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Archive for October, 2011

The Copyright Modernization Act (C-11), Digital Locks and turning ISPs into Gatekeepers One Step at a Time

For the fourth time in six years, new copyright legislation was introduced last month and debated in Parliament this week.  The proposed new Copyright Modernization Act (Bill C-11) is a word-for-word rendition of the last bill that died when the election was called, except for a few important tweaks (see below).

The bill, in fact, has much to commend it. It holds the line steady on the length of copyright protection at the lifetime of the author plus fifty years, rather than wildly extending it for up to 150 years, as in the United States.

It also recognizes new user rights, including the ability to swap content we already own across the devices we use, such as smartphones, tv screens, computers, tablets, and so on. So, yes, according to C – 11, take the music or episode of The Wire you bought online and burn a copy to watch on your telly. People can also copy legally-owned content for their own personal, non-commercial use, and for safe-keeping (section 29).

The most cutting-edge innovation is the nod given to the do-it-yourself culture of mass expression. People will be able to rip, mix and burn snippets of media content in order to create their own non-commercial parodies, satire, mash-ups, and Youtube clips.

The biggest problem is that these new rights are trumped by the sanctity given to digital locks in Bill C-11. Sure, do all of the things the new law permits until your heart’s content, but only if you do “not circumvent . . . a technological protection measure”. TPMs are inviolate, as the entirety of section 42 makes painstakingly clear.

This is the triumph of technology and contracts over human will and communication rights. Critics are right to single it out. It is hard to imagine the bill being salvageable without this ordering of things being seriously revamped.

That the Conservatives have consulted closely, and secretively, with Washington to design this bill is also problematic (see here and here). The book-burning clause requiring students to destroy copyright-protected, online components of course they take thirty days after receiving their final grade is plain dumb (section 30(5)).

Yet, there is another feature that needs higher billing than it has so far received: Notice and Notice rules that will require all ISPs to pass on notices from copyright holders to subscribers alleged to be illicitly downloading and sharing copyright protected content online. ISPs will also be required to retain records for six months that allow the identity of the subscriber to be established and disclosed if things end up in court (sec. 41.26b).

The requirement to retain subscriber information is new. The notice and notice regime, however, is not. Telus, for instance, already forwards 75,000 notices every month on behalf of copyright claimants on average.

In fact, all major Canadian ISPs – Bell, Shaw, Rogers, Quebercor (QMI), Telus and Cogeco – voluntarily agreed with the recorded music industry a decade ago to perform such a function — for free. Such a role is hidden in plain sight in each of their Terms of Service agreements (see here and here).

The publishing, software and movie industries have been the most frequent users of the voluntary notice-and-notice regime in recent years, while the recorded music industries have moved on to pursue a more ambitions agenda since 2008: new laws that require digital intermediaries – ISPs, search companies (Google), data centres — to block access to blacklisted URLs and, for ISPs to take the drastic step of cutting off the Internet connections of repeat infringers.

These approaches are known as the “graduated response” and “three-strikes” regimes. The Recording Industry Association of America (RIAA) and International Federation of Phonographic Industries (IFPI), working in tandem with their local offshoots, have been remarkably successful in having them translated into real-world laws in one country after another: Australia, Britain, France, Ireland, New Zealand and Taiwan, amongst others.

This agenda has not yet succeeded in the United States, however, although the push to make it so is relentless.  The terrain is not terra nulles, however, and all of the biggest U.S. ISPs – Comcast, Verizon, AT&T, Time Warner, Cablevision, etc. – signed a deal last summer with the big four music companies (EMI, Sony, Universal, Warner Bros.) and Hollywood studios (Disney, Viacom, Time Warner, News Corp., Universal, Sony) that will see them take on the notice and notice procedures and possibly some additional measures voluntarily.

The agreement is colloquially known as the “six-strikes-and-we’ll-see” approach because the higher level deterrents are seldomly used. Nonetheless, some worry that the push will be to steadily ratchet the levels of control enacted by ISPs to ever-higher levels.

The notice and notice regime contemplated by the Copyright Modernization Act is stricter than the approach arrived at in the United States. However, it is far less punitive than the “three strikes” and “graduated response” measures adopted by France, the UK, New Zealand and Ireland, among others, in recent years.

