The special coverage of the Bill C-11 senate hearing special is continuing. This one covers the second segment of hearing 14.
The hearings continue at the Canadian Senate and we are providing what seems to be unprecedented levels of coverage of what is going on. We continue our coverage with the 14th hearing and getting the second segment covered.
For those who are curious, here is the coverage of the previous hearings:
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)
Hearing 11 – Scholars/Researchers (3) and Lobby Groups (12)
Hearing 12 – Scholars/Researchers (3) / Digital First Creators (4)
Hearing 13 – Statistician / Lobbyist (13) / Canada Media Fund / Lobby Groups (14)
The first segment of hearing 14 featured a real mix of witnesses. It featured the CNIB, a middleman organization between rights holders and platforms, and a lobbyist. A highlight was how the lobbyist and a Senator had no idea how Bill C-11 violated Canada’s international trade obligations. It took me all of 5 minutes to dig up a provision in CUSMA that Bill C-11 clearly violates. Something tells me the undisclosed large law firm that was hired and turned up nothing is going to remain undisclosed because if I was that law firm, I’d be embarrassed at being so thoroughly schooled by some “random” internet user like that.
As always, the video we are covering can be found here. In terms of thoroughness, nothing will beat the original video or official transcript of the hearing. Still, we will do our best to provide a summary and throw in some analysis where we can. So, with that, enjoy!
Opening Statements
Vanessa Herrick of the English Language Arts Network opened with her statement. She said that Bill C-11 is of interest to her community. She said that she said that she was happy to learn that it passed second reading. That was really encouraging and excellent news (she sure is thrilled that free speech is one step closer to being abolished). She said it is important for many different artists because many artists are cross disciplinary (sorry, digital first creators are not happy about this). Her organization says that they have an interest in keeping the space open for Canadian artists (by shutting a huge part of that space down, apparently).
She then said that she expressed extreme concern for Section 5.2 that language minority groups would lose the right to consultation (this after saying she was thrilled that the bill passed 2nd reading).
She says that the space must be made available for content creators on the internet, that is what the bill is about (The bill is about shutting that space down to Canadian artists, actually).
She also said that we must be careful about what should qualify as Canadian content.
Jay Thomson of the Canadian Communication Systems Alliance opened with his statement. He comments that there has been a lot of talk about the impact Bill C-11 has on streamers and creators, but there has been scant attention paid to streamers on BDU’s and their customers. He said that there have been rumours about the impending death of cable TV and have ignored them. The data proves that those rumours are false. The data shows that two thirds of Canadian’s still subscribe to cable television. It also shows that Canadian’s spend more hours watching cable TV than via streaming.
From there, he called for fair access to streaming services by BDU’s. He also talked about how Netflix is not available to smaller BDU’s in more rural area’s. He called this discrimination.
Questioning the Witnesses
Senator Rene Cormier started the question and answer segment. He turned to Herrick and asked about the relationship between Quebec artists and the CRTC. He also asked about how this bill would help that relationship.
Herrick responded that it’s multi-faceted. She says she’s not an expert in the history of the CRTC. She spoke about communication lines with the CRTC.
Senator Cormier said that they’ve heard from witnesses about how it’s difficult for Quebec artists to be discovered. He asked if English productions in Quebec are well-discovered online.
Herrick responded that English is not a language that is under threat. How English fits in within Quebec is often overlooked. They face a lot of challenges.
Senator Paula Simons turned to Thomson. She asked how legally Netflix could be compelled to be part of a bundle.
Thomson responded by saying that it is long-standing broadcast policy that, regardless of where you are in the country, you get equal access to broadcasting services. It applies to CBC, CTV, and their specialty channels and that should apply to streamers being brought in to the broadcasting system. He mentioned how it was a matter of convenience for the customer.
Senator Simons said that, with an exception to a family member, they don’t necessarily consume media through cable any more. For the witness, requiring that bundling makes it easier to sell their product with a declining audience.
Thomson responded that they want fair treatment in that if they are selling their product to the larger companies, then they should sell to the smaller companies as well.
Senator Fabian Manning turned to Herrick and said that witnesses have asked for more flexibility for what is considered Canadian content. He asked if she would support an amendment for more flexibility of these definitions such as IP ownership.
Herrick responded that this is a tricky question. She said that she doesn’t think it’s an issue for it to be not part of the consideration. She admitted that this might be better argued with people with more expertise than her.
Senator Manning responded that he realizes that this is a complicated question which is why some of his questions were along a similar line with other witnesses. He then asked about what the measurement is in determining Canadian content and what level should there be to be satisfied that it is sufficiently Canadian.
Herrick responded that it’s a very tricky question and it’s something that needs to serve many different purposes. There are many things that need to be considered.
