Broadcasting Regulations in Canada

Leonidas Kanellos meets Tom Pentefountas, CRTC Vice- Chairman on Broadcasting

An informal excange of regulatory expertise between Europe and Canada is for sure a rare experience.

Presented for a short period of time in Canada, Dr. Leonidas Kanellos BEREC Chair 2013, meets Tom Pentefountas, Vice- Chairman, Broadcasting, Canadian Radio-television and Telecommunications Commission. The two regulators had a very interesting discussion about Broadcasting Regulation in Canada.

Leonidas Kanellos: Tom good morning, it is my pleasure meeting you again to briefly exchange regulatory expertise between Europe and Canada. We have both legal background but we have some differences since I have been a telecoms regulator in Greece and Europe, as chair of BEREC, the Body of European Regulators for Electronic Communications, where you are a media regulator as Vice-chair of CRTC, the Canadian Broadcasting Authority. So my question to you is how do you see the future of the media industry in Canada and what is the role of fixed and mobile broadband in this direction ?

Tom Pentefountas : Leonidas, welcome to Canada!! It is also my pleasure to meet with you again upon expiry of your national and European tenure as EETT and BEREC chair. I have followed your work on convergence and appreciate the progress made as regards European and Greek telecoms regulation. I know you have a teaching activity in Piraeus University and as a telecoms attorney in Athens and Brussels. From our perspective, we also at CRTC have put a great deal of thought into the future of media in general and the television industry in Canada in particular.

Beginning in October 2013, we hosted a conversation with thousands of people: broadcasters, industry analysts, content producers and citizens. And we’ve drawn important conclusions based on the feedback they gave us. Conclusions that we used as the basis for decisions that we put in place to change the way in which content is made, aired and governed in Canada’s media industry.

Leonidas Kanellos: What did you learn through this consultation process?

Tom Pentefountas : I’ll outline three lessons we learned right now. First, broadcasting not only in Canada but across the globe is evolving in ways and at speeds that very few could have imagined even five or ten years ago.

Content is everywhere. It is available to anyone at the time, in the location and on the device of his or her choosing.Second, the depth and pace of such change has forced everyone associated with media—creators, viewers and distributors—to re-think their relationships with programming. Viewers will have to learn new ways of discovering content in the digital universe. Producers will have to innovate to bring the next great show to audiences’ screens.

Broadcasters will have to reinvent themselves to remain relevant in a world where content is less and less consumed in linear fashion.The third lesson we learned is this: if they are to keep up with the demands of media change, the rules we regulators create must be easier to understand and adhere to, must better respond to technological innovation and must anticipate what is to come as much as what is contemporary.

They must invite investment. They must encourage innovation. And they must throw open borders rather than closing them, because protectionist ideas and attitudes that may have worked well yesterday appear old-fashioned today—and will be downright obsolete tomorrow.

These are the core concepts that we at the CRTC learned during our review of the television system and the foundation for our regulatory framework for the digital landscape.

Leonidas Kanellos: I understand that you have completed a review of the Canadian regulatory framework. What are the main changes introduced ?

Tom Pentefountas: Back in 2013, we embarked on a review of Canada’s television system, which we called “Let’s Talk TV.” We did so with the understanding that the regulatory framework we had in place was increasingly ill-suited to keep pace with change in the broadcasting industry. It was cumbersome, restrictive and, at times, ineffectual.

You see, our rules governed a system where television content was made, aired and watched in traditional, predictable fashions: in the studios of independent producers and major networks, at specific times of the day and on televisions mounted to the walls or sitting in the corners of living rooms, bedrooms and kitchens.

Leonidas Kanellos: I agree. We live in a multi - screen world with content been distributed over many devices. As European regulators we tried to foster broadband access to content over many fixed and wireless platforms, including laptops, smartphones and tablets. In your view, what is the users' perspective today ? What has changed and how did you accommodate changes within the regulatory landscape ?

Tom Pentefountas: Today’s reality is that fewer and fewer people every day watch television on set schedules, and on traditional devices. They watch the content they want, where, when and how they want using their phones, their tablets, their laptops and their desktop computers. Meanwhile, the choices available to them are expanding. Viewers are no longer bound by two or 10 or even 50 television stations.

They can watch hundreds more on TV and online—and the options available to them grow every day. Content is abundant in today’s media world. That simple fact has empowered the viewer in ways few of us might have foreseen even a decade ago. Content no longer dictates to viewers. Viewers control how and when they consume content.

Leonidas Kanellos: How did you collect the users' views? How effective was the public dialogue launched in Canada by the CRTC?

Tom Pentefountas: We at the CRTC kept that truth firmly in mind when we launched our Let’s Talk TV conversation. We set out to hear from as many people as possible—members of the public as well as experts across the industry—about how they engage with television, what they watch, how and where they watch and on what devices.

We learned from that intelligence. What we heard from Canadians helped us to build a new framework for the television system, one that responded to these transformations, that further empowered the viewer, and which gave broadcasters and producers the tools they needed to adapt their service offerings for success.

LK : In light of your findings, what are the main changes introduced ?

Tom Pentefountas: We announced our decisions last winter. One of the tools we used to do this was the broadcast quota. We required broadcasters to devote a certain percentage of the shows they aired at various times of the day to be Canadian made, while our government gave producers financial incentives to make Canadian programs. Our hope was that more and more Canadians would connect with Canadian-made shows as a result.

Leonidas Kanellos: Do you really believe such a quota system could work? I know some countries that tried to introduce it but the results were not so encouraging.

