
16 here last November, AOL Canada considers Canadian
17 content to be an extremely important part of the
18 services it provides to consumers. Without any
19 requirement or prompting, we have devoted considerable
20 resources to the production of Canadian new media and
21 have taken steps, such as our partnering arrangement
22 with Marc Boucher of Maple Square, to ensure that the
23 Canadian content receives prominent display and is
24 easily accessed.
25 13340 In the Chairperson's closing
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1 comments, he noted that many parties have expressed an
2 opinion about the imposition of measures requiring
3 operators of portals, content aggregators and others to
4 provide visibility and prominence to new Canadian
5 content. As demonstrated by the record, it is our view
6 that such measures are neither appropriate nor
7 required.
8 13341 Briefly, any Canadian business or
9 individual can establish a Web presence with minimal
10 financing and programming skills. Unlike the
11 conventional broadcasting system, access is not an
12 issue for new media. As a result, there are low
13 barriers to entry for both the content producers and
14 for ISPs to enter the market. This fact has been
15 recognized by the Commission in various determinations
16 forbearing from the regulation of the retail ISP
17 sector.
18 13342 It is AOL's strong belief that market
19 forces, rather than regulatory fiat, have provided the
20 optimal means to ensure that ISPs provide high quality,
21 relevant, informative and entertaining Canadian content
22 which is prominently displayed. It is also our strong
23 belief, and supported by others in this proceeding,
24 that the creation of artificial and arbitrary measures
25 would inhibit rather than encourage the production of
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1 additional Canadian content.
2 13343 The record in this proceeding on the
3 issue of Canadian content was conveniently summarized
4 by Commission McKendry during his questioning of
5 counsel for the Directors Guild of Canada.
6 Commissioner McKendry summarized the record as follows:
7 "Maple Square told us that they
8 index over 60,000 Canadian
9 sites. According to AOL, 5 per
10 cent of all Web sites in the
11 world are Canadian. Rogers told
12 us that Yahoo Canada can't keep
13 up with the emergence of new
14 Canadian sites. They have two
15 people working indexing them and
16 they are always a little bit
17 behind. Rogers also told us
18 that there is 14 million
19 pages..." -- 14 million pages --
20 "...of Canadian Web site
21 information and AOL and Yahoo
22 Canada, through Rogers, told us
23 that they don't charge for
24 indexing and they don't charge
25 for display."
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1 13344 You will no doubt recall that as a
2 result of this summary Commission McKendry then asked
3 counsel for the Directors Guild about their written
4 proposal for targeted financial support and a
5 requirement that ISPs provide their customers with
6 information on links to Canadian sites on their home
7 pages. Counsel informed the Commission that "the Guild
8 in light of that experience would take the view, as you
9 may, that there is no point in the Commission requiring
10 it if it's happening anyway".
11 13345 In conclusion, on this point, the
12 record in this proceeding demonstrates overwhelmingly
13 that market forces alone have and will continue to
14 ensure that adequate amounts of Canadian content are
15 readily accessible with prominent display to Internet
16 users. As Greg discussed, any measures targeting the
17 distribution of Canadian new media content would be
18 beyond the Commission's statutory jurisdiction.
19 13346 I would like to turn to the issue of
20 access by Internet service providers to the higher
21 speed facilities of Canadian carriers. This issue is
22 one which is of fundamental importance to the
23 advancement of new media in Canada, and one that goes
24 to the heart of the Commission's public interest
25 responsibilities.
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3033
1 13347 Without going into a detailed
2 background explanation, suffice it to say that the
3 Commission, as you know, has made an explicit finding
4 that incumbent telephone companies and cable
5 companies -- as broadcast carriers -- have substantial
6 market power with respect to higher speed access
7 services. And despite Mr. Engelhart's recent
8 representations, the market is not yet sufficiently
9 competitive to justify forbearance with respect to the
10 rates and terms on which the carriers provide the
11 higher speed access services.
12 13348 As a result, the Commission has held
13 that it would be appropriate to tariff the rates and
14 other terms on which such services are provided by
15 these incumbent broadcast carriers and telephone
16 companies.
17 13349 We recognize that the Commission has
18 initiated a proceeding, through Telecom Public Notice
19 CRTC 98-14, requesting comment on the methodology by
20 which the rates for higher speed access services should
21 be developed. The written record in that proceeding
22 closed on November 2nd with the reply comments of The
23 Canadian Association of Internet Providers. As a
24 result, AOL and the over 700 other competitive ISPs in
25 Canada are now waiting for the issuance of the
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1 Commission's decision.
2 13350 AOL strongly endorses the message
3 that the ISP community has put before the Commission in
4 this proceeding, which was summarized by the
5 Chairperson, and I quote, "that it's time for the
6 Commission to take some action to resolve this - issue
7 of access by ISPs to the higher speed facilities of
8 Canadian carriers."
9 13351 I would now like to return the final
10 argument to Greg Kane for concluding comments.
11 13352 MR. KANE: Through our written
12 filings in the two preliminary phases, as well as our
13 appearance in the oral phase, AOL has been a full
14 participant in the Commission's examination of the
15 relevant questions and issues relating to the "stuff"
16 of new media. Like other participants, we are
17 impressed with the record which the Commission has
18 generated as a result of this proceeding, and we
19 believe that the Commission's expectation of developing
20 a comprehensive record has been met.
21 13353 In accepting the invitation offered
22 by the Commission to participate in this proceeding,
23 AOL has tried to be as forthcoming and direct as
24 possible in responding to the Commission's questions
25 and addressing the various issues outlined in both the
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3035
1 public notices and the questions raised during the oral
2 portion of the hearing.
3 13354 On behalf of AOL, I would like to
4 emphasize that we respect the Commission for initiating
5 this important proceeding and that there is no lack of
6 respect when we submit the record demonstrates that the
7 Commission's jurisdiction under both the Broadcasting
8 and Telecommunications Acts does not extend to the
9 "stuff" of new media content or new media service
10 providers. We do not believe the Commission needs to
11 monitor the progression from "POTS" to "PANS", but if
12 it does so, then this monitoring should not be done in
13 the context of an exemption order.
14 13355 We trust that our submissions
15 throughout this proceeding, culminating in this final
16 argument, have been of assistance to the Commission and
17 we wish you well in your important deliberations. We
18 would be pleased to answer any questions you might
19 have.
20 13356 THE CHAIRPERSON: Thank you, Mr. Kane
21 and Ms Garcia.
22 13357 Just a question or two on this last
23 point, and we don't take any disrespect on this issue
24 when people say "Don't touch the stuff. Keep your
25 hands off."
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3036
1 13358 In your presentation this morning at
2 about pages 5 and 6 dealing with this question of
3 jurisdiction and definitions and exemption orders, and
4 so on, you talk about -- where are we here? About five
5 or six lines up from the bottom of page 5 you say:
6 "We submit that the record in
7 this proceeding is clear that
8 the `stuff' available through
9 interactive new media does not
10 today..." -- Underscore
11 "today" -- "...constitute
12 `broadcasting'.
13 13359 Then you go on page 6 to say that:
14 "...the Commission cannot assert
15 an anticipatory jurisdiction
16 which, we submit, you would be
17 doing if you were to issue an
18 exemption order as a result of
19 this proceeding."
20 13360 Now, one of the concerns that has
21 been expressed to us in the context of this proceeding
22 is the -- how shall I say -- the uncertainty with
23 respect to the Commission's role with respect to
24 treating new media on a going-forward basis, and it has
25 been expressed by some parties that the fact of this
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1 uncertainty has or may lead either to people simply not
2 developing a business in Canada, which they otherwise
3 might, for fear of requiring a broadcasting licence, or
4 going elsewhere to do that, perhaps the United States.
5 13361 If we accept that you are correct,
6 that today it does not but tomorrow it might, and that
7 one might define the parameters around which tomorrow
8 it might -- and I assume that you would acknowledge
9 that tomorrow it might if you are underscoring the
10 point that today it doesn't -- I'm wondering your view
11 about the Commission not asserting an anticipatory
12 jurisdiction -- that's not the phrase I might use, but
13 to make it clear, if one was going to take that route
14 that even if it is tomorrow the Commission would be
15 exempting it -- and I guess I'm kind of curious about
16 the point you seem to be stressing here, which my first
17 reading of it would be that even if it is going to be
18 you shouldn't today assert that you would be exempting
19 it.
20 13362 MR. KANE: I would not like the focus
21 of the discussion to be on the word "today,
22 Chairperson, and the reason is that we simply want to
23 try to reach a safe ground and a noncontroversial
24 ground in terms of the Commission's jurisdiction, and
25 our point then is that the Commission jurisdiction
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1 clearly does not exist as a result of this
2 proceeding -- the record of this proceeding.
3 13363 To be clear, as you may recall from
4 our appearance, we would take the position that even
5 tomorrow it will not constitute broadcasting because of
6 the issue of interactivity or, the word that was
7 developed in the course of the hearing, the
8 customization of the programming. We believe that as
9 the system evolves that degree of interactivity or
10 customization will continue to keep it outside the
11 purview of broadcasting.
12 13364 But my point is, let's not go there
13 because I don't think we have to for present purposes.
14 13365 But your point is well taken,
15 Chairperson, and it would be our recommendation that
16 rather than issuing an exemption order, which might be
17 problematic, the Commission could give a very clear
18 signal to the market through its pronouncement from
19 this hearing to say "We don't recognize jurisdiction
20 today, and as we continue to monitor the matter it may
21 arise in the future, but if it does, and if it does in
22 the way that we anticipate it might, our inclination
23 right now would be to issue an exemption order."
24 13366 So you would provide, I think, a very
25 good framework for the future in doing it that way and,
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1 more importantly, that would be the proper legal way in
2 which you should do it, in our submission.
3 1000
4 13367 THE CHAIRPERSON: Okay. Thank you.
5 13368 I think counsel may have a question.
6 13369 MS MOORE: Thank you,
7 Mr. Chairperson.
8 13370 I would just like to clarify some
9 comments that were made at the top of page 7, in
10 particular, it is the second full line from the top
11 where you state:
12 "...a particular server would
13 never receive a `program'
14 because it is only the conduit
15 for a portion of the packets
16 that need to arrive at the
17 end-user's computer."
18 13371 I just wanted to clarify whether you
19 are saying that not all of the packets would go through
20 the ISP and, if that is the case, who or what would be
21 the conduit for the remaining portions of the packets?
22 13372 MS GARCIA: All of the packets would
23 go through the ISP to get to the end-user's computer,
24 but they wouldn't go in any particular order and they
25 wouldn't necessarily all ever reside on the same server
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1 so a program, as it's anticipated under the
2 Broadcasting Act, would never be constituted in the
3 transmission process.
