Tag Archives: crtc

The Audacity of Shaw: How Canada's Internet just got Worse

It is really, really, really hard to believe. But as bad as internet access is in Canada, it just got worse.

Yesterday, Shaw Communications, a Canadian telecommunications company and internet service provider (ISP) that works mostly in Western Canada announced they are launching Movie Club, a new service to compete with Netflix.

On the surface this sounds like a good thing. More offerings should mean more competition, more choice and lower prices. All things that would benefit consumers.

Look only slightly closer and you learn the very opposite is going on.

This is because, as the article points out:

“…subscribers to Movie Club — who initially can watch on their TV or computer, with phones and tablets planned to come on line later — can view content without it counting against their data plan.

“There should be some advantage to you being a customer,” Bissonnette said.”

The very reason the internet has been such an amazing part of our lives is that every service that is delivered on it is treated equally. You don’t pay more to look at the Vancouver Sun’s website than you do to look at eaves.ca or CNN or to any other website in the world. For policy and technology geeks this principle of equality of access is referred to as net neutrality. The idea is that ISPs (like Shaw) should not restrict or give favourable access to content, sites, or services on the internet.

But this is precisely what Shaw is doing with its new service.

This is because ISPs in Canada charge what are called “overages.” This means if you use the internet a lot, say you watch a lot of videos, at a certain point you will exceed a “cap” and Shaw charges you extra, beyond your fixed monthly fee. If, for example, you use Netflix (which is awesome and cheap, for $8 a month you get unlimited access to a huge quantity of content) you will obviously be watching a large number of videos, and the likelihood of exceeding the cap is quite high.

What Shaw has announced is that if you use their service – Movie Club – none of the videos you watch will count against your cap. In other words they are favouring their service over that of others.

So why should you care? Because, in short, Shaw is making the internet suck. It wants to turn your internet from the awesome experience where you have unlimited choice and can try any service that is out there, into the experience of cable, where your choice is limited to the channels they choose to offer you. Today they’ll favour their movie service as opposed to (the much better) Netflix service. But tomorrow they may decide… hey you are using Skype instead of our telephone service, people who use “our skype” will get cheaper access than people who use skype. Shaw is effectively applying a tax on new innovative and disruptively cheap service on the internet so that you don’t use them. They are determining – through pricing – what you can and cannot do with your computer while elsewhere in the world, people will be using cool new disruptive services that give them better access to more fun content, for cheaper. Welcome to the sucky world of Canada’s internet.

Doubling down on Audacity: The Timing

Of course what makes this all the more obscene is that Shaw has announced this service at the very moment the CRTC – the body that regulates Canada’s Internet Service Providers – is holding hearings on Usage Based Billings. One of the reasons Canada’s internet providers say that have to charge “overages” for those who use the internet a lot is because of there isn’t enough bandwidth. But how is it that there is enough bandwidth for their own services?

As Steve Anderson of the OpenMedia – a consumer advocacy group – shared with me yesterday “It’s a huge abuse of power.” and that “The launch of this service at the time when the CRTC is holding a hearing on pricing regulation should be seen as a slap in the face to the the CRTC, and the four hundred and ninety one thousand Canadians that signed the Stop The Meter petition.”

My own feeling is the solution is pretty simple. We need to get the ISPs out of the business of delivering content. Period. Their job should be to deliver bandwidth, and nothing else. You do that, you’ll have them competing over speed and price very, very quickly. Until then the incentive of ISPs isn’t to offer good internet service, it’s to do the opposite, it’s to encourage (or force) users to use the services they offer over the internet.

For myself, I’m a Shaw customer and a Netflix customer. Until now I’ve had nothing to complain about with either. Now, apparently I have to choose between the two. I can tell you right now who is going to win. Over the next few months I’m going to be moving my internet service to another provider. Maybe I’ll still get cable TV from Shaw, I don’t know, but my internet service is going to a company that gives me the freedom to choose the services I want and that doesn’t ding me with fees that apparently, I’m being charged under false pretenses. I’ll be telling by family members, friends and pretty much everyone I know, to do the same.

Shaw, I’m sorry it had to end this way. But as a consumer, it’s the only responsible thing to do.

