Canada looks into ISP tax for $100m Web content fund

February 19, 2009, By Jacqueline Emigh

The Canadian CRTC launched hearings this week into a proposal that would force ISPs to relinquish about three percent of their subscriber revenues to fund Canadian-produced Web content.

"We must respect the principles of openness and individual choice that govern the Internet, while maintaining access to, and for, Canadian stories, opinions, and ideas," contended CRTC Chairman Konrad Von Finklestein, in opening the hearings on Tuesday.

If approved, the measure would represent a big departure for the CRTC, the Canadian Internet regulatory body, which committed to a hands-off approach to "new media" in 1999, and adopted the same stance toward Web-enabled cell phones in 2007.

Foes of the proposal charge that it would interfere with "freedom of expression" for Canadian ISPs, and that ultimately, the costs would be passed along to consumers.

"The introduction of a tax on Internet use or bureaucratic interference in access to content will not be acceptable and will be perceived as an unjustifiable restriction on freedom of Internet expression," wrote Ken Stein, senior VP of regulatory affairs for Canadian ISP Shaw Communications, in a letter to the CRTC.

In a way, the proposed Web content fund would be similar to the $242 million Canadian Television Fund (CTF). With about half of its funding coming from cable and satellite TV companies, the CTF provides independent producers with financial support for Canadian-grown documentaries, comedies, and dramas.

However, unlike ISPs, TV networks are clearly charged under Canada's Broadcast Act with helping to support Canadian culture.