One of the ideas placed on the table at the Canadian Radio Television and Telecommunications Commission (CRTC) ‘new media’ hearings last week was to impose a federal tax on Internet access to build a (C)$100 million fund to support the production of Canadian content for Internet and digital cell network broadcasting. That proposal was put forward by groups representing Canadian media producers.

Internet service providers (ISPs) and cell service companies immediately observed that any tax would have to be passed on to consumers, a move which would harm their businesses.

But observers say any move which would increase the cost of Internet or cell access would also hurt contrent providers. The more it costs for access, the less people will use the Net and their phones for secondary purposes, such as watching videos or downloading music.

According to information provided by the CRTC, theaverage Canadian Internet user spends 46 hours per month online, and 83 per cent of users now watch some video content.

Cell and Internet giant Shaw Communications has already sought opinions from more than one prominent legal firm as to whether the government can legally impose sich a levy.

The overall issue in the hearings is whether the CRTC should continue its current hands-off policy toward the Internet and cell networks or redefine them, officially, as broadcasting systems which should, by association, be subject to the same regulations and resrictions as conventional radio and television broadcasters.