4 13373 MS MOORE: Okay. Thank you. Those
5 are my questions.
6 13374 THE CHAIRPERSON: Thank you, counsel.
7 13375 Thank you very much, Ms Garcia,
8 Mr. Kane.
9 13376 MR. KANE: Thank you.
10 13377 Madam Secretary.
11 13378 MS BÉNARD: Thank you, Mr. Chairman.
12 13379 The next presentation will be la
13 Fédération culturelle canadienne-française.
14 PRÉSENTATION / PRESENTATION
15 13380 M. LAFRENIÈRE: Bonjour, Monsieur le
16 Président et membres du Conseil. Mon nom est
17 Pierre-Paul Lafrenière. Je suis le coordonnateur du
18 Regroupement des arts médiatiques du Canada ainsi que
19 le coordonnateur de la production et des services à la
20 clientèle de ConceptArt multimédia, une entreprise
21 enregistrée de la Fédération culturelle
22 canadienne-française.
23 13381 Une petite clarification avant de
24 poursuivre. C'est la première fois qu'on se présente
25 devant vous au sujet de ces questions et c'est surtout
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1 parce qu'on a entendu dire qu'il y a eu très peu de
2 commentaires de la communauté canadienne-française sur
3 ce sujet et on a beaucoup insisté pour qu'il y ait des
4 commentaires déposés devant vous.
5 13382 Alors il me fait plaisir, à titre de
6 représentant de ces trois organismes nationaux, voués à
7 la défense de la culture francophone au Canada et
8 impliqués dans le développement de contenus canadiens
9 sur l'Internet, de comparaître devant le comité du CRTC
10 chargé de la consultation sur les nouveaux médias.
11 Permettez-moi de vous dresser le portrait des
12 initiatives actuelles et en développement dans les
13 communautés francophones et acadienne en matière de
14 création et de développement de contenus francophones
15 sur l'Internet, de vous parler de la concertation
16 associative qui se fait dans ce domaine, de vous
17 communiquer les besoins de ces communautés et de vous
18 suggérer des moyens quant à la garantie du contenu
19 canadien-français sur l'Internet.
20 13383 Les trois organismes qui me mandatent
21 de les représenter sont des organismes qui oeuvrent à
22 l'échelle du territoire canadien dans les communautés
23 francophones et acadienne situées à l'extérieur du
24 Québec. Notre exposé et nos recommandations visent
25 donc les communautés francophones et acadienne oeuvrant
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1 dans un contexte minoritaire.
2 13384 La Fédération culturelle
3 canadienne-française, fondée il y a plus de 20 ans,
4 regroupe les organismes provinciaux francophones
5 oeuvrant dans le domaine de la culture, les artistes de
6 toutes les provinces et territoires excluant le Québec,
7 ainsi que cinq organismes sectoriels nationaux. Elle a
8 comme mission de soutenir le développement culturel des
9 communautés canadiennes-françaises par le biais, entre
10 autres, de services d'appui, de formation et de
11 promotion de la culture. Elle représente leurs
12 intérêts dans les grands projets et dossiers des arts
13 et de la culture, tel le dossier des nouveaux médias.
14 13385 ConceptArt multimédia a été créée
15 afin de favoriser la présence francophone sur
16 l'inforoute. Elle est active dans la création et la
17 gestion de sites portails francophones et dans le
18 développement d'outils pouvant aider la communauté dans
19 des initiatives reliées à l'inforoute.
20 13386 Le Regroupement des arts médiatiques
21 du Canada, fondée en 1994, représente les
22 professionnels des arts médiatiques du
23 Nouveau-Brunswick, de l'Ontario et des provinces de
24 l'ouest. Son rôle est de créer des liens entre ses
25 membres, mettre en place des outils et des structures
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1 d'information et de communication, favoriser la
2 création d'un esprit de partenariat, assurer une
3 collaboration et une concertation avec les organismes
4 engagés dans le développement culturel et artistique
5 des communautés francophones et acadienne et
6 représenter ses membres auprès des gouvernements.
7 13387 La sauvegarde du contenu canadien sur
8 l'inforoute est d'une importance culturelle capitale.
9 La consultation nationale qu'effectue le CRTC sur
10 l'impact des nouveaux médias en est la preuve. Nous
11 louons cet exercice et désirons attirer l'attention du
12 CRTC plus particulièrement sur la création, la
13 sauvegarde et le maintien du contenu canadien
14 francophone sur l'inforoute.
15 13388 Le contenu canadien francophone hors
16 Québec est actuellement créé par les organismes
17 communautaires, entreprises et individus francophones
18 qui ont des assises dans les communautés francophones
19 et acadienne du Canada. Ce sont ces communautés,
20 enracinées dans le milieu, qui sont habilitées à
21 fournir un contenu canadien francophone qui reflète les
22 valeurs et réalisations locales, régionales,
23 provinciales et nationales. Ce sont ces mêmes
24 organismes, entreprises et individus qui peuvent le
25 mieux analyser leur environnement pour le traduire en
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1 termes de développement et direction à donner.
2 13389 La création et la sauvegarde du
3 contenu canadien francophone ne peuvent être dévolues
4 directement aux pourvoyeurs de services Internet et
5 encore moins être assurées par eux,
6 13390 - parce qu'ils ne sont pas enracinés
7 dans les diverses communautés francophones et
8 acadienne;
9 13391 - parce qu'ils ne connaissent pas les
10 enjeux des communautés francophones et acadienne en
11 matière d'inforoute; et
12 13392 - parce que, s'ils étaient obligés de
13 par la réglementation de créer des sites portails
14 francophones, ils pourraient tout aussi bien limiter la
15 création de sites portails à leurs locataires.
16 13393 J'attire par ailleurs votre attention
17 sur le fait qu'une ou un internaute a le choix, au
18 départ, de configurer son navigateur soit pour déployer
19 une page vierge ou un portail de son choix, qui
20 pourrait être un des sites portails canadiens de langue
21 française. Alors le simple fait de se brancher à
22 l'Internet ne nous engage pas à voir le contenu d'un
23 portail particulier. On peut faire les choix qu'on
24 veut lorsqu'on se branche.
25 13394 Nous privilégions donc la création et
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1 la sauvegarde du contenu canadien via les organismes
2 qui fournissent déjà des sites portails canadiens ou
3 travaillent de concertation à les rendre disponibles et
4 accessibles.
5 13395 Présence et initiatives francophones.
6 13396 Permettez-moi de vous faire un bref
7 exposé de la présence et des initiatives francophones
8 en matière d'Internet en vous présentant brièvement un
9 descriptif des sites portails existants, en vous
10 renseignant sur les sites d'accès communautaires, sur
11 les divers programmes gouvernementaux auxquels
12 participent les communautés, ainsi que sur diverses
13 initiatives de commercialisation et de promotion en
14 cours.
15 13397 Sites portails existants.
16 13398 Au niveau national, voici entre
17 autres trois sites portails de la francophonie
18 canadienne:
19 13399 - franco.ca est un site portail sur
20 les communautés francophones et acadienne du Canada; ce
21 site portail comprend entre autres un centre de forum
22 électronique, un centre de documentation, un agenda
23 d'activités de la francophonie et une liste des
24 portails principaux des communautés;
25 13400 - francovoyageur est un site portail
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1 contenant un répertoire annoté sur les sites existants
2 de la francophonie canadienne sur Internet, incluant le
3 Québec; et
4 13401 - francoculture est un site portail
5 sur le domaine des arts et de la culture au Canada
6 français hors Québec; il comprend entre autres des
7 portraits d'artistes, les catalogues complets de toutes
8 les maisons d'édition et toutes les compagnies de
9 théâtre professionnelles ainsi qu'un catalogue de vente
10 en ligne de produits culturels.
11 13402 Au niveau provincial:
12 13403 - neuf provinces et territoires ont
13 un site portail sur leur communauté francophone;
14 13404 - l'Ontario et la Nouvelle-Écosse ont
15 des projets de création de site portail en cours sur
16 leur communauté francophone; et
17 13405 - seule la Colombie-Britannique et
18 Terre-neuve n'ont pas d'initiative en cours à ce jour.
19 13406 Je vous ai mis en annexe à ce
20 document la liste des sites portails dans chacune des
21 provinces et territoires.
22 13407 Mise à jour de sites Web -- un projet
23 ÉdiWeb.
24 13408 ConceptArt multimédia développe
25 actuellement trois outils -- Public, Pro et Plus -- qui
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1 rendront plus simple la mise à jour d'un site Web
2 francophone. Le propriétaire d'un site Web pourrait
3 faire la mise à jour de son site sans nécessairement
4 connaître la programmation html. Cette mise à jour se
5 fera de façon interactive grâce à une programmation
6 installée sur les serveurs de ConceptArt multimédia et
7 avec l'aide de conseillers. Le propriétaire pourra
8 donc modifier son site sans l'aide du développeur.
9 Alors nous investissons dans des outils pour la
10 communauté.
11 13409 Sites d'accès communautaires
12 francophones à l'Internet -- programme d'Industrie
13 Canada.
14 13410 À compter de mars 1998, grâce au
15 Programme d'accès communautaire d'Industrie Canada, 130
16 communautés rurales et éloignées francophones hors
17 Québec ainsi que 250 communautés québécoises
18 francophones avaient pu se doter d'un site d'accès
19 communautaire desservant le grand public. Les sites se
20 répartissent ainsi... vous avez la liste; je ne vais
21 pas aller nécessairement en détail, mais je peux vous
22 dire que c'est réparti à travers le Canada au niveau de
23 sites d'accès en français.
24 13411 Ce programme vise les communautés
25 rurales. Les communautés francophones et acadienne
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1 attendent avec impatience la mise en oeuvre de
2 l'élargissement du programme pour les communautés
3 urbaines. Et là, vous allez avoir plusieurs
4 communautés urbaines qui vont se présenter vers ce
5 programme.
6 13412 Les groupes bénévoles et de
7 bienfaisance francophones et l'Internet -- programme
8 VolNet d'Industrie Canada, un nouveau programme qui
9 devrait être lancé de façon ouverte, j'espère, dans les
10 prochains mois.
11 13413 Les groupes bénévoles et de
12 bienfaisance francophones participeront bientôt à un
13 nouveau programme d'Industrie Canada, le programme
14 VolNet. Celui-ci vise à améliorer l'accès du secteur
15 du bénévolat à l'infotechnologie et aux outils qui lui
16 sont nécessaires pour jouer un plus grand rôle dans la
17 société canadienne. Il a pour objectif de brancher
18 10 000 groupes bénévoles et groupes de bienfaisance à
19 l'Internet d'ici la fin de l'année financière
20 2000-2001. Le comité consultatif est à compléter la
21 mise en place de la structure de livraison du
22 programme. En mars 1999, le programme sera lancé
23 ouvertement à la grandeur du pays.
