The hearings of Bill C-11 continue at the Canadian Senate continues. This after a 1 week break.
After a week long break, the Bill C-11 hearings at the Canadian Senate is continuing. Earlier, we got a taste of what was to come for this fifth week, and it looks like we are going to be hearing from more digital first creators among others. So, an interesting thing to look forward to.
For those who want some quick links to our coverage of past hearings, here they are:
Hearing 1 – Privacy Commissioner and Global Affairs/Justice Department
Hearing 2 – Digital rights organizations and lobby groups (1)
Hearing 3 – Lobby groups (2) and platforms (1)
Hearing 4 – Lobby groups (3) and lobby groups (4)
Hearing 5 – Lobby groups (5) and lobby groups (6)
Hearing 6 – Music Canada / platforms (2) and lobby groups (7)
Hearing 7 – Scholars/researchers (1) and digital first creators (1)
Hearing 8 – Digital first creators (2) / lobby groups (8)
Hearing 9 – Digital first creator (3) / lobby group (9) / platform (3) / Lobby group (10)
Hearing 10 – Record Label / Lobby Groups (11) and Scholars/Researchers (2)
As usual, the recording of this video can be found here. As usual, in terms of thoroughness, nothing will beat the actual video or official transcript. However, we are happy to provide a detailed summary and analysis of what we heard. So, with that, let’s take a look inside.
Opening Remarks
Vivek Krishnamurthy of the Canadian Internet Policy and Public Interest Clinic (CIPPIC) started opening statements. He focused his statement on audio visual content on the internet as they pertain to the legislation. For him, those provisions are vague, over broad, and pose a risk to the right to free expression in Canada and beyond. He started by saying the fact that almost all broadcasting regulation needs to be understood as a form of restriction on the right to free expression. He referenced George Carlin’s 7 words you can’t say on TV. It is perfectly legal to write these words down in print or perhaps even say them in the Senate. He didn’t try.
He asked, how and why is that the case? Why can we restrict certain forms of expression in broadcasting, but not in print or in a public place? We don’t have a lot of law in this in Canada. We do know how the right to free expression has been interpreted and other rights respecting democracies that there are two reasons why more onerous regulations are justified in a broadcasting context.
The first, he explains, is spectrum scarcity. There’s only so much spectrum that is available for linear broadcasting or bandwidth on a traditional cable connection. So, certain kinds of restrictions on content are more justifiable in a broadcasting context than in internet or print content.
The second, he points out, is the invasive nature of broadcasting. Much like Forest Gump’s box of chocolates, you never know what you are going to get when you turn on the TV. It is why every democracy understands that you can restrict what kinds of content you can restrict at certain times of the day – for example, a child doesn’t see something that is inappropriate.
From there, he explains that these rationales fall apart in the online context. There is no spectrum scarcity in the online world. Watch as many cat videos as you want on YouTube without affecting the others ability to see content online. Also, streaming services aren’t exactly pushed into your home in the same way as conventional broadcasting signals are.
Despite these differences, he notes, C-11 seeks to apply broadcasting law, hook, line, and sinker, to services that deliver audio-visual content online. That raises serious constitutional concerns.
He says that C-11 defines broadcasting in terms of transmitting programs for public reception using a telecommunications system. In the existing Broadcasting Act, in turn, defines programs as basically sound, visual, or a combination thereof that are meant to inform, enlighten,, and entertain. Taken together, these two provisions seek to regulate practically all audio-visual content distribution on the internet. So, prima facia, the law says that the CRTC can regulate that content and the provisions that apply to traditional broadcasters apply to online distribution of content. The only thing that saves that is section 4.
In his view, we shouldn’t be enacting laws that seek to sweep so much content into a regulatory scheme. Surely, there are problems with internet content distribution, but those require a different kind of response. We shouldn’t just say that everything is in except for these few things that are out.
He then circles back to the exceptions found in Section 4. He says he has been a lawyer for the better part of 15 years, and he says that Section 4 is about the most confusing thing he has ever encountered. He points out that Section 4.1 has two catches. First, social media is left undefined. Second, it creates an exception to the exception. This includes for programs that generate revenue directly or indirectly. All social media platforms are profit making entities. So, of course, every piece of programming that they carry is going to directly or indirectly generate revenue for them because it ties to their business model. So, really, there is nothing that prevents the CRTC from imposing regulations on the full stack of audio-visual content distribution.
He then notes that supporters have pointed to two things. First is the provisions of the bill that say that the CRTC must take free expression into account. The second is that we can trust our institutions not to be overbroad. He says that this is not good enough for three reasons.
The first, he explains, is the basic principles of a democracy that legislation needs to be narrowly tailored to achieve its objectives. We need to specify in the law exactly how things apply and not leave it to the discretion of a regulatory agency. That is especially important because Canada is not immune to the winds of populist authoritarianism howling around the world. We cannot be sure that our institutions will perform as well in the future as they have in the past – and we need only to look to the inquiry into the events going on in Ottawa in February for proof of that proposition.
The third, he explains, is that, like it or not, other countries are watching, and they will emulate our example. If we in Canada can say that our cultural policy, promoting the voices of Canadians is so important, that we can regulate all online content, what’s to prevent Viktor Orbán’s Hungar or India’s Narendra Modi, who have their own views on who is Indian or Hungarian, from imposing similar views and pointing to our example? all of this behooves us to be more careful.
