Canadian Monopoly - Giant Telecom Companies and Cable Companies Creating Download Caps and Trying to Buy Major Content Assets to Control and Gate the Web from TV

written by: Richard Kastelein

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In a brilliant report from Canada, Steve Anderson at Tyee.ca is alleging that Canadian Telecoms are attempting to undermine the open Net to favour their own digital TV services using cap tactics, buying up TV content providers as well as lobbying legislators in the nation's capital of Ottawa. He says that by allowing Internet service providers to own major content assets creates an economic incentive for them to invest in a controlled content distribution infrastructure and to discriminate against the open Internet.

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He's done some great digging and provides ample evidence that Canadian broadband players are making a power move in an attempt to limit downloads as well as control the TV market. Go read it.

Never mind CE devices and products such as Samsung, Sony, LG, and other perhaps being limited on TV's, there's also hardware from Google TV, Apple TV, Boxee and Roku that also may be affected by Canadian telecom providers in the future. Nor does it rule out the option that Cable and Telecoms in Canada will open up platforms in the future for developers to create third party applications.

"In July, just days after online video service Netflix announced its expansion into Canada, Rogers Communications announced  that they would add new usage limits on some of their plans. This move appears to have been a defensive measure, meant to protect the company's own video services from encroachment by Netflix.

Rogers Communications is Canada's biggest cable television provider and it operates a video streaming service similar to Netflix called On Demand Online. Rogers' Video On Demand and Pay Per View offerings, which reach users via their televisions, will not be affected by the aforementioned caps, even though Rogers customers receive both Internet and television service through the same cables.

Some have argued that the caps are not discriminatory if they apply to Rogers's online services as well as Netflix. What these commentators fail to realize is that by adding limits to the Internet while keeping TV costs/services constant, Rogers is discriminating against the public Internet and those who use it to deliver competing services.

The company already forces customers to be cable subscribers before allowing them full access to Rogers Online. Rogers adopted this policy for fear of cannibalizing the market for their controlled TV service with the open Internet. Why would anyone subscribe to cable if they could get that same service online as part of an Internet subscription?"

Roger's digital cable service is branded as Rogers Personal TV and is making a very strong play in with its growing digital cable service which provides access to technologies such as high definition television, video on demand, interactive television and enhanced television. Rogers also provides broadband Internet access, co-marketed with Yahoo! and they also owns CityTV, a Canadian English language television system which consists of five owned and operated television stations located in Toronto, Winnipeg, Calgary, Edmonton and Vancouver, as well as three affiliates located in smaller cities in Alberta and BC. Citytv is now Canada's most widely-available over-the-air television service without "network" status.  Rogers' main competitors are the satellite Rogers Communications, Eastlink,  Vidéotron, television provider Bell TV; and the two main television companies controlled by Shaw Communications: Shaw Cable, and Shaw Direct (Satellite).

Then there's Bell:

"On September 10, Bell Canada Enterprises (BCE) Inc., already Canada's largest communications company, announced its plan to acquire 100 per cent of CTV, the nation's leading broadcaster. Earlier this year, Shaw announced its intention to purchase Global TV's assets, previously owned by the now defunct CanWest. Rogers and Quebecor (owner of Videotron) already own significant media content assets. If Shaw and Bell complete these purchases, telecom companies will own the majority of Canada's private broadcasters, with the exception of Telus, the only major ISP that isn't heavily invested in media content. "

"Allowing Internet service providers to own major content assets creates an economic incentive for them to invest in a controlled content distribution infrastructure and to discriminate against the open Internet."

South of the Border - in America

In the USA, one should look at the five-year, $900-million deal subscription service Netflix Inc. struck with fledgling pay-TV channel Epix to offer movies via the Web from Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate within 90 days of opening in theater. Time Warner reportedly axed a deal with Epix as soon after it did the deal with Netflix.

US cable companies are banking that "TV Everywhere" which came mainly from the minds of Comcast and Time Warner Cable, who didn't like the notion of their cable content getting out into the of the digital world jungle, will keep people from ditching their cable TV accounts and going internet-only.

The main problem, according to the Huffington Post is that TV Everywhere is a solution for Big Cable and not for its customers.

"Cleverly marketed as a consumer-friendly product, TV Everywhere is really a desperate bid by old media giants  to crush the emerging market for online TV. Cable giant Comcast just became the first company to launch TV Everywhere under the brand "Fancast Xfinity," and the other dominant cable, satellite and phone companies have announced plans to follow suit."

And similar to what might happen in Canada:

"New online-only TV distributors and independent channels are excluded from TV Everywhere. The "principles" of the plan, which were published by Comcast and Time Warner  (a content company distinct from Time Warner Cable), clearly state that TV Everywhere is meant only for cable operators, satellite companies and phone companies. By design, this plan would exclude new entrants and result in fewer choices and higher prices for consumers."

