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International regulators and experts provide a tangible, results-based discussion on best practices for regulators worldwide. The discussion includes topics such as regulatory and non-regulatory approaches to discoverability, including the sharing of success, challenges, and lessons learned.
Media regulation in Canada is a balancing act. Traditionally, governments around the world have regulated the media with public policies, like incentives and tax benefits, to preserve local content from market forces. Still common to many regions worldwide is the fear that indigenous voices and accessibility will be lost if media regulation isn’t in place to ensure equity. With media developments in nonlinear and over-the-top platforms, new media regulation becomes more of a challenge. Digital media and the Internet have transformed content space, improving media discoverability. But with this development comes the trend of content getting more global and less local. However, as well as protecting local diversity, media regulators can’t forget legacy users and platforms. To increase the challenge, media policy regulators in Canada need to predict media evolution. With all this, the role of government in media regulation is changing: more educator than regulator, promotionist rather than protectionist.
Commissioner, Federal Telecommunications Institute in Mexico
Commissioner, Federal Communications Commission
Vice President and Chief Research and Policy Officer for the Multicultural Media, Telecom and Internet Council (MMTC)
Chairman and Chief Executive Officer, CRTC
“Here’s an opportunity to talk about the issue of discoverability more from a public policy perspective. The role that governments, regulators, should or should not have in this area to make sure that the public good we usually are concerned about continues to be present.”
“We’re not even flagging a taxi, we’re ordering it through our mobile devices.”
“Another important aspect of discoverability [is] making content accessible to persons with disabilities, [with] closed captions, Mexican sign language, et cetera.”
“What else? What do Mexicans watch when it comes, for instance, to paid TV? Excluding broadcast channels the most viewed channels are Fox, TNT, Discovery Channel, Fox Sports, and Golden Movies.”
“Mexico is such a rich country in culture, in food, in our history, in archeology, in anthropology, that there must be a way to produce and make profitable local content with this cultural richness.”
“I have been home more than one time with my mother, with over 600 channels and I say, ‘What’s going on?’. And she says, ‘I’m playing solitaire because there’s nothing to watch.’ And I’m like, ‘You have 600 channels,’ and she’s like, ‘Nothing’s on.’ You hear that a lot, particularly when it comes to communities where I grew up, communities where Spanish will be the first language, Asian communities. You hear a lot that, ‘I don’t see me reflected on television.’”
“Even though it’s a mass media driven by consumer demand and therefore often majority demand for certain things…we need to find room for diversity, diversity of language, ethnicity.”
“Balance, when you’re talking about trying to balance the needs…of 320 million plus people, 50 million or so have disabilities, you count the number of growing differences, regional differences and the like, that is tricky. As a regulator you’re trying to keep ahead or in tandem of the curve of the changes, or these evolutionary trajectories.”
“[We ask,] ‘How do we fuel and enable more diversity of ownership and the like?’. From a regulatory and political standpoint, honestly, it’s a real challenge.”
Speaker 1: We’re good.
Good morning every, good to see you. I’ll be moderating this panel. Very happy to be here and certainly what I attend to do is just to briefly introduce the panel members. I’ll do it at high level because you can have full access to their bio info on the website. I can tell you that it is an absolute privilege to be moderating a panel of three remarkable, powerful women. It’s really good. (applause) We’re certainly not in a telecom hearing at the CRTC.
Adriana: Certainly not.
Jean-Pierre: Our first panelist is Adriana Labardini, who’s Commissioner from the Federal Communication Institute in Mexico. She’s a lawyer by training. Very long and respected background in consumer protection and consumer rights and user rights. She’d got a Master’s Degree in law and a Fulbright Scholar. We’re very, very pleased that she traveled all the way to Toronto for this event.
Adriana: Thank you.
Jean-Pierre: Our second speaker is obviously very well known to many of us, we’ve had an opportunity to exchange. She’s come to visit us at the CRTC on a couple of occasions. I think she actually saw two of our commissioners, or two of our Vice Chairs, have an ice bucket poured over their heads. She was very active on Twitter and I think she enjoyed it very much…
Mignon: I enjoyed it so much I did it and got in trouble for doing it because I posted it. Rules, anyway, I was so inspired I did it but I did it myself.
Jean-Pierre: Absolutely, absolutely. Mignon Clyburn is obviously an FCC commissioner, named by Commissioner Obama. She’s now on her second tour of duty on that, so congratulations. She’s actually, as many of you know, was acting Chairwoman as well and has got a long and respected history with the Public Service Commission in South Carolina. Comes from journalism and newspaper because of her family’s involvement in all that and we’re very, very happy that she joins us here today.
Mignon: It’s my pleasure.
Jean-Pierre: Last, but not least, is Nicol Turner-Lee, who’s Vice President, Chief Research and Policy Officer with the Multicultural Media, Telecom and Internet Council. She has a very impressive bio, like I said I’m going to refer you to the written bio, but she’s obviously award-winning. Recognized for the work that she’s done for her organization, over thirty-year-old organization, working with civil rights, government corporations, stakeholders to advocate and educate around multi-ethnic diversity in media generally and in society more broadly.
Nicol: Now, of course, I’m only twenty though. I just want to be clear.
Jean-Pierre: It goes without saying, we know time “doesn’t fly.”
The idea here is that we’re going to have a conversation. I’ll give each speaker a chance to give some opening thoughts on our subject matter here and then we’ll engage in a conversation. I’ll ask people in the room if they want to participate, ask questions, a little later on and we’ll try to do that in the normal course.
Here’s an opportunity to talk about the issue of discoverability more from a public policy perspective. The role that governments, regulators, should or should not have in this area to make sure that the public good we usually are concerned about continues to be present.
I’m going to turn first to Adriana, who’s going to tell us… Now, some of you may not know, her organization’s been created with a very, very important public policy goal. They are now enshrined in the Mexican Constitution…
Adriana: Yes, we are.
Jean-Pierre: … As an institution which shows how important media is. Media is very important. I don’t know of a lot of countries that have done that?
Jean-Pierre: Perhaps I can start off by asking you, how’s that going? You’ve got new converged responsibility. How do you see these issues of discoverability from where you sit?