Why the CRTC was right on Usage-Based Billing

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Up here in Canada (and I say that in the identity sense, since at the moment I’m in Santa Clara at the Strata Conference) a lot of fuss has been made about the CRTC’s decision regarding the approval of usage-based billing. So much fuss, in fact, that appears the government is going to over turn it.

One thing that has bothered me about these complaints is that they have generally come from people who also seem to oppose internet service providers throttling internet access. It’s unclear to me that you can have it both ways – you can’t (responsibly) be against both internet throttling and usage-based billing. As much as I wish it were the case there is not unlimited internet access in Canada. At some point this genuinely is a scarce resource and if you give people unlimited access at a fixed price at some point the system is going to collapse…

Indeed, what really concerns me is the incentive structure forbidding usage-based billing creates. There is a finite market for broadband access in Canada so the capital for increasing capacity can’t come exclusively from signing up new users. If you make it so that fixed bills are the only way to bill customers then what incentives do internet providers have to improve capacity? At best they will be incented only to provide a minimally viable service. I mean, why build out when you won’t be able to get a return on investment for the extra capacity?

I’d prefer to have an internet provider market where the players are building out their network in order to meet the needs of the most demanding users who are willing to pay for the extra bandwidth. Why? Because it will ensure that capacity keeps increasing as the large players continue to fight to meet the needs of that market. This means there is a financial incentive to increase bandwidth – which is ultimately what you want the incentives to be.

Besides, if – like me – you happen to believe that roads should be tolled then it’s unclear why you shouldn’t also feel like consumers of large quantities of bandwidth should pay more than someone who barely consumes any at all. Why should low bandwidth users subsidize high-bandwidth users (or worse, that innovative services be made useless because the other solution is throttling).

I want to be clear. All of this isn’t to say that we shouldn’t regulate the ISP business or that we should treat the internet service providers as trustworthy. We are still in an oligarchy, something their behaviour reminds me of every day. I agree that the ISPs demands are in part an effort to make less attractive services like Netflix that threaten many of the ISPs other business – cable TV. So, if we are going to engage in usage-based billing then I’d expect a few things, including:

a generous baseline of fixed-fee internet usage a month. (In an ideal world I’d actually say a basic amount should be free – as I believe access to the internet, like access to books in a library, is increasingly becoming a necessary basic service of our society)
let’s have REAL usage-based billing. This means, let’s do usage-based billing that will make us more efficient. Charge me more at peak times, less during off peak times the way electricity companies do. That way I’ll bittorrent my files at night when it costs next to nothing, and be smarter about consumption during peak hours.
real transparency into how much the ISPs are investing into increasing their capacity.
bandwidth from certain IP addresses – like Parliament, Provincial Legislatures and City Halls should be unlimited. No one should be eating into their fix-priced limit or charged extra while engaging in their most basic democratic rights (so unlimited CSPAN video watching)
your network now must be neutral. One reason I like usage-based billing is that it destroys a major argument used to justify traffic shaping – that the network can’t handle the demand. Well, not you get rewarded for high demand – so satisfy it! If consumer advocates can’t oppose both usage-based billing and throttling, then telcos and cable companies can’t have both either.

I can imagine that this post will make some of my colleagues upset. Please fire away, tell me how I’ve got it all wrong. But please make sure that you’ve got an answer that addresses some of the concerns raised here. If you’ve been against throttling (and you know who you are), explain to me how it is that we can both (sustainably) have zero throttling and unlimited fixed fee internet access? In a world where online video is taking off, I’m just not sure I see it. Unless, of course, we think Google is going to provide the answer.

Finally, if you haven’t read it, Richard French has a very thoughtful piece in the Globe and Mail entitled Second-Guessing the CRTC Comes at a Price check it out. It certainly helped reaffirm some of my own thinking.

Some theories on why Canadians are the #1 user of YouTube (it's not all good)

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In theory I’m on break – trying to recharge my batteries, summit mount inbox zero and finish off a couple of papers I owe various good people – but a few people have sent me links to this story (same content here at the CBC), about how Canadians are embrace the web like few others citizens of the world.

