What does basic service mean in 2016?

Technology has changed much faster than the CRTC’s definition of what constitutes a basic telecommunications service that has to be available to all Canadians, which literally dates from the last millennium (1999, to be exact).

It stipulates, as the Wire Report noted (subscribers only) in a 2014 story, that basic service includes a telephone line “with capability to connect via low-speed data transmission to the Internet at local rates,” as well as services such as “Touch-Tone dialing” and “a copy of a current local telephone directory.”

Len Katz, a former CRTC vice-chairman of telecom, told the Wire Report in an interview at the time that the last time the commission looked at the issue in 2010-2011, it recognized that the definition was “old, antiquated and outdated,” but that the “technology was changing so quickly that we didn’t have a good handle on what speed was the most logical speed to mandate.”

Instead of updating the definition, it set speed targets of download speeds of 5 Mbps and upload speeds of 1 Mbps.

On Monday, the CRTC will tackle the issue again, beginning a three-week hearing during which 86 parties will appear in front of a panel, including large and small telecoms, representatives from the Yukon and Nunavut governments, advocacy and community groups and experts.

They’ll all weigh in on which services Canadians find necessary to participate in the digital economy, acceptable Internet upload and download speeds, the need for funding mechanisms to support the provision of modern telecom services, and the proper role of the CRTC, the government and industry players in the market.

Many parties have already made their positions known.  During the intervention phase, the large telecoms told the CRTC it’s not necessary to implement a subsidy system for broadband Internet service, while advocacy groups argued that relying on market forces and government funding alone hasn’t worked to ensure all Canadians have satisfactory Internet access.

The commission also asked Canadians for their input, and most selected a combination of government intervention, market forces and use of a CRTC-established fund as the approach that should be used to provide the minimum standard. Ahead of the hearing, it also published its results in a study of broadband Internet performance (which found speeds were beating benchmarks), and a map of broadband coverage.

In the debate about the best way to achieve the basic service goal, two issues are bound to come up.

As that map shows, service in rural and Northern Canada is very different from urban Canada, and the CRTC will hear about the challenges of bringing it up to par from service providers, government representatives, and various groups.

It will also consider the question of affordability. On Thursday, days before the start of the hearing, Rogers announced it would expand its Connected for Success program, which makes a $9.99-per-month Internet service available for those living in rent-geared-to-income housing, and it’s a model that’s also likely to engender some debate during the hearing. The Public Interest Advocacy Centre will advocate for an affordability subsidy for low-income households.

The CRTC isn’t the only regulator grappling with these questions. The U.S. Federal Communications Commission recently said it would begin providing subsidies of $9.95 towards Internet service for low-income individuals.

We’ll be watching the hearings closely over the next few weeks to see where the discussion goes. As for whose arguments and proposals the CRTC finds most persuasive, we’ll have to wait until the decision—which typically takes a few months—to find out.


Are in-house ad agencies on the horizon for broadcasters?

As Vice Media makes the move from online giant to Canada’s newest broadcaster, it’s bringing to TV not only the attitude and style that made the company a digital juggernaut, but its ad strategies too.

That includes operating its own ad agency and making ads in the Vice style — the TV equivalent of sponsored content articles or videos.

Advertising money was the reason Vice decided to launch Viceland in the first place, which debuted Monday as part of a $100-million joint venture between Vice and Rogers.

Vice said (subscribers only) at a CRTC hearing last month that it’s hoping to draw more advertising from the likes of car companies and banks with a traditional TV platform than it was able to operating online-only.

“It sounds a bit crass, but absolutely we did it for the money,” Vice’s chief international growth officer David Purdy admitted at the time.

While sponsored content is commonplace on the Internet, it’s less so in TV’s hourly ad blocks. After all, TV broadcasters don’t normally have their own in-house ad agencies.

The ads will be “editorially relevant” to the show they’re accompanying but not “disguised as editorial,” Rogers and Vice executives told the Wire Report in interviews. They’ll be produced by Vice’s marketing and ad agency, Virtue, in the company’s Toronto studio, and be broadcast in addition to traditional 30-second spots.

As broadcast consultant Kelly Lynne Ashton noted, it makes sense Vice would be the company to export ad models from the Internet to television and not traditional broadcasters.

How well will it work? Less than a week into Viceland, that’s still to be determined.

The TV industry already knows it needs to evolve its ad offerings. It’s been a couple of years since Canadian TV first started playing with targeted ads, but as recently as last month Shaw Media president Barbara Williams was saying TV needs to step up that ability.

She said at a conference last month that TV will have to provide better audience data in order to keep up with digital competition, which allows advertisers to understand and target their audience more precisely.