The Conservative Government’s decision to reject the three-strikes approach delivers a clear set-back to the recorded music industries’ policy agenda. More importantly, however, it comports well with a recent UN Internet & Human Rights report that emphatically states that “cutting-off users from Internet access . . . on the grounds of violating intellectual property rights law . . . is disproportionate and . . .a violation of . . . the International Covenant on Civil and Political Rights (p. 21).

Nonetheless, C-11 is problematic insofar that it takes a voluntary deal cooperatively arrived at among Canada’s incumbent telecom and cable companies and applies it to the rest of the 400-500 smaller ISPs that exist in the nooks and crannies of the Canadian ISP market. The new law will force small ISPs to assume roles that most have rejected, and which some oppose on privacy, information rights, and freedom of expression grounds.

Second, the new bill mandates that all ISPs retain data for six months and to disclose the identity of Internet subscribers under court order. This is a new element introduced by the legislation over and above the current voluntary arrangements. For those who believe that the goal should be to minimize, rather to increase, the collection and retention of subscriber data, this is problematic.

Third, as the Chilling Effects Clearinghouse and the Electronic Frontier Foundation’s Take-Down Hall of Shame in the U.S. illustrate, copyright claimants frequently launch claims based on broader assertions than the law permits. Removing the hurdle of a court order essentially permits copyright claimants to take a shotgun approach that captures far more than what it legally required. The chilling effect on free expression is considerable since many people stop whatever they were doing when sent a notice of alleged copyright infringement rather than wander on to uncertain terrain.

Because copyright holders groups strongly oppose the suite of user rights outlined above – to make back-up copies, create User Generated Content (UGC), swap content across devices, etc. –  they will work very hard to have these rights defined as narrowly as possible. A legally mandated notice and notice regime will serve them well.

C-11 will not turn ISPs and other digital intermediaries into gatekeepers on its own. Translating the voluntary agreements that Canada’s biggest vertically-integrated telecom-media-Internet conglomerates — Bell, Shaw, Rogers, QMI, Cogeco — have made with the music industries into the law of the land, however, will only tilt the bias further yet toward a more net-centric model of control. Extending these methods — plus new data retention and disclosure mechanisms — to all ISPs will compound the problem.

The dominant  telecom-media-Internet players have already demonstrated their capacity to discriminate in favour of their own content and services. In addition, their use of DPI (deep-packet inspection) technologies is already very high relative to global standards (see here). I see no reason to give either them or the copyright holders groups yet even more incentives that will only bolster their pursuit of network-centric models of control and perpetual copyright.

Seen in this context, digital locks are important but the possibility that notice and notice will become the law of the land deserves far more scrutiny than it has thus far seen.

Who Owns the Telecom-Media-Internet in Canada, 1984-2010?

This post has been sitting in the wings for a while waiting for me to finish the mad scramble that is the beginning of the school term and to catch my breath after a whirlwind tour to New Zealand. Yes, I have violated the first cardinal rule of blogging — i.e. pick a frequency for your posts and stick to it no matter what — but I hope that you and the blog-Gods-that-be will forgive me.

I started this series of posts a month-and-a-half ago by outlining the growth of the network media economy in Canada and in a second post that examined concentration trends within the network media. Both covered the period from 1984 until 2010, and so too does this post by setting out the top 10 telecom-media-Internet (TMI) companies in Canada, their ownership, revenues, market capitalization, profits and debt over the past quarter-of-a-century.

Just to quickly recap, the first post argued that the network media economy grew immensely from $12.1 billion in revenues in 1984, to $23 billion in 2000, to $33.8 billion last year (in real dollars) (excluding wired and wireless telecoms services). The second that the network media industries became more concentrated during the same period, with the ten largest media companies’ share of entire network media economy rising from a little over 50% in 1984 to just over 70% in 2010. This third post extends the analysis by identifying the rise of media conglomerates in Canada since the mid-1990s and giving a snapshot profile of the “big ten” TMI companies as of 2010.

The Post-1995 Ascent and Triumph of the Media Conglomerate

The mid- to late-1990s marked a watershed in media history in Canada and many other countries around the world. It was the point in time in which media conglomerates – i.e. media companies with stakes in markets across many different kinds of media – went from being the exception to the norm.

If we look back to the late-1980s, we can see the difference. The media environment was much smaller and neither the growth of pay-television nor the Internet had taken-off. TV and the press were still the dominant core of the media, the CBC was the biggest single entity of them all, with about 14 percent of all media revenues, and most companies still focused on just one or two media sectors.

