What to do about vertical integration? Absolutely nothing | via @peternowak

Over-the-top services need to be left alone and possibly even nurtured as competition to vertical integration. Of course, the CRTC has already nearly screwed that up when it gave its blessing to usage-based internet billing, which would have effectively castrated such services. Amazingly, and somewhat perversely, the market responded by working as it should. Since the regulator fouled up, the public got outraged, the government threatened action and the industry ??? Shaw and Telus so far ??? have responded by significantly increasing their internet usage limits. The others will have to follow suit or risk even more consumer anger.

If the vertically integrated companies want to shackle down content with exclusivity, they should be allowed to go ahead and try. If consumers have all the internet data they want to play with, they will quickly find their content through other legitimate over-the-top services and, failing that, they???ll turn to less-legitimate options such as BitTorrent.

This sort of ???piracy??? is the ultimate competition. File-sharing and other questionably legal methods of acquiring content are constantly improving, both in terms of ease of use and encryption. It???s been proven over and over that when content providers make it more difficult or expensive for consumers to acquire the stuff they want, they not only turn to alternative means, they feel justified in doing so. It???s also been proven that legal and technological responses can???t stop this sort of thing, they only make it improve even more.

So bring on the exclusive vertical integration. Anyone who tries it will soon learn the folly of their ways as consumers turn to other options, as well as the fact that many people who do go that route never come back.

Pete Nowak puts the current CRTC hearings into perspective.

Not too many people do a better job describing and explaining the policy implications and practical ins and outs for Canadian Internet users. Required reading.

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