This comment from jcwtts1 at Huffpo caught my eye and has to be one of the main concerns of the old school:

“We have reached a tipping point. I was over at a friends house as he downloaded Up in the Air two nights ago. Still in theaters, DVD quality download available because it is getting oscar buzz so the producers sent out tons of copies and one made it to a torrent site. How long did it take to down load a 2 hour movie in DVD quality. 7 minutes. Start to finish. That is what I call a tipping point. The first song I ever downloaded from Napster or Kaaza... 40 minutes. I had a dial up connection and it took forever. I remember being so excited by a 40 minute download time 9 years ago. Songs now take 5 seconds... but the tipping point was 2 minutes. When you could download a song in 2 minutes stopping people from downloading music became impossible. The 7 minute movie is a tipping point. By the time you've made popcorn, gone to the bathroom and turned your phone to voice mail, the movie is on your computer which means it is on your tv. 7 minutes start to finish. Done. You can't put that back in the box. You can't unring that bell.”

And cable companies also ought to be worried about Verizon FiOS and AT&T getting into the content delivery space.

It’s interesting to see that one of the main trends recently has been the divergence of cable companies, ISPs and the major networks. The recent decision of Hulu to pull content from TV.com and Boxee is simply the latest in the long standing battle between the NBCs and FOXs and the Comcasts and Time Warners of the world to exclusively deliver video content to the greatest number of viewers on very different systems and if content is still king, exclusive distribution keeps it that way.

Google and Verizon


The internet and telecom giants Verizon and Google allegedly reached an agreement to impose a tiered system for accessing the internet which Anderson notes that the deal is precisely why they were careful to allow for telecom-based "differentiated services" that would access the Internet and those "differentiated" or "managed" services are really just neutral-sounding words for an Internet controlled by gatekeepers. According to other internet reports, the deal would enable Verizon to charge for quicker access to online content over wireless devices, a violation of the concept of net neutrality that calls for equal access to all services. The deal came amidst closed-door meetings between the Federal Communications Commission and major telecom giants on crafting new regulations in early October.

Google Goes Evil?


Comcast and NBC

Then there's Comcast in the US, making it's own play for more content taking control with a 51% stake in NBC Universal last year which is still under government review and which may open up a number of possibilities for disputes with cable and TV industry rivals.

It appears likely that Comcast will have to agree to arbitrate disputes about carrying its own and rivals' programming in order to win government approval for its $30 billion deal for NBC Universal.

Comcast is the largest cable operator and the largest home internet service provider in the United States, providing cable television, broadband Internet, and telephone services in the US. They also have significant holding in networks (including E! Entertainment Television, Style Network, G4, The Golf Channel and Versus), distribution (ThePlatform), and related businesses.

Many including myself, feel that, like it's counterpart in the music industry in the form of live music, traditional television will win with only certain areas: live events. News and sports. The rest will be rattled with disruption, as the record labels went through in the music business. 
 





About the Author

Richard Kastelein
Founder of The Hackfest, publisher of TV App Market and global expert on Media & TV innovation, Kastelein is an award winning publisher and futurist. He has guest lectured at MIT Media Lab, University of Cologne, sat on media convergence panel at 2nd EU Digital Assembly in Brussels, and worked with broadcasters such as the BBC, NPO, RTL (DE and NL), Eurosport, NBCU, C4, ITV, Seven Network and others on media convergence strategy - Social TV, OTT, DLNA and 2nd Screen etc.

He is a Fellow of the UK Royal Society of Arts (RSA) and UK Royal Television Society (RTS) member.

Kastelein has spoken (& speaking) on the future of media & TV in Amsterdam, Belfast, Berlin, Brussels, Brighton, Copenhagen, Cannes, Cologne, Curacao, Frankfurt, Hollywood, Hilversum, Geneva, Groningen (TEDx), Kuala Lumpur, London, Las Vegas, Leipzig, Madrid, Melbourne, NYC, Rio, Sheffield, San Francisco, San Jose, Sydney, Tallinn, Vienna, Zurich...

He's been on advisory boards of TEDx Istanbul, SMWF UK, Apps World, and judged & AIB awards, Social TV Awards Hollywood, TV Connect & IPTV Awards.

A versatilist & autodidact, his leadership ability, divergent and synthetic thinking skills evolved from sailing the world 24000 miles+ offshore in his 20′s on sailboats under 12m.

He spent 10 years in the Caribbean media & boating industry as a professional sailor before returning to Europe, to Holland.

A Creative Technologist and Canadian (Dutch/Irish/English/Metis) his career began in the Canadian Native Press and is now a columnist for The Association for International Broadcasting and writes for Wired, The Guardian & Virgin. His writings have been translated into Polish, German and French. 

One of Kastelein's TV formats was optioned by Sony Pictures Television in 2012. 

Currently involved in a number of startups including publishing TV App Market online, The Hackfest and Tripsearch TV. As CSO for Worldticketshop he helped build a $100m company.

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