Naturally I’m thrilled and unsurprised. Canadians live in a large country and connectivity has always been something that has driven us. Indeed the country as we know it only exists because of a deal on connectivity – my own province of British Columbia agreed to enter the Dominion only if a transcontinental railway was built to connect it with the rest of the emerging country. Connectivity is in our blood.

There is, however, I suspect another reason why Canadians have taken to the web and it has to do with our monopolies and content regulation.

The article notes that Canada is the number one viewer of YouTube videos:

“In Canada, YouTube per capita consumption of video is No. 1 in the world, it’s just absolutely crazy in terms of how passionate Canadians are about YouTube,” said Chris O’Neill, Canada’s country director for Google.

I wonder, however, if this is because of Canada’s proximity to and familiarity with American created content, but our limited access to seeing said content. The CRTC restricts Canadians access to US channels (and as a result, TV shows). Consequently, much like I argued that the continued success of Blockbuster in Canada is not a sign of effective corporate management but poor innovation strategy and telecommunication regulation Canadians may be flooding to YouTube because they can’t access the content they want through more traditional channels.

If true (and I concede I don’t know what Canadians are watching on YouTube) then on the brightside, this is good news for Canadian consumers are able to get what they want access to, regardless of how the government tries to shape their tastes. Indeed, I suspect that American content isn’t the only thing driving YouTube traffic, as a country of immigrants I’m sure that new (and longstanding) Canadians of a range of backgrounds use YouTube to stay on top of culture, shows and other content from their countries of origin. If all this is helping Canadians become more web savvy and appreciative of the benefits of an open web – then all the better!

On the flip side, this could be a sign that a whole series of Canadian companies (and the jobs they create) are imperiled because they refuse to innovate as quickly as Canadians would like. This isn’t a reason to preserve them, but it is a reason for us to start demanding more from the executives of these companies.

The Future of Media in Canada – Thoughts for the Canadian Parliamentary Committee

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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.

broadcast artists in a communication world

Just a brief follow up on yesterday’s piece. One reader yesterday pointed out that the CRTC did “get the internet” and that it was the interveners – The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) that “didn’t get it.” I think there is lots to dive into about the CRTC but part of his point is well taken. Check out this problematic quote from ACTRA:

“The Internet is just another media-distribution platform like any other that we’ve had,” said Stephen Waddell, executive director of the Alliance of Canadian Cinema, Television and Radio Artists. “And in our view, if the CRTC doesn’t give some opportunity to Canadian content to have a place on that platform, we’re going to be immersed in non-Canadian content.”

The number of problems with this statement are almost overwhelming. Building on some of the reasons I discussed yesterday the internet is not like any other distribution platform. Rather than analyze it line by line, I thought I would hand things over to Clay Shirky, who in Here Comes Everybody explains how our friends at ACTRA are caught in the same dilemma as scribes at the end of the 15th century:

Consider the position of a scribe in the early 1400s. The ability to write, one of the crowning achievements of human inventiveness, was difficult to attain and, as a result, rare. Only a tiny fraction of the populace could actually write… In this environment a small band of scribes performed the essential service of refreshing cultural memory. By hand-copying new editions of existing manuscripts, they performed a task that could be preformed no other way. The scribe was the bulwark against great intellectual loss…

…Now consider the position of the scribe at the end of the 1400s. Johannes Guttenburg’s invention of movable type in the middle of the century created a sudden and massive reduction in the difficulty of reproducing a written work… a scribe, someone who has given his life over to literacy as a cardinal virtue, would be conflicted about the meaning of movable type. After all, if books are good, then surely more books are better. But at the same time the very scarcity of literacy was what gave scribal efforts its primacy, and the scribal way of life was based on this scarcity…

…The spread of literacy after the invention of movable type ensured not the success of the scribal profession but its end. Instead of mass professionalization, the spread of literacy was a process of mass amateurization. The term “scribe” didn’t get extended to everyone who could read and write. Instead it simply disappeared, as it no longer denoted a professional class.

This is what the internet has done to radio, television and cinema professionals. It has radically lowered the barriers for the creation of Canadian content.