24 13414 Je soulève ça parce que c'est un
25 moment critique en ce moment où plusieurs initiatives
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1 font en sorte que la communauté va être très présente
2 au niveau de l'utilisation et la création de contenus.
3 13415 Développement de contenu de langue
4 française -- le programme Réseau des communautés
5 virtuelles de langue française d'Industrie Canada.
6 13416 Le programme Réseau des communautés
7 virtuelles de langue française est une initiative
8 d'Industrie Canada initiée en septembre 1998; il
9 favorise l'appropriation de l'inforoute par la
10 population francophone canadienne ainsi que le
11 développement de contenu de langue française.
12 L'objectif du programme est de positionner
13 avantageusement les communautés francophones et
14 acadienne du Canada dans la révolution numérique. En
15 1998-1999, seuls des projets pilotes furent considérés.
16 En mars 1999, le programme sera lancé ouvertement à la
17 grandeur du pays.
18 13417 Un contrat découlant de ce programme
19 est un projet intitulé "Trousse de développeur de
20 projet Internet". Grâce au financement d'Industrie
21 Canada, en collaboration avec Développement des
22 ressources humaines Canada, ConceptArt multimédia est à
23 créer quatre répertoires et un document d'information
24 portant sur l'élaboration et la gestion d'un projet
25 Internet. Il s'agit de répertoires regroupant les
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1 informations suivantes:
2 13418 - les sites existants de la
3 francophone canadienne sur Internet, en d'autres mots
4 le site francovoyageur;
5 13419 - les projets en développement et en
6 poursuite dans les communautés de la francophonie
7 canadienne;
8 13420 - les sources d'appui financier pour
9 des projets Internet; et
10 13421 - les ressources de production pour
11 des projets internet.
12 13422 Cette trousse sera disponible sur
13 divers sites portails de la francophonie canadienne;
14 elle sera aussi disponible en format numérique et
15 papier.
16 13423 Initiatives de commercialisation.
17 13424 ConceptArt multimédia négocie
18 présentement avec divers partenaires potentiels du
19 domaine bancaire afin d'élargir l'ampleur des
20 initiatives commerciales de la communauté. Par
21 ailleurs, il a entrepris la vente de bannières
22 publicitaires sur les sites portails auprès de divers
23 commanditaires.
24 13425 Promotion des sites francophones.
25 13426 ConceptArt multimédia a entrepris
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1 récemment une démarche particulière auprès de TFO, de
2 TVOntario et de la Société Radio-Canada en ce qui
3 concerne l'agenda d'activités de la francophonie et la
4 promotion des entreprises et produits artistiques
5 affichés à l'Internet.
6 13427 Concertation francophone.
7 13428 Les communautés francophones et
8 acadienne se concertent déjà depuis plusieurs années en
9 matière de création et de développement du contenu
10 francophone sur l'Internet.
11 13429 Au niveau national:
12 13430 - Le Consortium des organismes
13 nationaux francophones sur le positionnement dans l'ère
14 numérique regroupe 11 organismes nationaux
15 francophones; il a été formé dans le but d'assurer une
16 présence continue et dynamique du français sur
17 l'inforoute, de développer une approche qui permettra
18 l'émergence d'une prise en charge des nouvelles
19 technologies d'information et de communication et de
20 contribuer à faire des communautés francophones et
21 acadienne de véritables "communautiques".
22 13431 - Le Comité consultatif du programme
23 Réseau des communautés virtuelles de langue française
24 d'Industrie Canada, formé de représentants et
25 représentantes de chacune des provinces et territoires,
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1 des ministères d'Industrie Canada, du Patrimoine
2 canadien et Développement des ressources humaines
3 Canada, a pour mission de positionner avantageusement
4 la francophonie canadienne par l'intégration de
5 l'information et des communications, et du réseautage
6 dans toutes les facettes de son développement.
7 13432 Au niveau provincial:
8 13433 - Divers organismes de concertation
9 oeuvrent au niveau provincial. Mentionnons entre
10 autres le Consortium internet franco-ontarien,
11 regroupant 12 organismes francophones de l'Ontario dont
12 le rôle se rapproche du consortium national mais à une
13 échelle provinciale. Le Consortium internet
14 franco-ontarien fut responsable entre autres de faire
15 la promotion du Programme accès communautaire auprès de
16 la communauté franco-ontarienne pour le compte
17 d'Industrie Canada visant la mise sur pied de centres
18 d'accès communautaires à l'Internet.
19 13434 Les besoins.
20 13435 Les organismes de concertation
21 francophone en matière d'Internet réfléchissent depuis
22 quelques années non seulement à la présence francophone
23 sur l'Internet mais au développement et au maintien du
24 contenu sur l'Internet. Le Consortium des organismes
25 nationaux francophones et le Consortium internet
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1 franco-ontarien entreprendront en février, dans les
2 prochaines semaines, une planification stratégique au
3 cours de laquelle ils discuteront de leur prise en
4 charge du contenu canadien-français. Dix axes de
5 développement de la présence et du contenu francophone
6 à l'Internet ont d'ores et déjà été proposés et seront
7 alors discutés et traduits en termes des besoins de la
8 communauté. Il s'agit de:
9 13436 1. l'émergence d'un leadership et
10 la promotion de l'innovation.
11 13437 2. l'établissement de partenariats
12 en matière de contenu francophone, de compétence, de
13 communication, de capital et de commercialisation;
14 13438 3. l'accès à des outils
15 technologiques et de l'appui technique;
16 13439 4. la présence francophone sur le
17 World Wide Web en développant et liant, par exemple,
18 les principaux sites Web francophones, en développant
19 du contenu francophone, en développant et accédant à
20 des banques de données diverses et favorisant
21 l'interactivité et la mise ne place d'une communauté
22 intelligente;
23 13440 5. le réseautage de lieux de
24 communication offrant les services de courrier
25 électronique avec attachement de dossiers binaires, des
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1 conférences, la gestion de conférences à partir de
2 sites clients, l'accès à différents champs d'intérêt à
3 partir d'un endroit commun;
4 13441 6. l'apprentissage continu par la
5 formation en assurant la formation en français des
6 différents intervenants et un accès aux outils de
7 démarrage;
8 13442 7. la démarche d'accompagnement et
9 animation dont l'évaluation de facteurs de succès, la
10 formulation de recommandations et d'ajustements, la
11 mise à jour de contenus, la mise en place de projets
12 utilisant l'Internet comme véhicule de concertation et
13 l'organisation d'activités ou d'événements centrés sur
14 l'Internet;
15 13443 8. la contribution au développement
16 socio-économique dont la promotion de la communauté
17 francophone, le partage de ressources, de services et
18 de connaissances, l'accès à des services et des
19 personnes ressources et l'établissement de communautés
20 intelligentes;
21 13444 9. le commerce électronique dont la
22 bancatique, le cybermagasinage, la publicité et le
23 marketing, les services gouvernementaux, le transfert
24 électronique de documents, la transmission électronique
25 des déclarations de revenus et les transactions entre
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1 entreprises; et
2 13445 10. la présence et la promotion à
3 l'échelle internationale d'événements francophones tels
4 le Sommet de la francophonie à Moncton en 1999 et les
5 IVe Jeux de la francophonie dans la région
6 d'Ottawa-Hull en 2001, et d'autres événements de la
7 sorte.
8 13446 Les enjeux.
9 13447 En conclusion -- non, il y a des
10 recommandations qui viennent -- les enjeux prioritaires
11 pour les communautés francophones et acadienne en
12 matière de présence francophone canadienne à l'Internet
13 sont:
14 13448 1. de s'approprier le contenu
15 francophone à l'Internet; c'est un contenu qu'elles
16 détiennent, qu'elles connaissent et qu'elles sont les
17 mieux habilitées à gérer et à mettre à jour;
18 13449 2. d'obtenir un investissement
19 financier majeur leur permettant de développer,
20 entretenir et mettre à jour ce contenu;
21 13450 3. de former la communauté à trois
22 niveaux:
23 I. Premièrement, en éduquant
24 l'infrastructure organisationnelle des bienfaits des
25 nouvelles technologies afin de faciliter son
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1 cheminement et assurer son développement;
2 II. En offrant une formation
3 dans l'utilisation de l'Internet et des outils reliés à
4 l'Internet; et
5 III. En formant les cadres
6 professionnels dans la création de sites.
7 13451 À ce jour les programmes
8 gouvernementaux visent principalement l'accès à
9 l'Internet. Les besoins actuels sont axés sur le
10 développement, l'entretien et la mise à jour des
11 contenus ainsi que sur la formation.
12 13452 Les recommandations.
13 13453 La Fédération culturelle
14 canadienne-française, le Regroupement des arts
15 médiatiques du Canada et ConceptArt multimédia et leurs
16 organismes membres recommandent donc au CRTC:
17 13454 1. de reconnaître les organismes et
18 entreprises canadiens-français comme pourvoyeurs de
19 contenu canadien-français;
20 13455 2. de créer un fonds destiné à:
21 - créer des nouveaux contenus,
22 - entretenir et mettre à jour le
23 contenu,
24 - intégrer les nouvelles
25 technologies,
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1 - réseauter les sites,
2 - fournir la formation et créer
3 les outils de formation,
4 - fournir l'appui technique
5 nécessaire,
6 - développer le commerce
7 électronique de produits francophones, et
8 - promouvoir les activités et
9 les sites francophones.
10 13456 Ce sont entre autres des activités
11 qui pourraient être financées par un tel fonds.
12 13457 Au nom des organismes que nous
13 représentons, nous désirons remercier le CRTC d'être à
14 l'écoute des besoins et recommandations des communautés
15 francophones et acadienne en matière de nouveaux
16 médias.
17 13458 Merci.
18 13459 LE PRÉSIDENT: Merci, Monsieur
19 Lafrenière. Je pense que nous n'avons pas de
20 questions. Merci beaucoup.
21 13460 M. LAFRENIÈRE: Merci.
22 13461 THE CHAIRPERSON: I think we will
23 take one more presentation and then we will take our
24 morning break.
25 13462 Madam Secretary.
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1 13463 MS BÉNARD: Thank you, Mr. Chairman.
2 13464 The next presentation will be Astral
3 Broadcasting Group.
4 1015
5 PRESENTATION / PRÉSENTATION
6 13465 MR. ZOLF: Obviously time is
7 everything. I stepped out for five minutes. My
8 apology.
