Facebook is a Canadian utility

So many Canadians use Facebook that it should be regulated like any other Canadian utility. No broadcaster or telephone company would operate in Canada without government oversight. We should make it comply with our regulations as with other communications utilities.

      image: Tod Maffin

It’s the most-used Canadian social media. Ninety-four percent of Canadians aged 18 to 44 have a Facebook account. Overall, 84 per cent of us have an account and 80 per cent check the site daily according to The State of Social Media in Canada, 2017.

Now, Facebook is about to become more integrated into our lives with an announcement May 1, 2108, of a dating service. CEO Mark Zuckerberg said: “And if we are committed to building meaningful relationships, then this is perhaps the most meaningful of all.”

Facebook’s phenomenal rise has made it a monopoly. Canadian professors Andrew Clement and David Lyon say:

“In light of Facebook’s overwhelming grip on the social networking industry, the commissioner of competition should investigate the company for its monopolistic behaviour (Globe and Mail, April 23, 2018).”

Facebook’s ascent has left governments behind. Other communications industries have taken decades to mature and regulations have kept pace. Regulators have had time to insure that TV, radio and telephone companies meet Canadian standards of privacy, identity and sovereignty.

“The Canadian Radio-television and Telecommunications Commission (CRTC) should learn to treat social-media enterprises as utilities,” says Clement and Lyon.

There’s a lot of misunderstanding about the nature of Facebook’s grip. It seems so personal that there’s a conspiracy theory claiming Facebook is eavesdropping on people’s conversations through their smartphones and using that insight to serve ads. Tech expert Avery Swartz finds this ironic:

“People find it hard to believe that computers could know so much about them, even though they are voluntarily feeding their information into the machine. For private citizens, Facebook’s targeted advertising is creepy. For advertisers, it’s captivating (Globe and Mail, April 23, 2018).”

Facebook doesn’t sell users’ data to advertisers. It sells access to data, so advertisers can target their ads to specific audiences. No wonder that advertisers like Facebook. They can place an ad for as little as one dollar a day and ad campaigns can be created for $100.

Targeted advertising is hardly unique to Facebook. It’s been around much longer than the internet. Big businesses target consumers by placing ads on certain TV stations at specific times. They distribute flyers to targeted neighbourhoods.

However, the issue is not targeted advertising. It’s the way that Facebook treats Canadians and whether its practices align with the values and practices imposed on other communications utilities.

There’s been a campaign to #DeleteFacebook but given how integrated the social medium is in the lives of Canadians, it’s not likely to succeed. An Angus Reid survey revealed that only four per cent plan to delete their accounts.

“Given its business model,” add Clement and Lyon, “Facebook on its own cannot meet the objectives of Canadian media regulations – advancing Canada’s identity and sovereignty, its social and economic fabric, universal accessibility, neutrality, affordability, openness, public accountability and rights protection.”

Canadians like Facebook. Now’s the time help Facebook like Canadians by making it truly ours.

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No internet tax for Canadian media

I agree with Conservatives who reject an internet tax to support Canadian media but for different reasons.

    Heritage Minister Melanie Joly. Image: Huffington Post

Conservatives reject taxes do so because they reject government intervention in what they see as a commercial enterprise. If media corporations can’t stand on their own without support from taxpayers, then they should fall.

But media are not only an enterprise; they are reflection of who we are and necessary for an informed citizenry. The goal of all legitimate media is to report unfiltered news and if my taxes go towards achieving that end, then it’s money well spent.

Use of an internet tax to support Canadian media is controversial. Politicians who are normally on opposite sides of the issue agree on this one. Two lobby groups that I support are on opposite sides. The Friends of Canadian Broadcasting supports the internet tax. Open Media rejects it.

A parliamentary committee recently recommended the internet tax, which Prime Minster Trudeau promptly rejected. The recommendations weren’t even unanimously supported among committee members. Predictably, Conservatives rejected the tax and some Liberals supported it. Prime Minister Trudeau sided with the Conservatives (again, for different reasons).

Before decided which side you’re on, it’s useful to know what it is. It’s a tax on streaming content over the internet as opposed to a tax on cable or satellite content, or over-the-air broadcasting.

What it’s called is determined by which side you’re on. Opponents call it a Netflix tax. “Applying the 5-per-cent levy to broadband distribution, that’s a Netflix tax,” said Conservative committee member Peter Van Loan. “Efforts to turn back the clock to an earlier era are doomed to failure.”

Prof. Michael Geist agrees with Van Loan but doesn’t find it necessary to call it a Netflix tax. It’s an internet tax because it applies to all internet content and as such, it’s a bad idea. Geist, a law professor and Canada Research Chair in Internet and E-commerce Law, sees the internet as more than a source Canadian content:

“A taxation system such as the one used for cable and satellite companies is highly inappropriate given the Internet’s importance for communication, electronic commerce, Web banking, education and tele-health. Given its integral role in virtually every aspect of modern life, it is wrong to treat network access as little more than an ATM for the cultural sector.”

Geist points also points out that such a tax is inconsistent with the Broadcasting Act because internet providers are not “broadcast undertakings” under the act.

Trudeau took the line that he was protecting the middle class: “We’re not going to be raising taxes on the middle class through an Internet broadband tax. That is not an idea we are taking on.”

Canadian media deserves support. Open Media suggests that the proceeds from the sale of cell phone wireless spectrum could go to Canadian content. Tax revenue should be used to support public and private broadcasters as suggested by Friends of Canadian Broadcasting. Small market broadcasters like CFJC in Kamloops should continue to receive funding from the CRTC.