So do we lament the loss of scribes? Not at all – we are liberated because today we can all write. Has the acerage quality declined? Possibly, we aren’t all writing Dante’s Inferno. But the best writing is way, way better (and better paying as well).

Will we lament the loss of television, cinema and radio (I doubt they will disappear completely) no. Something new and more interesting will arise to replace it. With the end of scribes we didn’t writers, instead we gained something far more valuable, the growth of contemporary authors! (who in 1350 could have imagined a world of authors, book stores, top 10 best seller lists?)

Now, imagine if there had been a tax on every printing press to pay for scribes to continue copying books… that would have just made books more expensive and less accessible.

We must acknowledge ACTRA fear of the new world. However self-serving, it is rational and genuine. Everything is going to be unpredictable for a while. But the future also the opportunity for something new an amazing – unimaginable ways for new types artists and mediums to describe the human condition and touch our souls. Just because it won’t be the way it has been done – through the broadcast mediums of radio, television, and cinema – doesn’t mean that it won’t be good. Indeed, I predict, that once the dust has settled, there will be more artists, producers, actors, and creatives in general, many of who will continue to get paid well. It’s just that the line between amateur and professional will be more blurred. There may even be a role for a professional association – although I imagine it will look, much, much different. Scary, yes. But also unavoidable.

The CRTC’s broadcast nationalism won’t matter in a networked world

Woke up today was confronted by yet another headline demonstrating why the Canadian Radio-television and Telecommunications Commission (CRTC) must go.

For those who’ve never heard of the CRTC, it is the government agency that regulates Canadian broadcasting and telecommunications activities, the best-known of which is probably the Canadian content rules.

At the core of the proposal is a fundamental misunderstanding of the internet. The CRTC wishes to treat it like a broadcast medium – one where there are distinct roles of creators and consumers. Happily for us, this is not what the internet is. Instead it is what Clay Shirky describes as a communications medium – one where we are all talking to one another and where the distinction between creator and consumer has broken down.

So with that lens in mind, I encourage you to read the article. Below is my analysis:

Amid fears that Canada’s culture is being drowned in a sea of online video from around the world, federal regulators are looking at setting up a $100-million fund to support homegrown programming on the Internet… under a scenario proposed yesterday, Internet service providers could be asked to surrender 3 per cent of their subscriber revenue – roughly $100-million – to a fund that would help produce Canadian programs for the Web.

Is Canadian content being drowned out in a sea of online videos? I suppose. But so is everybody’s. It is the nature of the medium. What % of content on the internet is American, Indian, Chinese? Does it matter? Not really. Because people don’t surf the internet like they surf the radio or television – most often the seek out content. But the CRTC is used to a certain % of content being Canadian on the radio and television because it controlled how much content ended up on those mediums. This is their frame and why they can’t understand the internet.

Ironically, even though we don’t know what % of online content is Canadian what the CRTC cannot grasp is that since the advent of the internet ordinary Canadian both produced more content and – I’ll wager – consumed more Canadian content than ever before. Think of all the blogs, videos, podcasts made by ordinary Canadians that are sharing Canadian stories over the web. Think of this blog. Ensuring Canadian stories get shared is core to the CRTC’s mandate. And yet, for all their discussion about Canadian content the CRTC does not include content created by all those Canadians who’ve previously could never tell their stories.

Why? Because none of us have title of “producer” or “writer” or “actor” in the CRTC’s eyes. We (Canadians) don’t count as culture.

More ironically, the one thing you often can’t find online (and/or has been slow to get online) is the very media the CRTC does count as culture and that it seeks to protect – the Canadian TV and radio shows broadcast on CTV, CBC and Global. These artifacts of the broadcast era have fought or denied the existence if the internet, who have been the slowest to make their content available to us, now want us to foot the bill for creating their content.

What I can be certain of is that the $100 million raised by the CRTC will not go towards Canadians telling their story on the web. My blog, your blog, your podcast, or your video of the play you wrote, none of these will never see the CRTC’s money. Instead a public servant somewhere in Ottawa will determine what is “Canadian” not so we can promote Canadians stories, but so that we can prop the old and dying business model of broadcast media – the expensive production facilities, the hierarchies of managers and staffers that are necessary to produce older media like television.

