Will the CRTC really try to regulate video streaming?

One of the big technology questions heading into 2016 will be: What is television?





Equally poignant for a growing number of consumers will be: What is a television complaint, and who do I send it to?

Video subscription streaming services such as Netflix, Shomi and CraveTV are relatively new, and in many cases beloved by subscribers. But some people are already taking issue with them.

The Canadian Radio-television and Telecommunications Commission says it has received 482 complaints about Netflix since 2008 — two years before it officially launched in Canada — 50 regarding Shomi and 17 against CraveTV since both started operating last year.

And while these are, so far, pretty low figures — especially compared with complaints about TV coverage and cellphone plans — it's not as if anyone can do much about them anyway.
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In cases where someone might find content objectionable — say because of profanity or graphic violence in one of Netflix's original shows — it's an open question whether the CRTC can take the same sort of action as it can against a traditional television broadcaster.

Through the Canadian Broadcasting Standards Council, the regulator can levy a range of penalties against a network such as CTV or the CBC, up to and including the suspension of a broadcasting licence.

Netflix and other streaming services, however, benefit from the CRTC's "new media exemption order," which could make them immune from traditional rules.

The regulator's jurisdiction, especially over a foreign video provider such as Netflix, has not yet been tested in such cases.

As well, aside from potential immunity to rebukes, the new media order relieves streaming services of any Canadian content requirements or funding obligations
Mega-content

Of course, even if the CRTC did choose to regulate streaming services as it does traditional TV networks, enforcement would be difficult given the vast amount of content coming over the internet from so many different sources.

"Say Netflix had a raft of 200,000 complaints because they did something really stupid… it's possible they could remove the exemption and put some jurisdiction on it," says John Lawford, director of the Ottawa-based Public Interest Advocacy Centre. "But that would be awkward."

Netflix global public policy director Corie Wright is pictured on streaming video as she testified before the CRTC in September 2014. The global streamer turned the CRTC down flat when it asked for more information about Netflix operations. (Sean Kilpatrick/Canadian Press)

When it comes to the provision of service itself — billing disputes and the like — the CRTC doesn't deal with such issues directly and instead sends them to the Commissioner for Complaints for Telecommunications Services.

The CCTS, set up by the federal government in 2007 to resolve disputes between companies and customers, is also handcuffed since it currently only deals with phone, wireless and internet services.

Television is not yet part of its mandate, never mind streaming.
Code of conduct

At least part of that is likely to change in 2016. In its review of the television industry earlier this year, the CRTC signalled that a code of conduct similar to the one that governs wireless carriers is necessary, and that the CCTS would be the appropriate body to enforce it.

"The review includes consideration as to whether the participation of TV service providers should be mandatory, and the decision is forthcoming," said CRTC spokesperson Patricia Valladao.

As for its role, the CCTS has been successful in nudging telecommunications service providers toward resolving issues with customers before they escalate.

Total submissions to the complaints organization were down 12 per cent in 2014-15, according to its latest annual report, to 9,988 from 13,692 the year before.

Consumer advocates believe streaming services should be added to the CCTS's mandate at the same time as regular TV, but they expect a fight.

Television providers such as Bell have argued that online streaming is a form of broadcasting, so it should not be subject to telecommunications rules like phone and wireless services are.

Canada does indeed have separate laws covering broadcast and telecommunications. But with television and radio increasingly being delivered over internet connections, the two fields are merging. This is especially true with subscription streaming services.

"It looks and walks and talks and quacks like a TV service," Lawford said. "We're back in this hole of what the CRTC says it can regulate. Are you broadcast or telecom? Or does it matter?"
Monthly usage

The shift to streaming on the part of consumers could soon prompt an upsurge in complaints regarding data usage.

Canadians watch an average of 29 hours of television per week, according to the CRTC, and most have caps on their monthly internet usage, after which extra charges are incurred.
How the subscription services count usage is going to become more important as more of those hours are streamed.

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In that vein, Netflix, Shomi and CraveTV, which is expanding in January to all Canadians beyond just those with existing TV packages, all report different bandwidth usage estimates despite delivering essentially the same service.

Netflix says regular high-definition video uses about three gigabytes of data per hour. Viewers can downgrade the video quality if they want to use less, to 0.7 GB per hour at standard definition or 0.3 GB at low resolution.

Shomi, which is co-owned by cable providers Rogers and Shaw, requires 2.6 GB when streamed on an Xbox 360 game console, 2 GB on a laptop, Apple TV or Chromecast, or 1.4 GB on a smartphone or tablet. Users can also downgrade their video quality to use less data.

Shomi refuses to explain why its data requirements are lower than Netflix.

"As you can imagine, the technology supporting a streaming service is fluid, ever-evolving, and competitive so we can't go further into the specifics," a spokesperson said.

Bell's CraveTV does not have variable video quality settings and states on its website that "streaming video can generally use between 0.2 and 0.9 GB per hour of viewing."

A spokesperson says those numbers are incorrect — that CraveTV actually uses between 0.9 GB and 2 GB per hour, depending on the device being used — and that a change to the website is forthcoming.

Consumer advocates say complaints on usage issues and other problems are inevitable, which is why regulators would do best to define what is expected of service providers and institute policies sooner rather than later.

Otherwise, the fights are likely to be long and drawn out.