Olé!

Ole is a music publishing company with offices in Los Angeles, Nashville, and Toronto. I don’t know if they’re a Canadian company, but their web page includes a note that says, “Made possible with the support of the Ontario Media Development Corporation.” The Ontario and Canada government logos also appear. What this governmental help made possible is not explained.

Ole’s submission to the federal government’s Digital Economy Consultation confuses me. They either want money and don’t much care where it comes from, or they seem not to understand how much of the media in Canada works. Their submission states what they see as a problem:

The Problem

Canadian families often buy their “infotainment” from a single Cable and Internet supplier. Typically they pay $150/month for one connection, called “Cable TV”, and $50/month for the other, called “Internet”.

Consumers, especially young ones, are frequently accessing the $150 material through the $50 connection. Here is the heart of the inequity being practiced by those controlling the communication pipeline. The Cable/Internet Company will take the lion’s share of the $150 monthly access fee and redistribute it to the creators and suppliers of the Cable/TV content, while they do not distribute any of the $50 monthly access fees to the creators and suppliers of the same content on the Internet connection.

Canadian families typically pay $150 each month for cable TV? I don’t believe it. Further, I pity the poor bastard who is paying $300 a month to make up for my not having cable at all.

So cable companies pay to bring in specialty networks and other programs that aren’t otherwise available to the viewers they service. This makes sense. Those networks charge the cable company for the feed so the network can produce the content. The cable company pays the fee so they can draw customers with the content, and perhaps charges those customers an extra fee for it.

The analogy to the Internet doesn’t work so well, however. The Internet Service Provider you sign up with allows you access to the Internet. That’s all. The analogy would have worked better had it been with cable TV in the 60s and 70s. Back then, the cable companies simply took the feeds from the local stations, and routed the signals to their subscribers using a coaxial cable. In essence, they saved the subscriber from having to set up an antenna or two. The cable company was merely simple a way you could get the signals from the television stations in your area.

Today however, cable delivers local stations and specialty channels. Basic cable includes your local stations. You could get them with an antenna, but if you don’t want to buy, install, and configure an antenna, you pay for the convenience. If you want specialty channels, you pay more, depending on what you want.

For the Internet, you pay your ISP for access to the Internet. That’s it. It’s a data pipe that comes to your home and nothing more. You can read the CBC News because the CBC runs the site with money from advertising and money from the government. Other sites use ads alone to generate revenue and allow free access. Some sites require a paid subscription for access. Small sites have no ads and owner pays the bills or solicits donations.

My point is that with the Internet, the payment arrangement is directly between the site and the end-user. The ISP has nothing to do with it beyond providing a link between the two parties. If you want full access to The Wall Street Journal, you pay them directly. If you want access to CBC News, you’re expected to view ads to offset the costs involved. If you want to read my ramblings here, I invite you do so and ask for nothing from you.

Cable is fundamentally different because while they’re the middleman, the cable service provider is also an active broker of content, unlike the ISP. Therefore, the comparison Ole makes is false.

It gets worse, however. They suggest a solution to the problem:

The Solution

The ISP business model for the Internet could and should mimic that of Cable/TV. Modern technology allows the ISP to identify what content is being used and then they can allocate the appropriate share to the creator or supplier of that content.

When I first read this solution, I didn’t understand why they were expecting me to pay the CBC to read the news when I’ve already contributed to their operating budget with my taxes, and helped pay for their web site’s operation by viewing the ads alongside the news stories. Why do I need to pay again? I later learned that I don’t. Only later in the text do they come out and say that this is a solution to the problem of copyright infringement.

Still, it’s nowhere near reasonable. Are the ISPs at fault for allowing their customers to download music they haven’t paid for? They sure as hell are not. They provide access to the Internet. Nothing more. Yet many entertainment groups either want them to pay for users’ infringement in the form of a monthly fee, or to actively watch what users are doing and report infringement.

Imagine if the post office opened and read all your mail to make sure you weren’t doing anything illegal. Would that be okay with you? How about if the phone company listened to your calls, all the time. After all, you might be discussing plans to rob a bank. Like the phone company and the postal service, your ISP moves information. The information is the business of the sender and the recipient. If law enforcement can convince a judge to authorize a phone tap, that’s something else entirely. Ole wants your ISP to track all your movements on the Internet and record everything you do simply because you might do something wrong.

There’s another issue that isn’t so obvious. The equipment, data storage, and maintenance of the system Ole is suggesting would be significant. Who would pay for it? You can bet Ole is not volunteering. The ISP will pay, and as with any other business, costs are eventually borne by the customer.

Further, if we’re being billed, the transaction becomes a purchase. If it’s legal, everything is fine, right? Toward the beginning of their submission, Ole states,

Internet Service Providers (ISPs) act like short circuits that enable their customers to circumvent markets. As long as they are free to do so, there will be no viable market for recorded music and similar media.

It’s interesting that they suggest ISPs should monitor users and bill for content, and at the same time decry circumvention of markets because the result will be a lack of viable markets for the media. Wouldn’t the effective legalization of media downloading circumvent all TV, radio, and cable stations in addition to theatres and all the on-line and retail outlets that sell any form of music, television programs, and movies? Of course it would … but Ole is obviously okay with this because they believe it would be to their advantage. Screw your local television, cable company, Amazon, and every entertainment retailer in your community. When it’s good for them, there’s no problem with circumvention of markets.

I love it when media companies talk about fairness and what’s right. It’s the best comedy available today. It’s even free!


Hat tip to Michael Geist’s article, “Ole Calls for ISP Monitoring of Customer Content.”

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