9 13466 Good morning, Mr. Chairman, members
10 of the Commission. It does say good morning there and
11 I'm glad it does say good morning on the presentation.
12 13467 My name is Stephen Zolf. I am here
13 today on behalf of the Astral Broadcasting Group to
14 summarize Astral's final written argument.
15 13468 Astral's presentation will address
16 the following issues: The Broadcasting Act and new
17 media services. Who are the relevant broadcasting
18 undertakings in a new media environment? What are the
19 next steps for the Commission following the conclusion
20 of this proceeding? What is the appropriate scope of a
21 new media exemption order? Finally, should the
22 Commission modify its regulatory treatment of
23 traditional broadcasting services as new media
24 proliferates?
25 13469 The Commission has heard a range of
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1 views in this proceeding as to the appropriate
2 regulatory treatment of new media services. A number
3 of parties have argued that none of the content on the
4 Internet is within the Commission's jurisdiction, while
5 others have argued that the Commission has no choice
6 but to regulate the Internet.
7 13470 Astral's position on this matter is
8 clear. A sub-set of new media content on the Internet
9 indeed falls under the definition of broadcasting.
10 That being said, the nature and attributes of this
11 content currently pose little threat of bypassing
12 traditional broadcasting services and their
13 contributions to the creation and presentation of
14 Canadian content.
15 13471 This in turn suggests that it will be
16 appropriate for the Commission to take a low profile
17 with respect to new media content and the Internet for
18 now.
19 13472 But Astral's concern has largely been
20 a forward looking one. To the extent that the Internet
21 becomes a partial or complete alternative for the
22 delivery of the programming that is now provided within
23 the broadcasting system, the current contributions made
24 by Canadian broadcasting undertakings would be
25 threatened.
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1 13473 This threat would occur because of a
2 critical dichotomy. While the Internet as a
3 distribution medium has had a significant impact on the
4 economics of delivering content, it has not and it will
5 not change the economics of program creation.
6 13474 If indeed the Internet evolves to
7 allow traditional broadcasting content to be
8 distributed on a ubiquitous basis, then the Commission
9 will need to ensure favourable conditions for the
10 expression of Canadian voices.
11 13475 Moreover, we have seen that the pace
12 of change in this area is extremely fast and impossible
13 to predict. Again, this underscores the need for the
14 Commission to reserve its right to oversee the new
15 media sector in the future.
16 13476 During our oral appearance before the
17 Commission on December 2, Chairperson Colville sought
18 our view as to the scope of the Commission's
19 jurisdiction under the Act. By way of final argument,
20 we note that most of the new media content that is
21 currently distributed on the Internet is predominantly
22 alphanumeric text and, therefore, would not be programs
23 under the Act.
24 13477 Furthermore, even programs would not
25 comprise broadcasting if they are customized in a
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1 manner that would allow individual users to view
2 different images, hear different sounds and read
3 different text. Using the nomenclature of the Act,
4 such content would not be transmitted for reception by
5 the public.
6 13478 Of course, this hearing has
7 demonstrated that the dividing line between what does
8 and what does not come under the paradigm of the Act is
9 not an easy one to draw. In any case, we support
10 Chairperson Colville's suggestion made during our
11 December 2 appearance that the Commission should
12 clarify its approach to interpretation of the phrase
13 "for reception by the public".
14 13479 In our view, this would effectively
15 provide more certainty to the industry about the
16 sub-set of content that the Commission is concerned
17 about.
18 13480 Astral fully supports this principled
19 interpretive approach to the Commission's jurisdiction,
20 but we must be clear about where this dividing line is.
21 There mere ability to select new media content on a
22 non-simultaneous or point to point basis is not, in our
23 view, sufficient to take the activity outside of the
24 ambit of the Act.
25 13481 While we noted in our written
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1 submissions that the ability to select content at a
2 user's discretion was one element of non-broadcasting
3 content, it should be clarified that this attribute,
4 without any other defining characteristic such as
5 interactivity or customization, would not be sufficient
6 to take it outside of the definition of broadcasting.
7 13482 We are pleased to note that other
8 parties clearly support this view. The Directors Guild
9 of Canada is on record as urging the Commission to
10 focus on whether the nature and characteristics of the
11 content are amenable to customization rather than the
12 "mechanism by which the content is transmitted and
13 received by a user".
14 13483 This analysis clearly suggests that
15 traditional long form content such as feature films and
16 other long form programming will comprise broadcasting,
17 even when such content becomes available over the
18 Internet on an on-demand basis.
19 13484 In fact, as broadband becomes more
20 ubiquitous over the Internet, it is likely that the
21 proportion of broadcasting content will similarly
22 increase. This again leads to the conclusion that the
23 Commission should reserve its right to be proactive in
24 this sector if the need arises.
25 13485 A number of parties during the
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1 proceeding noted that it is difficult to predict to
2 what extent new media distribution networks will
3 duplicate a broadcast paradigm. However, in response
4 to various questions raised by the Commission during
5 the hearing, three specific issues are noteworthy.
6 13486 First, the definition of a
7 broadcasting undertaking. Astral concurs with those
8 parties who noted that the definition of broadcasting
9 undertaking in the Act is expansive rather than narrow
10 in scope. It is defined to include a distribution
11 undertaking, a programming undertaking and a network.
12 13487 Ultimately a new media broadcasting
13 undertaking could consist of a hybrid programming and
14 distribution undertaking, depending ultimately on the
15 nature of the transmission and receive arrangements
16 employed.
17 13488 Second, the role of ISPs. Already
18 certain functions performed by ISPs resemble a
19 broadcasting function. Content aggregators and ISPs
20 are increasingly replicating the role of traditional
21 BDUs. As the price of access falls, ISPs are looking
22 at alternative means to differentiate their product and
23 to generate revenues.
24 13489 They are increasingly integrating the
25 access and the aggregation functions to include the
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1 selection and organization of content. So the primary
2 function of an ISP may indeed move away from that of a
3 mere gateway and closer to that of a program
4 distribution undertaking.
5 13490 Furthermore, during the public
6 hearing the Commissioned questioned the relevance of
7 the comparison between ISPs and BDUs. Chairperson
8 Colville noted that ISPs face lower costs and
9 significantly lower barriers to entry than BDUs. This
10 in turn suggests that the potential for gatekeeping
11 that exists among traditional BDUs would be
12 non-existent in a new media context.
13 13491 Yet, it may be equally likely that
14 the ISP market evolves to be less competitive in view
15 of the potential for new media service providers to
16 acquire a dominant position by virtue of access to the
17 local high speed delivery last mile.
18 13492 This was already raised before the
19 Commission during the hearing. This in turn suggests
20 that the ISP market could find an equilibrium in which
21 only a handful of ISPs survive.
22 13493 The recent application by CAIP to the
23 Commission seeking equitable access to retail telco
24 ADSL Internet access services underscores the potential
25 for dominant firm behaviour in the broadband access
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1 sector.
2 13494 Third, ISP territoriality. We are
3 pleased to note that other parties have also noted the
4 likelihood of the Internet ultimately adopting the
5 strictures and disciplines of copyright. In as little
6 as five years copyright sanctions may begin to apply
7 which will impose a discipline of territoriality on the
8 distribution of long form programming.
9 13495 What are the next steps for the
10 Commission? All of these factors suggest that at the
11 very least the ultimate configuration of the new
12 distribution sector is in flux. While ubiquitous
13 delivery of long form broadcasting on the Internet is
14 not here today, the Commission must nevertheless avoid
15 throwing the baby out with the bath water if this
16 medium begins to resemble the traditional broadcasting
17 paradigm.
18 13496 In fact, the Internet is already in
19 some aspects beginning to resemble a mass
20 communications medium. As we noted in our written
21 submissions, the development of multicast Internet
22 protocols have enabled the use of point to multipoint
23 broadcast models over digital networks. This has moved
24 the Internet paradigm further away from the litmus test
25 of a non-broadcasting activity, as some have suggested,
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1 namely individual receivable transmissions.
2 13497 Today we do not know the extent to
3 which the Internet will tomorrow serve as a primary
4 delivery pipeline for traditional film and television
5 programs. This merely underscores the need for the
6 Commission to reserve its right to assert its
7 jurisdiction on a prospective basis in order to
8 implement cultural policy initiatives in the future.
9 13498 Astral supports the issuance of a
10 broad exemption order for new media services. At this
11 stage of their evolution, we agree that neither
12 licensing new media broadcasting undertakings nor
13 requiring compliance with other provisions of the
14 Broadcasting Act would contribute in a material manner
15 to the implementation of broadcasting policy.
16 13499 If the Commission adopts an exemption
17 order, it should be broad as well as time limited so
18 that it has the right to revisit the overall new media
19 area after a reasonable time period. The Commission
20 should also make clear its expectations to the industry
21 that at the conclusion of the specified period, it will
22 consider reasserting its jurisdiction over all or some
23 of the new media content, if necessary.
24 13500 This time limited approach will be
25 useful, particularly if the Internet indeed becomes a
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1 partial or a complete substitute medium for the
2 delivery of traditional film and television
3 programming. This would preserve the Commission's
4 authority to address key cultural policy objectives,
5 namely the creation and exhibition of Canadian film and
6 television programming.
7 13501 The Commission should also accompany
8 its exemption order with a statement under section 6 of
9 the Act that it will continue to monitor how the new
10 media environment develops. This policy statement
11 would provide adequate notice to the new media sector
12 that the Commission could indeed have a potential role
13 in overseeing content that falls squarely within its
14 ambit.
15 13502 We note that some parties have
16 proposed that all exempt undertakings should be
17 required to make contributions under certain
18 conditions. Astral supports these proposed approaches
19 in principle, but nevertheless feels that they may be
20 premature at this time. It would be preferable if the
21 Commission considered such an approach after an initial
22 blanket exemption process. We have suggested 18 to 24
23 months.
24 13503 Moreover, there is a risk that
25 attaching conditions to an exemption order may be
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1 subject to a legal or jurisdictional challenge by
2 parties to whom the exemption order may inadvertently
3 attach. Thus, we support the arguments for a very
4 broad exemption approach. At this stage there is no
5 need to split hairs among different types of new media
6 services.
7 13504 Finally, we note that a number of
8 parties have submitted that the Commission must avoid
9 any asymmetry of regulation between new media and
10 traditional broadcasting undertakings. They assume
11 that the Commission is powerless to take action in
12 relation to new media broadcasting services.
13 Accordingly, they seek a similar equitable regime of
14 forbearance.