Senator Manning turned to Thomson and asked about how we reach a level that we are satisfied at the level of Canadian content on our TV screen.
Thompson responded that this is a very subjective question in terms of being satisfied about whether we have a minimum amount of Canadian content. He agrees with Creighton (reference to hearing 13, second segment) that maybe this should be handled by the CRTC.
Senator Manning commented that a number of concerns about the legislation where the bill is passed, then the regulations come after the fact. Many of the things they are talking about will be left in the hands of the CRTC. Are witnesses comfortable with that?
Thompson responded that this is exactly the way it should be.
Herrick chimed in saying that she thinks people would be a lot more comfortable with it going to the CRTC if there had been less pushback with the CRTC being open to consultation from different sectors. This is a larger conversation that shouldn’t just fall to the CRTC or the Senate in her opinion.
Senator Pamela Wallin commented that she has concerns about the level of service you get in rural areas because she lives there. Her concerns, however, revolve around reliable internet because everyone is going over to Mr. Musk because he is allowing them to drive their tractors and combines. Going back to access, though, correct her if she’s wrong, but can she get access in Saskatchewan?
Thomson replied that no, you can only get access in the communities that have licenses to serve where it has cable infrastructure.
Senator Wallin commented that, so, that is limited as well. She turned to the issue of platforms refusing to negotiate, why would they consider access to Regina some kind of threat?
Thomson responded that it’s not because they are a threat, it is because they are small. It takes a lot more work for Netflix to work with a smaller provider than with a larger provider with millions of subscribers.
Senator Wallin said that, so, it’s just a numbers game.
Thomson responded that this is their understanding for the rationale for that.
Senator Wallin said that she is just trying to figure it out. If she’s at a fishing lake, she can get Netflix and the major broadcasters. Why would they care if there is no cost imposed on them?
Thomson responded that if they come before them again, he’d encourage Senators to ask them that question. They don’t understand it themselves.
Senator Wallin asked what it was that they want the government or the government through the CRTC to do.
Thomson responded that you must make Netflix available in a non-discriminatory basis under fair terms with any distributor within Canada who wishes to have access.
Senator Wallin asked if that is a reasonable thing to ask. This comes back to the trade issues. They have a business model and the Canadian government is asking them to change all of that whether or not it is within their financial interest. Her concern is with when the Canadian government starts dictating who a foreign company must do business with.
Thomson responded that he can’t speak to the trade issues, but to the policy issue, it is an obligation for the Canadian broadcasters.
Senator Wallin clarified that when he talks about levelling the playing field, it’s not so much the streaming services, but with the BDUs.
Thomson responded that this is right, that is ultimately the end-game.
Senator Wallin asked if this is about growing his viewership. We are kind of mandating that people watch something they may not choose to watch.
Thomson responded that cable companies serve very specific markets by their very nature. Their ability to grow in smaller markets is limited because there are only so many people in those smaller markets. It’s more about serving customers.
Senator Wallin asked if he makes any contributions to the various media funds.
Thomson responded that larger cable companies are obliged to provide 5% of their revenues to the CMF and other production funds. The smaller players are not under the same obligations. However, they carry community channels and they contribute through that.
Senator Wallin asked if they are not looking for a change in the funding structure with money flowing from streamers to them.
Thomson responded that they are not looking for cash from streamers. They are looking for the streamers.
Senator Wallin added that they are looking for that access be provided to them.
Thomson agreed and that they will pay the bill and pass that service along to the customer.
Senator Scott Tannas asked about what percentage of their customers would have both internet and cable TV.
Thomson responded that he doesn’t know the exact number, but he would guess about a vast majority of them.
Senator Tannas responded that if it is the vast majority, then with tying Netflix to their cable offerings, you are encouraging customers and hardening their defence if other internet providers come that might come in to the marketplace. Is that part of what this is about? He can’t imagine being an agent for Netflix would be that big of a money maker.
Thomson responded that it is a competitive issue. It’s about the ability to offer the same level of service as your competitor does.
Senator Tannas commented that in smaller areas, there isn’t a competitor or maybe that competitor is the phone company.
Thomson responded that this is often the case.
Senator Tannas asked about the CRTC. He asked if he had any concern about the CRTC managing an ecosystem that is changing so rapidly compared to the cable companies whose cable has been in the ground for 50 years. How good does he feel about the CRTC’s ability to move quickly when they make a mistake and kill something off or they see something good that is for the benefit of Canadian’s and allow that to take off.