(I think these comments really helps ground the debate again and takes it back to the core issues. I thought it actually adds a good perspective to even paid streaming services in that these remarks talk about how even these streaming services don’t operate in the same way, technologically speaking, as traditional broadcasting. I was, admittedly, not entirely sure what the defence is for premium streaming services. What was provided here offered really good points.
On another note, this is the organization I suspected might either be involved in litigating against this legislation should it go through without amendment, so my ears perked when he, straight off the top of this hearing, mention the constitutional problems with this bill. I had a feeling they knew that constitutional concerns would be a problem with this bill and that opening statement confirmed to me that they know full well – even better than me in some instances.)
Gregory Taylor then began his opening remarks. He said that he wanted to challenge some myths regarding contemporary media. The first is that broadcasting media, or old media, is dying. September 2022 data shows that nearly 70% of Canadian households still subscribe to a broadcasting distribution service. Can you imagine another industry with that level of penetration that would be crying that it is somehow in dire straits. The citing of this usually involves the one in five people who have cut the cord which means that they have stopped receiving cable or satellite signals as a sign that the industry is in peril.
His response to that, generally, is ‘is that all?’ because if the number is only one in five, Canada has now had Netflix for 12 years and he thinks that we’ve known that this change has been coming now for more than 10 years. At that point, cable had 85% penetration in Canada. So, it’s increased decline, but it is still by no means an industry that is dying. In C-11 hearings thus far, broadcasting has been called “an obsolete artifact of the 20th century”. However, to him, the real story remains the incredible resilience of this sector after 12 years of streaming wars going on in Canadian living rooms.
This, he says, matters for a couple of sides in the C-11 argument. First off, media industries who own distribution who are crying for protection need to be taken with a substantial grain of salt. His colleague, Winseck, who has demonstrated in his research, that some areas of old media such as distribution are actually doing quite well and regulatory assistance is unnecessary. Other areas, such as ad supported local television are clearly in difficult times right now.
Also, he says, that for those who say that C-11 is a regulatory mistake and that we are protecting a relic of some other age in the modern day of the internet, he’d argue that broadcasting is far from dead – that this is still something that continues to have impact on people. The problem, however, is that distribution is tied to how we fund creation in this country and distribution is clearly on the decline and there is no stopping it in the near future – but it is a very slow decline.
He thinks that this is what C-11 tries to admirably rectify by making streaming services to now contribute to the production of content in Canada.
Another myth, he says, is that the Canadian private broadcasters are defenders of Canadian culture. Any cursory glance at a prime time TV schedule in Canada will demonstrate that Canadian private television’s very existence relies on rebroadcasting of American programming. It’s been like this for a long time. If they are in need of regulatory protection, they have to do a much better job at proving their value to Canadians. If the system must be that Canadian broadcasting shall be owned and controlled by Canadians, we have to emphasize why this is important. Part of this should be the private broadcasters making a real contribution to Canadian culture.
(I actually ran an experiment like this a while back where I looked through the prime time TV schedules and it was almost all, if not, all American program rebroadcasts. So, I’ve done it and can confirm that this point is exactly true.)
The third myth he cites is that public broadcasting was necessary in an era of limited choice, but is no longer justifiable. He argued that the exact opposite is true. We have more media choice by far, but Canadians still place trust in the CBC to their significant online presence and higher visitation than any other site in Canada. Some have argued that the CBC should be a subscription service, we don’t need it. He argues that this is entirely wrong and the wrong direction to be going in for Canadian media right now.
The fourth myth he cites is that government will assume a big brother role to control media or to restrict freedom of speech. He says that the CRTC is the very body that chose not to regulate online content back in 1999. There was never anything in the online media exemption order that said that the CRTC did not have legal grounds to do it. They could have chose to regulate, but they didn’t. So, he thinks a lot of the hyperbole around big government watching you hasn’t really played out in the real world.
(There’s plenty of counterarguments to this. One is that to say the CRTC of 1999 is the same as the CRTC of 2022 is definitely a stretch given some of their recent controversial rulings. Second, it’s not hyperbole to ask for the legislation to clearly exempt user generated content. In fact, it is one of the single most common sense asks for people who are creating and publishing digital first content. While some Conservative party supporting idiots are screaming WEF among other gibberish comments, there are very reasonable arguments about what the bill could do to the world of user generated content. Lumping the different types of criticisms together and making that conclusion is dubious at best.)
That said, he thinks that C-11 is not perfect. It tries to do too much. It punts too much power to the CRTC. He sees this as a common thread throughout the presentations. However, keeping the current Act as-is is a recipe for turning over the Canadian system built over a century to economic powers beyond our control. He’s not concerned with an elusive Canadian identity. He thinks the Canadian identity is fine. He’s worried about political sovereignty.
These amendments, he goes on, as presented to the Broadcasting Act, build a far more inclusive act as well. This is a point he thinks that is undersold in a lot of the discussion around C-11. He goes on to talk about minorities and indigenous people being more clearly defined in these amendments.