Adriana: Okay. Thank you Jean-Pierre, thank you very much to you, to CRTC for this wonderful opportunity to address this very, very important issue of discover-ability. In the context of millions of issues we’ve been dealing with since 2013 when the Federal Institute of Telecommunications, as Jean-Pierre said, was created by constitutional provision. In the context of total reform and the legal and institutional reform for telecoms and broadcasting in Mexico where both competition, access, plurality, quality services, penetration of broadband were and are badly needed, need to be pushed through both public policy. Eliminating barriers to competition. We have very highly concentrated markets, both in broadcast and in telecom. Of course, through regulation, with a symmetric regulation for incumbents through making licences easier, not only for commercial TV and telecoms but also in a very innovative scheme of licensing. We are pushing for community and indigenous radio and TV licences that are addressed for nonprofit organizations willing and wanting to issue contents for communities in their own regional ethnic languages that are also nationally recognized.
For the last two years the institute and my colleague commissioners, it’s a board of seven commissioners, nominated through a very competitive process by the President of Mexico and ratified by the Senate, we’ve been passing a number of pro-competition rules. We are also not only the regulatory agency for these two sectors but also the anti-trust, the competition authority.
I think when it comes to discoverability another way to address it, not only with incentives and tools for users, but also through ex-post investigations where there is anti-competitive behaviour would be interesting. I give one example, like four years ago I bought one of the first smart TVs, it was a Sony TV, and first thing I see is this remote control, brand new, with a big red box on it saying “Netflix.” Well, that enhances discoverability for one single OTT. If I extrapolate that to other coming OTT services they could have a claim of being discriminated, being taken out of the market, by some discriminatory practice that could be addressed ex-post through competition proceeding.
We also want to make sure that spectrum… Because what are the enablers of all this abundance? In Mexico, first thing before discoverability, we want to make sure everyone has an option, everyone has abundant content. In order for that we also need efficient use of spectrum, much more licences. We’ve been now optioning radio and TV. Spectrum’s not something that didn’t happen for over thirty or forty years.
We completed analog switch off last December. That liberated 700 bands which we will be using entirely for 4G mobile services that also enable much more content. We made a recent survey in Mexico and most of the content downloaded online is downloaded on mobile devices, a very high percentage.
What else? Well, we also want more community radio, indigenous content and of course, a tool to discover. We are learning a big lesson from our Canadian partners and friends. I mean, it’s not easy to discover, not only the commercial but also the cultural and indigenous content. First we had to deal with all these issues that were long pending in Mexico due to lack of competition, expanding broadband, promoting multi-programming, accessibility.
Another important aspect of discoverability, making content accessible to persons with disabilities, closed captions, Mexican sign language, et cetera. One of the huge campaigns we have been working on, and Maria Lizarraga is here with us, our chief of the media unit, is passing this guidelines for what we call the “Audience Rights.” The 2014 Telecom and Broadcast Act passed a number of rights, of course, freedom of information, access to information, access to telecom services as public interest services, and Internet, et cetera.
Still in Mexico, the fact is that open, over–the-air TV is watched most. It’s the number one platform. From 98% of households have at least two TV sets, and of those, 56% of homes only have open TV. See? Yes, cable and satellite TV have grown a lot, about 50% penetration, but mainly we’re still having a huge audience for now digital TV and multi-program. So we have to focus on the rights of these people.
At the same time, of course, online content is growing. The new law does provide for mandatory programming guides that have to be accessible, that have to include the classification or rating of programs in the schedule for children’s programming. We have also obligations for paid TV. They also have to have this programming guide. Working hard on implementing these rights of audiences, that include a number of different rights, among which discoverability is one.
At the same time the number of audience online and nonlinear platforms is increasing and that’s harder to address from a public policy point of view. We’re looking at different applications where some trends of content can be found, but let’s face it, the most concentrated industry globally are search engines. Google has an index of, Hirschman Herfindahl concentration index, of 8,000. It’s the number one concentrated industry, as put by Eli Noam in his latest book “Media Concentration Around the World.”
If we want to help discover contents we have to generate new engines to look for it, local content, but it’s not all that easy. In spite of the fact that we have this abundance of content online, the trend is that it’s getting more global, less local, because of economies of scale. We might have much more variety but not necessarily of local content. In Mexico there hasn’t been a protection of local content. There are incentives to include in your broadcast transmissions local and independent productions. It give you, if you include a 20% independent, local production you are entitled to increase your amount of advertising per day as an incentive but there is no cap or ceiling to foreign-produced series, actually. That’s one thing I’m not that proud of.
Children’s programming, 89% of it is foreign. Even in public TV channels 70% of the children’s programs are foreign. We need to create more incentives to produce more local content.
On the other hand we’re one of the top exporters of Spanish and Mexican produced TV. Televisa exports, it’s number one exporting broadcast network in Spanish language, and it exports over 80,000 hours a year of program to more than 72 countries. Most of which are non-Spanish speaking, China and Eastern Europe. We’re huge at exporting commercial content. There’s no such a thing as promoting discoverability abroad but they seem to be finding it because they are buying it all over the world.
What else? What do Mexicans watch when it comes, for instance, to paid TV? Excluding broadcast channels the most viewed channels are Fox, TNT, Discovery Channel, Fox Sports and Golden.
Mignon: What was the last one?
Adriana: Golden, Golden Movies, the classic oldies. Those are the five channels distributed either by cable or satellite that are most viewed but second to our Channel Two, which is the most watched channel which is mainly Mexican productions of series soap operas, et cetera.
Mignon: Did you say, “Series soap opera” or “Serious soap opera”?
Adriana: Are there any?
Mignon: I’m just asking.
Adriana: Are there any serious soap operas?
So yes, it’s a challenge and we’re working hard at more than regulating. Finding the incentives for more local production. We have been great lately in the film industry, documentaries. Mexico is such a rich country in culture, in food, in our history, in archeology, in anthropology that there must be a way to produce and make profitable local content with this cultural richness. We have, I guess, part of discoverability efforts will have to come from market solutions when it comes to nonlinear. There is, of course, a role we have to play, which we were just awarded in Geneva at ITU for our tools, in helping consumers find the best deal in mobile services. Comparing plans and packages and quality and price and so the same we can do when it comes to content, whether it’s for children, adults or all different genres of programming. Also, we have now logic channeling policies that also enable and make it easy to find your digital preferred channel throughout the nation so you don’t have to change what’s the channeling number. It’s a virtual or logic channeling system.
