The System According to Konrad: The Digital Transition, Over-the-top Programming, and the Future of the CRTC

Although I’m relatively new to blogging, I’m quickly learning that a speech by Konrad von Finckenstein makes for an interesting post; of course, von Finckenstein’s most recent presentation to a delegate-packed ballroom at the Banff World Media Festival doesn’t disappoint.

While, admittedly, this year’s speech lacked the urgency characteristic of the previous year, von Finckenstein did take the time to address insistent issues such as the Digital Transition, over-the-top (OTT) programming, and the future of the CRTC.

As most of us know, the Digital Transition is a few months away, and, while it has been discussed fervently for some time now, von Finckenstein reminded those in attendance that the Transition has been no small order: the installation of new technology, an expansive country, and limited funds have combined to make the Transition a huge undertaking— especially for the CBC.

After all, it is for these reasons that the CRTC decided to relax its transition goals, and make the impending August 31 deadline apply only to broadcasters serving mandatory markets.

The Transition will only affect those 7% of Canadians currently receiving over-the-air television services, and any suggestion that cable or satellite services will require ‘upgrading’ is simply untrue.

When the deadline passes, and the 700-megahertz band is freed from the shackles of analog television, the frequency should accommodate a superior number of digital signals — mobile data, video traffic, and so on.

An auction planned for 2012 will determine exactly how the band’s limited vacancy will be allocated.

In the meantime, the CRTC will likely find itself occupied with the increasing penetration of over-the-top programming and the dubious task of its regulation, or lack there of.

The CRTC is now accepting submissions regarding the perceived effects of OTT programming, but von Finckenstein remains uncertain of the new delivery system’s significance. In other words, the Chairman is split on whether OTT programming poses a threat to regulated broadcasting, or can complement traditional methods of delivery.

In fact, von Finckenstein believes that the CRTC should have nothing to do with the regulation of OTT programming -- rather, he believes that the government should rethink the existing regulatory system, and have it consolidated into a single all-encompassing Act.

By doing so, Mr. von Finckenstein believes that the new legislation could focus on regulating bits, and will ultimately “support the development of a flexible, competitive and innovative system providing access for all Canadians to their choice of fast and efficient digital resources.”

Personally, I agree that the industry needs a regulatory rethink, but I don’t see von Finckenstein’s motives as particularly transparent; at one point in his speech, he decries the extent of ‘consumer control’ and the shrinking regulatory power of the CRTC in the digital world. Later on, he idealizes a future regulator that would wield increased ex post powers of enforcement and intervene only in cases of market failure. Putting the two thoughts together, I fail to see how increased consumer access is a market failure when it exists in a highly concentrated industry predominantly owned by conglomerates.

Nevertheless, von Finckenstein ends his speech by asserting that regulatory change is necessary in the new digital world, and urges the industry to organize in order to persuade the government to rethink the existing legislature. Perhaps it was the stripes of those attending that influenced him to say “Government intervention is unlikely if the industry isn’t pushing it”? Regardless, I hope that the Chairman learned one thing from the CRTC's recent UBB fiasco: you shouldn't push regulatory decisions without consulting the consumer.

Other questions posed by von Finckenstein:

— Should communications policy be consolidated into a single government department?

— Should the regulator have a more passive role and have its retroactive disciplinary powers increased?

—If the CRTC survives a regulatory rewrite, how will it be defined?

What do you think?

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