Media conglomerates had begun to emerge – Maclean-Hunter, Videotron, Rogers – but they cut a far less imposing figure. Their reach covered two or three media sectors and their combined share was only slightly greater than that of the CBC at the time, i.e. 14.4 percent versus 14 percent, respectively.

The ‘Big 10’ Media Companies in Canada, 1988 (millions$, real dollars) (excluding wired line and wireless telecoms)

 

TV

Cable

Press/Mags

Radio

Total Rev (Mill$)

Mrkt Share

CBC

846

282

1128

13.9

Southam

789.9

789.9

9.7

Thomson

599.6

599.6

7.4

M-H

104.2

83.5

321.8

509.5

6.3

Videotron/TVA

97.8

245

342.8

4.2

Rogers

36.4

277.8

314.2

3.9

Torstar

286.7

286.7

3.5

Toronto Sun

248.6

248.6

3.1

 Power Corp

 169.70

 169.7

2.1

Baton/CTV

144.6

144.6

1.8

Total $/Sector

2176.4

1242.9

3699.5

1005.6

8,124.4

Amalgamation amongst television ownership groups in the late-1980s and early-1990s produced the large national companies that came to single-handedly own the leading commercial television networks – e.g. CTV, Global, TVA, CHUM, TQS – by the late-1990s. While weighty in their own right, however, these amalgamations did not have a huge impact across the media as a whole.

That changed dramatically in the late-1990s as investment poured into a wave of mergers and acquisitions, yielding massive media conglomerates with unheard of capitalization levels and debts. A second wave of consolidation followed from 2003 until 2007, albeit not nearly on the same scale.

By 2000, the ‘big 10 media enterprises’ in Canada – the first five of which were massive media conglomerates towering over the industry as whole — included: Bell Globemedia, Canwest, Quebecor, Shaw, Rogers, CBC, Torstar, Cogeco, Hollinger, Power Corp/Gesca.

Consolidation sealed the media conglomerate as a defining feature of the TMI industries in Canada, while pushing concentration levels to new heights. Although still significant, the CBC was already occupying a much reduced place within the mediascape.

Since that time, some firms have crashed and burned (Canwest, Hollinger), others have slid off the ranks of the top ten (Power Corp) and yet other new entities have emerged (Post Media). After its failed Bell Globemedia venture (2000-2006), Bell renewed its gambit to make convergence work by buying-back CTV ($3.2 billion) in 2011.

Bell is now at the top of the heap, commanding a sprawling TMI empire that spans: wired and wireless telephone, satellite TV, Internet access, CTV and the A-channel network (now rebranded CTV2), 31 satellite and cable television channels, 28 local television stations and 33 radio stations.

Excluding its wired and wireless telecom revenues, Bell now single-handedly accounts for 16 percent of all revenues across the TMI industries – an extraordinarily high number only paralleled in the era before the mid-1980s when the CBC stood as a central institution peering out across the nation. Bell and the rest, too, are only to eager to assume the mantel, relentlessly and shamelessly wrapping themselves in the flag whenever it suits.

The main difference between now and ten years ago when Bell first trotted out its vertical integration, media convergence strategy is that it has scaled back its stake in the Globe & Mail (15 percent) and that in most developed capitalist economies media conglomerates have fallen from grace (albeit with the exception of the Comcast/NBC-Universal merger approved in the United States in 2011). Not so in Canada, however, where the novel role carved out by the emergence of the media conglomerate at the core of the network media ecology has been more deeply cemented into place with the passage of time, aided and abetted by permissive government policy and a complicit regulator, the CRTC.

Altogether, as of 2010, four massive media conglomerates and a half-dozen large but more specialized companies which are half their size constitute the ‘big 10’ media firms in Canada, as the following table shows.

The ‘Big 10’ Media Companies in Canada, 2010 (millions$) (excluding wired line and wireless telecoms)

Companies & Owners

Mrkt Cap (mills)

Total $

Cable & Sat Dist

ISP

Total TV

Radio

Press/ Mags

Mrkt Share – All Media (%)

Bell/CTVDiversified

6,910*

5175

1676

1408

1801

290

16

Shaw(Family)

9495

4957

2332

916

1469

240

15.2

Rogers(Family)

19785

3826

1830

842

802

213

139

11.7

QMI(Péladeau)

2,421

3028

982

644

345

1056

9.3

CBC

NA

1593

1235

358

4.9

Post Media (Godfrey,et. al.)

1,266

1350

1350

4.1

Cogeco(Audet – 60%; Rogers – 40%)

525

939

594.9

282

62

2.9

Astral (Greenberg)

2051

888

550

338

2.7

TelusDiversified

1,000*

679

60

619

2.1

Torstar (Atkinson, Thall Hindmarsh, Campbell, Honderich)

966

490

490

1.5

Big 10Total $

22926

7475

4712

6265

1430

3035

Total NMI $

32,360

8,100

6,800

6848

1,910

6,502

71

* estimate based on proportion of total revenue accounted for by segments other than BCE and Telus’ wired and wireless telecom services.

So, what stands out from the above table? First, that the “really big four” telecom-media-Internet conglomerates are in a league unto their own, with dominant stakes spanning the media versus the greater focus of second-tier players on just one or two media: CBC, Postmedia, Astral, Telus, Torstar (Cogeco is an exception, being a second-tier player but with the media conglomerate form). The revenues and capitalization levels of the ‘big four’ media conglomerates also dwarf those of the second-tier players, to say nothing of the multitude of other players that fill the nooks and crannies of the media system.

Second, the ‘big 10’ media firms’ share of all revenues (excluding telecoms services), as I noted in the second post in this series, rose to all-time highs in 2000 and have hovered rather steadily around 71-75% ever since — a substantial rise from 61% in 1996 and bigger yet from 56% in 1992. In other words, while the telecom-media-Internet ecology has grown far larger and more structurally differentiated over time, the ‘big 10’ players’ share of it has become bigger still.

Third, as the big ten, and in particular the four major media conglomerates, gained in scale, their capitalization levels soared. During the boom years of the late-1990s, the market capitalization of the largest eight publicly-traded companies tripled from $8.5 billion to $26.8 billion.

The collapse of the TMT bubble cut these figures down to size, but during the mini-boom of 2003 – 2007 capitalization levels rose steeply to reach an all time high of $55.4 billion. Things have fallen from those heights in the face of the global financial crisis but capitalization levels in the TMI industries are at a very high level even relative to the excesses associated with the dot.com bubble.

Figure Big 8 media companies’ market capitalization (millions$), 1990-2010

Fourth, the media business is still a highly profitable one. The eight largest publicly traded media companies for which data is available show that these firms profits stayed steady between 16-17% in the late-1990s, nearly double the rate of profit for all other industries in Canada as a whole.

Operating profits at Rogers, Shaw and Quebecor plunged at the end of the 1990s and during the crash of the dot.com bubble in 2000/1. Downward trends took hold across the media industries as a whole during this time as well, but more modestly so.

By 2002, however, pre-crash profit levels were regained and surpassed, with operating profits for every year except 2006 in the 18-22% range – although the fortunes of individual firms did vary. Last year, they were nearly 19%, or more than double the estimated profits for all industries in Canada. Indeed, since 2008, things have been better than ever for Bell, Shaw, Rogers, QMI and Astral, with operating profits in the 20-30% range – despite the global financial crisis (and versus an average of 9.2 percent in 2009, according to Statistics Canada, for all industries as a whole).

Figure: Big 8 media companies’ operating profits, 1995-2010

Fifth, the big ten media companies in Canada are bloated with debt.  During the rah-rah days of the TMT boom, debt levels across the big eight publicly traded media players soared nearly five-fold. In 1996, total debt for these companies was $8.8 billion; by 2001, and after the orgy of acquisitions described in the previous post, total debt was closing in on $43 billion. Things have turned around since, and in 2010 debt levels were just over a half of what they’d been a decade earlier – still high by historical standards, but a significant decrease nonetheless.

Figure: Big 8 media companies’ debt (millions$), 1990-2010

QMI, Rogers and Shaw continue to labour under high-levels of debt, while at the opposite end of the spectrum, those who have stuck to their knitting – i.e. Astral, Torstar, notably – have never carried the massive debt loads that their counterparts used to buy their way into the centre of the network media economy.

Thus, at a time when these players should have been plowing resources into coming to terms with pervasive digitization, the rise of the Internet, development of broadband networks, more quality content and good journalism, most dominant players in the media industry were mired in debt. Handsome profits and increased market capitalization served owners and investors well, while dealing with the mountain of debt has had devastating effects on media workers and journalists and likely in terms of under-development of the network infrastructure and media content with resources siphoned off into paying the cost of debt rather than innovation.