This is a bit of an overview in the context of first creating all the enablers of this abundance and plurality. We want to measure plurality. We want to measure what the viewers are watching. We have issued a number of studies regarding children’s programming and the online program trends. First of all are movies and music, there’s a lot of video clips being watched, I mean listened to, by people in Mexico.
Then deal at the same time with commercial, non-commercial content, discoverability and competition we believe is a big enabler. Also, public TV, which we are also licensing, much more public and making sure they have new criteria. What is public TV? It used to be government, to be honest. That is not public TV. We want independent, editorial boards, citizen participant and we are passing some guidelines on what we will consider as public TV with an independent governance rules to make sure that the citizens at the local level are participating in their local media.
Jean-Pierre: A lot is happening, I know, in Mexico [crosstalk 00:21:52]. I’m even more honoured to note that you’ve made time to join us here because I can’t imagine that regulatory agenda being anything simple. I’ve got dozens of sub-questions to unpack that, but why don’t we just keep setting the stage? I’ll turn things to Mignon. You know, obviously, the United States, often the epitome there is you rely on market forces, the strength of Hollywood. Yet, there’s FCC proposal to unlock the set top box?
Mignon: I hadn’t heard of it.
Jean-Pierre: Maybe you could tell us how you come to this issue of discoverability?
Mignon: Thank you Mr. Chairman. One of the things, as I was listening to my colleague speaking, is so appropriate that you named the conference and some of the subtitles and sub themes, I was at the first session. The two things that stuck out to me in this context was, “Discoverability to Discovered” and that the inventions that were created are no longer used as originally intended or proposed. When I think about those two streams of thought, that really explains what’s going on in the U.S. from a regulatory standpoint. Regardless of the platform, regardless of the bucket in which we are speaking. We’re speaking more of content, and you’re right Mr. Chairman, we take a more hands-off approach when it comes to that, with the exception particularly on over-the-air TV when it comes to children or what we call a “family hour.” Other than that it is an incredible cornucopia, I just like saying that word actually, you know, of options.
I say that, then I say but. I have been home more than one time with my mother with over 600 channels and I say, “What’s going on?” And she says, “I’m playing solitaire because there’s nothing to watch.” And I’m like, “You have 600 channels”, and she like, “Nothing’s on.” You hear that a lot, particularly when it comes to communities, where I grew up, communities where Spanish will be the first language, Asian communities. You hear that a lot that, “I don’t see me reflected on television.” Then you have other forces saying, “You’ve got options, you’ve got content, you’ve got the Internet.” That is when you talk about how to be discovered or discoverability.
We are thinking about all of this convergence and how we keep saying that we’re platform-agnostic. We might be as agnostic as we know how to be from a regulatory standpoint, but it’s not agnostic in terms of how people are consuming. There are challenges that remain when you talk about, you know, there might be content all in the ecosystem but if you’re not connected, and millions of Americans are not, if you can’t afford that plan that you have mobily, then really how connect and how much can you discover?
When you talk about the preceding with the set top box that we kicked off in February, it asks a series of questions, and you’re going to hear the other side with my good friend here about whether we should move in this direction, but I am a person that believes that we should put everything on the table in the wake and light of all of the changes that are going on. The Chairman circulated a proposal that asked a series of questions, “Whether or not consumers should have more control with how they access their video services.” It sounds like a simple question, but 200 pages later (laughter)… So what you will see here is a series of questions addressing the display and selection and use of programming. It asks about the development of more user-friendly interfaces. Whether we should be opening the market to additional platforms that are not under the purview and management of that particular single distributor and that, as we say, is the rub here.
Whether or not that set top box… 99% of Americans who have a paid relationship with a content provider, they rent a set top box from a single distributor who controls what goes over that platform to the tune of almost $200+ a year. It is a $24 billion + industry that we’re talking about. I have heard from a number of independent distributors or independent content creators that say, “I don’t fit, where does my content go? I’ve got these options and opportunities that people want my content but I’m landlocked. I can’t even get the provider to return my call.” The Chairman, in light of all of that and more, put forth something for our approval or not, that will address those issues. In the coming weeks and months you will hear more and there will be some excitement from your neighbours to the south.
Jean-Pierre: We’re following quite closely and it sounds like an interesting preceding, and we’ve all lived through those, so.
Nicol, there’s been in all our jurisdictions with respect to linear content, a pervasive, continuing, sometimes successful, sometimes unsuccessful, attempt to make sure that even though it’s a mass media driven by consumer demand and therefore often majority demand for certain things, that we need to find room for diversity, diversity of language, ethnicity, whatever. Now we’re in a new frontier where we maybe have developed some tools, or maybe not, in radio, television and here now we are in a very, very open environment. Discoverability may drive consumer issues but we also have to be concerned about citizens, don’t we? What’s your perspective?
Nicol: Bonjour everybody, that’s about all you’re going to get from me. I just wanted to try it out. Thank you Mr. Chairman. It’s so great to be among distinguished regulators as well and my distinguished American regulator, of which sometimes we don’t agree but…
Mignon: We’re still friends.
Nicol: Right, exactly.
It’s really interesting. I work for an organization, MMTC, that for 29 years has been involved in this debate around equity in broadcast. We originally started out with, “Are the regulatory requirements in place to ensure,” what I think was said earlier, “this equity when it comes to multicultural ownership, multicultural voices.” We fought a long hard fight with the tax certificate program, you give a program anther mechanism to ensure this equitable platform. I’m proud to say at MMTC our telecom brokerage is responsible for probably 3/4 of the American broadcasters that are in ethnic or racial-oriented stations. That’s a success story, but guess that, the future of radio and broadcasting is going crazy right now, right?
