internet

Update – Response on Netflix/Internet Tax

From my local Member of Parliament, Karen McCrimmon (Dated June 13th, 2018) :

“Hello Rob,

Thank you for taking the time to share your ideas with me.

Our government understands the importance of supporting our artists and creators. We also know that the way Canadians access content is changing. That’s why we have made historic investments of $3.2 billion, to support our artists and creators. It’s also why we will be modernizing our laws and programs to better support our artists in the digital era.

Netflix’s investment is a part of the transition. It secures 5 years of investments for our creators, as we modernize our laws and programs.

We, as a government have decided not to introduce a Netflix tax because we don’t want to raises taxes on the middle class, we want to lower them. We will always look at ways to strike the balance between a fair tax system and the investments we need in our culture, but in doing so, we’re not going to be raising taxes on the middle class through an internet broadband tax.

I will share your ideas with my fellow colleagues, including the Minister of Finance, Bill Morneau.

Thank your again for your engagement as a constituent.

Kind regards,

Karen”

I had suggested that if taxes on streaming services are absolutely necessary that they consider forwarding a portion of the federal taxes collected from these services to Canadian Content initiatives, instead of introducing an independent levy for that purpose.

As i’ve mentioned in a previous entry, these services will be taxed on New Years Day in Quebec and the Canadian Radio & Telecommunication Commission had made a proposal of their on in regards to levy to fund Canadian Content.

The publics views have been made clear by a February 2017 poll conducted by Innovative Research Group earlier in 2017. But I had thought to send my opinion and suggestions to my local MP and Heritage Minister Melanie Joly in response to the CRTC’s recent proposal.

If you wish to contact your local Member of Parliament on this issue, you can do so via the MP database by clicking here.

I will of course update this blog if the situation changes.

Thank you.

New Taxes On Streaming?

On New Years Day 2019, residents of Quebec will begin paying a tax on streaming services. And unfortunately the Canadian Radio & Telecommunication Commission is considering a “levy” to fund Canadian programming and a House of Commons committee is asking for sales taxes to be collected on these services.

This would of course raise the price of these services for the consumer, significantly. And these had been opposed by Canadians according to a Open Media poll conducted in early 2017 by the Innovative Research Group.

According to this poll, 70% of the respondents opposed a new tax on internet and mobile phone bills, 51% strongly. And in regards to the implementation of sales taxes on foreign streaming services, 47% of the respondents supported it provided the funds would be used on Canadian content.

CRTC chairman Ian Scott claimed the “levy” itself “would cost less than 50 cents on an average broadband bill of $47” durring a May 31st, 2018 Financial Times interview so they could easily just divert some of the sales taxes to Canadian Content instead. But there has yet to be a response in regards to these “contributions” from Canadian Heritage Minister Mélanie Joly and Prime Minister Justin Trudeau, who had both claimed there would be no internet taxes.

Please contact your local Member of Parliament on this issue. I will be contacting mine as soon as possible.

Thank you.

My Year End Predictions For Retail

With the death of Sears Canada, had become obvious that retail is changing way quicker than anticipated by economists.

Back in the 90’s, I suspected something was going on in the industry because one of the stores I had expected to have a future went under a few years after I had left the company.

Consumers Distributing was a chain of stores in Canada and the United States that operated with catalogs like Sears but dedicated only a small portion of their retail space to displays at all of their stores. And most of their merchandise could be found stacked on shelves the back of their outlets, which were brought forward by associates to the consumer, who chose their products from catalogs located in the retail space.

Had they survived into the 2000’s, I suspect they would have progressed from their six-digit catalog system, where people physically presented order slips to an order desk or called an order in using their credit cards, to a touchscreen system that simply gave consumers an order number. And I suspect Amazon would have simply purchased the company, automating the warehouse space further.

Unfortunately, the 212 store chain went under because Sears Canada had a foothold in the catalog market and it just could not survive both the recession of the time and Walmart’s expansion into the Canadian market. But I suspect Amazon may have a limited number of retail outlets that closely resemble Consumer’s Distributing stores in the future, where people could place orders and pick up purchases 24/7 from coded lockers.

Amazon Pickup Point locations already exist in Canada and the United States. And I believe they will likely expand these to Whole Foods locations, a chain that was recently purchased by Amazon.com, creating one stop shop locations in the major cities.

I’m personally hoping they’re going to convert my local Sears Home store here in Western Ottawa to a Whole Foods/Amazon outlet. But I doubt they will consider taking over that many Sears retail stores because the large department store format is pretty much dead.

Consumers are previewing merchandise online so retailers will not need to provide as many displays as they did before. And with 3D technology, I suspect people will scroll through merchandise on virtual reality headsets with customized 3D imagery before 2020.

Optometrist retailer sites already offer services in which people can place frames on their faces and all one would need to do in the very near future is to provide their measurements for virtual models, who would wear clothing for consumers to preview.