The sixth and final thing that I want to observe from the listing of the ‘big ten’ is the fact that, despite the sweeping changes that have occurred, a peculiar form of ownership has been left intact across much of the TMI industries in Canada. As I have indicated elsewhere, several scholars have pointed to how the hothouse of innovation required in the communication and media industries has led to the rise of firms that are not only more capital intensive, but share-holder owned and managerially controlled as well.

According to Noam (2009), owner-controlled media firms in the U.S. fell from 35 percent to just 20 percent between 1984 and 2005 (p. 6). Demers and Merskins (2000) also argue that the managerial revolution has signaled the demise of the media baron – a figure reviled and revered in equal measure. They argue that this is a good thing as well, because media managers do not have ideological axes to grind, but do have the deep pockets and expertise needed to support technological innovation and higher quality journalism than owner-controlled companies.

Yet, the situation in Canada clearly does not conform to such a portrait given the fact that all of the ‘big 10’ media firms, except Bell, Telus and the CBC, are owner-controlled. If observers of the “managerial revolution” are correct, then we are the sorrier for it. Essentially, in Canada the sharp and dramatic bout of consolidation that occurred in the last half of the 1990s and again in the mid-2000s simultaneously transformed the structure of media companies and led to a sharp rise in concentration but without altering the structure of media ownership.

In Canada, the media mogul lives. Given their standing in terms of wealth and, often times, political ambition, the structure of ownership alone smacks of oligarchy. The fact that the boards of the big 10 TMI companies are stacked with ex-government and political figures drawn from the Conservative and Liberal parties alike only compounds the image (see Crony Capitalism for details).

This peculiar form of ownership (outside Russia, Latin America and the Arab world) will also continue to make media moguls in Canada a magnet of attention by both those who wish to sing them paeans of praise and others who see the conjunction between personal ambitions, media control and political power as being supremely unhealthy in relation to the values of a network free press and democracy.

Why Google Monopoly Matters

Okay, there, got your attention. Google Monopoly. Sounds sinister, eh?

The point of this post is not to get into what all the implications of such a thing — Google’s dominant market power — but instead to comment on the steady drip of blog postings and articles that keep telling us to, move along, nothing to be gained by thinking about Google as a dominant force in today’s network media environment. Indeed, to listen to this cant, its just plain stupid to even raise the issue of anti-trust when it comes to Google’s overwhelming dominance of search, as the Federal Trade Commission (FTC) decided to do in June of this year.

The major brew sites for this kind of stuff, as far as I can see, include outfits like the Technology Liberation Front, a libertarian group utterly enthralled with free market fundamentalism (see here and here), entrepreneurial journalism guru Jeff Jarvis, and Matthew Ingram at GigaOm (see here and here). In his latest missive, Ingram takes aim at a story by Chris O’Brien called, Google’s grip on users is as firm as it is invisible. Awesome title! I can’t wait to read it.

My aim though is not to judge O’Brien’s work but rather the silly case that there’s nothing to even bother looking at when it comes to Google’s growing dominance of a growing suite of online digital media services (search, servers, browsers, operating systems, maps, document storage, distribution of online advertising revenue, etc.). So too should we turn a willful blind eye,  sings the ‘move-along crowd’ from the same hymn sheet, toGoogle’s powerful array of servers buried deep in cyberbunkers and in other locations scattered around the planet (yes, cyberbunkers, as some of them literally are in old ‘cold war’ missile silos) (for more on bunkers, bandwidth and datacentres, see paper by Peter Jakobsson & Frederik Stiernstedt). Nothing to see here folks, move along.

Yet, dominant communication and digital media players tend to be close to the state, and easily regulated by the state, turned into proxies in the copyright wars, moral crusades against online erotica, national security crackdowns (Patriot Act, “Lawful Access” anyone?). So, even from an uber libertarian position, we should be skeptical of concentrated power — gateways through which the sluices of cyberspace flow. Anybody that thinks that is far fetched, can have a look at Microsoft’s recent statement on the issue here.

It is hard to decide just where to start when confronting this, “move along” mentality. Let me start by saying that it would be real nice to have direct links to the Federal Trade Commission’s launch of an anti-trust investigation in June, earlier this year. None of these guys do that, and instead just cycle us through links to various online newspapers and other such sources. I looked the other day and didn’t find one directly, but I’m busy and not the one telling people to bugger off. Here’s a link to Google’s response to the FTC announcement, however, and another to the Senate Judiciary Committee hearings held last month, “The Power of Google: Serving Consumers or Threatening Competition“. I hope you find them helpful.