(It’s really odd how much he glosses over the fact that the internet and traditional broadcasting technology are two very very different things. Maybe it is in the interest of time, I don’t know.)
Dwayne Winseck then opened with his remarks. He says that he thinks that what we need to realize is that we are at a critical juncture – a moment where the internet was is no what it is. Today, we have, instead of a free and open internet, we have a centralized internet that is ruled by a relatively small number of access network operators. Search engines, social media services, and digital media content aggregators and distribution platforms.
Consequently, he comments, many democratic and non-democratic governments alike are reasserting their authority to regulate internet services to deal with enduring communication and policy issues. Some of these efforts are good, some of them are terrible. Some of the best have been well thought out from the beginning and are being revised today as they evolve.
Unfortunately, he says, the Broadcasting format could be one of the latter – one of the good ones. There are seven fundamental areas that he thinks hold it back.
First of all, he says, as others have pointed out, the bills intent to deal with the streaming services is laudable, but the problem revolves around the line of who and what is in and what is out is very convoluted and unclear. This needs to be fixed (I 100% agree). The definition of a broadcast program sweeps far too diverse of a range of diverse human expression into the reach of this act and leaves it up to the CRTC to decide who it will regulate, what it will regulate, and what it will not.
At present, he explains, Section 4 is at war with itself on account of these problems with the rest of the bill. Consequently, users could end up being regulated instead of just capturing these large streaming services as a good bill would. Clear thresholds based on market capitalization, revenue, and audience size are needed to draw lines on which streaming services are covered and which are not. The European Digital Markets Act, the Digital Services Act, and several bills before congress in the US offer useful guidance on this point.
A third point, he says, Bill C-11 does not deal with market gate keeping power, but should. We live in a country in which we have the 8th largest media economy in the world. We do not have a tiny media economy. Based on revenue, it is the 8th largest in the world. The Canadian media economy has more than doubled in size from 2000 to 2021 from an about $48 billion media economy to a $94.5 billion economy. Many in the sector are in a thriving environment. There are a few sectors that are in dire straits.
He then says that online distributors and aggregators have emerged as significant players in Canada. On this, there is no doubt (I don’t doubt that either). In 2021, Google, Amazon, Apple, Facebook, Microsoft, Netflix, and Disney combine have revenues of $15 billion from their media and internet services in Canada – about a 16% market share. They have been steadily chipping away at the high levels of concentration that have defined the Canadian media economy for a very long time – especially in the last decade, particularly in the TV marketplace. Giving people more choice and also giving program services more doors to knock on when they want to distribute their programming. They have also, however, snuffed out competition in other areas. For example, online advertising where the big three American tech giants – Google, Facebook, and Amazon – now account for about 90% of the market.
That said, he continues, let’s keep things in perspective. The big 6 Canadian media companies – Bell, Telus, Rogers, Shaw, Quebecor (I think that was the name he said, it was difficult to catch the whole thing from my perspective), the CBC, have combined revenues last year of $65 billion or a combined market share of about 70% – four and a half times the market footprint of the US tech giants in the media and internet sectors.
(I have to admit, the numbers are very interesting. When I saw some of the Bill C-11 supporters in earlier testimonies saying both that their sectors are dying and need support while, at the same time, saying that they are also experiencing growth, I always suspected that there was something fishy with the biggest players claiming poverty. It seems that what I was detecting to a vague degree was the rather large market footprint that the biggest Canadian players have. I didn’t have those numbers, but this guy did. I guess my senses were on the right track on that, but to what degree, I had no idea.)
In short, he says, there are well established and new instances of substantial market and gate keeping power in Canada. C-11 should confront this reality, but it does not. Just as the CRTC regulates the terms of trade for vertically integrated BDU’s and programming services, Bill C-11 should expand the commissions capacity to do the same for online aggregators and distributors. This could include thresholds, for example, asymmetric obligations for players with significant gate keeping power subject to periodic review. This goal might be what we would call ‘fair carriage’ – a kind of selective picking of principles from common carriage and must carry rules that we already have. It would deal with terms of hosting, access, carriage, and distribution – the distribution of revenue and a redefined concept of discoverability that has unfortunately hijacked in the debates and the discussions in this chamber around this bill. To mean simply that it’s all about promoting Canadian content.
Instead, he says, a better view of discovery, would mean opening up and discovering what’s inside the complex technical and economic black boxes that now comprise our communications systems. The ideas that companies algorithms and source code should be off limits should be a non-starter. The principle of fair carriage would aim to constrain gate keeping power while promoting access to the content of small players and furthering the values of pluralism and diversity. Similar principles could also apply to the internet advertising system and serve as a unifying thread to the Online News Act, Bill C-18.
He closes with some small points, saying that C-11 sets out minimal disclosure requirements, but punts the details to the CRTC to work out. It needs to be much more specific in terms of what information should be disclosed and who is to get access to that information. Not just the regulator, but also scholars, journalists, and the public at large should have access. Data and privacy should also be enshrined in Act given how valuable audience and personal information is He says he is a big fan of the CRTC, believe it or not, but C-11 over-estimates greatly the commissions ability it’s independence from corporate influence and it’s commitments to the public interest. Punting so much to the CRTC also means that the contentious debates in this room and around this country are now going to just be brought inside of the CRTC and left to play out in a much more closed environment – and not subject to the scrutiny, and therefore deprived of the same levels of legitimacy that this bill is going to need for the long haul.