Norstrom currently offers a service where clothing is set aside for people to try out and I suspect other stores will offer this convenience shortly through their website, with the aforementioned virtual modeling. And I wouldn’t be surprised some stores would offer perks like high-end coffee and/or liquor through these services as well.

In regards to drones and self-driving vehicles, I don’t know if drones would be the best choice for our weather.

Not only does it get quite cold in most of Canada’s major cities during the winter, it also gets quite windy.

Those who have tried to take digital photographs in the cold here can attest to issues related to draining batteries and I’m sure that drones would be constantly slammed on the side of buildings and into trees by the wind in my suburb. We even get the occasional microburst here.

Self-driving vehicles are currently being tested in my community and I’m expecting pizza/food delivery to be the first service in my area to take advantage of this new technology. But I doubt I’ll be seeing drones delivering goods in my area before 2020, especially fragile items.

The Transport Canada regulations to fly drones are quite tight and I believe we are more likely to get deliveries from our grocery stores and pharmacies in normal vehicles for quite some time. Several of my local grocery stores have only recently started offering click and collect services.

I personally don’t see many advances in music retail either.

As you may or may not know, I had originally wanted to have a career in music retailing. But when the MP3 came along I knew stores would likely go online.

Vinyl sales will continue to expand slightly until higher resolution recordings become the norm and offer the depth of vinyl. And High Definition radio will eventually become the norm, requiring consumers to purchase equipment to listen to the higher resolution recordings, although most stations will likely continue to broadcast in FM and simply include high definition recording data on the same signal.

I don’t believe Canada will follow Norway’s example and go all digital because we haven’t gone all digital when it comes to television in the minor markets. And the government will probably want as much access to Canadians as possible for emergency and weather-related broadcasts so I won’t personally be purchasing an HD radio compatible device for some time.

Even if I wanted to purchase a receiver now they’re over $100 at the moment and there are only three of four HD radio stations in my city. It just isn’t a priority for most and will not likely be until well past 2020, although virtual reality multi-cam live concerts could be a “thing” soon.

4k cameras are getting incredibly compact and can be placed in multiple discrete locations at venues, enabling broadcasts to fans via the internet now. Mostly static front row, mezzanine, and other multiple angle shots but we can just imagine what they’ll be able to do soon with VR headsets. 360-degree 4k live shots of entire performances from the front row or stage, perhaps?

I don’t expect everything to happen next year but it’ll be quite interesting after 2020.

Net Neutrality Still Under Attack

It appears that Americans will have no choice but to subscribe to services dictated to them by their internet providers. And that Canadians will be up for a fight to retain fast access with the states.

That’s right, not only are these Americans limited in regards to their choice of internet providers but these providers will be able to throttle sites that compete with sites they own or have business relationships with, which include Canadian sites.

Although this is being sold as an improvement to the internet by the Federal Communications Commission in their official November 21st, 2017 statement (PDF), most experts know that this is yet another call for deregulation, a process that eventually results in parties imposing themselves on the consumer, without a means for the consumer to defend himself/herself.

In this statement, the FCC claims “the FCC would simply require Internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them and entrepreneurs and other small businesses can have the technical information they need to innovate” yet nothing is mentioned about the lack of competition is some states or the possibility of fees being placed on accessing certain sites like Netflix, iTunes or even Amazon.com, who also stream content to Americans.

The bill itself calls for the US Government “to prohibit the Federal Communications Commission from reclassifying broadband Internet access service as a telecommunications service and from imposing certain regulations on providers of such service” with no information on how it proposes to regulate internet providers that currently hold a monopoly on high speed internet access in some areas or how it would prevent some internet providers from blocking certain competitors or redirecting traffic to their sites.

As Canadians we should also be conserved about these content providers because whatever happens in their primary market can determine how much we pay for their services here. And it appears that quite a few of the content providers are spending considerable amounts fighting the so called “Restoring Internet Freedom Act” because it hinders not only their freedom but the freedom of their customers.

In what way is the average consumer having his or her freedoms hindered by net neutrality ?

The claim that access is being withheld because internet providers are unable to fund their infrastructure is made dubious by the amount of profit these companies release every quarter. They can easily afford expanding but won’t because they want to re-direct their customers to more profitable in house services, whose cable television services have been suffering because of the new content providers.

In other words they’re asking the FCC to give them their cable television customers back by enabling them to throttle and block their competition, which could easily include streaming broadcasts from television networks they do not own. This is a rather vague, slippery slope situation that could be so litigious as to cause subscription fees to skyrocket beyond the inflation rate. And the North American Free Trade Agreement talks won’t help either.

If you have American friends, please encourage them to visit Open Media and to contact their local representatives in regards to this issue.

Thank you.

Get Your Security Updates !

A new Wi-Fi exploit has been discovered and you should update all of your devices a.s.a.p.

