The Canadian Radio-television and Telecommunications Commission (CRTC) announced its decision this past Thursday (4 June 2009) to extend the exemption of new media broadcasting from regulation. After considering the current state of broadcasting in new media, the CRTC felt that while new media is of growing importance, it currently does not pose any threat to traditional broadcasting licensees' ability to meet obligations. The finding in the hearing was in fact the opposite - new media is currently employed in a manner that is complementary to many broadcasters' activities, such as audience building via promotion of broadcast offerings, building brand loyalty, and giving audiences the ability to catch up on missed programs. The belief is that an unregulated new media is conducive to creativity and innovation in broadcasting, and the CRTC has yet to find evidence to the contrary.

The CRTC's decision reflects the same rationale of its previous decision. Back in 1999, the CRTC set forth the New Media Exemption Order as a means to allow continued innovation by stakeholders engaging in the growing opportunities of the Internet. The CRTC's decision to issue the Exemption Order was also due to their view that at the time, new media's effect on audience size was still limited. The general view was that regulating new media broadcasting was not necessary to achieve the policy objectives set out in the Broadcasting Act.

The recent decision comes in light of the decade of change reported by the New Media Project Initiative ("Initiative") and the submissions from Broadcasting Public Notice 2008-44. The Initiative released its results regarding the cultural, economic and technological issues associated with new media broadcasting on 15 May 2008. Similarly, the CRTC's Public Notice called for comments on the issues pertaining to Canadian broadcasting in new media, specifically regarding themes such as the definition of broadcasting in new media, new media's impact on the Canadian broadcasting system, necessity or desirability of a regulatory measure for new media broadcasting, public policy issues, and the general appropriateness of the continued exemption of new media broadcasting.

As a result, the CRTC has decided to continue its hands-off approach to allow new media to flourish, fostering innovation and creativity. The CRTC believes that broadcasters are sufficiently equipped to adapt to the challenges of changing technology and were encouraged to embrace and innovate new methods of integrating new media into their business models. This view was countered by some parties, such as artists, writers, unions, etc., that argued that regulation would foster a stronger Canadian presence in new media. However, the CRTC holds that the traditional broadcasting framework cannot be imposed on new media broadcasting when evidence does not point towards regulation being a necessity (and in the meantime, eliciting positive development by remaining unregulated).

The CRTC also remains 'hands-off' on the issue of resolving digital rights, expecting the broadcasting and production sectors to develop the appropriate framework to resolve ownership and exploitation of digital rights.

One area of positive action, however, is the CRTC's decision to amend the New Media Exemption Order to prohibit gatekeeping of the new media environment. The amendment will prohibit any new media broadcasting undertakings that are the result of the conferring of an undue preference to access, either to themselves or another person, or by subjecting any person to undue disadvantage.

Also of note in this decision was the rejection of calls for a levy to fund Canadian new media broadcasting content. The proposal was put forth by many cultural groups to establish a fund to develop high-quality, professional Canadian new media broadcasting content. These groups also argued that Internet Service Providers (ISPs) and Wireless Service Providers (WSPs) were critical players in Canada's new media broadcasting and as such, should be required to contribute to such funding initiatives. Naturally, ISPs and other parties argued that ISPs are by definition not subject to the Broadcasting Act and as such, the CRTC lacks jurisdiction to impose a levy on revenues for broadcasting-related purposes. Also, such a fund was not required as new media plays a complementary role to traditional broadcasting sources as well as the fact that there are sufficient market incentives in place to provide high-quality professional content. Ultimately, the CRTC was of the view that there was insufficient evidence presented to establish that any funding to support increased Canadian new media broadcasting content would further the objectives of the Broadcasting Act. (The Canada Media Fund, which will come into effect in April 2010, will provide funding that may cover this area).

Although the idea of ISP levies was rejected, the CRTC nonetheless stated that it is important that the issue of whether the Broadcasting Act is applicable to ISPs be resolved. The CRTC intends to initiate a reference to the Federal Court of Appeal to determine this issue.

Despite the CRTC's refusal to get its hands dirty with new media broadcasting regulation, it stated that it will continue to monitor the evolution of the new media environment and is set to review the decision within 5 years.

The CRTC's decision also calls on the Government of Canada to address the need to develop a national digital strategy. The digital environment is changing very rapidly and the current state of legislation may not be flexible enough to compensate for the growth of the digital age. It was alluded to in the concurring opinion of Commissioner Timothy Denton that the CRTC has made the best decision that it could have within the confines of an almost obsolete Broadcasting Act. The Act is incapable of addressing the full extent of new media's effect. The statute is silent on new media technology and in light of the boom of the Internet, Canada desperately needs new legislation. The CRTC is conscious of the many other countries that have already developed national digital strategies (e.g. Britain, France, Germany, and Australia). Without its own digital strategy, Canada may risk being left in the dust of countries with more competitive legal frameworks for their digital realm.