Finally, he thinks that C-11 unwisely expands the scope for ministerial intervention in matters before the commission and that should be drawn in.
(I think an important thing here in all of this is the line clearly separating user generated content and everything else that clearly is within the range of the bill. For me, that is a very big thing for a lot of really big reasons – not just personal, but from an overarching digital rights perspective. I think he made that distinction here. Another good point being made here is how C-11 punts so much to a much less accountable and transparent CRTC. I’ve long worried that the current goal is to shield this debate from public scrutiny by hiding the whole thing at the CRTC which is why so many supporters are basically saying ‘shoot the bill through the passage process now, let the CRTC ask questions later’ which is an extremely big red flag here. I’m glad he hit on that point here.)
Questioning the Witnesses
Senator Leo Housakos opened questions by noting that Taylor wrote that Bill C-11 does too much and that the bill must be narrowed in scope. Many have said the same thing. Unfortunately, he doesn’t think that this is likely to happen, but it does speak to serious concerns on implementations – serious flawed implementations that affects the bill. Concerns echoed by the CRTC themselves who has argued that the regulatory responsibilities that are envisioned for the CRTC are simply beyond the capacity of the organization. So, he asked two questions. First, how concerned are the witnesses that the implementation may become unmanageable and what would be the possible fallout of that? His second question is should this committee and the Senate insist that the government provide the regulatory directives attached to the bill?
Taylor responded to the question about the regulations potentially being unmanageable. The answer he gave was yes he does. This bill, as written, will need to be accompanied by a major overhaul of the CRTC itself. This is not unprecedented. When the UK realigned a lot of its media policies 15 years ago, they also developed a brand new media regulator, OFCOM. He says he’s not saying that we need a brand new regulator, though that is something to be considered. He believes we should have a communications regulator instead of a sort of split between ISED and some areas of communication and the CRTC and some others. Is it unmanageable? Potentially. It will depend on how the CRTC decides to go about this, but like everybody has said so far, he finds that this places too much responsibility in the hands of the CRTC by leaving some things to be determined and always means to be that we’ll let the CRTC figure it out.
He says he’s not sure that it is always necessarily a closed shop at the CRTC. Like Winseck, he says he’s a big supporter of the CRTC. One of the things he likes about it is that it does have public hearings. Now, when you are having public hearings, it’s slow like this is right now. Democracy is slow. The CRTC is a democratic institution. He thinks it does fairly well that way, but it does pose problems.
He then tackled the second question about should this come with mandates from the government itself. He has hesitations around that because that would then compromise the arms length institution of the CRTC itself – meaning that it should not be dictated to by the government. That’s why it’s always been designed as it is for something that operates beyond thinking about the next election cycle. So, he does have some difficulties with leaving it with the government to tell the CRTC what to do.
He thinks that this bill, because it’s going to be around a long time as well, needs to be clarified. He gets that it, perhaps, is not going to happen at this point, but he thinks that it is something to be considered.
Krishnamurthy chimed in saying that he thinks that the bill should be the regulatory direction. So, instead of issuing self-standing regulatory directions to the CRTC, we should fix the bill and make sure it is fit for purpose.
Senator Julie Miville-Dechene then started her turn with questions. She notes that Winseck spoke about thresholds to correct 4.2 (2). She asked if he could give senators an idea of what threshold he is thinking about. They have heard $100 million and $150 million (this seems to be in reference to Tim Denton of ISOC clear back in hearing 2). She asked what he thought.
Winseck responded by saying that he is not sure he would want to go out on a limb and peg a particular number right now. It would be a number we would have to look at using market share, using the revenues that they have in Canada, the size of the audience relative to the other major Canadian players. Kind of a cutoff between large, medium, and small users. The idea that we should be aiming for this, that maybe the bill should be the best place to set out the thresholds. Then, maybe we can argue about whether they got it exactly right.
Senator Miville-Dechene then touched on the subject of freedom of expression. Krishnamurthy mentioned that. She said that you probably well know that in the bill, page 10, there has been an amendment saying that the Act apply in a matter that is consistent with freedom of expression. She says she didn’t quite follow his argument about restrictions being about freedom of expression, and he mentioned about protecting kids. She said that freedom of expression as a right is not absolute and there are reasonable limitations and there has been so in the history of this country. She says she is wondering if he is not fear mongering by referring to freedom of expression in this context.
(There’s a difference between freedom of expression being absolute and freedom of expression being hampered for no real reason other than ‘because I said so’. The effect of the bill is the latter, not the former. Further, the amendment that just tacked that line on is completely meaningless.)
Krishnamurthy responded that with regard to 4.2, the invocation of freedom of expression in the bill does no work, regardless of that statement. Of course, the CRTC or the government or whoever else would have to respect freedom of expression. Otherwise, the courts will strike them down. That’s how things work.
