Bell Canada to Acquire CTV, the Seed for Canada’s Next Net Neutrality Debate?

There was recent news of one of Canada’s biggest ISP, Bell Canada (or BCE) acquiring CTV Globemedia, one of Canada’s largest broadcasting network. With service delivery corporations being one with content a content production industry, does this put network neutrality at risk?

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

The network neutrality debate might have been stalled for now in the US, but for now, the network neutrality debate has been a sleeping issue in Canada for quite some time.

That may change in the near future on news of Bell Canada, one of Canada’s big three ISPs, is planning on acquiring CTV Globemedia, one of Canada’s largest broadcasters and television producers.

While investors were grinning ear to ear in the pictures, does this potentially plant the seed for Canada’s next great network neutrality debate should the deal go through? I’d argue that while it doesn’t do so immediately, the potential is certainly there for this to happen in the future some time. Basic facts about both entities in a general context certainly point to this.

An ISP has a business model that revolves around selling access to the internet. What makes access to the internet such a sellable service? Content. When we say content, we mean anything digital. We’re talking about video, audio, entertainment, communications and everything else you can imagine that exists online. As much as rights holders want people to believe that ISPs make money solely on infringing material, there is not a shred of evidence to suggest that it’s exclusively that. We’re talking everything from CC licensed material to top 40 music. From independently produced YouTube content to the latest Hollywood movies being streamed to you. Programs from the latest Adobe software to the latest Linux distribution. eMail fits nicely into this category as well since it is produced by one person and sent to another. Now, take away that content. What happens to the internet? No one would want to even consider buying access to the internet if content couldn’t be published and messages being communicated. The internet would simply cease to exist and so would the ISPs as well. It’s one reason why entire business empires are made over access to mankinds biggest repository of knowledge – the internet.

Now, look at the other side. Content producers – particularly the larger content producing industry’s – has one purpose – to get people to access their specific content. If they produce it, they want you to “consume” it (though the term “consume” is actually a concept up for debate in the digital environment context). If people consume other people’s content like independently produced content, that is a detriment to their business model. You can’t produce a sustainable TV show with no one watching it because advertisers would walk away – the traditional revenue stream for TV shows.

Now, what happens when you combine these business models? We have an industry built on access to content. On the other hand, we have an industry built on getting people to “consume” their content in particular. A hybrid of those two is simply a business of selling people access to their specific content. That, alone, is everything network neutrality is not and a concept that could put access to the internet and what made it as great as it is at risk. It financially motivates an industry to remove any competing content that is accessible to people.

Now, one might argue that simply starting to discriminate content for one ISP would simply cripple that particular ISP’s revenue stream because the quality of service would be reduced. Unfortunately, that would only assume that the market is highly competitive and all competitors in the market are evenly distributed out in terms of market power. That is, by far, not the case in Canada having only three big ISPs. If Canada was more like, say, China where there are numerous ISPs all being cut throat in that market, even considering discriminatory practices would potentially spell disaster for that ISP. In a comfortable oligopoly, though, such kind of activity is possible.

In the US, media organizations and ISPs have been merging for a while now and now, AT&T is arguing that network neutrality rules must allow for discriminating packets for certain services. Going back to the initial logic I provided, such things happening after these types of acquisitions is not surprising. Unfortunately, like the US, the idea of regulators in Canada holding the industry at bay from abusive practices is a joke. Calls to have the CRTC – Canada’s regulator that will oversee this latest acquisition – disbanded is not uncommon with regular accusations that the CRTC is run by the very people they are suppose to regulate.

Still, at this point, the deal hasn’t been given regulatory approval and a debate over network neutrality in Canada being sparked as a result of this would be a long way off. Still, this situation a concoction for some serious fireworks in the future if things move ahead.

Drew Wilson on Twitter: @icecube85 and Google+.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: