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Intellectual property the key to prosperity, says Cogeco chief

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Cogeco Cable Inc. (Head Office)
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Intellectual property and copyright
MONTREAL - The ongoing growth and penetration of the Internet, with all that it can deliver - and with its inherent challenges - means the prosperity of countries such as Canada will rely on the growth and protection of intellectual property, Cogeco Inc. CEO Louis Audet told the Montreal Board of Trade in a speech yesterday.

The Internet experience (where one can get many things on line for free, legally and illegally), especially the broadband experience, has led customers to think that all media should be available whenever they want it, said Audet.

"They have free access to powerful search engines, unbelievable databases and a large range of photographs as well as audio and video clips. And, slowly but surely, the idea set in that everything is available instantly and, above all� at no cost," he said. "Thus, the consumer's Internet experience contributes to defining and increasing his expectations towards video services, thereby precipitating the introduction of television on demand."

With so many Canadian high speed Internet users here in Canada (Forrester Research estimates 80% of Canadians will have a high sped connection by 2008), Canadian companies are leaders in providing on demand content, such as cable's video on demand services.

VOD and its various forms are only the beginning, said Audet. "We are witnessing a slow and inevitable shift from scheduled television viewing (at fixed times) to on-demand television viewing (when the customer is ready to watch). Within the next few years, it will no longer be several hundreds of feature films that will be available, but rather several thousands of hours of programming," he explained.

On demand television, powered by VOD and personal video recording technology, puts far more power into the hands of the consumer and threatens the composition of the traditional broadcast industry, too, said Audet, who pointed to the ease in which viewers can skip commercials. "It goes without saying that if the practice of systematically skipping commercials should spread, and if the trend continued, channels that rely on advertising would have no other choice but to move to the subscription model," he said.

And is the end of "free TV" paid for by advertising, really in the public interest? It's an issue Audet says must be studied. "Is (the end of free TV) what the consumer truly wants? Is that what we wish for our society? I believe this issue must be the subject of a public debate, at least here in North America. Indeed, this subject greatly exceeds the scope of a simple punctual consumption decision because television plays a unique role in shaping the identity and unity of a country's population," he explained.

Now, while consumers "have become the ultimate masters of their entertainment and information consumption," content creators must be able to charge for their work and protect their rights in the face of public opinion that says some kinds of stealing is acceptable.

"According to a Decima Research study conducted in 2002, only 17% of Canadians feel that copying music through downloading on CDs constitutes a serious offense. In fact, according to Forrester, in 2003, over 50% of Canadians who surfed the Internet did it! Over a third of these people are adults. Have we become Ars�ne Lupins or should I say parasites of cyberspace?" asked Audet.

"As a so-called evolved society, we must act."

That action, says Audet, must come from the parents and teachers and not just government and the companies which own intellectual property. "Along with the decision-making power comes the responsibility of consuming in an enlightened and legal fashion," he said. "For example, in November, Mrs. Terry Price, president of the Canadian Teachers' Federation, unveiled the results of a survey. 60% of grade 8 students say their parents do not supervise their use of television. In grade 7, 75% of students say they never receive any indications from adults regarding their computer or video game use. It is obvious that as parents and educators, we must guide more actively our children to help them make choices that are both judicious and honest."

Adding all this to the fact that countries like China and India are no longer just doing most of the manufacturing work for North American companies but also a growing portion of white collar work such as accounting and computer work, "economists suggest that the answer for so-called mature economies can be found through the creation of new ideas and evolved services," said Audet.

So, if new ideas � intellectual property � is going to be our engine for growth and prosperity, "what will the economy of an evolved country, that banks on knowledge, be worth if its citizens steal the works of its creators?" asked Audet.

"Whether it is music, films or software, the problem is the same. Along with the freedom to consume, comes the responsibility to respect what will be our economy's best chance of achieving a new global economic order � intellectual property."

Consumers, however, are not easily convinced of such arguments since they like free things. "The only way to beat this long-term plague is through increased awareness at school and at home as well as in corporate and governmental communications. Increased penalties to wholesalers and consumers through the Telecommunications Act would be very constructive," said Audet.

So would better communication from large corporations of the overall value they generate. "For example, explain that the profits generated by businesses support the value of the stocks in which are invested the retirement funds of these same consumers who are also our clients and stockholders," he added.

"Obviously, transparency in corporate governance must be greatly enhanced. And of course, we must treat the consumer with utmost respect at all times. In fact, we must side with the consumer and facilitate his decision-making, rather than try to curtail his options."
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