Yesterday, Google presented to a House of Commons Heritage Committee which has launched a study of “new media.” Already some disturbing squawks have been heard from some of the MPs. For those who believe in an open internet, and in an individuals right to choose, there is no need to be alarmed just yet, but this is definitely worth keeping an eye on. It is however, a good thing that the parliamentary committee is looking at this (finally) since the landscape has radically changed and the Canadian government needs to adjust.

In his SXSWi talk Clay Shirky talked about how abundance changes things. One an item ceases to be scarce – when it is freely available – the dynamics of what we do with it and how we use it radically change.

It is something government’s have a hard time wrestling with. One basic assumption that often (but hardly always) underlies public policy is that one is dealing with how to manage scarce resources like natural resources. But what happens when something that was previously scarce suddenly becomes abundant? The system breaks. This is the central challenge the Heritage Committee MPs need to wrap their heads around.

Why?

Because this is precisely what is happening with the broadcast industry generally and Canadian content rules specifically. And it explains why Canadian content rules are so deeply, deeply broken.

In the old era the Government policy on Canadian content rested on two pillars:

First, the CRTC was able to create scarcity. It controlled the spectrum and could regulate the number of channels. This meant that broadcasters had to do what it said if they wanted to maintain the right to broadcast. This allowed the CRTC to mandate that a certain percentage of content be Canadian (CanCon).

The second pillar was funding. The Government could fund projects that would foster Canadian content. Hence the CBC, the National Film Board of Canada and various other granting bodies.

The problem is, in the digital era, creating scarcity gets a lot more complicated. There are no channels to regulate on the internet. There is just the abundant infinity of internet content. Moreover you can’t force websites to produce or create Canadian content nor can you force Canadians to go to websites that do (at least god hopes that isn’t a crazy idea the committee gets into its head). The scarcity is gone. The Government can no longer compel Canadians to watch Canadian content.

So what does that mean? There are three implications in my mind.

First. Stop telling Canadians what culture is. The most offensive quote from yesterday’s Globe article was, to quote the piece Bloc Québécois MP Carole Lavallée quote:

Bloc Québécois MP Carole Lavallée highlighted the often low-brow, low-budget fare on YouTube. She accused Google of confusing leisure with culture.

“Leisure is people who play Star Wars in their basement and film one another and put that on YouTube,” she said. “ But culture is something else.”

Effectively, she is telling me – the blog and new media writer – and the 100,000s if not millions of other Canadians who have created something that they do not create Canadian culture. Really? I thought the whole point of the Heritage Ministry, and tools like the CBC was to give voice to Canadians. The internet, a tools like YouTube have done more on that front than any Government program of the last 5 decades. Lavallée may not like what she sees, but today, more Canadian content is created and watched around the world, than ever before.

Second. Be prepared to phase out the CRTC. The CRTC’s regulatory capacity depends on being able to create scarcity. If there is no more scarcity, then it seizes to have a lever. Yes, the TV industry is still with us. But for how long? Canadians, like people everywhere, want to watch what they want, when they want. Thanks to the internet, increasingly they can. The CRTC no longer serves the interests of Canadians, it serves to perpetuate both the broadcast industry and the cable industry (yes, even when they fight) by creating a legal scaffolding that props up their business models. Michael Geist understands this – the committee should definitely be talking to him as well.

Third, if the first pillar is dead, the second pillar is going to have to take on a heavier load and in new and creative ways. The recent National Film Board iPhone app is fantastic example of how new media can be used to promote Canadian content. If the Commons committee is really worried about YouTube, why not have Heritage Canada create a “Canadian channel” on YouTube where it can post the best videos by Canadians and about Canada? Maybe it can even offer grants to the video creaters that get the most views on the channel – clearly they’ve demonstrated an ability to attract an audience. Thinking about more micro-grants that will allow communities to create their own content is another possibility. Ultimately, the Government can’t shape demand, or control the vehicle by which supply is delivered. But it can help encourage more supply – or better still reward Canadians who do well online and enable them to create more ambitious content.

The world of new media is significantly democratizing who can create content and what people can watch. Whatever the heritage committee does I hope they don’t try to put the cork back on that bottle. It will, in effect, be muzzling all the new emerging Canadian voices.

Update: Just saw that Sara Bannerman has a very good post about how Canadian content could be regulated online. Like much of what is in her post, but don’t think “regulation” is the right word. Indeed, most of what she asks for makes business sense – people will likely want Canadian filters for searching (be it for books, content, etc…) as long as those filters are optional.