Thomson responded by saying that the CRTC doesn’t move quickly which is a problem. It’s a problem on the telecom side and it’s a problem on the broadcasting side. There is a proposal on their side regarding the speed of the CRTC. As for whether the CRTC has the resources to adapt to a rapidly changing industry, yes, they have concerns about the resources. Not only are there additional resources needed to handle the workload of this bill, but there is also an additional workload for other bills being proposed (Bill C-18 and online harms would be two examples). He then said that when they sit back and think about it, they don’t see anyone else. They are going to have to stay good and get better.
Senator Leo Housakos commented that we’ve heard from a lot of witnesses that the CRTC listens to bigger players with more bandwidth in this town and smaller creators and streamers far less than they do some of the giants. He asked how confident they are about the CRTC being transparent in their public consultation process and be able to handle many of the loose ends many of the witnesses brought up before this committee.
Thomson responded that they are a small organization, so they are up against larger players that get decisions that benefit them. They have faced that challenge all throughout their history. Ultimately, they respect the organization. They believe they act with integrity and they will work with them as best they can. They believe that their processes are open and public and transparent (Uh, quite sure Monica Auer would disagree with you there) and give everyone an opportunity to make a presentation and be heard.
Herrick responded that she believes that the CRTC does operate with integrity. While speed is important in these decisions, she ultimately thinks it’s important, in the interest of transparency and representing Canadian’s properly, that these consultations are encouraged and made official.
Senator Housakos asked if they think it would be beneficial or helpful, perhaps not in an amendment, but in an attachment, the policy guidelines the CRTC follows in their public consultation are a little bit more narrow than the broad scope that this bill gives the CRTC.
Herrick responded that any guidance that can be provided by the Senate would be beneficial to all. The government has been moving towards inclusion and transparency (LOL! Thanks, I needed the laugh) and she thinks that the CRTC should do the same. So, any guidance that can be provided to the CRTC by the Senate would be something she would encourage.
Senator Leo Housakos commented that it seems to him that streamers have created an enormous amount of energy over the last decade for artists and Canadian content producers across the country. Is it fair to say that Canadian artists, producers, actors, movie industry, etc. has never been robust in this country in the last few years in large part because of these platforms? At the end of the day, after hours of testimony, it seems that the discussion is about cutting the pie up. Who gets what. It seems that there are a group of people who have become very successful because they came up with an innovative business idea and that there is a group in this industry that is not doing as well and the people who are not doing well are telling the people who are successful that they want to keep doing what they are doing, but they want the new businesses to pay their fair share. Is that statement fair? If not, he’d love to hear their statements.
Thomson responded that he comes at it from a different perspective because the bill looks at who pays and how much as opposed to who gets to benefit from those payments. Once the system is set up, everyone will have to make an equitable contribution to the creation of Canadian programming. Then, the next decision comes from how we allocate it fairly. He doesn’t think it comes from the other way around. It’s not a perspective of who gets to split the pie because there is no pie yet to split (I’m not sure I buy that).
Herrick said that she agrees that this is a really exciting time when it comes to artistic creation and contribution. The pandemic has enabled and empowered artists to move online. We have to figure out how we protect artists and protect this space in the context of regulation.
Senator Wallin notes that Thomson thinks that the CRTC, although he doesn’t agree with all of the rulings, he believes that they are the organization with expertise. However, as Senators have heard from other witnesses, they do not believe they have the manpower, the person power, they do not have the budgets to deal with this. The CRTC would have to be expanded greatly if they are going to bring in monitoring of the internet and all of the platforms (that is actually an understatement). The experience comes from the monitoring and regulating the BDUs the television industry and the radio industry. These platforms and the internet, they are not TV channels and not BDUs. So, what gives him confidence that they have the expertise to deal with this?
Thomson, after a pause, responded that the answer is who else would? They got the background to develop the expertise going forward. It’ll be a challenge. No doubt it’ll be a challenge. His understanding of the bill is that, if it passes, is going to create a system for bringing the streamers into the broadcasting system and making them contribute and someone is going to have to administer it. (he shrugged)
Senator Wallin commented that this is the issue. They are going to be monitoring endless numbers of hours. It’s not like a television station where there is 24 hours in a day, 7 days in a week and you can manage that. The internet is infinite. We are now asking the CRTC to monitor all of the output for things like Canadian content and discoverability of Canadian content. That is a massive task when we don’t even have, according to Herrick and others, and she certainly agrees, that clear definition of what that is – what Canadian content is.
Thomson responded by saying that it is much easier for the CRTC to monitor expenditure operations, but such matters as discoverability is going to be a real challenge, he totally agrees with her. (I think “fools errand” would be a more accurate turn of phrase.)
Senator Wallin asked if Herrick would like to add anything with respect to the workload and this is just one bill we are talking about. There are others in the pipeline.