So, he explains, what is the nature of his concern? The problem is with the government giving itself the authority or investing the authority with the CRTC. In the first instance, to regulate a great deal of human expression. Using a structure that is purpose built for broadcasting where governments do have limitations on freedom of expression in the broadcasting context are stronger. There’s more grounds for a government to do that. That is what our constitutional laws and the laws of other countries that are democracies have held.
So, his concern is with the government sweeping all of this in in the first instance and then creating narrow exclusions that are not very strong that could be. Our institutions are (didn’t catch that word), and his view is that when we are crafting legislation, we should not sweep more broadly than we need to. So, he would like to propose his simple solution to 80% of the concerns that he raised. The solution is simply to recast the exception in 4.2 so that it does not apply in respect of user generated content or it could be framed in terms of editorial control.
So, he further comments, when a service like Apple TV Plus decides what it wants to put on its service, the Act could apply. When YouTube has its own created content that it uploads to its service, the Act could apply. However, when he uploads a video of his very cute cat to YouTube, the Act would not apply. It would not apply to things that the platform does not have editorial control over. This would cure many of the free expression concerns that he and others have of the bill and it would also set a positive example in the international debate and he wants to set out the international stakes here.
Canada, he explains, is the chair of the freedom online coalition. A free and open internet are central to Canadian values and to Canadian foreign policy and we have taken that leadership role in the world. So, he thinks that when we are regulating the online sphere, we need to be very clear about what we are doing and what we are not doing – and to send a signal to say that we think broadcasting is different.
(This nicely highlights the dichotomy of supporters of bill c-11 and critics when it comes to the freedom of expression. Supporters just brush these concerns off as made up or hyperbole, and critics lay out why it is not in a clear and concise manner. The Senator may not think these concerns are no big deal, but someone like a representative from CIPPIC will not only know better, but could also set the wheels in motion to challenge this in court should the bill not fix this. It’s a big reason why I believe this law will get challenged in court and what someone like the aforementioned senator may think won’t really matter in the long run.)
Senator Karen Sorensen noted the discussion on thresholds. Her question is whether the witnesses believe is consistent with what other jurisdictions have done. Then, in the broader scope, she appreciates the references to other jurisdictions because some witnesses say that this is the first country to have ever done this (accurate with respect to online expression) and there is going to be terrible consequences to it (there will be) and they’ve had other witnesses who made references to other jurisdictions. So, she wanted clarity on what other jurisdictions mean. Are there other C-11’s or is it alternate (didn’t catch the word).
Winseck responded that, internationally, we are seeing an enormous amount of activity. So much, it makes his head spin (it can be hard for me to keep up too, so I can relate) and about two years ago, a colleague of his in Switzerland said that they should tally these things up so we can keep track because they are trying to write articles and cite sources because he couldn’t remember if it was this version or that version or this country or another country. The list is now two years old. It gathers up major inquiries, bills, legislative regulatory decisions for roughly the last 5 or 6 years – and it’s now 120 entries long. So, this is soil that is becoming very well tilled. The closest approximates for reference points, he thinks, are the European Unions Audiovisual Media Services Directive, the Digital Services and Digital Markets Act, the latter two of which have very clear thresholds for what they call very large online platforms and he is suggesting that they can use that as a guide.
The US, he adds, has a suite of about a half a dozen bills taking up various angles of the big tech industry from market power to interoperability to privacy and all sorts of other things (even some of those bills are getting convoluted because of the gridlock and obstruction issues. An example is the JCPA where anti-moderation amendments have been added to them thanks to Senator Ted Cruz). One or two of those bills also have specific criteria for what they call covered platforms. That’s what he is thinking we need here in Canada.
He says he is hesitant to put forward a concrete number because you have to be very careful about this and he doesn’t want to put out a number that will make him look silly afterwards (fair enough). Basically, we can talk about numbers. Netflix has $1.3 billion in revenue last year, more or less about 7.5 million subscribers or half of the households in Canada. That would clearly be in. What about Disney+? He would think that on the basis of their revenues, absolutely. Amazon Prime based on revenues and number of users, absolutely. Maybe Gem (I believe this is in reference to CBC Gem) might not be because it is so tiny and has a small audience and revenue base and so on. So, lots of examples, very clear guidance, we can do this, the ceiling will not fall.
He adds that what we really have to start with is this is not your parents internet. We do not have the free and open internet any more. The free and open internet has been re-centralized in a reoccurring pattern that tends to happen to new communication technology. They go through a phase of 20 to 25 years of what we can characterize as methodless enthusiasts. There are hundreds or thousands of various players and no clear sense of where things are going. Then they go through a period of consolidation and consolidation begets institutionalization of the industrial form, the technological form, and the regulatory form. That’s where we are today and many countries around the world are trying to nail down what the institutional parameters are going to look like. We need to do that too.
Senator Fabian Manning noted that many of the witnesses that have appeared before them have argued for a more flexible definition of Canadian content. He notes that some works may be written by a Canadian, played by Canadian, etc., but the rights are not with a Canadian, that makes them not qualified to be Canadian. Does the witnesses believe that it’s time to update what is Canadian and would they support an amendment to Bill C-11.