We are seeing through consolidation and other venues where this cultural indigenous voice is sort of being obliterated over periods of time because the platform has changed. Much of that is due to consumers. Consumers now know how they want to get content. I mean, I’m old school, you know what, I sit on the metro in D.C., it is so weird, sometimes I look around at people. They’ve got headphones on, they’ve got mobile devices to their faces. There are no newspapers anymore, there are no radios or like I told my kids, “A CD Player” and they’re like, “What? What are you talking about?” Those things don’t exist because content is being driven anywhere, any place, any device. The marketplace is pretty much changing. I mean a smart TV, I thought my TV was smart until I saw that you can actually stream video over my television set, as it was said.
Given that we’re just seeing these multimedia platforms, or these multi-formatted platforms, that are changing the scope of how content is delivered. In the process of that is this whole concept of diversity of voices and the extent to which you can retain that voice by the variety of choices that people have. I think that’s where it becomes really tricky.
I spent last Saturday, the day before Mother’s Day, sitting in my kitchen because we have paid TV service as well as a Roku, watching my nine-year-old look for several hours at a gentleman who shows how to destroy iPhones. It was just a continuous play, volcanic eruptions, gas, fire. I said to my kids, “Why are you watching this?” They were like, “Oh, he’s got five million viewers, mommy. He’s got a lot of people watching his content.” I, as a person who grew up in the 60’s, had to go back and think about why I watched television back then. I mean in the 60’s when my parents were going through the protest of the Civil Rights Movement it was a battle to get the protest in Selma televised. There were governors that did not want to show what was happening in America in regards to bigotry and racism. We fought hard to get those images on TV so the presidential administrations could actually stop the type of bigotry that was locking off people from opportunity. Now, with the plethora of platforms, I’m not sure if my kids will ever watch the history that’s behind the African-American experience, will ever understand the cultural morays of what comes behind certain struggles, simply because they have too many options.
So I tell people all the time, because we deal with a lot of programmers, while the Internet provides so much space for opportunity to be seen the extent to which it contributes to this conversation, this narrative, of diversity of voices, is still questionable. The extent to which I go on to the Internet and the billions of pages and I’m able to put in a search, let’s just say, for “French films” and I don’t get something that has the word “French foods” is another conversation around search and discovery. The ability for me to go deeper into the Internet…
Just commenting, just briefly, on the set top proposal, we feel that the Chairman and the Commission is right when it comes to the changing nature landscape of how people access content. What we also feel strongly is, “Let’s not shift the future of TV to the sacrifice of people who fought hard to be televised in the 60’s. The people who fought hard to have an independent place in programming, diverse and independent programming.” How do they money off of this model, right? Who subsidizes it? Will it become, again, the battle against the person who has five million subscribers showing how to destroy and iPad or iPod or iPhone or one of those things, versus the ability to tell a very authentic story. One of the areas that we’ve tried to work closely with Commissioner Clyburn’s office is just raising awareness about that.
Just a few years ago when everything went digital, just another example with newspapers, there were local newspapers in local communities. Now, I don’t know about you, but I get all my news on Twitter. I get all my news via this, but guess what? That comes at a cost to that local newspaper courier that actually talks about what’s happening within the vicinity of the Thompson Hotel. We’ve got to think about those costs. How we put it at MMTC, “As we shift this paradigm, because localism and diversity are so important, we shouldn’t pick winners and losers” and we hope that regulators share that concern.
At MMTC we constantly push our constituents to go online, but when we take the poll of who’s ready to go online and switch from a model that’s more linear-based or television-based, they’re not ready. They haven’t developed the technology. They can’t fit the Apple or the Android platform. They’re not ready so they need that time to migrate into that space where we still retain, again, those voices. I’ll just leave it there. I mean, I’m so passionate about that as a sociologist, that we figure out ways to have it so balanced so you don’t have this media where it’s so skewed toward one side that you’re not getting the facts about your experience.
Mignon: When you talk about balance, you know to me, this is very tricky.
Mignon: I know this is very obvious, but it’s very tricky because balance is in the eye of the beholder.
Mignon: Balance, when you’re talking about trying to balance the needs, for us of 320 million + people, 50 million or so have disabilities, you count the number of growing differences, regional differences and alike, that is tricky. As a regulator you’re trying to keep ahead or in tandem of the curve, of the changes, or these evolutionary trajectories.
I have to give Nicol credit on this one, she puts it well, the legacy traditional experiences and exposure but you have to be careful not to do it through your own lens so much so until you stifle options and opportunities.
Mignon: That’s difficult for a person who wants balance, who wants you to see all sides of an equation. But if don’t want to see all sides who am I to say? It’s a tough one, it’s a tough call.
Jean-Pierre: Right, because we all believe in open-dialogue society and all that but by the same token… I was struck when my colleague Claude Joli-Coeur opened up this morning and he talked about, “It’s about not just discovering what you want but what you might not yet know you want or need.”
Jean-Pierre: We often struggle as regulators or public policy makers to find the right place to intervene to open up so that people get to know what they don’t know. Whether it’s the Civil Rights battle, not on linear television perhaps on the new platforms, because it’s still an important societal story to be told. What is the way?
In Mexico you’re working very hard to open up the marketplace so there’s more than one voice, or a number of voices, controlling the corridors of opinion. Is there a public policy need to go one step further and actually make room for the diversity of voice in an active way, rather than holding back and waiting for it to emerge through the natural evolution of the ecosystem?
Adriana: Let’s talk a bit about radio because it still plays a very important role in this relationship to your local reality and I guess the media that provides the most local, including ethnic, content. For instance, in the past, we had hundreds of pending applications for a community radio licence. We’re kind of trying to find our way to the end, there were problems, some of them were not sustainable, they are not allowed and the new act won’t let them sell advertising but now we’ve been issuing quite a few and we still have over 500 applications for community radio licences. We are hoping to be able to find spectrum for most of them. The more remote they are there is spectrum, of course.
We really want also to do as much as we can as regulators to make them more professional, more sustainable, to be able to spend more money through volunteering and funding, to produce content that has worth for their local communities. Of course always in their own languages whether it’s Nahuatl, or Mayan or Zapotec. I think there’s a need for them and quite a few very successful NGO’s working and have created like banks of content that have been very, very good radio programming that could be broadcast in different radio communities.