Many of the ‘turn away, don’t look crowd’ assert that it’s very hard to count market power. They’ve got a point, it is. The problem, however, is they but don’t even try.

Instead, Ingram for example, offers up some numbers of unknown providence showing Google’s dominance of search to be in the 65% range, falling, and proof that the company is not unassailable. However, what he forgets to mention, even though writing from Canada, is that those are just the numbers for the US (see below).

There is a lot of hand-wringing amongst the “don’t look crowd” too about the poor availability and low quality of the data on the subject. Yet, the numbers available quite easy to find, reasonably reputable, replicable, and of a piece so to speak (see for example Alexa.com, Experien Hitwise, Comscore). The number 65% so often pointed to is for US; it flunctuates in a 2 percent band from month to month, but has stayed remarkably steady after plateauing at that level.

There are many comparison made, too, mostly unfavourable to the 1990s and all the misguided diagnoses then. Of course, the myths of the era are legendary, but pointing to predictions made then about say Yahoo, Excite, Infoseek, Lycos, Altavista, and a myriad number of other entities is not apt precisely because at that point in time there wasn’t a dominant entity like Google, and search had not yet emerged as the nexus through which so much else flowed. At the time, it was not flow-through, however, that was key, but rather keeping people happily enveloped in walled gardens. A disaster all away around, and thank god things didn’t pan out as imagined.

But search has emerged as a key gateway through which the masses must flow. And one thing that our US-centric, move-along crowd forget to note is that their preferred number of 65% of all searches going to Google applies only to the United States. The numbers for Google globally are typically in the 80 to 90 percent range, including the low 80s here in Canada. They are as high as 93 percent in Australia. And the trend, at least until 2010, has been one of growing dominance, not shrinking.

Google is company non-grata in China, Japan, Korea, Russia. Monopolies there remain nonetheless. There is something about this area — and others, including FB — of the digital media that is prone to consolidation. That may not be illegal — which, again, our ‘move along crowd’ never fails to mention — but levels of concentration this high are high even by the historical standards of the ‘industrial media era’. They may not be illegal, but they are a signal to perk up and pay attention and that, generally speaking, even from the perspective of free marketeers, the situation is a far cry away from the ideals of a competitive market.

Another argument from the ‘move along crowd’ is that dominant companies such as Google are not nearly as omnipotent and immovable as the fantom foes they conjure up would like us to think.  Tim Wu’s the Master Switch seems to be the favourite whipping boy of this group as of late, attributing to him the notion that digital media  monopolies/consolidation are immutable and omnipotent.  Yet, this is a mischaracterization. Wu, like other such as Yochai Benkler, do not argue that players with dominant market power are either omnipotent or permanent, but a regularly occurring feature on the ‘infoscape’. They may be transitory, but also hard to move and sometimes a short time turns into a very long time, indeed — like 70-80 years for the ‘natural monopoly’ telecos throughout most of the 20th century.

This is basic Schumpeterian innovation economics and the move along crowd ignores it, but it ’tis all the rage, even amongst some of the folks amongst this crowd. And while transitory, monopolists/dominant firms can fundamentally tilt things — and then bury them in the metal (servers, search, networks) so to speak — for better or worse. So, when a dominant company like Google (or Facebook, or Amazon, or Apple, or . . .) dominate particular nodes in networked spaces — which are simultaneously social spaces and market places, and much else in between — we need to do our utmost to see that things point more towards better than the worst.

We need to pay attention, and not bury our heads in the sand, and make up excuses as to why we should turn a blind eye to such an obvious phenomenon. We can debate until the cow’s come home what all of the implications of ‘digital media concentration’ might mean, if in fact it exists at all, but a few basic facts on the ground, some references to historical cycles repeating (from methodless enthusiasm, to competition, to consolidation, ala Wu, Benkler, Gabel, Babe, etc.), and presto, we have a recipe for conversation about digital media consolidation and democracy in the 21st century.