Winseck responded that some ways, this is one more element of this bill where it’s kind of like kabuki theatre or shadow boxing. What this debate is really about is drag it down the cancon and cultural nationalism rabbit hole where everyone can squabble and beat one another up down these two holes. What this really is about is television and film finance models and there’s two basic models in play. One is the commission model where you basically hire a group to produce a film and you don’t own all the rights. Another one is a finance for partial rights model. What the streamers are doing and what the big American film and television studios always done in Canada is rely upon the commission model. They pay you, you produce the programs, and you give up the rights forever across any medium across all time and across all geography.
He says that there are other models including one in the United States where independent producers take some financing from a distribution studio from financial investors and from other sources and they trade off partial rights for distribution in certain windows.
What he thinks is really at stake here in Canada is we are trying to get more control for producers over the distribution rights of the program. All this stuff about Canadian content is really a diversion and so much other. It really muddles people’s heads so they can’t think straight about the real money issues and control and power issues on the table.
Senator Manning has noted that all witnesses have raised concerns about Bill C-11. Others have raised concerns. He is wondering that if the bill is passed as-is – as it stands today – what are two major repercussions of that? We talk about rabbit holes, he wonders what rabbit hole are we going down here if the bill carries through in its current form.
Winseck responded that his point he made earlier about Canada being the 8th largest media economy in the world means that companies are not going to bypass Canada because they got a piece of legislation that they don’t like or crimps their style. He thinks he can put that as a bogey. However, he does share the concern of Krishnamurthy of if we try to force fit this diverse expression of human expression into the broadcast program mould that we are going to set up a bad precedent that will not serve Canadians well. He thinks it will be prone to judicial challenge and he thinks it does not do us well in the international stage (I was very visibly nodding up and down on this point). He disagrees about the free and open internet, but he thinks that Canada can set a good model if it properly regulates these new services and old ones.
Senator Pamela Wallin commented that on the Canadian content question, she understands the point that it’s sometimes a cover, but we are seeing the government use that in such an ill-defined way. She spent a couple hours with some of these smaller content creators last week who walked her through this. They have a business proposition, they make money, but they cannot figure out what it is that they would qualify them or disqualify them from Canadian content because that is so core to them about what gets pushed up and what gets pushed down and if that’s not clear, then they will get pushed down.
Winseck responded that this is the knot that is so hard to get out of. The concerns are misplaced. He does not have these things to fear. In fact, they might find it beneficial to them to open up and discover inside the black box what it is that is actually shaping who sees their content, how it is distributed, and most importantly, how they’re paid. So, the idea that there is going to be some magic picture of what constitutes Canadian content and that is going to be the North Star that they now have to approximate going up and down in the rankings-
Senator Wallin commented that these are successful businesses. They are trying to figure out at what point they are going to be defined as Canadian content or not because it will impact their bottom line and it will impact their discoverability on the system. They are successful. They have a very targeted audience, it’s not wild cat videos, it’s educational content and they need it defined.
(This is likely a reference to Morghan Fortier from hearing 8)
Winseck responded that he knows who she’s talking about. He’s read her Twitter thread last week (I’d link to it, but I seem to be unable to find the one he is referring to it. I’m probably just missing it, but I’m sure it’s not the one dated the 18th as he commented that it was from last week.) and heard her testimony and he thought it was excellent. So, he doesn’t want to be seen as disparaging or belittling anyone. What she and and many others have done is great. (He separated out the Section 4 user generated content with the debate about large streaming platforms and that is the critical point that needed to be made in my opinion.) He does think that Section 4 the real problem and it does sweep them in because of the conditions it sets out with respect to licensing and agents and making money and so on and so forth.
So, he says, that their content being redefined as a broadcast program is fundamentally flawed. This should be clearly excised from the bill and dealt with elsewhere. However, the idea that they are going to somehow harness what they do with their educational programming or their gaming program into the cramped conception of Canadian content? He’s not buying it. He thinks that they, just like the Canadian government, are both playing this.
(When the text of the bill basically says that user generated content are being swept in, the direct consequence is that we, as digital first creators, have to somehow conform to these cramped concepts of Canadian content or risk being downranked in the platforms we happen to work with. At the risk of rephrasing what was said, I agree that it is an absurd notion and I agree that user generated content should be clearly out of the bill. I don’t think digital first creators are “playing” anything in this context. It’s the logical next step in thinking about this bill as it is currently – and badly – worded. If my content is going to be swept up in the bill, then now we have to conform to this clearly unreasonable mechanism of being defined what is Canadian content and what is not. I think a safe bet here is that us creators would agree that the solution is to remove our content from the bill. Even senators are starting to admit that the chances of that happening are slim. Exactly how else do you expect us to think about this bill with regard to cancon?)
Krishnamurthy chimed in that on this particular point, this points out the pernicious aspects of using the Canadian content model to deal with user generated content that is uploaded to platforms. He knows at this point that Senators have heard from the privacy commissioner (very first opening remark in this whole series all the way back to hearing 1) and the privacy commissioner expressing serious privacy concerns because it means that in order to benefit from the boost that one would get from the discoverability provisions, you need to identify yourself and who you are and show how you comply with those requirements.
He explained that for certain kinds of programs – we are not talking about large productions – multi-million dollar productions – or large companies exchanging rights, maybe we don’t care so much about those definitions. They are easy to meet. However, when we are talking about individuals who are small businesses making content or individuals expressing themselves in a democratic way on these platforms which is what they are used for. Then we get into a free expression problem. So, that’s his pitch for exempting anything that a user uploads themselves from these regulations.
