Why CRTC won’t tax ISPs

CRTCThere are around 100 submissions currently listed on the CRTC’s New Media consultation website. The usual suspects came to the proceeding looking for internet service providers to become new sources of funding for Canadian cultural production.

Most interventions warned the CRTC to stay away from regulating the internet. Some were pretty basic, like Ron Turner’s eloquent contribution to the discussion:

You are talking bout poking yur nose into regulating internet in Canada—keep your nose out of it– none of your business– we got way too much government regulation already– why dont you go after the virus and spammer guys and for thaT you dont haver to regulate nothin for that—- MAKE YOURSELVES USEFUL NOT USELESS

And then there is John Renny’s submission:

I am disgusted and appalled to think that the CRTC are thinking or even thinking about regulating the Internet; you’ll keep your damn hands off of our Internet; I’m going after each and every one of your jobs; …

Who the hell do you think you are? …

Into this debate, a number of other parties waded with far less passion. Such as Google looking to keep the internet ‘awesome’:

Canadian content is flourishing on the Internet. The Commission should resist the temptation to try to fix what is not broken. Without regulation the Canadian broadcasting policy objectives have been, and will continue to be, implemented on the Internet. The New Media Exemption is the best regulatory approach to keeping the Internet awesome.

Barrett Xplore’s submission is strictly legal, indicating that the CRTC has no legal authority to impose such fees. Barrett suspects that some continue to believe that there are very few facilities based ISPs, a fact belied by the Deferral Account proceeding.

Most facilities based ISPs are explicitly exempted from provisions in the Broadcast Act:

For greater certainty, this Act does not apply to any telecommunications common carrier, as defined in the Telecommunications Act, when acting solely in that capacity.

Rogers has appended a legal opinion from Faskens which confirms that the CRTC has no legal authority to impose fees on the ISP sector.

Since the major ILECs and cablecos are also Broadcast Distribution Undertakings, perhaps this is what leads some to believe that the Commission has authority and administrative wherewithal to tax ISPs for subsidies. It will be interesting to see legal argument on the other side.

As CAIP notes in its submission:

The true issue at hand is that no amount of funding will compel audiences to watch content that is not compelling. … Canadians are simply finding the content they desire using online resources rather than traditional distribution methods.

There are many other issues being reviewed by the CRTC in this proceeding, as we wrote in October. Many of the parties noted constraints set out in the Public Notice that limited their ability to discuss accessibility and net neutrality. At least one party has noted the potential for overlap with the internet network management proceeding and has recommended merging the oral hearings.

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