Maybe the model offered by Viceland will see a quicker adoption by Canadian TV than targeted ads did if it turns out to be successful. That still remains to be seen. As Rick Brace, president of Rogers’ media business unit, said in an interview, right now “it’s bit of a wait and see.”

“But I think if 30 per cent of your population is millennials … advertisers will begin to flow,” he added.

And if it turns out the types of ads produced by Virtue for Viceland are a good way to reach that audience — which, after all, we hear all the time is becoming increasingly scarce on linear TV — others are likely to consider giving it a shot.

Canada’s biggest media and telecom companies are already Internet and TV service providers, phone companies, TV and radio broadcasters, magazine publishers, and more.

So why not ad agencies, too?

— Anja Karadeglija is editor of The Wire Report. She can be reached at akarad@thewirereport.ca.


TV is dead? Yeah, right

We can see the numbers as well as anyone. Each quarterly report shows cable companies are losing television subscribers.

Many people are migrating to IPTV services offered by telephone companies, which are aggressively marketing an alternative to cable, even though what they are providing is essentially a different type of cable with a few more Bells (pun intended) and whistles.

The novelty factor could wear off soon with cable providers stepping up their own game; Cogeco last year began offering TiVo (subs only), Rogers is planning its own IPTV service and Shaw intends on utilizing Comcast’s X1 platform for its TV customers.

Still, many people are leaving “television” services altogether. Boon Dog Professional Services issued a report last month showing that Canada’s publicly traded providers of TV service — even when factoring in the growth of IPTV — lost a combined 153,000 customers during the first three quarters of 2015. That was seven times higher than it was a year earlier.

The numbers could escalate further next year. In fact, this might be a structural trend that becomes more pronounced in future years, considering the fact that younger people are the ones less likely to subscribe to TV service.

Then again, some research indicates many of people who forgo any kind of TV service will give it a try next year when new regulations kick in that ensure cheaper starter packages and more choice over the channels they get.

During the CRTC’s Let’s Talk TV hearing in 2014, Rogers’ regulatory vice-president Ken Engelhart said that the TV system, as we know it, could survive another two years or another two decades — but make no mistake, its days are numbered.

Engelhart was not saying the practice of watching some kind of story, sporting event, informational program or live entertainment on an electronic screen with sound is dying. Rather, he was talking about the way video content is delivered to your home. He feels the closed connections between homes and their TV service providers will eventually be replaced by a distribution model that involves the Internet.

The popularity of online streaming services such as Netflix, and efforts by major Canadian media/telecom companies to compete by offering services like Shomi and CraveTV, are likely indications of where things are going.

We’ve also witnessed some jarring changes with over-the-air TV operations, most recently at CHCH and CTV. You might view this as another sign that the boob-tube business is going belly up, but you would be mistaken. The business model behind conventional TV, where advertising is relied on for virtually all of the revenue, is broken.

But we must keep in mind that people still spend a great deal of their lives watching screens for entertainment. It just seems more of it is being done online. One can understand why the Internet is an appealing way for companies to get TV content to people. Businesses can avoid mandated Canadian-content quotas and all kinds of other hoops the CRTC makes companies jump through for the privilege of a broadcasting licence.

Yet, some people would rather watch content on the living-room TV than a tablet or computer, and they don’t feel like trying to figure out what gadget will get an Internet signal to the main set. Traditional TV subscriptions hold some appeal for these people. Many providers, such as Bell, Telus, Rogers and Cogeco, now help you connect the TV right to Netflix through the set-top box. Yet, the real and perceived hassle of connecting Internet to televisions, especially as more of them become “smart” TVs, should lessen in future years.

The plumbing behind the infrastructure might change, but we will remain a TV-obsessed culture. Look at the evidence. Great inventions like the Internet come along and what do we do with it? We find a way to use it for TV. Even the latest buzz about virtual reality is how it can be used to access TV content.

People will — for the duration of my lifetime and many generations into the future — continue to be entertained by electronically generated images that tell a story, inform or provide some form of entertainment, whether it’s on a movie screen, a television set, computer, smartphone, tablet or maybe even a 3D hologram.

The baskets that have been used to collect money from this cultural habit are no longer working, and the eggs that have been placed in these baskets are cracking. The trick now is to find new baskets that work.

Derek Abma is editor of The Wire Report. He can be reached at dabma@thewirereport.ca.