Canadians pay one of the highest internet rates in the world. The best way to support Canadian media is to ensure that Canadians have an affordable, high speed internet where innovators can create content.

Canada’s internet remains flat, despite challenges

Canada remains a world-leader in keeping our internet equal for all. Challenges to tilt the internet in favour of special interests come from at home and abroad. Last month, Canada’s telecomm regulator ruled that all online data be treated equally.

The ruling comes after Videotron, a music streaming company, offered their wireless service to subscribers at no charge for data used. This practice, called “zero-rating,” is violation of net neutrality because content would be biased in favour of their service. Subscribers to other music streaming services would pay more. The Canadian Radio-television and Telecommunications Commission ruled the practice illegal.

In his ruling, the CRTC chair Jean-Pierre Blais suggested a less disingenuous tactic for Videotron:

“Rather than offering its subscribers selected content at different data-usage prices, Internet-service providers should be offering more data at lower prices,”

The ruling is a victory for the little-lobby-group-that-could, OpenMedia.ca (which I support financially).

“We just won again!,” they crowed in an email to me, “The Canadian Radio-television and Telecommunications Commission (CRTC) just decided in favour of historic Net Neutrality rules that prevent Big Telecom from unfairly manipulating data caps to discriminate against certain apps and services.”

Michael Geist, professor of Internet and E-commerce Law, was equally enthused but more muted in his response:

Most notably, Canadian consumers and creators will benefit in the long term from the Net-neutrality policies.”

Canada’s firm support of net neutrality extends beyond a level playing field. Without it, giant telcomms could start to collect browsing habits of unsuspecting customers and sell them to advertisers for the purpose of targeting specific demographics.

The concept of a flat internet is vital to free expression and innovation. In an earlier column, I argued that net neutrality is fundamental to democracy:

Canadians must stand on guard for a free and democratic internet.”

Net neutrality in the U.S. has been tilting back and forth. In 2014, the U.S. appeals court ruled that the internet was not a “common carrier.” A common carrier is like a telephone line, simply a conduit to carry information. If telephones weren’t a common carrier, telephone companies could make it easier for businesses to access your phone than your friends and family.

The designation of common carrier is vital to net neutrality. Without that designation, internet service providers could effectively suppress content by making it more costly to view.

Sensibly, President Obama restored the designation of common carrier in 2015.

Now President Trump’s appointees to the U.S. telecomm regulator, called the FCC, intend to overturn net-neutrality in the U.S.

Canada faces a mixture of faux worry and resistance from the U.S.  A Trump-appointed advisor to the FCC, Roslyn Layton, said “My biggest concern for Canada is that you continue to add regulation that deters the incentive to invest,” Her fake concern for Canada not believable. Many big U.S. giants such as Netflix oppose the Trump initiatives because they don’t want their subscribers paying more than competitive video-streaming. They fear that U.S. telcomms will do what Videotron tried to do and tilt the internet in favour of their own services.

I have a feeling that Layton’s real concern is that U.S. tech start-ups will move to Canada where innovative technologies still have unbiased access to the internet.

Local content on the new aether

Medieval scientists believed that radio waves were carried through a medium they called the aether. Seems sensible. If sound waves require a medium, why not radio waves? It turns out that radio doesn’t need a medium; a vacuum will do nicely.

radio

     radio waves

The internet is the new aether. The “network of networks” depends on wires and optical fibers to carry signals. The internet wouldn’t exist without it (Wifi is radio but it’s just a connection to the internet).

We straddle both worlds –ethereal radio waves surround us while the internet remains wired. If I put up an antenna, I can receive CFJC TV for free. I chose to pay Shaw cable to have the station delivered to my house.

The internet is as disruptive as early radio and TV was and its role is still being defined. Is the internet a broadcaster? If CFJC is a broadcaster and if I can receive the same station over the internet, it would seem like it.

Not so. In 2012, the Supreme Court of Canada heard arguments from program producers that cable companies were broadcasters. The court agreed with cable companies that they were not.

It’s not trivial matter. If traditional TV stations are broadcasters and cable companies are, then the cost of production local shows and news has to be paid for by the TV stations –they receive nothing for the signals that cable carries.

It’s a problem in small cities like Kamloops because local news and programming is expensive to produce and ad revenue is not as high as large cities.

In the past, cable and satellite companies have grudgingly paid into temporary funds to support local programming but it’s a constant battle. This has left small markets scrambling to make ends meet.

Local news is vital. It not only informs the community it serves, reflects its values, and is vital in emergencies. Rick Arnish, Chair of the Small Market Independent Television Stations Coalition (SMITS), was a strong advocate of local TV before retiring. He also supported free over-the-air TV for people who can’t afford cable. He made that clear in his letter to the Canadian Radio-television & Telecommunications Commission in 2015:

“Over 95% of the participants who posted comments on the topic of over-the-air television in the online consultation held during Phase 3 referred to the importance and value of the ability to receive television programs inexpensively over the air and opposed proposals to shut down transmitters. Canadians value local news, with a CRTC commissioned poll putting the number who consider it ‘important’ at 81%.”

Arnish also made clear that cable companies should share the cost of local TV if small stations are to survive.

“Moreover, all things being equal, with the phase out of LPIF [Local Programming Improvement Fund] now complete, the SMITS Coalition stations as a group will be in the red this broadcast year, given the loss of the $5.4 million contributed by LPIF last year.”

Before retiring last year, Arnish was Program Director at CFJC TV and General Manager of Broadcast Centre and later President of the Jim Pattison Broadcast Group.

The internet transmits the content from traditional sources without paying for its creation. Unlike the old aether which radiated local programming, the new aether sucks the life from local TV.