Thursday, July 7, 2011

Three regulatory challenges must be addressed when discussing OTT broadcasting

Recently the CRTC requested comments from industry on Over-The-Top broadcasting in Canada.  Over-The-Top, or OTT broadcasting refers to content providers that do not directly control the transmission of their material.  Services such as NetFlix that stream movies over the Internet are an example of OTT providers.

We believe that technology has revolutionized the media world and NGNs provide the fibre backbone that enable Smartphones, tablets, video streaming, etc.  It is important to remember that the same fibre infrastructure that is used to support entertainment is also used for important economic drivers like ecommerce as well as delivering education and health services to Canadians.

It is our belief that the current debate around OTT really comes down to regulated content (broadcast) vs. unregulated content (Internet).  Witness the fact that all the traditional broadcasters also provide OTT content on their respective websites.

The current challenges have arisen because the concept of OTT is a reflection of the traditional telecommunications/broadcasting model supported by an outdated regulatory framework.  

We believe that there are three regulatory challenges that need to be pulled apart and addressed separately.

  1. The Internet should not be regulated and the content running over it needs to be deregulated.  The old model integrates the network with the content/media/web services.  The new model that has emerged has the end user/consumer choosing the media/web services they want independent from the network service provider they use. It’s time to seriously consider moving to the new industry construct of NGNs that are focused on providing connectivity to end users, that is a separate industry sector from the new content/media/web services sector.  Canada’s regulatory framework should then reflect this structural separation.  As a recognized global player, we have worked with governments that have tackled this issue head on.  In our experience structural separation of the network transport layer from the content/media/web services layer provides the end user with competitive choices for both service and content providers. 
  2. Regulate the network infrastructure to ensure cost and quality.  The regulation of the cost and performance of network connectivity should be an entirely separate topic from the regulatory framework that the Government of Canada implements to maintain a public policy objective and cultural bias to support Canadian content.  Additionally, regulations could be required to level the digital divide and ensure non metropolitan communities in Canada have access to broadband fibre infrastructure and connectivity.  This would deal with network access prices recently raised by the Prime Minister.
  3. If the Government of Canada is concerned about the concentration of media rights then it should deal with it using existing anti competition and antitrust laws rather than trying to regulate the Internet.
We would recommend that the CRTC segment the review of its policy framework into the Network, Media and Competition components as suggested above so that the issues can be looked at without the presumption that the incumbent cable and telcos are the vehicle through which each of these issues are tackled.

This approach would set the stage for the Government of Canada to develop policy to solve the rural urban digital connectivity divide.

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