(Un)Lawful Access: Wiring Canada’s Networks for Control

The Conservative Government is off and running. A majority in hand, it is already driving through on its legislative agenda. An already in just the last week, we have seen several items of critical importance to the network media in Canada:

1.The Copyright Modernization Act (Bill C-11) was introduced Thursday last week, a copy of the bill that died when the election was called. The new bill was the third on list of items introduced by the government this session. Digital locks and new rules requiring ISPs to formally block certain websites under court order and to routinely take on ‘intermediary roles’ on behalf of copyright industry claimants are its irredeemable Achilles heal, despite the fact that there are some good measures on it.

I have had my say on this before, and you can see my views here. Michael Geist has a good sum of the implications of the new Copyright Modernization Act here. On ISP website blocking and intermediary roles, the Government’s explanation of the measures is clear enough and can be seen here.

2. Konrad von Finckenstein won’t be coming back to the CRTC after January 2012. The government wants to appoint someone more compliant. It will not have any problem in that regard, with a gaggle of the underserved far worse than KvF standing in line (i.e. the I-don’t-know-jack-about-media Harper appointee, T. Pentefountes; the wireless industry’s kingpin and ex-Conservative Premier of New Brunswick, Bernard Lord; Quebecor Media Inc’s (QMI) front man Luc Benoit; and former Minister of Foreign Affairs, Lawrence Cannon).

Just what we need, more political hacks overseeing the development of the network media in Canada at such a critical time. I called it crony capitalism a while back, and it looks like it’s about to get worse. An independent and network free press depends on autonomy from Government, not for supplicants from one government after another to be spread throughout the media system.

3. A third item has not yet appeared, to some people’s surprise, given that it was supposed to be a prominent piece of the Government’s omnibus crime bill: so-called “lawful access” legislation. While held back from the omnibus crime bill, you can rest assured that it will be coming back.

A cornerstone of this push last Parliament was the Investigative Powers for the 21st Century Act (Bill C-51), a bill which would make it mandatory for telecoms providers, ISPs and search engines to disclose subscriber information, including name, address, IP address, and email address, to law enforcement officials without court oversight. It would also require costly upgrades to these networks to enable new surveillance capabilities. The post I wrote on the topic can be seen here.

I have said for some time that ISPs and other network, search and social media providers should not be turned into gatekeepers acting on the behalf of either commerce or the state. Lawrence Lessig said the same thing ago in his classic, Code and other laws of cyberspace. This is a principle and one that should not be thrown under the bus. Creating an open network media system requires that the collection, retention and disclosure of subscribers’ personal information be minimized, not maximized.

Coupled together with the new requirements for ISPs to block websites and take on intermediary roles in the Copyright Modernization Act, the requirements included in the Government’s surveillance and lawful access legislative proposals to date cut intensive gatekeeper functions. Don’t look for a smokin gun, but a serious tilt slowly biasing the evolution of Canada’s telecom-media-Internet infrastructure in the favour of greater control and away from a transparent and open model of the open Internet.

We reach certain points in time, what the critical media scholar Robert McChesney calls “critical junctures”, or which the sociologist and media historian Paul Starr calls “constitutive moments”. We are in one such moment at present, I believe, and choices and decisions made now will tilt the evolution of the network media away toward a much more closed, surveilled and centralized regime than the open and distributed one, with the latter being the ideal because it strives to put as much of any networks’ capabilities at the ends of the networks and into as many people’s hands as possible. It is called maximizing the diversity of voices and it is a principle essential to any free press — digital, networked, or otherwise — and to the role of communications media in a democracy.

I think we need to push back against the tide. As part of my efforts to do so, over the past several months I joined with a number of groups and academics to produce a short video on the Conservative Governments proposed lawful access legislation. The efforts involved the Digitally Mediated Surveillance (DMS) research project (http://www.digitallymediatedsurveillance.ca/), the New Transparency project (http://www.sscqueens.org/projects/the-new-transparency/about), and features renowned Canadian academics discussing why cyber-surveillance and this lawful access legislation in particular is problematic for the future of privacy, democracy, civil liberties and the open internet.

The video is also part of a national campaign led by a coalition of academics and civil society groups, notably OpenMedia.ca, to on lawful access and cybersurveillance. One goal of that campaign was to have such legislations separated out from the Conservative’s Omnibus crime bill, and ensure the legislation receives full parliamentary debate (http://www.stopspying.ca/). That goal has been achieved. Now, it’s the tough part: the debate that will help determine whether networks will be designed and operated to minimize or maximize the collection and disclosure of personal information.

The full video, Unlawful Access: Canadian Experts on the State of Cyber-Surveillance, can be seen here:

An extended video interview with yours truly is available here:

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