15 13505 We urge the Commission to reject
16 these arguments. They would have you believe that
17 there is no longer any justification for regulation in
18 traditional broadcasting markets. We beg to differ.
19 13506 As we noted in our appearance on
20 December 2, the Broadcasting Act was intended to be
21 technologically neutral. It clearly recognizes that
22 old wine can indeed be poured into new bottles. Thus,
23 Astral rejects the view of some of the parties of the
24 inevitability of total forbearance with respect to new
25 media solely due to the difficulties involved in
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1 asserting or enforcing jurisdiction under the Act.
2 13507 There will indeed be a continued need
3 for the Commission to provide the appropriate
4 incentives in traditional broadcasting environments to
5 produce, promote and distribute such programming, even
6 if that programming is ultimately consumed on a purely
7 on-demand point to point fashion over new media
8 distribution networks such as the Internet.
9 13508 It is unlikely that the new media
10 distribution network model alone can support certain
11 types of content, namely high cost, long form
12 programming designed initially for distribution in
13 traditional mediums.
14 13509 Rather, the creation of this type of
15 programming depends on the existence of adequate
16 regulatory and other structural incentives to produce
17 and distribute and exhibit such content in traditional
18 broadcast mediums.
19 13510 There is a cogent precedent for the
20 distinction between long form content such as full
21 length feature films delivered on a purely VOD basis,
22 for example, and other point to point services that may
23 be appropriately exempted by the Commission.
24 13511 This distinction was articulated in
25 the Convergence Report where the Commission indicated
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1 that mass appeal on-demand applications, such as VOD,
2 because of their nature and scale can and should be
3 regulated where this would contribute materially to the
4 cultural objectives of the Act. In fact, the
5 Commission has licensed a number of VOD providers,
6 including an Astral-owned service on this rationale.
7 Thus, it follows that similar regulatory tools should
8 be applied to such services when they are distributed
9 over global distribution networks such as the Internet.
10 13512 These are Astral's final comments and
11 recommendations in this proceeding. We are grateful to
12 the Commission for initiating this important
13 proceeding.
14 13513 I would be pleased to respond to any
15 questions.
16 13514 THE CHAIRPERSON: Thank you, Mr.
17 Zolf. I don't think we have any questions. Again,
18 thank you very much.
19 13515 MR. ZOLF: Thank you.
20 13516 THE CHAIRPERSON: We will take our
21 break at this time and reconvene at a quarter to
22 eleven.
23 -- Short recess at / Courte suspension at 1030
24 --- Upon resuming at / Reprise à 1050
25 13517 THE CHAIRPERSON: We will return to
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1 our proceeding now.
2 13518 Madam Secretary.
3 13519 MS BÉNARD: Thank you, Mr. Chairman.
4 13520 The next presentation will be by the
5 Canadian Association of Internet Providers.
6 13521 THE CHAIRPERSON: Mr. Kawchuk.
7 PRESENTATION / PRÉSENTATION
8 13522 MR. KAWCHUK: Good morning. My name
9 is Rob Kawchuk from the Canadian Association of
10 Internet Providers, and we are very pleased to be here.
11 13523 With me today are some familiar
12 faces, starting with Julie Garcia from America Online
13 Canada; Richard Cantin from UUNet Canada and Wayne
14 MacLaurin from Cyberus Online. As of three days ago
15 Wayne became a board member of CAIP at our AGM.
16 13524 Today we are going to talk about
17 three main issues: access to telecom, some Broadcast
18 Act issues; and what CAIP and the industry itself is
19 doing regarding self-regulation and self-management.
20 13525 Richard.
21 13526 MR. CANTIN: CAIP wishes to summarize
22 its position with respect to these proceedings and to
23 build upon our earlier oral presentation.
24 13527 In its oral presentation the
25 Commission engaged the CAIP panel in a discussion of
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1 the merits of a "hands off" approach to regulating the
2 new media industry.
3 13528 While there are areas where such an
4 approach is necessary, CAIP firmly believes that there
5 are a number of key roles which the Commission must
6 take in order to assist the nascent new media industry
7 in Canada in becoming an international force. These
8 roles include a stronger regulatory hand, primarily
9 under the Telecommunications Act, in respect to the
10 creation of a competitive last-mile infrastructure for
11 these new media products and services.
12 13529 CAIP respectfully submits that the
13 Broadcasting Act does not apply to current new media
14 content and services, and that the Commission should
15 maintain a hands off approach with regards to the
16 Broadcasting Act.
17 13530 Throughout the proceedings the
18 Commission and a number of our colleagues focused
19 attention on access to the Canadian infrastructure on
20 which new media is transported and delivered. CAIP and
21 its membership believe the issue of competitive
22 last-mile access is crucial to the expansion and
23 success of the Canadian new media industry.
24 13531 As such, our membership is presently
25 involved in a number of discussions and proceedings,
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1 including some before this Commission, involving the
2 opening of access to the networks of the telephone
3 companies and cable companies. For years telephone
4 companies and cable companies alike have been working
5 towards building the physical networks to carry broader
6 bandwidth. Technologies, however, are continuously
7 emerging, which make the existing infrastructure faster
8 and more cost-efficient.
9 13532 While the costs of building the
10 physical networks is enormous and far beyond the
11 investment capabilities of all but the largest industry
12 players, the initial infrastructure is currently in
13 place.
14 13533 If new technologies are implemented
15 into the last mile of the existing infrastructure, the
16 Canadian industry will have access to faster, more
17 cost-effective networks, and the Canadian public will
18 have access to competitively priced services and
19 innovative new media products.
20 13534 Ron.
21 13535 MR. KAWCHUK: Thank you.
22 13536 I would like to talk a little bit,
23 briefly, about some of the things that have been in the
24 recent press and media about what is actually happening
25 today.
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1 13537 We had an annual meeting a few days
2 ago and Bell Canada representatives were present to
3 discuss a service option with us. That service option
4 included significant delay because of new technology,
5 technology that is currently not being used by their
6 own affiliate, though they are an affiliate that is
7 already in the marketplace. There appear to be two
8 services in high speed access in ADSL, one of which is
9 tariff. We highly encouraged the telco to immediately
10 tariff the other service if they -- if they would so do
11 so that we could have access to it.
12 13538 We believe that Bell is actually
13 stalling on this whole issue, and we think it is a key
14 issue because we believe that the outcome of this
15 specific battle and this overall war is the future of
16 the Internet in Canada and whether we will have a
17 vibrant industry or whether we will end up with a
18 duopoly.
19 13539 On the one hand, the telephone
20 companies have provided some access to their ADSL
21 services, but non-facilities-based members of CAIP
22 contend that such access is not being offered on a
23 competitive basis. On behalf of these members CAIP is
24 asking the Commission to direct the telephone companies
25 to provide both competitively priced access and timely
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1 implementation of new cost-effective technologies.
2 13540 With respect to the cable companies,
3 as you know, CRTC 96-1, quite some time ago, opened up
4 access, and we had some input during the proceeding
5 98-14 that set a time frame and a schedule for third
6 party access to cable to also take place, and we
7 certainly want the cable companies to abide by that and
8 the Commission to move forward.
9 13541 Cable companies, on the other hand,
10 have yet to open their access to third parties, despite
11 the Commission's direction some years ago to do so.
12 13542 CAIP believes the Commission's
13 immediate intervention on these issues will provide
14 much needed support to the new media industry in
15 Canada, both on the service side and with respect to
16 the production of new innovative digital content and
17 applications.
18 13543 Richard.
19 13544 MR. CANTIN: It should be noted that
20 while CAIP membership does have a vested interest in
21 securing access to the infrastructure, CAIP is not
22 alone in its pursuit of additional speed and bandwidth.
23 CAIP is in agreement with many of the new media content
24 providers and their representatives who have appeared
25 before the Commission to note that greater access to
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1 broadband networks would foster the growth of Canadian
2 new media content and production industry.
3 13545 The Commission has also seen, during
4 the course of these proceedings, that access to such
5 networks would also benefit other Canadian industries
6 such as health care, education and a myriad of small
7 businesses.
8 13546 As was seen in October during the
9 OECD Ministerial Conference in Ottawa, much of the
10 world is looking to Canada as the leader in new media
11 technology and the policy relating hereto. With a
12 clear stated direction in regulatory policy to address
13 new media, Canada would be in a position to set the
14 benchmark for other jurisdictions.
15 13547 CAIP, along with other participants,
16 has stated that it does not believe the Broadcast Act
17 applies to new media. For clarity, CAIP contends that
18 the content available as new media is not programming
19 within the meaning of the Act, and the distribution of
20 such content is not broadcasting within the meaning of
21 the Act. CAIP further contends that where the nature
22 of new media falls beyond the scope of the application
23 of the Act, the Commission does not have the
24 jurisdiction to use its exemption powers.
25 13548 CAIP believes that all of the policy
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1 objectives are met under the status quo, without the
2 intervention of the Commission, without additional
3 legislation, and without concluding that the content is
4 programming or the service is broadcasting.
5 13549 The bulk of the new media created by
6 and used by Canadians in Canada still falls into
7 categories which, under any circumstances, should not
8 be considered broadcasting within the meaning of the
9 Act, for example, e-mail, business-to-business data
10 transmissions, and still images with limited
11 interactivity.
12 13550 Respondents in a recent study
13 indicated that 84 per cent of the activities or
14 services done online relate to e-mail communications.
15 Other key activities include research, companies,
16 financial institutions and products; downloading
17 software and visiting sites, including cultural sites.
18 Looking at new media applications from a products
19 perspective instead of activities or services, a 1997
20 survey reported that U.S. home users purchased
21 software, books, travel-related items, computers,
22 subscriptions, information and stocks.
23 13551 Internet and new media opportunities
24 also include software application development,
25 integration, training, as well as value-added services
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1 such as security and network computing, none of which
2 constitute broadcasting.
3 13552 The seven consensus points addressed
4 earlier by CAIP have been addressed in our earlier
5 presentations, and that, coupled with AOL's comments of
6 the morning, have adequately addressed the hands off
7 issues in respect of the Broadcasting Act.
8 13553 With respect to CAIP's position that
9 self-regulation is both preferable and effective, we
10 refer the Commission to CAIP's published Fair Practice
11 Guidelines, attached with our Phase III submission,
12 which covers the following five areas: privacy,
13 security, content management, reputable service
14 delivery, and unsolicited e-mail or SPAM.
15 13554 Ron will, with a recent testimonial,
16 demonstrate how these practices have been successfully
17 used in Canada.
18 13555 MR. KAWCHUK: As you know, we like to
19 tell you a little bit about our members of our
20 association, and there is a very interesting member who
21 appeared at our Annual General Meeting. Actually,
22 while I was talking to John Darcy (ph) from the media
23 awareness group he came up.
