Results of CRTC fact-finding on our Netflix agony: there are none!

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"I've come to suck the soul out of your culture and take your money too"

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Agency fails to find any real bananas on banana hunt – only “inconclusive” bananas

When a public agency tries to scam its way to the conclusion that Canadians need to be protected from the heroin drip of US programming, especially the cheap, innovative online kind, then shit is bound to happen. Or so you might have thought after reading my scary posts from June entitled “Get yer grimy paws off my Netflix: Ottawa’s big OTT scam” (here and here).

But this morning brought no such thing. Instead, the Commission launched “Results of the fact-finding exercise on the over-the-top programming services.” In the accompanying press release, it confesses the non-proceeding produced “inconclusive results.” And goes on to say the responses filed did not contain “any clear evidence.”

A fact-finding exercise that seems to have found no facts worth reporting is trading on a very odd notion of what “facts” are. (Truthful is not the same thing as actionable.) Not that this outcome is so unusual for a body that does almost no research of its own, especially about the facts of life as experienced by digital media consumers (quantitative measurements of market concentration, fair international broadband rankings, etc).

On the other hand, the press release does provide a list of six items based on what the intervenor responses indicated. Here they are, with my  comments inline:

 

  • “The traditional broadcasting system continues to support Canadian programming even as services emerge to deliver content to Canadians in new ways.”

Did we really need to be reminded of this? This isn’t a fact or a finding, it’s a stipulation of the Broadcasting Act. Support it or you’re busted.

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  • “While consumption of online and mobile programming is growing, current measurement tools are unable to accurately reflect trends in consumer behaviour.”

So let’s be sure and not attempt any consumer research, since you never know what those zany consumers will do once they’ve ditched their loyalty to the Canadian Broadcasting System. Have these guys never heard of Cisco? Not their gear, their research – like Cisco Visual Networking Index: Forecast and Methodology, 2010-2015 (published June 1, 2011 – here). For example, scroll down to Table 1 (Internet Video Users, 2010-2015) and note that – on the basis of research prepared by comScore, Nielsen and IDC – the number of Canadian Internet video users is projected to increase from about 3.3 million in 2010 to about 21 million in 2015. It’s not that the CRTC can’t find measurement tools; they just doesn’t like measurement tools. Check out the flowchart below that shows how Cisco combines measurement tools to make its five-year forecasts of global Internet traffic…

The basis for Cisco's annual Visual Networking Index and Internet traffic forecasts

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  • “There is no clear evidence that Canadians are reducing or cancelling their television subscriptions. Online and mobile programming appears to be complementary to the content offered by the traditional broadcasting system.”

A clear indicator of the Commission’s priorities: not what Canadians see as good for themselves, but whether or not the struggling capitalists at Rogers, Bell, Shaw and Vidéotron will see their BDU businesses suffer. The CRTC has managed to make cord-cutting a difficult consumer choice for Canadians, by encouraging the BDUs to implement economic disincentives, like the data caps that for many subscribers would make a Netflix subscription at $7.99 a month as expensive as a cable-TV subscription (by piling on penalties of as much as $50/month for “over-use.”)

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  • “Canadian creators are taking advantage of the digital environment to produce innovative content and to reach Canadian and global audiences. Canadian broadcasters and distributors are also launching their own online and mobile programming services.”

If Canadian creators are actually making “innovative” content and reaching global audiences, then why do ACTRA, the Writers Guild, the Directors Guild and their sister bodies continue to insist that Internet content be put under the control of the CRTC, so Ottawa can turn it into just another delivery platform for Canadian content?

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  • “Some online programming services have established viable business models and are competing in the marketplace for programming rights and viewers.”

The broadcasters and distributors that are competing in the digital marketplace are now largely owned by the four vertically integrated conglomerates. So Rogers and the other conglomerates have both the motive and opportunity to restrain trade by making life a lot more difficult for new online services – whether considered broadcasting or not – that have the nerve to compete with the incumbents’ own well established and well protected core businesses. As Dwayne Winseck demonstrates in his work on “Media and Internet concentration in Canada, 1984-2010” (here), our media and network industries are now so concentrated that it’s nonsense to call this marketplace competitive in any meaningful way. Take TV, for example : “The largest four television providers now control 78 per cent of all television revenues (i.e. Bell, Shaw, CBC, Rogers, in that order), up from 71 per cent two years ago and the high 50s, low 60s-range for the rest of the years since 1984.” And after the court battles over the CRTC’s tight restrictions on program exclusivity, count on the health of competition to get worse not better.

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  • “Internet and wireless networks may encounter capacity constraints and be challenged to support increasing consumption of media content.”

Oh piffle. This is more of the alarmist exaflood bullshit that’s hyped by ISPs that want to be allowed to manage their subscribers as much as they manage their networks. Their alarmist attitude translates nicely into the need to discourage Internet use; manipulate retail prices; block or impede competitive services; and treat bandwidth as a scarce resource. It’s certainly true Cisco forecasts huge increases in traffic over the next five years: “In 2015, the gigabyte equivalent of all movies ever made will cross global IP networks every 5 minutes. Global IP networks will deliver 7.3 petabytes every 5 minutes in 2015” (op. cit.). And the best reason of all to think the world will rise to the challenge is the money: Tier 1 and Tier 2 providers, e.g., will provision for much greater capacity because they know transit customers will be coming out of the woodwork with new orders for tons of bandwidth.

Finally, given all the great benefits derived from conducting the fact-finding exercise in 2011, the CRTC promises more to come:

As part of its ongoing efforts to track trends in technology and consumer behaviour, the CRTC will hold another fact-finding exercise in May 2012.

In a perfect world, maybe we could hope the CRTC would explore consumer behaviors by conducting tracking surveys that ask the consumers themselves – rather than trying to divine such information by asking the regulatory executives of our biggest media and network companies what they think consumers are doing and thinking. Maybe that’s why this year’s fact-finding didn’t turn up any actual facts, or measurement tools.

D.E.

 

One thought on “Results of CRTC fact-finding on our Netflix agony: there are none!

  1. Thanks for the link and mention, David. And thanks even more for yet another thoughtful piece on what it means to regulate in world where evidence either doesn’t exist or is provided mostly by those with interests to protect and entrench. cheers DW

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