Tom Pentefountas: That is true. The quota system wasn’t perfect. It did some things very well, such as bringing new Canadian-made productions to air. But it also encouraging broadcasters to air and re-air the same shows in order to meet their content obligations. Such was the trade-off in place for many years.

In the age of abundance, however, where viewers have more direct control over their watching experiences, we regulators can no longer pretend our borders are sealed. Quotas are less and less relevant every day. They simply don’t work when a viewer watches shows only online or on demand. So one of our first steps was to greatly reduce our application of broadcast quotas.

Leonidas Kanellos: So what did you hope to achieve in so doing?

Tom Pentefountas: We wanted to free up broadcasters to air the shows their audiences wanted most, as opposed to tired re-runs of the same old programs. We stopped short of eliminating broadcast quotas altogether. Because evidence tells us they still have a role to play during prime-time hours, when a significant number of viewers still watch conventional broadcasts, and when the best Canadian-made programs are usually brought to air.

Our decisions also took aim at the way in which content was created. Too often, our rules very narrowly defined the criteria that made a program Canadian. We loosened them and launched two pilot projects to allow producers more freedom to innovate, to bring the best Canadian-made content to the screen, and to invest more money in the system. This is intended to create a virtuous cycle that funds and develops even more—and better—programs made by Canada.

LK: I understand that you want to support Canadian content which brings value to viewers.

Tom Pentefountas: Correct ! The CRTC wants to give Canadian producers the tools they need to create the world’s next favourite television program, and the tools we have put in place will surely help them do just that. Among all these decisions we made, we were also mindful that Canadians value local television.

Leonidas Kanellos : So do you encourage offerings of triple play bundles by operators with some mandatory local content ?

Tom Pentefountas: Beyond the entry-level service, Canadians will be able to choose the channels they want on an individual basis or in small, reasonably priced bundles of channels.

The empowered viewer is the new reality, and the traditional system must adapt to it. Television distributors will have an incentive to offer reasonably priced services that meet the needs and interests of Canadians. Similarly, broadcasters will have an incentive to produce high-quality, original content that is compelling and attractive.

Leonidas Kanellos: Tom that sounds ambitious. How realistic is such perspective ? The global media market is dominated by large producers and over the top content distributors how easy is for local producers to survive in this very competitive and investment-intensive market?

Tom Pentefountas: Leonidas I see your point. These steps were not easy to take. Some worried about producers’ ability to survive in this new environment, about the future of Canadian-made programming, and about the capacity of the system to fund larger-scale productions.

Speaking as a member of the panel that arrived at these decisions, I can say they weren’t easy ones to make. But we made these choices because they were necessary to create a regulatory framework for Canada’s television industry that responded to the digital media environment and positioned our creators, broadcasters and advertisers.

Leonidas Kanellos : How can you ensure that the viewer has an active role in this new digital era?

Tom Pentefountas: The CRTC is acting to solve that problem in two ways. First, we created an industry working group to explore the development and application of a viewer-data measurement system that could be implemented via set-top boxes.

Knowing who watches what and when is valuable data for the media industry. Such information can be monetized. It can create new—and potentially vast—revenue streams that can bring new revenues into the television system, while also giving the industry the intelligence it needs to better compete with data-rich digital platforms.

Our other solution to the challenge of disintermediation is to host a summit on discoverability. It’s one thing to fund and make great content. It’s another entirely to have it found and watched. Content must be widely available, evidently visible and easily found.

Leonidas Kanellos: As a European regulator I tried to cooperate with my peers to attract investment in broadband as a powerful access platform to online content. At BEREC level we closely interacted with the European telecoms industry to make every European digital by implementing the flagship initiative called European Digital Agenda 2020, what are you doing in Canada in this regard?

Tom Pentefountas: We at the CRTC also appreciate the powerfully influential role that broadband technology plays in Canada and around the world. We acknowledged as much in 2011. That’s when we set a target for Canadian Internet service providers to deliver what we then considered the minimum speeds necessary—at least 5 megabits per second (Mbps) download and 1 Mbps upload—to all homes and businesses in the country by the end of this year.

Much progress has been made over the intervening years. Today, nearly every Canadian has access to such Internet speeds and the benefits of the connectivity they offer. There are still, however, some areas in the country where these speeds are not available.

Leonidas Kanellos: Are those targets still relevant today? How do you ensure that everyone has a similar baseline level of service, regardless of where they live?

Tom Pentefountas: Those are the fundamental questions the CRTC will ask during a forthcoming review of our mandated basic telecommunications services. We see regulators in other countries aiming for much higher targets—25 Mbps in the United States and Australia, and 50 in Germany—and we wonder if our targets should be brought more in line with those of other geographic and political neighbours.

I don’t know the answer to that question. My fellow Commissioners and I will rely on the intelligence given through the course of our public consultations to formulate our answer—not just to this question, but to many others associated with the basic services Canadians need and desire.

Leonidas Kanellos: To conclude, what does success look like in the digital media world, in television’s age of abundance?

Tom Pentefountas: For the viewer, it’s about finding and watching new and exciting programming—the best the world has to offer, produced anywhere in the world—as and when he or she decides.

For the broadcaster, it’s about offering new services that interest consumers and keep them engaged, and using viewer data to make content (advertising as well as programming) as relevant as possible.

For the creator, it’s about bringing content to individuals rather than to broadcasters, and taking advantage of new opportunities to realize impressive revenue streams.

And for us regulators, it’s about modernizing the rules we create to make them more responsive to changing times and conditions, about offering broadcasters and creators more opportunities to bring new ideas into the market, and about ensuring the public plays a major role in helping us arrive at our decisions.

Leonidas Kanellos: Thank you Tom for this very interesting discussion.