Mignon: Funny you should bring up radio, that you tee that up because in the U.S. we’ve got a similar balancing challenge on steroids. Did I say the word steroids? I’m sorry.
You’ve got two or three radio conglomerates that own quite a few, hundreds of stations, in markets. Now, we’ve got some rules in place that, you know, talk about in local communities how many voices, how many independent voices can be heard but when you go from city to city in the U.S. is not uncommon to hear the same thing. You’ve got economies of scale and scope being realized, also from a content and a music and an entertainment standpoint.
You’ve got some people in America, including, I’m going to be honest, get in trouble, this regulator, who misses some of the local type of flavour that she heard growing up. I credit radio, an AM station in Charleston, South Carolina, that is no longer owned by and African-American, for helping me get my voice. They had me on the radio before I could put three words together. They allowed me to be there on a weekend on a call in show. I don’t know, with the exception of some of the smaller hamlets in the U.S., where you get that. On the low power radio side we have done some incredible things that open up the market to thousands, I think about 2,000 pending applications, I mean they just came flowing in which affirms, though they cannot technically make money from it that there are people out there that want to be heard and want to serve their communities.
It is a tough balance, again, because our framework is so different, for us from a regulatory standpoint to make any more significant changes as it relates to that. The low-power radio thing, I’m proud of that one. AM revitalization, AM stations, that’s the most diverse platform in America when you talk about African-American, Latino and other owners and content. The most diverse space but the most vulnerable because right now for those who do not have a translator it is hard to listen to. It’s hard for that coverage to get that penetration. So what do we do? We’ve got as a part of our articles and sections in the Communications Act, we talk about, “How do we fuel and enable more diversity of ownership and the like?”
Mignon: I say what I believe people want to hear. From a regulatory and political standpoint, honestly, it’s a real challenge.
Jean-Pierre: We may be at a state, too where we’re getting the tools for traditional platforms but we have yet to tackle the new converged platforms. (general agreement) We have the same thing in Canada. We have some great community radio, economics that are quite challenging quite challenging. They have the difficulty like the commercial of finding an audience except it’s ten times worse because they’re already starting with less resources and capacity and yet they’re so important from their community perspective.
Mignon: I’m going to be rude, Mr. Chairman, and mention one more thing…
Jean-Pierre: Mignon, you’ll never be rude. You’re just adorable.
Mignon: I find that if you say it up front, you get [inaudible 00:43:40].
Also in February, I don’t know if people noticed, including the set-top box item, we issued a programming N.O.I., “Notice of Inquiry”. I’m going to say, guilty as charged, I pushed. This is a fact-finding exercise, so to speak, where we really talk about some of the core issues that those independent programmers say they have. Now when they came to me they said they have insurmountable challenges when it comes to acquiring programming carriage, we kind of teed that up. They said it’s difficult for them to receive fair or reasonable contract terms because they are at a disadvantage, they don’t have the market share or the type of strength to do anything other than say yes or no, and because a program just reaching access is often restricted via contract they say that they cannot grow their online business because sometimes there are clauses that prevent them from really having any meaningful over-the-top type of platform. So, we’re talking about that and we’re teeing that up. We had a couple of workshops and we’re going to figure out what next steps, if there are any, we can as a commission take.
We had the conversation and wanting you to know and we will continue to have the conversation. I think it’s important for us to really look at the landscape and to say, “Is it broken or not? If it’s broken, who’s in the best position to move to the next step?”
Nicol: Yeah, if I could just add on that. I think that’s where the regulatory process, particularly for people like our group that represents constituents, what the commissioner is talking about, this Notice of Inquiry was helpful to sort of lay out the record of where these views are. I think as regulators it’s really imperative particularly for a changing marketplace. I mean, the Internet has taken all of us by storm, you know, honestly. It’s transformed so many verticals, not just in the content space but in transportation and in healthcare and in energy, right? In a way that we’re not even flagging a taxi, we’re ordering it through our mobile devices.
I think where regulation takes that time to understand the forces that effect, I think, this convergent space in addition to traditional media, it helps everybody in the long run. I always think about it this way: my mother or my grandmothers still rely upon their sources of media, my kids another source and then I’m in the middle. As regulators begin to think through processes and rules and regulations, what the Commissioner did with that N.O.I. gave those voices an opportunity to start the discussion as opposed to moving to this rule making that becomes set in stone, that we then go back to evaluate the consequences on communities or more vulnerable communities that weren’t factored in. I think that’s where good policy making actually comes back in to play, because you’re allowing the forecast of what those projections are.
Many of us, and I just want to go back to the radio thing real quickly, did not anticipate the decline in broadcast ownership among minorities and vulnerable groups when the federal government in the U.S. got rid of the tax certificate program. We went from over 1,000 to now we have like three full power African-American stations in the United States. That was a quick shift with regards to ownership. I think, again, thinking through, much like the Commissioner has done, what are those consequences beforehand just makes good regulatory policy.
Adriana: The other thing is to what extent we will be seeing a major shift from massive markets which are broadcast to niche markets. Maybe in niche markets there is more of an opportunity for local content, which anyway was viewed or listened to in a given community because also administering it and sustaining spectrum fees, an AM station is very expensive when it comes to power and other fixed costs, and they could deepen those resources better to develop a local niche content through the Internet. But, as you said they have to get ready to move on. They just got their broadcast licence and now they have to start thinking about moving to this other platform, to Internet radio, et cetera. But to what extent? That, I think the analytics and the big data we just heard about will be extremely useful to understand what are the audience’s preferences and habits, schedules and… but to seize the attention of viewers and keep it is the main challenge. After all we have a limited time to listen and view but at least now we can have better measurements, like we did the the Nielsen kind of rating which of course do provide a major source of marketing studies.