Nor is this is not about protecting artists – writers, actors, singers – they all thrived before the advent of television, and they will thrive after its demise in ways we cannot imagine. Again, this is not about them. It is about an industry trying to prop up a dying broadcast medium and a government agency trying to assert control over what can be defined as Canadian.

Both are problematic and have no place in a networked world. As a closing counter factual, imagine a tax on your phone designed to raised funds to ensure a certain % of all phone calls in the world were being conducted by Canadians. A fund designed to pay people to make “Canadian” phone calls. That is what this is. At the very time when we need the internet to be free and as cheap as possible so those with the fewest resources can make use of it to tell their stories, organize protests, create a new business or just find a job, we are going to try to make it more expensive.

In short. Are Canadians lost in a sea of content? Yes. And they are thriving in it. More Canadian stories are being told than ever before. Moreover, I never watched Canadian content on television, but today I read numerous Canadian blogs, and listen to the occasional podcast. I never consumed so much Canadian media in my life. Moreover, never has Canadian content been so widely viewed. Readers of even this small blog come from around the world.

What we don’t need is a tax that makes it more expensive for ordinary Canadians to tell their stories. We don’t need a levy that props up a dying business model. We don’t need a government agency that defines what is “Canadian culture.” Arguing against this proposal is not the most important battle of our time, but it is worth fighting against. Today Canadian culture is a free culture, increasingly defined and created by Canadians. That’s the promise of the internet, why would we fight that?

The end of TV and the end of CanCon?

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A few weeks ago I blogged about how the arrival of Joost could eventually require the rethinking of Canadian content rules (CanCon).

For those unfamiliar with CanCon, it is a policy, managed (I believe) by Heritage Canada and enforced by Canada’s broadcasting regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), that establishes a system of quotas to ensure a certain amount of Canadian programming (e.g. music, TV) is broadcast within Canada.

In laymen terms: CanCon ensures that Canadian radio and TV stations broadcast at least some Canadian content. This can be good – making stars out of artists that might not have have received airplay – think The Bare Naked Ladies. And it can be bad, making (usually temporarily) stars out of artists that should never have received airplay – think Snow.

Well I’ve been allowed to serve as a Joost beta tester. After getting my email invitation last week I downloaded a copy.

In essence Joost is like You-Tube, but bigger, faster, and sleeker. It’s as though Apple’s design team revamped You-Tube from the ground up and, while they were at it, grabbed themselves some partners to provide some more professional content.

But what makes Joost so interesting is how it’s organized. Joost feels like on-demand TV, with content divided into “categories” – such as “documentaries films” – and subdivided into “channels” – such as the “Indieflix channel” and the “Witness channel.” There is already a fair amount of content already available including a number of hour long (or longer) documentaries that are worth watching. (I can’t WAIT until Frontline has a channel up and running. I’d love to be able to watch any Frontline episode, anywhere, anytime, on a full screen.)

So what happens to Canadian content rules when anyone, anywhere can create and distribute content directly to my computer, and eventually, my TV? At this point, the only options left appear to be a) give up, or b) regulate content on the internet. Problematically, regulating internet content and access may be both impossible (even China struggles with this policy objective) and unpopular (I hope you’re as deeply uncomfortable as I am with the government regulating internet content).

The internet has (so far) enabled users to vastly expand the number of media sources available to them, and even create their own media. This has been a nightmare for “traditional media” such as newspapers and television stations, whose younger market demographic has significantly eroded. As a result, these same forces are eroding the government’s capacity to control what Canadians watch.

Which brings us back to option (a). At worst, CanCon is going the way of the Dodo – it will be too difficult to implement and maintain. Indeed a crisis in cultural policy may be looming. On the bright side however, the internet enables ordinary Canadians to create their own media (blogs, podcasts and now even videos) and distribute it over the internet, across the country and around the world. This is a better outcome than CanCon – which essential supports large, established media conglomerates who do Canadian content out of necessity, not passion – could ever have hoped for. Ordinary canadians may now be in the driver seat in creating content. That is a good outcome. Let’s hope any policy that replaces CanCon bears this in mind.