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Monday, December 6, 2010

Peter Bissonnette, welcome to the rent-seekers' club

It's been a while since we found a suitable inductee into the rent-seekers' club. Previous invitations have gone to Heather Reisman and Dr. Antoinette Dumalo. A rent-seeker is an individual or corporation that attempts to influence government policy to generate monopoly profits for themselves.

Mr. Bissonnette is the president of Shaw Communications. He is trying to pursuade the CRTC, the regulator of Canadian broadcasting, that Netflix needs to be regulated in Canada. The argument is that Netflix does not have to incur the costs of broadcasting Canadian content and thus have an unfair advantage over broadcasters like the Shaw-owned Canwest Global. See the article in Canadian Business.

Netflix is Blockbuster or Roger's video without the bricks and mortar. Instead of going to the store to rent a movie, we can now order it online for immediate deliver. Shaw did not object to the existance of Blockbuster, why Netflix?

Our guess is that using Netflix uses up Shaw's bandwidth and that may slow their internet service. Regulating streaming video reduces Shaw's infrastructure costs. Funny that a company wants to charge for unlimited internet usage, as long as you don't use it.

Notice that Roger's has been silent on this issue since they provide both cable/internet and DVD rental.

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