Jean-Pierre: Right, and I’ve just got a few more questions and there are mics in the room and we’ll open it up to questions in a moment. Just before we get there, regulators, governments, public policy makers have had, traditionally, tools to open up access from an ownership perspective, from an industrial structure perspective. The demand side to make sure that people know what exists has historically been more of a challenge. I’m thinking in the context of discoverability, when you’re not massively popular, but you may still be an important voice, how do you promote that? I mean, because, since 2012 we’ve been talking about being a promotionist rather than a protectionist. How do we in our various jurisdictions make sure those sub-voices, in a larger national dialogue, are promoted and find an audience?
Adriana: Well if you ask the millennials, and I did ask my sons, and peer-to-peer, spread the word, is very powerful. Many of the videos, including YouTube videos, they find is through Facebook, through their friends and peers. It can get viral in a few days with millions of viewers. Other specific search engines for specific video-on-demand platforms also classify their catalogue of content through age or gender or origin. I am sure that more and more peer-to-peer catalogues will emerge. We could as regulators I believe create apps to make this process easier. Just like comparing mobile rates, which was like you needed a PhD in Economics to compare all these mobile packages but we have made it easier for consumers.
Jean-Pierre: You’re a facilitator, enabling, greasing the system.
Adriana: Yeah, so I think more than regulation, although they do have this obligation for program guides, we could implement some aids, some tools. Not only the commercial programming but this more local, cultural, educational programs which is important to make more visible to parents and youth.
Mignon: The Commissioner points out something that both is an enabler and sometimes it’s exciting and fulfilling for me, but it’s a challenge that our role as a regulator has changed and will continue to change. Sometimes we’re an educator. Sometimes we are a regulator in the traditional sense, meaning the market forces are not working the way in which everyone envisioned so we have to have a stronger footprint. Sometimes we stand back and look. Sometimes we totally forebear.
When you were speaking, and Nicol mentioned this too, I wrote the word “age” down, a-g-e, and not because I think I might have bursitis because I can’t explain what’s going on with my right hip today. I just can’t explain it. But how we, again, going back through the lens in which we look. It’s sometimes difficult, especially where we come to these platforms and these conferences where everything is sleek and we are just so forward thinking that there are some people who consume content that are not as visionary and forward thinking as we are. We cannot afford to have this pathway the single focus, so single and narrowly focused, so myopic, that we forget about the legacy users and the legacy platforms. I’m using the word “tough” a lot, but it’s very difficult to balance all that because you don’t want to leave anyone behind. My fear and some of the fear in what we talked about is codified in the open Internet proceedings, which we’re waiting any day now for a ruling from the appeals court.
Nicol: We didn’t have it at 10:30 today so we’re good.
Mignon: I don’t know if you know this happens in the FCC and the Communications bar, but every Tuesday and Friday everybody’s like this, because 10:30 is when a decision either comes down or not. It has been almost funny to watch lawyers because every time those two times come they’re poised.
The reason behind, and I supported Title Two from the beginning in 2010, I didn’t have to make a conversion in ’14, I didn’t have to make one. It’s just so important, and some people fear that if we go and treat things in legacy ways that the Internet will not be as free and open. That’s why I endorsed the platform I did, but we can’t be so much focused on the future that we forget about how people consume information. They’re cutting the cord and that means two different things. From a mobile standpoint households might be mobile only, or they might be cutting the paid TV cord which means over-the-air television is as important as ever.
Nicol: If I can add on to that, I think being a non-regulator I love this idea, Chairman, that you pose, promotion versus protection, is that right? I think the marketplace has already sort of said how they want to get their content, what type of content that they want to get. They’re telling us that. We cannot ignore the fact that the evolution of the marketplace has come very much in response to what consumers have wanted versus what government has done to intervene.
I think there’s also, and I don’t know if you’re going to get to this question so I’m going to roll it in because of time, I think there’s also this conversation, picking up on what Commissioner Clyburn talked about, in terms of sustaining new media platforms in the age of legacy support and legacy regulation. There is right now based on the edge providers that we all enjoy, you know, this lack of framework for how you actually look at over the top, how you actually look at multimedia video distribution, how you look at the video marketplace in the context of legacy platforms. Where does the regulation start? Where does it end? How do the business models change?
I’d just like to share, like when I think about it, having spoken to companies like Google to Comcast, it’s always and interesting conversation. You really dig down in the weeds, you being to understand the conversation. On the over-the-top side, their business is less about the production of content and more about the distribution of content. They’re really not worried about the quality of the YouTube videos that show up and whether or not they had a showrunner and a talent person and it was populated by the most popular actor or actress in the creative ecosystem. That’s not their concern. Their concern is visibility and eyeballs. They want to see that young person or that older person who has this viral video of one million people overnight become a success but a success for that moment, not necessarily a success that creates a series or episode or network. I think the legacy models of paid TV and broadcast are more interested in the production of that content.
That creates a different tension, for example, when you look at ad revenue. I was looking up the other day, Netflix, for example, has made about, I have the statistic, but it’s in the billions in terms of their subscription model. Google has made billions in terms of their ad model. Netflix CEO will tell you, “We’re not trying to do ads because the content that we curate we’re not targeting a single demographics. We’re going to throw as many post-it notes, as we say in the office, on the wall and whatever sticks, sticks.” Their investment, for example, in original programming this year is like $600 million I believe it was reported and they’ve been very careful about the type of content that they actually produce. On the new media space, if you talk to Google, they’ll tell you, “We’re not trying to do web series, that’s not our business model. We make money off of our ads and our ads wrap around the content that people are actually generating.” If you know the business model pretty well, which I’m sure many of you do, the ad revenue that actually gets to the producer of that content is very nominal. It’s not enough to create the type of networks that we all envision.
When you look at the traditional side of media, paid TV, broadcast, et cetera, those models are heavily dependent on ad revenue. They’re the reasons they show up at a prime spot on television. They’re the reasons why they have this connection with Hollywood, why they work with unionized and un-unionized workers, right? There’s a structure to how that model supports the production of content that people have grown to love and want to see on Tuesday at 9:00.
That’s why I think it’s so interesting where we are right now, right? As regulators you have the ability to figure out, to turn the switch, that changes the ecosystem on both platforms. I think for groups like ours we’re always trying to find this third way. Sort of like, can’t we all get along in this space given the demands of content?