Job opening

Editor, The Wire Report
The Hill Times
Location: Ottawa, Ontario
Posted: December 12, 2015

The successful candidate will report, edit and direct coverage of the telecommunications (phone, wireless, cable and Internet) and media (broadcasting, radio, etc.) sectors for our subscription website, which is tailored toward readers involved in these sectors. Among the hot topics we cover are competition in the wireless sector, how the TV Industry is adjusting to things like Netflix and coming CRTC regulations giving customers more choice over the channels they get, and cutting-edge technology such as the Internet of Things and wearables.

The Editor of The Wire Report will lead a staff of two other journalists, assign stories and write them first-hand. This will include an assortment of breaking news and features, long and short.

The Wire Report is based in downtown Ottawa, a short walk from Parliament Hill. We are a division of Hill Times Publishing, which also operates The Hill Times, Embassy, The Lobby Monitor and Parliament Now.


The ideal candidate will have a university degree or college diploma in journalism, and experience in providing news coverage of business, government, courts and/or regulatory bodies, and have spent some time editing and managing other journalists. The successful candidate would, over time, be expected build up a network of sources in business, government and among relevant organizations who can provide tips and insight to help us stay a step ahead of the competition in coverage of telecom and media matters.

Please send your resume and clippings – plus cover letter stating you found this job on Jeff Gaulin`s Journalism Job Board – to:

Asha Hingorani at ahingorani@parliamentnow.ca

Or by mail:

The Hill Times
69 Sparks
Ottawa , ON
K1P 5A5


TV issues could land on new MPs’ desks

You wouldn’t have known it from the election campaign, but issues related to telecommunications and media stand to figure prominently in the decision-making of parliamentarians in the coming term.

In the area of television, the CRTC has already decided that, starting next year, customers of cable, satellite and IPTV services will have the right to pick each channel one-by-one beyond a very basic package costing no more $25 a month. This is in contrast to past convention where packages were forced upon consumers containing dozens of channels they would never watch.

Many stations will not survive this change because not enough people will choose to subscribe to them, and this will create some job losses and business failures in the domestic -TV industry.

Another TV-related issue is the migration of consumers toward Internet-based video sources like Netflix and away from conventional TV-subscriptions.

The government doesn’t have to worry about big TV-service providers like Rogers, Shaw and Bell, even though they will lobby and/or litigate for any break they can get. These companies will take care of themselves, largely by exploiting the increasingly important Internet side of their businesses.

What politicians have to consider, however, is the extent to which government regulation should support the creation of Canadian TV programming and films. Currently, major TV-service providers have to contribute five per cent of their gross revenues toward the development of Canadian video content. In recent years, this regulation has generated almost $500 million annually.

However, this requirement only applies to the traditional TV industry, not the Internet operations of the same service providers or the companies that provide content over the Internet, like Netflix.

Early in the election campaign, the hated concept of a Netflix tax was discussed, with none of the three main parties wanting to be in any way aligned with such an idea.

But if current trends hold, Internet-based TV services — which do not have to contribute to Canadian content or adhere to Canadian content quotes — will become a bigger business, and subscription-TV services will become smaller, meaning less support for Canadian productions.

In the near future, House members might have to decide whether they need to tweak contribution rules to apply to newer sources of home-viewing entertainment — in other words, consider a Netflix tax — or whether to let those in the TV-content industry succeed or fail on their own merits.

Similar reasoning can be applied to deciding what to do with the CBC in the coming years. Decision-makers are going to have to determine, at some point, whether the public interest is served by prioritizing the CBC in government spending decisions.

Another issue that’s going to come up is the Internet of Things. Such innovation stands to create more personal convenience and business productivity. It also creates many more links between people’s personal space and the outside world, and facilitates the collection of exponentially more data about people’s personal habits that can be used by private enterprises and government.

The NDP made brief mention of this technology and its impact on privacy in its election platform, and the Office of the Privacy Commissioner is slated to release a report on the matter in the near term.

The Internet of Things and how it relates to privacy still falls short of being a typical kitchen-table issue. However, as this technology becomes more common, all it will take are a few highly publicized instances of baby monitors being hacked or household temperature-control systems being tampered with before MPs start getting phone calls.

There are other issues, of course. Both wired and wireless access to the Internet will become even more essential in people’s lives, and government will have to decide how far it should go in ensuring that private-sector access providers are dealing with the public in a fair manner. And there’s also the matter of people in rural areas and the North not getting the same level of connectivity to the Internet at reasonable prices as those in more populated areas.

Even more telecom and media issues are bound to confront this next session of Parliament, many of them seemingly coming out of nowhere. MPs would be well advised to appreciate the newness of it and govern carefully.

Derek Abma is editor of The Wire Report. He can be reached at dabma@thewirereport.ca.