The final batch of submissions in the CRTC’s over-the-top video fact finding exercise were posted yesterday. I focused on the lack of evidence and the fear of competition for foreign content in my first post on the submissions. The latest group of submissions includes many of the biggest names – the telcos, Internet companies, and creator groups. The participants in this consultation fall into three main groups: those seeking competition, those who want more regulation, and those who want de-regulation.

What remains is the next step for the CRTC. It seems certain that there will be a full scale hearing, but the question is whether the Commission will cave to pressure from some groups for something immediately, or wait until the next new media hearing round in 2014. Given the lack of actual evidence – this has been a fear-finding exercise rather than a fact-finding one – the CRTC should surely label this a watching brief and wait until 2014.

A glance at each of the submission groups:



Competition



Submissions embracing more competition include the likely suspects – Google, Netflix, and Apple – along with a couple of surprises. Google’s submission doesn’t pull any punches:

This Consultation is deja-vu all over again. The CRTC tackled this exact issue two years ago. It received submissions. It heard evidence. It made an important – and correct – decision to maintain and expand the exemption for New Media. The key facts on the ground underlying the CRTC’s current don’t-mess-with-a-good-thing policy are the same as the last time around. No new online audio-visual content regulation is warranted.

Google highlights the remarkable growth of YouTube, both as a platform for distributing Canadian content to a global audience and in generating revenue for creators.



Netflix chimes in by noting that its service “effectively expand[s] the pie of viewing choices, and are positive from a consumer welfare standpoint” and “despite much public discussion of so-called ‘cord-cutting’, there is virtually no evidence of viewers abandoning traditional broadcasting to any significant degree in favour of OTT services.” It states that 10 percent of its inventory in Canada is Canadian content. Apple makes similar arguments:

Rather than competing with Canadian broadcasters and reducing their available market, Apple’s services help to grow the size of the overall ‘pie’ in Canada, by providing Canadian creative industries and broadcasters additional outlets for the sale and promotion of their programs that enhance their availability and attractiveness to Canadians.

While the responses from these companies is not surprising, it is good to see some Canadians expressing similar support for embracing OTT competition. For example, the CBC acknowledges that “it is too early to conclude that Netflix or other OTT services will significantly change how Canadians consume TV in the next five years” and notes that the availability of OTT alternatives is consistent with its mandate:

CBC/Radio-Canada’s goal is to ensure that Canadians have access to its programming on whatever platform they choose, thereby increasing the quantity and variety of Canadian content on new platforms. CBC/Radio-Canada must also maximize the value of its content. CBC/Radio-Canada is therefore eager to negotiate the supply of its content with OTT services used by Canadians, including any new Canadian OTT services that may arise.

The National Film Board of Canada, which has been active in streaming its films, is also supportive of OTT services. In fact, the NFB wants to compete with Netflix:

There is room to create an alternative Canadian OTT service that would not compete with the existing commercial sector but provide unique opportunities for the Canadian private production industry and for Canadians. Such a service can be enormously advantageous in promoting the value of Canadian programming at home and abroad.

The NFB describes how it has been developing all the functionality necessary for an OTT service and is looking to work with the Canadian private sector to develop new alternatives. Once established in Canada, the NFB envisions exporting it to other countries in much the same way as Netflix entered into the marketplace.

Regulation

If the NFB represents the vision of Canadian content competing in the online environment, the creator groups such as ACTRA, the Canadian Media Production Association, the Directors Guild of Canada, and the Writers Guild of Canada represent the opposite view. Rather than competing, their submission conjures up all the fears associated with OTT:

As consumers opt for non-contributory OTT services, we can conclude that a significant negative impact will occur on the Canadian content creation industries because of reduced funding for the CMF and independent production funds. Further, we can surmise that the availability of Canadian content to Canadians could be detrimentally impacted as those who opt for OTT services may have less such content available to them.

As a result, the submission seeks new regulations requiring OTT services to contribute financially to the creation of new Canadian content and to meet Cancon requirements. The submission supports this position with an opinion from lawyer Peter Grant, who argues that regulating foreign-based OTT services is legally possible.

Moreover, it includes a study by Paul Gratton that purports to find that Netflix Canadian content is actually 2.3%, not the 10% that Netflix claims. The study appears to have some serious methodological shortcomings, however. For example, working without a master list, it simply counted programs or movies as they appear by genre. The study then removed Canadian duplicates that appear in more than one genre. While the Canadian duplicates were removed, it is not clear that all duplicates were similarly removed, possibly leading to a much lower percentage of Canadian content than is actually the case. Moreover, the study treats all television programs as one title, without regard for the number of episodes. By its count, Canadian television accounts for 7% of the total titles but the actual percentage of episodes may be higher still.

Joining the creator groups in seeking more regulation is Bell, now the owner of CTV. Bell calls for a further proceeding, leading to a new regulatory framework that would require regulation of a company’s “principal broadcast business.” The approach would mean Netflix would face new regulation. The Bell submission coins a new acronym for OTT services – FOBs or Foreign Owned Broadcasters. While the question of whether services like Netflix are broadcasters is open to debate, the choice of acronym is unquestionably a bad one.

Allarco, which owns SuperChannel, a leading pay TV service, is also squarely behind greater regulation for OTT services. The submission makes a compelling case for why pay TV is most threatened by OTT services, as it offerings such as Netflix are far more price competitive and flexible.

De-Regulation

The third group of submission involves major cable companies who view the OTT exercise as the opportunity to remove regulations from their businesses. Rogers argues that it is premature to regulate Netflix, but that the CRTC should use the opportunity to remove regulations from its video-on-demand products. Shaw joins the call for deregulation, arguing that the current “walled garden” regulatory environment is unsustainable. Instead, it says:

Three key principles should form the cornerstone of any new regulatory model: (i) no new regulatory requirements or entitlements should be introduced into the Canadian broadcasting system, (ii) steps must be taken to decrease the regulatory burden of licensed undertakings; and (iii) a plan for deregulation must be based on re-evaluating and prioritizing broadcasting policy objectives and regulations, with the goal of implementing a new framework that supports the satisfaction of consumer expectations and the competitiveness of Canadian broadcasters and BDUs.

The Shaw position is particularly notable since represents a shift from what it told a House of Commons committee last year when it called for a reconsideration of the new media decision.