Mignon: No. (laughs)
Nicol: I know, it’s a common thing to say. But it goes back to that original premise, right, that I started with. How do you maintain this search and discover-ability in a manner that creates equity on both sides because consumers in the end, my daughter, she doesn’t know what’s she looking for but she knows what she’s found, my mother, my grandmother, like your mom doesn’t know what she’s looking for but she knows what she’s found [crosstalk 00:59:30]. If we sort of take those models and immediately, you know, weaken the bonds and regulatory structures that have supported really heavily one side, because we can only regulate, in the U.S. for example, one side of it. Do we miss opportunities to really create a robust media ecosystem where people can survive on both fronts. I think that’s the part where advocacy groups we share similarities and we have differences on how to get there but we’ve got to get there, right? Or else we’re going to miss these opportunities to have a full and robust conversation…
Mignon: I promise twenty seconds.
I was in Jackson, Mississippi a few weeks ago and I got interviewed by their daily paper. Do you know where I appeared? I think I might have been in their daily paper in Jackson, Mississippi but I was on their online platform. When they cover the news they’re not thinking about that printed paper as much. The guy was like, “Oh, yeah, newspaper” almost like it was an aside. Now he worked for the newspaper but their online portal, which they have not monetized I will say, is where that news happens in a real time. Even the most legacy platforms that are struggling, you know, there pages might be fewer and fewer each day, they’re looking at this and trying to figure it out, too. The people that they’re keeping they’re not the standard print journalists sitting at a terminal, they have an online presence…
Jean-Pierre: They’re the makers of news, not makers of paper.
Nicol: That goes back to, can that Jackson paper monetize itself with the ad structure that they had before?
Mignon: As of today they have not, but they’re trying.
Jean-Pierre: Okay, well let’s turn it to the audience. Cathy, perhaps, there’s a mic I think circulating? So everybody hears you. Let’s start with [French phrase 01:01:33].
Cathy: Thanks, I was really interested to hear that a common concern it seemed for all.
Jean-Pierre: Sorry, Cathy, maybe introduce yourself? I know you but not everybody does.
Cathy: I’m Cathy Edwards with the Canadian Association of Community Television, a not-for-profit association that promotes access by Canadians to mainstream media on TV and video.
I was really interested to hear it be a concern of all of the panelist equally that local voices and also a diversity of voices be somehow be maintained in this new ecosystem. Two of you mentioned opening the gates on community radio licences in your country and how people are lining up to do that. I just wondered, neither of you mentioned community television in your jurisdictions, and I just wondered if you might be able to share what’s happening on that front?
Adriana: Well in Mexico it definitely open and it’s a possibility under the new rules. The problem is capital expenditures. There’s none yet. There’s a lot of public TV stations but none community-owned because it’s expensive. I wonder at this point wouldn’t it be better to gain access through multiplexing to other stations; it makes much more sense this infrastructure in a sharing economy. If they’re going to spend their very little capital in owning a station wouldn’t it be better to get on even the commercial channels through access to multi-programming. Access to multi-programming is not mandatory in Mexico but it’s completely flexible and we encourage them to give access to independent producer or community producers. If you have an idle why not give access?
Under a law we have in favour of indigenous ethnicities’ linguistic rights, commercial broadcasters are mandated to give a certain time of their airtime for programming of indigenous languages. They have not complied with this but we have not received any complaints, either. I don’t know if there have been any actual formal requests of, “Hey, I want one hour of your daily airtime to broadcast this indigenous content.” We’re looking to that more closely but maybe that will be nowadays the way to go.
On the other hand we have the spectrum and we have this announced spectrum plan of which frequencies we’re willing to either auction, for commercial purposes, or allocate to public and community. The frequencies are there and this year there was interest in participating in community TV. Maybe we will have our first community TV stations.
Mignon: When I think about what you asked I think about it in three buckets. I should have mentioned that we do have a low power television ecosystem, we do have that. Of course we have our public broadcasting system. We’ve got what we call paid channels, you know, public education and government channels. I should know this.
Nicol: You’re the regulator. (laughter)
Mignon: Right. In that particular one we set aside space on paid TV space for ideally local content to be had.
Nicol: If I can just say, the regulators have put it best, but I think it’s also, the spectrum assets are really important. We’re dealing with this in the U.S., we’re going through an unprecedented auction through the Federal Communications Commission to do a forward and reverse auction where broadcasters would voluntarily put their spectrum in the pot and then commercial wireless companies will come in and buy that spectrum. Now the challenge in the long run is, how many broadcasters put their spectrum in the pot and what does that look like for community broadcast? We don’t know.
Mignon: The other amendment to that is when we switch things up and change things up from a channel standpoint and recalibrate the market, low-powered television stations are not protected under the set of options. They are very concerned right now about what their future will be. To be honest with you, right now I don’t have an answer to make them feel more at ease other than I will do everything in my personal power to make sure that there are few disruptions.
Nicol: This is the reason that I came here today. Thank you Chairman, but that’s the answer I needed because that is so important. I would stand up and give you a standing ovation for that one Commissioner. [crosstalk 01:07:14] I have to say, but that’s an important issue for people with regulators. The unprecedented move based on everything we talked about with new media, with the use of unlicensed wireless and other applications and experimentations, comes at the cost of radio and television that’s localized. Again, you have to think through that equation because again, if LPTV people are not protected you then create this uneven distribution of media frequencies that in the case of this whole conversation will go toward the new and forget about the legacy.
Mignon: For the record, Congress did not protect low-powered television. [crosstalk 01:07:57]
Nicol: That’s the challenge.
Jean-Pierre: We have time for two last questions…
Cathy: This is for Madame Labardini, you talked about working on incentives for more local production. I wonder if you could tell us a bit about the incentives you’re looking into. Coming from Quebec that is of interest to us, of course.
Adriana: Under the new Broadcast and Telecoms Act there’s a specific provision allowing commercial broadcasters to increase the ceiling of allowed advertising time if they include 20% of independent local production. Then they are entitled to increase also their quota of advertising, that’s one. On the other hand, because it involves a number of other government entities we are trying to act as mediators with the Ministry of Education, we have a Commission for the Rights of Indigenous Communities, the Ministry of Interior, which interestingly also has certain powers when it comes to content, and also NGOs and academia and, most importantly, our Ministry of Finance to see what kind of incentives, including tax deductions, could be put in a basket to promote local content and especially, we’re very concerned about children’s programming. We need local children’s programming that is both fun and educational and addressing some of our national identity issues and cultures.