Certainly, he says, there are certain things we need to do there. Platforms need regulation. There is lots of interesting international models that he is happy to answer questions about those, but it is a different set of issues that needs different regulations.
Senator Paula Simons noted that Krishnamurthy suggested that we carve out all user uploaded content from 4.2 (2). Here seems to be the one challenge: the government has said to Senators repeatedly that the reason they need that is because of giant record labels like Warner and Sony who use YouTube as a distribution streaming platform to compete with Spotify. They said that it’s not fair to Spotify if we have free range on YouTube because it’s Warner Brothers who uploads. It’s Sony that uploads. So, if we are exempting user created and uploaded content, you might exclude really big international entertainment (didn’t catch that last word). Monica Auer said get rid of Section 4 altogether (reference to hearing 7). YouTube has a very complicated set of amendments in Section 4 that would try to carve out just those big record labels. She would like an amendment to Section 4.2 (2). What amendment can they bring that will make sure that smaller players are allowed to use that platform, but not exempt the giant record labels and then maybe we don’t need Winseck’s thresholds of money, we would have a clear language about who is in and who is out.
Krishnamurthy responded that he supposes the question is how much can a single piece of legislation solve for without contorting itself. The thing about a platform like YouTube, and all user generated based platforms – Facebook, you name it – is that they have diverse audiences, diverse users, and they have multiple forms of functionality.
So, the answer to the question is perhaps unsatisfying, is that the economic problems by record labels, who, quite frankly, own the copyright to these things, so it’s kind of their business to make their copyrighted material available, needs to be addressed through different legislation. It’s, perhaps, a copyright issue. It’s perhaps an issue of trade fairness of anti-competitive practices. Is it an abuse of your copyright monopoly as a record label copyright holder to go head to head on your streaming service by making your copyrighted catalogue available on YouTube? So, we need to deal with that problem on its face as an economic problem rather than using a means to deal with that that sweeps a lot of protected expression and creates free expression problems.
Senator Simons noted that Auer suggested getting rid of Section 4 completely.
Krishnamurthy responded that he thinks that is a bit of a problem because of the breadth of which broadcasting, broadcast undertakings, online undertakings, and program have been defined. If we are going to get rid of Section 4, there is a lot to be said for that. We need to refine those definitions. We need to bring in some other limiting principles like a .gif on his website, which is audiovisual content, is not covered by this. We need to have some other clear limiting principles to who qualifies and who doesn’t.
Senator Simons commented that some would argue Section 2 does that.
Krishnamurthy responded that he’s not- (interrupted)
Taylor said that, if he may, he thinks this is the change made between C-10 and C-11. He thinks that C-11 is clearer when it comes to the exclusion of amateur uploaded content (it’s not clear). So, he thinks we are spending a lot of time on something that is actually addressed in the bill. Section 2.1 is explicit that way (Section 2.1 only excludes the person, not the content they produce.)
The other thing that he wanted to point out has to do with Winseck’s idea of setting tiers for this. We are not re-inventing the wheel. The CRTC already does this for broadcasting distributors in Canada. If you are a broadcasting distributor and you only have 20,000 subscribers, you have different regulatory obligations then if you are Bell or Rogers. So, he wanted to say that there is precedence for this. What Winseck is putting forward already exists in the broadcasting environment.
Senator Jim Quinn noted that one of the themes that is clear is that there does need to be some modifications of the bill. Not a big overhaul, but some areas of concern need to have clarity. The clarity is required so that the CRTC can have greater direction from the bill itself. They have heard a lot of concerns from various witnesses about the powers of the CRTC. A few panels ago, he mused about if there is a methodology that would allow the CRTC to create regulation before they are enacted, they come back to the committees of the House and the Senate for a period of time, like three days, so they can be reviewed and have witnesses come in and talk about those changes, so that there is some certainty that those changes are bonafide correct and make sense. He was wondering what the witnesses were on that view and approach.
Krishnamurthy admitted that he is not an expert on the administrative law challenges that might pose. His initial reaction is that it is a good idea. He says he guess he is in favour of regulatory agencies like the CRTC having as much transparency in the processes as possible like a parliamentary committee or Senate committee is a great place to talk about those things. Now, of course we have a model of an independent regulator in Canada. The CRTC is supposed to be independent of politics to some extent, these are great places to study these things. So, he thinks it’s an idea worth exploring.
Winseck responded that he would be hesitant about this idea of the CRTC coming back to some Parliamentary or Senate committee to run something by them. He thinks what we need is (bright?) letter law, he thinks that’s what it’s called. He admits he’s not a lawyer. The language and the text needs to be very clear, Auer has been very clear on this point and he defers to her judgment on this. So, much clearer in the specification of the law, and Krishnamurthy is making the same point. He thinks certain definitions at the start are ham fisted. This idea of forcing this range of human expression in a broadcast program really sticks in my gullet (agree on that too).