24 13556 It's a company called the OA Group of
25 Companies in Edmonton. They provide end-to-end
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1 solutions to business institutions and government
2 agencies. Many of those agencies fall under the
3 Freedom of Information and Privacy Act. Their
4 division, OA Internet, was recently tendered a bid for
5 a FOIT (ph) organization. In that bid they included
6 their affiliation with CAIP and their voluntary use of
7 CAIP's Code of Conduct covering issues like privacy.
8 13557 This document was reviewed by the
9 committee and was included in their final report to
10 their board as one of the salient points. The total
11 contract for Internet services was a six figure
12 contract over a three year term, and the message was:
13 Thank you, CAIP.
14 13558 And I also would like to thank that
15 company for starting to move forward with industry
16 self-management.
17 13559 MR. CANTIN: In conclusion, we
18 believe that the Commission will continue to play an
19 active role in the new media industry in Canada. Our
20 immediate concern is that the infrastructure on which
21 new media is distributed be accessible to Canadians at
22 competitive prices and that the Canadian cultural
23 industries developing in new media be granted the right
24 to continue and grow.
25 13560 On behalf of its membership and the
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1 Canadian new media industry, CAIP undertakes to
2 continue its leadership role in the establishment of
3 industry practice, codes of conduct and community
4 education, both nationally and internationally. In
5 this regard, CAIP released its Fair Practices
6 Guidelines on Friday, Feb. 5, 1999, which will serve as
7 a benchmark for the industry and are included in your
8 package.
9 13561 CAIP wishes to thank the Commission
10 for the opportunity to participate in this process and
11 looks forward to working with the Commission on other
12 new media related matters.
13 13562 THE CHAIRPERSON: Thank you very
14 much, Mr. Cantin and Mr. Kawchuk.
15 13563 I don't think we have any questions.
16 Thank you.
17 13564 Madam Secretary.
18 13565 MS BÉNARD: Thank you, Mr. Chairman.
19 13566 The next presentation will be by the
20 Independent Internet Service Provider Group.
21 PRESENTATION / PRÉSENTATION
22 13567 MR. MacLAURIN: Good morning.
23 13568 The Independent group of ISPs is a
24 loose affiliation of a number of ISPs who felt that our
25 views were best represented by ourselves rather than
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1 some of the larger affiliates we are with.
2 13569 Tim Denton here is our legal counsel
3 and myself, Wayne MacLaurin, with Cyberus Online.
4 13570 We have had the advantage of
5 co-ordinating our response with CAIP. We can only
6 declare our complete agreement with its positions.
7 13571 Basically they are twofold: First,
8 that the Broadcasting Act does not apply to the
9 Internet; and, second, that the critical issue for the
10 survival of a healthy domestic access market depends
11 upon the Commission taking action to regulate the terms
12 upon which owners of "last-mile" access facilities, and
13 their affiliates, offer Internet access to the public.
14 13572 Of the two issues, it is now apparent
15 that the second is of pressing urgency.
16 13573 There remain a few points which we
17 think it would be useful to emphasize. First, the
18 discussion of whether the Broadcasting Act applies must
19 be linked to an understanding of the technical system
20 called the Internet.
21 13574 "New media" is a term without precise
22 meaning. It is used equivocally to cover both the
23 technical system for distributing signals on IP
24 networks, and the products and services that most
25 resemble television programs that might be distributed
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1 on such networks.
2 13575 In our October 1st submission, the
3 Independent Group was at pains to describe the
4 technical construction and operation of the Internet,
5 including the software standards that make it work.
6 The considerations of the Commission must be grounded
7 in a precise technical understanding of the Internet to
8 be of any use or effect.
9 13576 The Internet is the result of a
10 fundamental redesign of communications based on the
11 needs and characteristics of computers, rather than
12 that of the human voice. So great a transformation of
13 communications does it represent that we can now talk
14 about the Public Switched Telephone Network as a
15 "legacy" system.
16 13577 The transformation of communications
17 systems, including what we now call broadcasting, will
18 not stop. All communications, including a ubiquitous
19 broadband video-capable system of the near future, will
20 eventually run on the Internet protocol and related
21 technical ideas.
22 13578 Despite this ongoing transformation,
23 the broadcasting system as we know it has a reasonable
24 long life ahead of it. The public does not yet see an
25 affordable alternative to the convenience of the
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1 television set, and interactive broadband to the home
2 is in its infancy. These considerations determine the
3 pace of change, but not its direction or ultimate
4 destination.
5 13579 The arguments against the application
6 of the Broadcasting Act from a legal point of view are
7 compelling. They are extensively discussed in other
8 submissions and in the previous submissions of this
9 group. The technical characteristics of how a person
10 selects and receives material found on the servers of
11 the Internet mean the distribution of content via the
12 Internet cannot be "broadcasting" and that the content
13 available is not "programming". They need not be
14 related further here.
15 13580 Though the determinations of American
16 courts have no legal force in this country, it is
17 significant that the United States Supreme Court, and
18 the U.S. Federal Court before it, determined that the
19 Internet did not constitute "broadcasting" after a
20 careful examination of its technology and methods of
21 operation.
22 13581 However, beyond the legal arguments,
23 which are compelling enough, there remains a further
24 fundamental question for the Commission. This concerns
25 the extent of the Broadcasting Act. Putting it in its
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1 essence, the problem with the Broadcasting Act is that
2 it captures systems, not transactions. It knows no
3 boundaries. Once it captures a part of a system as
4 "broadcasting", it captures the whole. The Commission
5 must carefully weigh this feature of the Act.
6 13582 The issue is not whether transactions
7 on the Internet are subject to the laws of the land.
8 It is commonly agreed that the rule of law, both civil
9 and criminal, applies to all transactions on the
10 Internet, and that "cyberspace" is not some independent
11 realm immune to competent legislation. Sale is a sale,
12 whether conducted on paper or through a
13 computer-mediated transaction. So is fraud. Neither
14 legal nor criminal activity changes its nature by the
15 mere fact that it is transacted through computers and
16 telecommunications.
17 13583 The issue for the Commission to
18 consider, if it really wanted to apply the Broadcasting
19 Act to "new media", is its potentially unlimited
20 application to all components of the Internet within
21 federal jurisdiction.
22 13584 The Broadcasting Act captures systems
23 and undertakings, not transactions. The Act subjects
24 "distribution undertakings" or "programming
25 undertakings" to its authority. Once deemed to be a
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1 part of a broadcasting "system", all the equipment
2 involved tends to be deemed part of a
3 government-regulated system, subject to licensing and
4 heavy penalties for evasion of licensing.
5 13585 As the technology of communications
6 evolves towards a ubiquitous infrastructure of
7 broadband-capable signalling, based on the Internet
8 protocol and packet switching, every form of
9 electronically or photonically mediated transaction
10 will be potentially subject to the Broadcasting Act, if
11 the Commission or the courts of this land decide that
12 any one of them, transacted across the Internet, is
13 "broadcasting" within the meaning of the Act.
14 13586 The defect of the Broadcasting Act is
15 that if it were ever to be applied to the Internet it
16 would capture too much. Like nuclear weapons, the
17 Broadcasting Act is too devastating to be used. A
18 25 megaton bomb going off over Detroit would rip the
19 shingles off roofs in Toronto. Likewise the
20 Broadcasting Act applied to the Internet would have
21 large, catastrophic and unintended consequences for
22 every aspect of the Internet in this country. The Act
23 would apply indiscriminately to computers attached to
24 the Internet, if any part were found to be
25 "broadcasting".
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1 13587 Consider the following: The number
2 of Internet service providers in Canada is estimated at
3 around 700. If ISPs were found to be "distribution
4 undertakings", the Commission would be forced to
5 license them.
6 13588 The Act does not stop at
7 "distribution undertakings", however. In a broadband
8 Internet people would be sending "programs" to one
9 another. Home movies or other forms of full-motion
10 video sent over the Internet would constitute
11 "programs", according to some extreme and, we believe,
12 wrong interpretations of the Act.
13 13589 But suppose, for the sake of
14 argument, that the Commission ignored the weight of
15 legal opinion submitted to it and opted to apply the
16 Act to the Internet. The extent of government
17 licensing and regulation would logically extend to
18 every computer capable of directing video signals to
19 any other within the jurisdiction of the federal
20 government.
21 13590 The Independent Internet Service
22 Provider Group believes that this is a plainly
23 unacceptable result. It would constitute a massive and
24 unwarranted extension of governmental licensing
25 authority into innumerable private transactions having
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1 nothing to do with any conceivable cultural objective.
2 A few minutes of clear thought on this question will
3 suffice to persuade the Commission that trying to apply
4 the Broadcasting Act to the Internet constitutes
5 "massive overkill".
6 13591 For reasons advanced in many of the
7 submissions, we do not believe that the signals
8 conveyed and received over the Internet constitute
9 "broadcasting", and we are pleased to see that when the
10 issue was fully considered judicially in the ACLU v.
11 Reno case, careful analysis by judges with similar
12 concerns as would motivate a Canadian court came to the
13 same conclusions. We cite this case not because
14 Canadians are bound to accept an American case, but
15 because when a court determines whether the Internet
16 should be considered "broadcasting", the process of
17 reasoning followed by courts in both countries would be
18 very similar.
19 13592 As we submitted in October:
20 "For ISPs, and we think for the
21 vast majority of Canadian
22 computer users, the relevant
23 issue is not whether some
24 particular line of businesses
25 would benefit from being
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1 regulated, that is, from being
2 the target of subsidies, or be
3 harmed by having costs imposed
4 upon it. The important issue is
5 whether the government should
6 take the entire zone of
7 computer-communications and make
8 it subject to state licensing.
9 Such an expansion of government
10 authority over private
11 communications would be
12 unprecedented, and, in our
13 submission, unwarranted."
14 13593 Regulating Access to the Internet
15 13594 The Internet promises everyone a
16 degree of citizen empowerment that would have been
17 inconceivable only a few years ago. This empowerment
18 consists of services, information and transactions made
19 possible by ever cheaper and more powerful computer
20 power. This vast resource of computer-driven
21 possibilities is accessible only through two physical
22 media, for the time being: co-axial cable and
23 telephone systems.
24 13595 The cost of replacing or bypassing
25 these two physical media remains uneconomically high,
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1 and owners of these media can exercise market power to
2 preclude, dissuade or defeat competitive entry.
3 Wireless media are not in place and, for a number of
4 technical reasons, wireless access to the Internet does
5 not look to be a competitive alternative for a long
6 time to come.