We already have very good programs of subsidies and tax benefits but for film making. That has worked very well. Mexican films are kind of getting better and better. Our directors are going to the U.S. and getting Academy Awards.
Speaker 7: Yes, you are.
Adriana: Still it is considered a U.S. production because, you know the criteria, who is financing the production?
That model of giving the tax benefits to Mexican film makers or creators could be probably replicated for TV and radio. Also, look at local government efforts as well. I know this is one of our million still pending challenges but we are going to have a very interesting forum in June with Maria Lizarraga, who fortunately is here with us, and she is a wonderful engineer expert in both public policy in media and in production. She’s hosting an international event in Mexico City on media for children. Canada’s speakers are invited, I’ve been told, and others from all around the world. See what models work best in other countries because we do have to increase Mexican production of content for children. Why not Mexican discoverability tools for children’s programming specifically? So we’re working on that.
Jean-Pierre: Maybe the last questions from Serge Sasseville, who comes from a little upstart in Quebec.
Jacques: Hi, Serge Sasseville, Quebecor. It’s not a question, just a comment, just referring to what you said about the importance of the quality of content for Netflix. I just want to add that Netflix in 2016 will invest $5 billion in programming and fund 31 original exclusive web series which is quite a challenge for the traditional media players who kind of don’t want to complete with Netflix with their own OTT services and don’t have access to the same funding.
Nicol: If I could add on that, it’s so funny because I was going to add that stat. Out of the sixteen that Netflix will actually fund with that billions of dollars, not one has a multicultural lineup. [crosstalk 01:13:13] So the comment was, “Netflix in their launch of their 2016 line up, for example, has announced sixteen original programming series.” When you go back and you do the weighting of the diverse content that’s actually associated with those sixteen programs not one of them is diverse. They may have one or two actors but they’re written…
Jean-Pierre: You’re obviously not happy with that outcome.
Nicol: No, not at all.
Jean-Pierre: So what’s the solution? Because social responsibility’s not doing the trick.
Nicol: Well part of it is and I don’t want to say “social responsibility” but since I’m in the company of friends and we’ve been publicly on the record on this…
Jean-Pierre: Put down your pens.
Nicol: The challenge that we have with the high Silicon Valley companies, particularly in the U.S., I’m not going to speak about this globally, is there have been recent studies that have come out about the level of diversity of decision makers in those companies. Over the last few years Rainbow Push Coalition under Reverend Jesse Jackson, everybody knows, has peeled the onion to show that when you look at the top Silicon Valley companies from Amazon to Netflix to Google, et cetera, the percentage of African-American and Hispanic front leaders tend to be under 4% to 5%. When you have 4% to 5% of decision makers who are not in key positions to actually think about the type of content that is being delivered, to entail and participate in higher decisions, to think about investments, you then create this practice and I’m not going to say discrimination in this group, but you create this practice where you do not have key leaders within those conversations that see the importance of diversity. [crosstalk 01:14:55]
Real quick. That is the same trend that you see in Hollywood. When you think about what you saw with the great movies that were represented at the Oscars this year that campaign has a lot to do with the lack of diversity that was on the Board of Governors for the Academy. Now, Cheryl Boone Isaacs, who runs that, has made a huge commitment to add people to the Academy. Those are the people, not us in the room, who make the decision on who gets to the awards.
To your point, I’m a Netflix subscriber, I think the Internet has completely thrown everybody through a curve ball to the best of our efficiency. But you can’t tell me that you cannot find a person of colour, a person of different ethnic origin, a person who speaks a different language, a person with a disability, a person who brings a different colour and understanding of the demographics of this global society of which we live into a leadership position. Even if they’re not in the engineering side, because we know we have problems finding engineering, but you can’t find a lawyer? An accountant? A secretary? A bookkeeper? [crosstalk 01:16:09] Right, so we constantly, I mean we’re friends with them, but we put them on blast.
Last personal example, on Netflix the story of Nina Simone came from a high school friend of mine, personal friend of mine who actually sold that documentary to Netflix that led him to the Academy Awards, the amount of money that it took for him to make that outnumbered the amount it took to sell it. So, he’s the same Jason Jackson, with a lot more coverage, but again it goes back to that conversation between the production of content and the distribution and the eyeballs around that content. We just got to find people who actually turn around and say, “You know what young man? We’re going to invest in the development of that content, we’re going to make that part of our line up because you took us to the Academy Awards.” You can’t do that when you don’t have anybody around the table that can actually bring that opinion.
Mignon: We can talk about greenlighting, twenty seconds, time me. All the things that we were talking about, particularly the platform, and when you talk about hills and valleys that all have silicon in them, the one thing I will say here is that when we talk about these platforms, these enabling platforms, they enable us to become more efficient and better at what we are organically. If we are not organically inclusive then we’re just going to have these platforms that reflect [crosstalk 01:17:51] so these are the things, you know I am not in the content business but this is Mignon Clyburn speaking and we all have to think about what that means in terms of what drives people to adopt these multi-layered platforms. What it means and if you, not me, as a community person, whether you think more enlightenment would be for the benefit of communities? And that’s the question. This is a public/private, regulatory/non-regulatory partnership and exercise and we need to put everything on the table and have these conversations and I’m glad to have been part of it.
Nicol: She can say that as a regulator and I can say what I said. (laughs)
Jean-Pierre: All right, very nice.
Colleagues, you’re obviously very passionate and I completely lost control of the panel. I was supposed to end fifteen minutes ago, but that’s okay. I’ve got one bad news, our time is over. But, two pieces of good news is that we still have the opportunity to have a conversation on the margins, you now know who these wonderful people are and that you can come up to them and chat. And, the other is it’s recess time and it’s time to play right next door with all those gadgets.
Thank you very, very much on all our behalves, it was a very rich debate. Thank you. (applause)
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