That includes anything that uses wi-fi, from your desktop/laptop to tablet/cell phone. And yes, some devices will not be patched immediately so keep trying.

Microsoft has patched their software, from Windows 7 to 10, and Apple is currently working on getting their iOS patches up and running, having already released them for developers. But Android users may need to wait until November 6th, 2017 for an update.

In the case of Linux operating systems and routers, OpenBSD systems have already been patched and patches are available for Debian-based systems. But most of the router manufacturers are working on firmware updates so you’ll need to contact your Internet Provider or Router manufacturer for details on that.

The problem is the KRACK wi-fi vulnerability, which is an issue to anyone that accesses non-secured websites online and doesn’t use a Virtual Private Network to do so. But it should be noted that Android and Linux users are more vulnerable to the exploit than anyone else because most of the other desktop and laptop operating systems are more complex.

The good news is that if you rent a cable modem from your internet provider, it will be updated by your internet provider soon (if it isn’t already updated). And if you don’t use your tablet and phone to browse the net outside your home, you will likely not have an issue.

If you use public wi-fi services in hotels or at your local coffee shop/restaurant, then I would recommend keeping an eye on updates and getting a virtual private network set up on your device to encrypt your internet, including those unencrypted sites you browse on.

By the way, there’s no point in changing your wireless password but you should change your router’s admin password, especially if it’s been left at default. :-/

No to Internet Tax !

Apparently Canadian Heritage Minister Mélanie Joly is considering an Internet Tax to fund Canadian content, according to University of Ottawa professor Micheal Geist. And unfortunately for Canadians this tax may make internet access more expensive.

There are currently two taxes being considered ; One on content providers like Netflix and iTunes and another general sales tax on internet access. And although the previous tax may sound better than the latter, one has to wonder if all music, television programs and films purchased or rented online would be subjected to this tax, including those that are made available through the internet television providers.

SiriusXM subscribers are already subject to taxes and a “Music Royalty and Regulatory Fee of 14.2%”. But would the service also be subjected to this additional tax ? Will Apple Music subscribers need to pay for this additional tax ?

We currently pay nothing to listen to radio and to watch television offline. We also already pay taxes on compact disc, DVD and blu-ray purchases, which would not be subject to this new tax. It therefore makes no sense to charge people more taxes for the same content, especially when it involves the streaming of purchases matched or uploaded to a Cloud service.

Why does the government not fund Canadian Content by taxing Canadian broadcasters that run adverts online, when they stream foreign content ?

I’m sure Rogers and Bell would likely oppose this because they’d likely rather see the foreign services taxed instead. But the foreign services have no legal obligation to collect these taxes and the Trans-Pacific Partnership Agreement would disallow this requirement, if passed.

We also currently pay taxes on our internet provider subscription fees so any additional tax would simply make it unaffordable for many Canadians.

Canadians spent on average $203 per month on communication services in 2014, according to a CRTC Report released in 2015, an increase of approximately 6% from 2013 ($11.92). And according to CBC News, there was a 10% increase on wireless and internet services specifically from 2013.

To dissuade use of foreign services like Netflix and iTunes, Canadians are also already subject to data caps and the proposed tax would simply make the unlimited internet plans less affordable.

Many Canadians also still pay a “Digital Services Fee” on their cable, satellite and television subscriptions, a fee that cannot be justified now that an analog service has been fazed out.

Could the government not demand this fee be replaced with a Canadian Content Improvement Fund fee instead ? Or will this obsolete fee be buried like that of Bell’s $2.80 Touch-Tone fee, which netted Bell $80 Million in 2013 according to CBC News ?

At the moment Bell is claiming the Digital Service Fee is collected to improve their services. But isn’t that what their investors are paying for ? Why their customers are being asked to pay more per month for television ?

Prior to September 2014, cable and satellite television subscribers in Canada paid a monthly 1.5% fee to the Local Programming Improvement Fund, which netted $106 million in 2011 for television stations in markets smaller than a million. And although this fee was discontinued, these subscribers barely noticed because they were asked to pay more for their television subscriptions shortly after.

The average monthly rate for television services paid by Canadians climbed from $65.25 in 2014 to $66.08 in 2015, according to CBC News ; A difference of 83 cents per month when the average monthly rate for Canadians for the Local Programming Improvement Fund was 50 cents. And with the mandated “skinny package” changes some have seen their monthly rates rise significantly since the spring of 2016.

I believe it makes more sense to apply a Canadian Content fee of a dollar or two to the sale of television antennas, digital converter boxes, digital television receivers/set top boxes, satellite/internet radio receivers and streaming media players in Canada, although some members of the public would likely not enjoy the prospect of paying it in addition to a Provincial environmental handling fee and having both fees taxed.

Perhaps a monthly fee of 1.5% on unlimited internet packages or bundled packages over $150/month would be the path of least resistance because it would likely be negligible to the subscribers of these specific bundles or packages.