7 13596 Independent ISPs are fighting for
8 their survival against competitors who own these
9 physical media. The race to supply high-speed access
10 to the Internet is on, and those unable to offer
11 increasing bandwidth will be progressively eliminated.
12 13597 If access to high speed facilities is
13 not made available, or if unregulated affiliates of
14 these monopolies are allowed to underprice their
15 competition unfairly, then we could see a return to the
16 old situation where a cable and telephone duopoly
17 control access to all other possible services that lie
18 beyond the last mile. The promise of the Internet, to
19 bring a vast array of computer-mediated services to the
20 home would be largely defeated if the owners of the
21 choke points reduce the competition to two owners of
22 physical media. This must not be allowed to happen.
23 13598 CAIP has already submitted an
24 application to the Commission to address the issue of
25 Bell and its affiliates as regards the pricing of ADSL
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1 services. The independent ISP sector, under the banner
2 of RISC, has supported that submission fully and tried
3 to explain why the issue is vital to the future of the
4 Internet in Canada.
5 13599 The independent ISPs, those who do
6 not own "last-mile" facilities, urge the Commission to
7 undertake immediately a general review of this issue,
8 and to act in the interim energetically to maintain the
9 ability of Canadians to access the Internet through a
10 wide variety of competitive access providers.
11 13600 Do not allow the promise of the
12 Internet to be lost for failure to see the nature of
13 the issue. The Internet is the first technical system
14 that allows for the separation of the services provided
15 from ownership of the physical means of transmission.
16 13601 In principle, limited means of
17 physical access does not necessarily translate into
18 market power over the services made available over
19 those physical media.
20 13602 To illustrate a point that was made
21 in earlier submissions by this group, in a telephone
22 system you cannot but call forward from anyone other
23 than your telephone provider. On the Internet, and by
24 means of the Internet model of layered software,
25 services are divorced from the physical transmission
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1 medium.
2 13603 Competition in services of all kinds
3 is possible despite the fact that the Internet rides on
4 limited physical media.
5 1115
6 13604 The Internet already delivers a
7 worldwide free "local calling area", effortless
8 "call-forwarding" and a host of other features that the
9 telephone systems cannot or can only barely deliver.
10 This value proposition is deeply troubling to companies
11 long accustomed to collecting an economic rent from
12 their ownership of expensive and inherently limited
13 physical plant. Independent ISPs are but the first
14 level of enhanced service providers that owners of
15 these physical medias can perceive as commercial
16 threats. Eliminating them would assist them to control
17 other sectors of the computer-mediated economy.
18 13605 It is vitally important for the
19 future of the Internet in Canada that the Commission
20 understand the stakes involved in these apparently
21 mundane issues of access to high speed facilities. The
22 independent sector urges the Commission to act
23 consistently with a vision of maintaining a competitive
24 Internet access market. By doing so, all of its goals
25 for "new media" will be achieved, and by failing to do
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1 so the promise of new media will go largely
2 unfulfilled.
3 13606 Thank you for the opportunity to
4 speak.
5 13607 THE CHAIRPERSON: Thank you very
6 much.
7 13608 I don't think we have any questions.
8 Thanks again.
9 13609 Madam Secretary.
10 13610 MS BÉNARD: Thank you, Mr. Chairman.
11 13611 The next presentation will be by
12 CATA Alliance.
13 PRESENTATION / PRÉSENTATION
14 13612 MR. PATTERSON: Good morning,
15 Mr. Chairman, ladies and gentlemen.
16 13613 The membership of CATA Alliance
17 includes many companies which are important players in
18 various aspects of the new media. They include
19 telecommunications equipment manufacturers who provide
20 the backbone for the Internet, software companies which
21 produce the tools to operate it and develop the
22 content, and the content producers which make the Web
23 interesting and valuable. They all have strong views
24 on these proceedings but that is not where I wish to
25 focus today.
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1 13614 The majority of our members are not
2 suppliers to the Internet, but its users. All our
3 members use the Net for one purpose or another, from
4 simple e-mail to sophisticated electronic commerce. As
5 a result, they too have a keen interest in your
6 proceedings. They fear that intervention by the CRTC
7 in the Internet will cause higher communication costs,
8 create regulatory barriers which increase costs and
9 slow development, and discourage investment in
10 technology, equipment and content. Their concerns are
11 identical to those of businesses in all sectors of the
12 Canadian economy. This breadth of interest
13 distinguishes these proceedings from other CRTC
14 hearings under the Broadcasting Act. The impact of
15 your recommendations will extend far beyond the
16 broadcasting sector.
17 13615 The subject of the Broadcasting Act
18 is essentially entertainment, but new media, as defined
19 in these proceedings, is not entertainment. The
20 Internet is primarily a business tool. More than 70
21 per cent of Internet traffic is business-to-business,
22 and that percentage is rising. We are all familiar
23 with the forecasts for incredibly rapid growth in
24 electronic commerce. CRTC intervention in the Internet
25 risks a perverse instance of the 80/20 rule, a case
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1 where addressing a perceived problem of the 20 per cent
2 inflicts serious damage on the 80.
3 13616 I decided not to use the
4 tail-wagging-the-dog analogy here, but since the baby
5 was thrown out with the bath water earlier this morning
6 I think I will insert it at this time.
7 13617 CATA Alliance's members see no need
8 to apply Broadcasting Act style rules on content and
9 ownership to the Internet. There is no apparent
10 shortage of Canadian content in terms of both quality
11 and quantity. Access is not a problem; anyone can get
12 on the Net by using simple software to create a Web
13 site.
14 13618 Access to portals has been identified
15 as a concern. The best known portals are major
16 commercial enterprises. Their business practices do
17 not differ much from other large retailers; they
18 emphasize what sells best. Specialty portals are now
19 emerging, which cater to specific markets or market
20 segments. These will proliferate, as specialist
21 magazines and TV channels have.
22 13619 There is no shortage of opportunity
23 to offer content on the Internet. Success is dependent
24 on the quality of the product, not the nationality of
25 the author.
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1 13620 Many intervenors have emphasized that
2 the Net is a global phenomenon to which it is
3 impractical to apply Canadian regulations. Without
4 getting into a technical argument about whether it is
5 possible or not, the mere threat of regulation will
6 precipitate migration of Web sites to more hospitable
7 climes. The centre of the Internet universe, in terms
8 of innovation, volume and costs, is only a few miles
9 away. Other countries make no bones about offering
10 generous tax breaks, privacy, and other attractions to
11 build their Internet economies. Again, these locales
12 are only a mouse click away.
13 13621 Electronic commerce is seen as the
14 leading engine of economic growth in the new
15 millennium. IDC forecasts that worldwide it will grow
16 from US$33.5 billion in 1998 to US$435 billion in 2002.
17 That is a growth rate of 89 per cent annually.
18 Forrester Research has an even higher forecast,
19 US$3.2 trillion by 2003 which would be 17.5 per cent of
20 total global sales. E-comm's contribution to the
21 Canadian economy will be reduced if Canadian businesses
22 move their activities offshore to avoid costs and
23 regulations. Regulation will have a real impact on
24 jobs and growth. What you decide will determine
25 whether Canada gets its share of this market or whether
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1 the U.S. gets our share.
2 13622 Several intervenors have urged the
3 CRTC to apply a tax, usually 5 per cent, on the
4 revenues of Internet service providers to subsidize the
5 production of Canadian content. It is our members'
6 view that there is no shortage of Canadian content so
7 why is there a need for a subsidy? What interest is
8 served by taxing one small business to subsidize
9 another?
10 13623 Leaving that aside, an ISP tax would
11 raise the cost of Internet use for all Canadians. It
12 would create another incentive for businesses of all
13 sizes to look outside Canada for Web site locations.
14 The impact on jobs and growth would unquestionably be
15 negative. Any job growth in the content industry would
16 be offset many times over by the loss of jobs in the
17 broad economy. Taxing the Internet would also be
18 contradictory to the assurances of the Prime Minister
19 and Revenue Minister Dhaliwal that business on the Net
20 will not be subjected to new taxes.
21 13624 The government has announced its
22 Connecting Canadians strategy. It has six core
23 elements, four of which, Canada On-line, Smart
24 Communities, Canadian Content On-line and Electronic
25 Commerce, will be effected by the outcome of these
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1 proceedings.
2 13625 In the first two categories, Industry
3 Canada operates two excellent programs, SchoolNet and
4 Community Access, aimed at assuring access to the
5 Internet from all Canadian communities. The government
6 announced its Canadian Electronic Commerce Strategy
7 when it hosted the OECD Ministerial Conference on
8 Electronic Commerce last October. Its objective is for
9 Canada to be a world leader in the development and use
10 of electronic commerce by the year 2000. None of these
11 will be successful if CRTC regulatory decisions raise
12 costs or impede growth. Such decisions would directly
13 conflict with government policy.
14 13626 Canadian Content On-line is being
15 supported by such initiatives as Heritage Canada's
16 Multimedia Fund. It is not evident to us that further
17 support is necessary from CRTC.
18 13627 Our members see the CRTC's actions
19 under the Telecommunications Act as a more appropriate
20 model for dealing with new media. They heartily
21 applaud the CRTC decisions which have led to
22 deregulation and more competition. The result has been
23 better service and lower costs for all Canadians. They
24 do not want the CRTC to reverse course now and regulate
25 the Internet. The result will inevitably be negative
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1 for the broad range of Canadian users.
2 13628 At the conclusion of the first round
3 of hearings, the Chair asked for specific comments on
4 certain issues. CATA Alliance offers the following:
5 13629 - The definition of broadcasting
6 obviously includes those who currently fall under the
7 Act. If they are already regulated, we do not see a
8 need to create special new media regulations for them.
9 The CRTC should limit any consideration of extending
10 the definition to activities which fall clearly in the
11 field of entertainment. It should be noted that this
12 definition does not encompass education.
13 13630 - We are not sufficiently versed in
14 the Act to comment on licensing or exemption beyond
15 reiterating the position that regulation of the
16 Internet is to be avoided.
17 13631 - Again, it is premature to
18 specifically define ISPs because the industry is
19 evolving at a rapid pace. It's hard to tell whether
20 they are telecoms or BDUs because the business models
21 which they have developed vary so widely.
22 13632 - New Canadian content is plentiful.
23 The question of prominence is largely a matter of
24 quality.
25 13633 - On the subject of monitoring the
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1 status of new media, in that regard we would be
2 grateful if the CRTC could bully Statistics Canada into
3 collecting any numbers on new media at all. They seem
4 to have chosen to ignore all of the new knowledge-based
5 economy in favour of metal bashing and resource
6 processing.
