The CRTC has initiated a public proceeding to allow interested parties to comment on the implications for the Canadian broadcasting system of the increasing consumption of Internet-delivered programming in Canada – but has urged them to back up their assertions with any applicable data.

The “fact-finding exercise” follows pressure from several sources to consider changes to the existing broadcasting regulatory framework in light of increased competition from unregulated over-the-top (OTT) program providers.

The Commission has requested submissions on the following topics, as they relate to the potential impact of OTT services:

  • The capabilities of measurement and analytical tools to assess programming trends
  • Trends and predictions respecting consumer consumption of programming, and the impact of the growth of OTT services on consumers
  • Technological trends in consumer devices and network capabilities
  • Opportunities and challenges for the Canadian creative industries
  • The impact on the acquisition and exhibition of programming available to Canadians
  • submissions and evidence respecting the potential contribution of OTT services to the achievement of Canadian broadcasting policy objectives

While the CRTC has previously found Internet delivered programming to fall under its jurisdiction under the Broadcasting Act, it has to date exempted such “new media” undertakings from licensing, imposing only minimal conditions. The Commission has consistently found, including as recently as 2009, that no evidence existed to demonstrate that new media posed a threat to the ability of traditional broadcasting undertakings to meet their regulatory obligations. Moreover, the Commission has found that it has not been established that regulating new media undertakings would contribute in a material manner in achieving Canadian broadcasting policy objectives.

However, in recent months, a number of interested stakeholders, including broadcasters, broadcast distributors and the creative sector expressed concern that unregulated foreign providers of OTT programming are increasingly competing with licensed broadcasting undertakings, negatively impacting subscription and advertising revenues and the ability to acquire programming. These parties argue that this trend is creating an unlevel playing field, where traditional broadcasters and distributors have to meet a range of regulatory requirements, including minimum Canadian content requirements and substantial financial contributions to subsidize the creation of Canadian programming. Some have argued for imposing similar regulatory obligations on OTT providers, while others favour a relaxation of obligations imposed on incumbent broadcasters.

Following hearings held in late 2010 to consider, among other things, the impact of new viewing platforms on private television, the Standing Committee on Canadian Heritage issued a report recommending that the CRTC examine the growing emergence of non-Canadian OTT program providers and determine whether and how such companies should support the creation and exhibition of Canadian programming. An ad-hoc working group of executives from the broadcasting, distribution, telecommunications, production and creative sectors has also been lobbying the government to examine regulatory policy respecting foreign OTT programming, including requesting that the CRTC initiate a public consultation.

In initiating the new proceeding, the CRTC noted that since its most recent consideration of the new media exemption order, there have been a number of material changes to the broadcasting environment, including greater consumption of Internet-based programming, and increased substitution by consumer of such programming for programming from traditional broadcast sources.

However, the tone of the Notice of Consultation, with its emphasis on supporting data, seems to signal that notwithstanding these observed trends, the CRTC wants a clear evidentiary record before taking any regulatory action in the face of emerging OTT programming services.