The Ottawa Business Journal reported that a Harris Decima poll shows overwhelming support among Canadians for requiring Internet and wireless service providers to help finance production of Canadian digital media content.

Of course people would say that.

Until they stop to think about what it really means for ISPs and WSPs to provide financing for content.

Alan Goluboff, President of the Directors Guild of Canada is quoted in the press release saying:

ISPs and WSPs are as much ‘distributors’ of information and entertainment content as cable and satellite TV providers. They should be required to help fund Canadian digital media content in the same way that cable and satellite companies are required to financially support Canadian television programming. These companies are immensely successful and have ample resources to support the creation of Canadian content for new media.

The study was funded by the actors’ union (ACTRA), film producers (CFTPA), the directors guild, and writers guild (WGC).

Who do you think would actually foot the bill? Would it be the shareholders of the “immensely” successful companies or their consumers who pay the Canadian content surcharge?

I’m going to guess that if Canadians were asked “would you be willing to pay more for your internet and wireless service so that producers of Canadian content don’t have to produce economically viable content” the results of the poll would be somewhat different.

This smells a lot like a pitch for a hidden (or not so hidden) tax.

We know that Canadians think that wireless and internet service prices are too high as they are. Do we really need or want a new Content Access Fee added to our bills?

Let’s go back to the underlying premise itself.

Why don’t the Canadian content producers believe they can produce content that would attract advertisers or direct subscribers? Why are we starting with a presumption of a subsidy system to fund production of new media content?

What’s next? Preferential treatment of Canadian content on ISP networks?

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Harris Decima, Canadian content, wireless, internet

Just when we might have hoped that System Access Fees were as bad as it could get, the marketing folks at Bell Aliant have found a new way to stick it to consumers.

The CRTC approved plans by Bell Aliant to introduce a 30-day notice period when customers cancel certain bundles. I guess they figure that if you can’t charge the people who want your services, charge the people who want to go. That will sure leave them with a great feeling, won’t it?

Among others, the plan will affect students who may consider taking bundles for 8 months before going home for the summer. If they don’t remember to cancel their plans in March, the new fee is the equivalent of a 12% rate hike.

What is the fee for? Because Aliant can charge it. Call it a contribution to the Aliant Income Trust Profitability Relief Fund.

On one hand, I could argue that we should let market forces rule – let companies charge what they want. If consumers don’t like it, find another service provider. But this kind of fee is a ‘back-end load’. Customers are being hit with it when they leave – a set of handcuffs to try to get customers to think twice before switching.

Consumers have market forces to bring to bear as well. How could Bell Aliant customers respond? Maybe they could start by canceling their pre-authorized payment plans as an expression of disapproval. Or start shopping elsewhere – after all, you need to give 30 days notice when you switch.

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Bell Aliant

Call this post a preview of coming attractions. Next Monday, the CRTC will commence hearings to look into the privatization of Bell.

It is the final exam for Teachers’. And it’s going to be oral, open book.

At the heart of the CRTC’s examination is the change in voting interest at CTV Globemedia. Bell currently holds 15% of CTVgm; Teachers has 25% of the voting shares. The transaction would result in Teachers’ increasing its interest to 40%, which requires regulatory approval.

The overall transaction for BCE equity is nearly $40B. Of that, only $110M has been allocated to the broadcasting undertakings. This is important because 10% of the value of almost any broadcasting transaction has to be allocated to “tangible benefits”: a kind of charitable gift to enhance broadcast life for those affected by the transaction.

Bell has proposed $11M in such benefits: $6.2 million over 7 years for the creation of HD programming that features “important and underserved Canadian entertainment properties on a pay or free per view basis.” It appears that 80% of these benefits would go towards “original programming that is both of popular interest and of specific relevance to viewers in Quebec.” Bell also proposed to add $4.1M to the Bell Fund and $700K to the Media Awareness Network, also over 7 years.

As a result, besides satisfying itself that “control of the broadcasting and distribution undertakings will be exercised by Canadians at all times”, the CRTC may look at the quantum of the transaction allocated to broadcasting, in order to extract the appropriate level of benefits for all Canadians.

Catalyst Asset Management, has continued its PR campaign against CRTC approval of the deal. In a full page ad in the Hill Times, Catalyst says:

The Pension Benefits Standards Act prohibits Teahers’ from holding, directly or indirectly, more than 30% voting control of BCE. To suggest this limitation allows Teachers’ to meet the Canadian ownership rules enforced by the CRTC is an artifice.

The CRTC’s file is filled with comments received from a variety of parties who wrote letters of support. Letters are on file from producers who have benefited from the Bell Fund in the past and look forward to the new money; letters from other Teachers’ buyouts such as Shopper’s Drug; Cybertip weighed in with its support – saying how happy it was to have received a new 3 year funding commitment.

On the other side sits Catalyst, a few disgruntled individual shareholders and citizens. Writing on behalf of “all Canadian Senior Citizens”, Paul Muser writes:

It is very obvious that BCE and Teachers are out “trolling” for letters in support of this transaction, as there are submissions from a number of groups like Kid Help Phone and others who are closely tied to BCE and Teachers, like Carol Stephenson of the Ivey School of Business, Michael McCain of Maple Leaf Foods, the Canadian Chamber of Commerce, and the Ontario Chamber of Commerce. All of these parties are closely linked economically to either Teachers’ and/or BCE.

It will be an interesting week of hearings. You can catch it live in Hull. The audio will be webcast. Prepare your own report card for the Teachers.

After reading a story in this past weekend’s National Post, I wonder if it is time to rethink how we fund rural broadband.

I have long questioned the need to apply universal subsidies. The Post story speaks of the boom in rural Canada, led by surging crop prices over the past year and a half.

You now see satellite dishes on farms because people need access to the Internet and international grain markets. Farms are doing those things themselves, instead of relying on others, because the technology allows them to do that.

There is a need to facilitate broadband in rural Canada, but not necessarily to subsidize it.

Maybe Canada needs to look at targeting broadband subsidies based on income, regardless of where people live. There is a gap in the level of connectedness among lower income Canadians in urban markets as well. Maybe it is time to consider making PCs and broadband part of our social welfare system.

Will a broadband tax credit be a part of the next federal budget?

Is it just my impression or is Cisco actually enjoying some consistent traction in deals with Canadian service providers?

Yesterday, Cisco and Bell had a joint press release and analyst conference call to announce they are partnering to develop and deliver a range of IP-based Managed Services as well as expand the pool of qualified technology professionals.

A couple weeks ago, Cisco and Videotron announced their wideband internet solution.

And TELUS and Cisco have had a couple announcements already this year – TELUS becoming a TelePresence user and service provider and TELUS announcing that it is deploying Cisco gear to improve its mobile messaging platform.

It all adds up to a lot of Cisco announcements in the first few weeks of February.