Historically, he explains, broadcasting has been a small carve-out of a much larger concept of communications at a distance by electrical means. That’s the master concept. It is a grand concept, and broadcast programs and broadcasting has been selectively excised from that beginning in the 1930s and then treated to special rules because of its special characteristics – some of which Krishnamurthy outlined at the very beginning.
He continues by saying that what we are seeing with C-11 turns things on its head. It’s the tail wagging the dog. So, he thinks this is a really big problem and its this conceptual problem that one: ends up sweeping way too much into the bills potential reach and at the CRTC. It’s the one that is driving us into these acrimonious debates between those who are arguing on behalf of free speech vs those who are arguing on behalf of a strong national culture and he also believes that it will be very susceptible – again, he is not a lawyer – to legal challenges, constitutional challenges. The idea that what we say, how we express ourselves, how we act online somehow can be shoehorned into a broadcasting program, he thinks it’s just (very visible frustration. Trying not to curse?) – this has just got to go in his view.
Taylor chimed in, saying that he doesn’t necessarily see this as being shoehorned into broadcasting (it’s in the text of the bill, dude), but he gets Winseck’s point of the tail wagging the dog. It’s putting too much significance in the broadcasting sector. He tried to emphasize that broadcasting is by no means dead, but it is absolutely in decline. The emphasis should be on the online model, but as far as will there be challenges to this in the future? Of course there will be. (Time ran out at that point.)
Senator Marty Klyne asked about what this bill changes with regards to the rebroadcasting of foreign programs and definitions of cancon.
Taylor said that the short answer is “no”.
Winseck commented that this bill should be about getting access to money.
After that, the hearing adjourned.
Concluding Thoughts
One thing that stands out to me overall is Taylor’s denial that user generated content is, as both other witnesses pointed out, swept into this bill. By now, you have numerous witnesses, including the Privacy Commissioner, a former CRTC commissioner, scholars, and experts, as well as digital first creators, point to Section 4 and say that this ropes in user generated content and it shouldn’t. I’m honestly losing track of how many different perspectives all come to the same conclusion. I honestly don’t get what the strategy here is to just continue to deny that Bill C-11 touches user generated content so late in the process.
You’d think that, by now, there would be a complete rethink of what the strategy should be to respond to criticisms that the bill regulates user generated content. Instead, you get the same tired strategy of “no it doesn’t” and leaving it at that. I get that a lot of people’s minds are made up by this point in the debate, but who exactly are you trying to convince here with such a strategy? Is there a section of the bill that suggests that user generated content is in the bill? Yes, Section 4. Is there room for interpretation that says that this might be a misunderstanding? No. Are there proposed fixes to this? Yes, multiple.
What’s more is that the sole argument I’ve seen, and it’s a really weak one because it’s easy to bat down, came not from Taylor, but from one of the Senators (Simons to be precise). You’d think that would have been yet another hint to try and come up with a more convincing counter-argument, but that just was not forthcoming from Taylor. If anything, this feeds into the thought process that there is no real defence of Section 4 to be left in the bill as-is. I can’t think of a defence for that and, from the looks of things, supporters of this section can’t think of anything either.
Perhaps the most frustrating part in all of this is that, despite the barrage of comments and remarks and letter writing campaigns, the chances that this will actually be fixed at the Senate level is low. Because of this, it lends support to the idea that the whole purpose of the legislation is to, in part, completely wipe out the user generated content industry altogether because it represents competition to traditional broadcasters. Some might continue to be diplomatic and say that this bill was written with the best of intentions, but the patterns of behaviour, from my perspective, still lead me to believe that the idea was to completely nuke the whole industry and somehow make it look like an accident. After all, I’ve seen multiple instances where MP’s could have fixed this bill only to vote those efforts down.
Having said that, you’d think that those who think user generated content isn’t going to be touched from the bill would at least no blatantly insult people’s intelligence and conjure up a reason for why Section 4 should be in the bill as-is. Instead, it seems that the approach ultimately boils down to “we are gutting the careers of digital first creators because f*** you, that’s why.” It is absolutely asinine and it frustrates me to no end.
Another thing that was interesting to see is Winseck agreeing with Krishnamurthy that if the bill is not fixed, it will be open to, at minimum, a constitutional challenge. The arguments are clear, if you sweep up user generated content into the confines of broadcasting rules, the government is getting sued. The only thing that could have made that clearer is if they both held up a giant blinking red LED board with an intermittent buzzer sound that says “you’re about to get sued.”
I mean, if you, as a Senator, are sitting there thinking that this whole user generated content debate is a joke, that you really believe that this is just about making Canadian voices heard, and that arguments against the bill in general are a waste of time, you’d think that the threat of litigation with advance warning would be enough to at least make you wonder if this bill has any weaknesses to a possible court challenge.
I mean, there are huge political implications of ignoring the warnings and getting sued. It’s going to cost taxpayers money and it will be embarrassing to have a chunk of the law struck down by a judge because politician’s just flat out refused to do their jobs. That’s not even getting into how this law was crafted seemingly in a way that screws over literally thousands of Canadians in the process.
So, all of this liability overshadowing so much about this bill is all done in the name of, what? Because they felt like making a dick move in all of this? How is all of this is even remotely worth that? It’s really mind blowing.
Drew Wilson on Twitter: @icecube85 and Facebook.
