ISPs should contribute to new-media fund, CBC tells CRTC

Canada's public broadcaster said ISPs should be required to contribute to a fund to bring more Canadian content online, but priority for these funds should be given to those that produce the bulk of the content.

Speaking during a presentation to the CRTC's hearings on whether to regulate new media, CBC/Radio-Canada chief regulatory officer Steven Guiton said that since broadcasting distribution plays an increasingly important role for internet service providers, it makes sense that they make a contribution to new-media funding.

In its submission to the Canadian Radio-television and Telecommunications Commission in advance of the presentation, CBC/Radio-Canada had called for money to be set aside for a new-media broadcasting fund. Prior to Thursday's presentation, however,it had yet to suggest a funding model.

Guiton said that after considering other methods and regulatory approaches, CBC/Radio-Canada concluded "the only reasonable and effective funding approach is to require a contribution from ISPs."

Guiton said that the CRTC could require ISPs to contribute to the fund on an interim basis as it conducts reviews on a new-media broadcasting business model.

Representatives from CBC/Radio-Canada said funds to support new-media initiatives are needed because while the public wants more content to be distributed online, the revenue generated from online content isn't substantial enough to cover the costs.

In calling for contributions from ISPs, the public broadcaster echoed the sentiments of several cultural groups, such as ACTRA and the Canadian Conference of the Arts who have called for a levy on ISP revenues to go towards a new media fund.

A spokesperson for CBC/Radio-Canada said the broadcaster has not suggested a specific amount of money, but acknowledged that numbers discussed at the hearing range from 2.5 to 3 per cent of ISP revenues, or about $5 billion.

CBC digital programming executive director Steve Billinger said online broadcastingisn'ta replacement for radio and television, but rather as complementary to those traditional broadcasting outlets. He said the challenge for broadcasters is to find a way to generate online revenue for content such as online video, he said, which made up less than one per cent of online ad revenue in Canada in 2007, according to the Interactive Advertising Bureau of Canada.

Most advertising revenue generated online comes from search and banner advertising, he said.

Since advertising does not the cost of putting video online, new funding models need to be considered, said Guiton.

In its submission, CBC/Radio-Canada said the CRTC should earmark a substantial portion of any new-media fund because of the "pivotal role" conventional broadcasters play in promoting Canadian content.

"The best way to promote the production of Canadian content across all delivery platforms, including new-media ones, is to guarantee that the broadcasting system supports the involvement of conventional media, more specifically conventional broadcasters," said Guiton.

The CRTC new media hearings are expected to continue Friday before taking a short break and reconveningthe week ofMarch 9, when many ISPs are expected to speak.

Communication industry giants Rogers and Bellhave already voiced their displeasure at proposed levies which they have said they would pass on to consumers via increased fees.

Speaking before the hearings began, Rogers senior vice-president of regulatory affairs Ken Engelhart likened the levy to an unnecessary tax.

"People [already] visit Canadian websites," he told CBC News. "We don't see a reason why it needs a subsidy."