Herrick responded that, absolutely, it is not a simple thing, of course. However, do we expect the CRTC to regulate all activities of everyone on the internet? No. She doesn’t expect the CRTC to monitor all activities of everyone in society all of the time. The CRTC has to figure out what is Canadian and then operate on a certain level of an honour system (some of her speech was garbled). It’s all about clear parameters of operation.
With that, the hearing concluded.
Concluding Thoughts
So, another hearing that was a little bit light on content that we can work with, but there are certainly some notable points. It was annoying to see such enthusiasm that this legislation passed 2nd reading, however, towards the end, that only punctuated just how poorly thought out everything was when the witnesses were asked about how the CRTC could enforce it. It was borderline laughable when Thomson wound up shrugging and said, well, the CRTC isn’t perfect by any means, but it’s all we got and that’s what we’ll have to use. It really tells the story of an absolute lack of foresight supporters of this bill have.
There’s very few laws out there that can really function without some sort of enforcement mechanism. So, to see that enthusiasm of how we must pass the legislation, but then to see the resignation that the CRTC is poorly equipped to even consider handling it really emphasizes how short sighted everything is. Supporters focus so much on just passing the bill that they really haven’t thought much beyond the notion that they’ll have some nice cozy corporate friendly debates behind closed doors, and all of the problems they imagined will just magically go away on their own. I mean, saying “who else?” really doesn’t instill confidence that anyone has really thought this all of the way through on the supporter side of things.
The cherry on top was the other supporter saying that maybe we’ll have to work on the honour system. You really can’t make this up.
To back to a point made very early on in the hearings – specifically Tim Denton on hearing 2, no one is really equipped to handle the task of regulating the internet. The bill seeks to turn all forms of human expression into a broadcast that is indistinguishable from a TV station. It was an idea that was doomed to fail at every level from the very beginning. The more ignorant you are with how the internet works, the less of a problem you have with the notion. We’re not talking just a handful of platforms here. We’re talking about numerous platforms of every conceivable concept, topic, and a whole lot more that come and go on a very regular basis. There is constant evolution to a degree few even realize is even occurring.
What’s more is that this doesn’t even get into the concept of decentralized networking. I mean, if the lobbyists get everything they want, you know, suspend the Charter, do away with freedom of expression, destroy the lives of creators in Canada, completely decimate the digital first industry, and somehow skirt international trade obligations in the process, the only thing they will successfully accomplish is eliminate a large swath of the commercial aspect of the creation of digital content in Canada.
Other countries are going to eventually follow suit because that’s what happens in international law. Just look at the disastrous link tax laws and some of the most brutal copyright regimes in the world. The end result is that it’s going to encourage people to decentralized platforms. What’s even more insane is that this is just repeating technological history. When we had file-sharing clients in the early points of p2p history, a lot of them, like Napster, Kazaa, and Grokster, were much more centralized in their operation of creating a client at minimum. Then, we had the MGM vs Grokster case in the US that basically gutted most of that aspect of software development. What took it’s place are open source clients on completely decentralized and open source networks. BitTorrent basically became one of many unstoppable forces afterwards.
If you are going to try and bury platforms in regulation, that creativity that gets squeezed out is just going to find another outlet. At that point, you better hope that there is going to be innovation of some sort in the realm of moderating such networks because, otherwise, you are going to have an even more wild west scenario online. If you think that YouTube and Facebook are difficult to deal with, just imagine an open source decentralized version taking over. There is already the decentralized nature of Mastodon already operating as an alternative to Twitter, so this idea has already been implemented. At that point, the CRTC is going to be forced to raise the white flag because something like that is going to be impossible to regulate.
While brand deals might still be struck and donations might still live on, advertising is going to be stripped away and it’s going to be considerably more difficult for creators to get revenue. That is the direction you are going to head if the powers that be somehow get everything they want.
The thing to remember is that such a law is going to get litigated on multiple fronts. There is no question in my mind about that. So, I suspect that this will buy developers time to think of ways of decentralizing more of the concepts of platforms.
The point is that for supporters of this legislation, there really is, well and truly, no winning outcome in any of this. You have the issue of the CRTC being unable to enforce this in any reasonable manner, there is the issue of how wide open this bill is to a court challenge should this pass, and even if you clear all of those hurdles, there is still the issue that talent is going to get squeezed out and moved to a much more censorship resistant part of the internet. When the talent leaves, the audience will follow because mainstream content in Canada is terrible from what I’ve seen.
The most pathetic thing in all of this is that supporters seem nowhere close to even thinking long term. Supporters have barely even gotten to the legislation making it to the CRTC level. What happens after that? Shrugging motion.
Drew Wilson on Twitter: @icecube85 and Facebook.