7 13634 - At this time, we do not see a need
8 for additional proceedings at this time.
9 13635 These proceedings are being held
10 under the Broadcasting and Telecommunications Acts.
11 Our members, and industry in general, dread the
12 application to the Internet of the content and
13 ownership rules and cross-subsidization which are
14 features of broadcasting. They prefer the
15 telecommunications model, where the CRTC's moves to
16 deregulate the industry and encourage competition have
17 led to both better service and lower costs.
18 13636 We commend the later approach, and
19 urge you to apply it to new media. Forebear from
20 regulating the Internet, which will discourage
21 innovation, increase costs and reduce economic growth
22 and job creation. An open, competitive environment,
23 unburdened by regulations and taxes, will establish the
24 conditions under which the Connecting Canadians
25 strategy will flourish.
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1 13637 MR. PATTERSON: Thank you for the
2 opportunity to present.
3 13638 THE CHAIRPERSON: Thank you very
4 much.
5 13639 Notwithstanding what some people
6 think, it is not in our nature to bully anybody, but we
7 would be happy to discuss the issue.
8 13640 I should remember this, but I don't.
9 Could we have your name for the record?
10 13641 MR. PATTERSON: Dave Patterson.
11 13642 THE CHAIRPERSON: Mr. Patterson,
12 thank you.
13 13643 I don't think we have any questions.
14 No.
15 13644 MR. PATTERSON: Thank you.
16 --- Short pause / Courte pause
17 13645 THE CHAIRPERSON: Good morning,
18 Mr. Reddick.
19 13646 MR. REDDICK: I have five copies of
20 my presentation.
21 13647 THE CHAIRPERSON: The Chair was
22 noting this is just-on-time delivery, I guess.
23 PRESENTATION / PRÉSENTATION
24 13648 MR. REDDICK: I would like to thank
25 the Commission for asking us to appear here today.
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1 13649 My name is Andrew Reddick and I am
2 with the Public Interest Advocacy Centre. I am also
3 representing Action Réseau Consommateur in addition to
4 PIAC.
5 13650 PIAC and ARC have found that this
6 proceeding is both timely and useful. In particular,
7 it raises a number of important broad policy questions
8 which we feel have not been properly addressed by the
9 Government of Canada, and this also has implications
10 for the Commission.
11 13651 Part of this policy confusion exists
12 because the development of new media, the Internet, and
13 an information society are works in progress. We are
14 very much in a transition or developmental stage.
15 13652 In the context of this proceeding, we
16 have found that before asking "How does new media
17 affect existing regulation?" or "Do some new media
18 constitute broadcasting or telecommunications
19 services?" or "Can we provide recommendations on policy
20 to the government?" it is more appropriate to ask:
21 What are our social, economic and cultural objectives
22 with respect to the development of an information
23 society?
24 13653 We ask this because rather than being
25 driven by technology, our actions in society are driven
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1 by decision making relating to objectives and goals.
2 13654 The means by which we achieve
3 objectives are shaped by the rules, regulations and
4 market frameworks we apply, and how technologies and
5 content are treated within those.
6 13655 Ostensibly, one of our goals in
7 Canada is to create an information society, a society
8 that is not physically grounded but exists using the
9 Ether. Now, to be clear, the Ether I am referring to
10 is that used for the transmission of communications as
11 opposed to the anaesthetic, though I do have to say
12 Neil Postman may not have been too far off when he
13 observed a certain hysterical enthusiasm in the hype
14 about the information highway. To some degree, both
15 ethers may be involved.
16 13656 The point is, if the intention is to
17 create an information society where much of our
18 socio-economic activities are on line as they are in
19 real life, then as it develops, and in future, we
20 should be able to look at that information society like
21 a mirror, and see the existing diversity of our real
22 life social practices and interests -- our society --
23 also existing in the electronically-based environment.
24 13657 Part of what Postman was getting at
25 with his comment about hysterical enthusiasm is that
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1 the information society, the Internet, new media and so
2 forth are not exception to society. They do not exist
3 outside of society, its obligations and
4 responsibilities, they are a part of it. They are not
5 wholly exceptional to broadcasting or
6 telecommunications, they are a part of these. But at
7 the same time, there are significant aspects of these
8 which are different than traditional broadcasting and
9 telecommunications, for example, in the area of
10 content.
11 13658 Now, as we noted in our written
12 submissions, it would appear that the Federal
13 Government advocates broad objectives relating to
14 access, diversity of content, economic and social
15 needs, among others, for the information highway, but
16 there is also considerable fudging and a lack of
17 specificity by the government.
18 13659 Clarification is required on a number
19 of issues, particularly those regarding end objectives
20 and the means for achieving these end objectives. This
21 is important because clarity on objectives has
22 implications for regulatory, market, fiscal and other
23 tools which may need to be employed on a selective or
24 permanent basis to achieve these desired results.
25 13660 Some of the important policy issues
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1 which need to be clarified include: Is the Internet
2 now, or in the next few years will it be, considered an
3 essential service, a service which all Canadians should
4 have access to from the home comparable to telephone
5 service? Are some types of content or services
6 considered essential or will they be?
7 13661 If the answers are yes, then
8 questions about the regulatory, government program,
9 fiscal, market-based, third sector-based and other
10 mechanisms which may need to be employed to achieve
11 such goals need to be addressed.
12 13662 PIAC/ARC make two recommendations to
13 the Commission with respect to these concerns.
14 13663 First, we recommend that, as part of
15 its final decision or report from this proceeding, the
16 Commission request that the government of Canada
17 clarify its policy positions on the essential nature of
18 the Internet and related new media content. This
19 clarification should include policy direction for both
20 federal departments and the Commission where required.
21 13664 Second, PIAC/ARC recommend that the
22 Commission conduct periodic reviews -- for example,
23 every three years -- which include a public proceeding
24 to assess and determine which services are essential
25 and whether some regulatory initiatives may be required
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1 to ensure universality of these services at reasonable
2 and affordable rates. Such a review should also be
3 concerned with essential content and the diversity of
4 content.
5 13665 Regulation.
6 13666 PIAC/ARC are of the view that the
7 objectives of the Broadcasting Act and the
8 Telecommunications Act are relevant and important for
9 new media, however, the means of realizing these will
10 require some innovation in approach by the Commission.
11 The Commission has stated previously that under
12 convergence it has confidence in its abilities to do
13 this, and we have similar confidence in the
14 Commissions' abilities but we have a few suggestions.
15 13667 Part of this innovation requires
16 evolving and modernizing the meaning of "social" in
17 telecommunications beyond that of basic voice telephone
18 service to include what is also being transmitted by
19 these services -- new forms of digital content. It
20 would also be useful to have a more coherent policy on
21 content in Canada within which new media, programming
22 and other forms of content would be included.
23 13668 It is also our view that
24 telecommunications companies and those companies using
25 the PSTN have obligations and responsibilities in an
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1 information society and that these need to be brought
2 into an information society context.
3 13669 We have recommended the type of
4 regulation we feel would be appropriate in the near
5 term in our written final argument. This regulation
6 would take the form of required contributions to be
7 used to meet the apparent objectives of the
8 government's connectedness agenda as well as the
9 public's emerging communication and information needs
10 in a converged communications environment. Our
11 proposal also brings symmetry with the regulatory
12 approach applied to broadcasting distribution
13 undertakings under the Broadcasting Act.
14 13670 We note that in many submissions to
15 this proceeding, representatives of the free market
16 have asked for public money or subsidies to be spent in
17 the form of tax and fiscal initiatives, among other
18 ideas, to help make their businesses and investments
19 viable. Justifications include that this will
20 contribute to industrial policy and cultural policy
21 such as the creation of a diversity of information.
22 13671 It is our view that, for social in
23 addition to economic objectives to be realized, funding
24 is also required to facilitate public access through
25 community not-for-profit sites and networks, and for
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1 the development of not-for-profit content resources.
2 13672 If the Internet is a network of
3 networks, then local community networks and
4 non-commercial social, cultural and civic content
5 similarly must continue to be developed and supported.
6 A number of communities have been providing these types
7 of services for some years. Both the Federal and
8 Provincial governments have provided seed funding to
9 foster the development of these services in communities
10 throughout Canada.
11 1130
12 13673 Without the continued support of this
13 type of new media at the local level, many community
14 networking initiatives, if they survive at all, will be
15 little more than ports to the outside Internet, in
16 other words, an electronic bus out of town. Local
17 buses are also needed.
18 13674 Market players are not able to
19 provide these types of services or content. With these
20 community-based public services, there is little to
21 sell and a commercial imperative has little relevancy
22 to the needs and activities of citizens, community
23 groups, NGOs and similar organizations who are
24 increasingly integrating new technologies as part of
25 their operations.
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1 13675 Is it possible that these needs could
2 be met through government program funding as opposed to
3 a regulatory solution or in some combination of these?
4 Any of these options are possible, but policy
5 clarification is required.
6 13676 In conclusion, in general, PIAC/ARC
7 believe that the Commission will need to pursue a
8 strategy of selective regulation as new media, the
9 Internet and other new services evolve.
10 13677 No one can predict how all this will
11 look in the years to come, though a study of
12 communications history and the current structures and
13 practices of the marketplace, particularly in the areas
14 of market structure, distributing and marketing,
15 suggests a certain continuity as opposed to
16 revolutionary change.
17 13678 The most realistic course is to
18 generally adopt a lighter regulatory approach, but with
19 selective interventions to ensure that defined policy
20 objectives are achieved. Once the market has matured
21 and stabilized, there may be cause for other
22 interventions, for example, if market power develops.
23 13679 PIAC/ARC recommends that the
24 Commission should as a minimum monitor and supervise
25 and undertake research to assess developments in this
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1 sector.
2 13680 The results of these activities,
3 including research, should be made public on an annual
4 basis. As well, the Commission should hold public
5 proceedings on a regular basis to review policy and
6 regulation in this area.
7 13681 That concludes our comments. I would
8 be pleased to answer your questions.
9 13682 THE CHAIRPERSON: Thank you very
10 much, Mr. Reddick. I don't think we have any
11 questions.
12 13683 Madam Secretary, I think those are
13 all the parties registered for today.
14 13684 MS BÉNARD: Yes, they are. Yes.
15 13685 THE CHAIRPERSON: In that case, that
16 concludes our proceeding for today.
17 13686 We will resume tomorrow morning at
18 9:00 a.m.
19 --- Whereupon the hearing adjourned at 1132, to resume
20 on Tuesday, February 9, 1999, at 0900 / L'audience
21 est ajournée à 1132, pour rependre le mardi,
22 9 février 1999, à 0900
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