Catching Up on MediaPolicy.ca – Brits soften Online Safety Bill – C-11 and C-18 plod through Parliament – Bunny Ears TV is back, only it’s online.

Journalist and Nobel Prize winner Maria Ressa appeared on Stephen Colbert’s Late Show on November 30th to describe the impact of Facebook’s content moderation failure on political violence and democracy in Philippines.

December 3, 2022

The UK government announced this week it is backing away from take-down orders against social media platforms in its proposed Online Safety Act for legal but harmful content and will rely on self-regulation by the platforms.

Canada is still waiting for its own Online Safety Bill. It seems likely we won’t see it until Bills C-11 and C-18 make greater progress through Parliament.

***

Canada’s Online Streaming Act Bill C-11 made little progress during its two sessions this week in the Senate Transportation and Communications Committee. Senators are bogged down in section 3(1) of the Act which enumerates the goals of the national broadcasting policy, mostly in symbolic or general terms.

Ontario Senator Donna Dasko’s motion to make ‘audience’ satisfaction more explicit won government support (but not from Conservatives who preferred ‘consumers’) which means the House will accept the change.

New Brunswick Senator René Cormier also earned the government’s endorsement to reverse the House’s ill-advised change to the existing Act that puts broadcasters’ in-house production on the same level of priority as productions supplied to them by independent Canadian filmmakers. If not for Cormier’s amendment, C-11 would have put a big dent in the CRTC policy of supporting a viable Canadian TV production industry.

Cormier’s second motion was defeated by both government and Conservative senators. This was an attempt to undo C-11’s “two-tier” treatment of domestic and foreign film producers in section 3(1)(f-f.1). Expect to hear more about this issue, it isn’t going away.

In industry news relevant to C-11, two Canadian “FAST” (free, advertising-supported television) online platforms launched this week. CBC Explore and PlutoTV (a Corus/Paramount partnership) will offer a range of channels and programming without a paid subscription. Each will include their daily news shows, but other programming will be mostly non-premium entertainment and re-runs.

This new kind of platform has potential as a cord cutting option in tandem with premium streaming subscriptions. And for those of us who grew up watching bunny-eared over-the-air television, FAST may feel very Retro.

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As for Bill C-18, MediaPolicy posted that Heritage MPs need to carefully define the parameters of ‘eligible news business,’ with attention paid to the line drawn between small publishers and citizen journalists. I posted a second time suggesting MPs look at Rebel News as a test case of distinguishing between professional journalism and political actors.

When MPs met yesterday to grapple with section 27(1) defining an eligible news business, they agreed to qualify any news organization staffed by a minimum of two journalists including a proprietor and a family member.

MPs are poised to approve Bloc MP Martin Champoux’s much needed amendment requiring news organizations to either belong to a recognized Press Council or adhere to a bone fide editorial code.

Heritage MPs have moved through about two-thirds of C-18 amendments now and may be headed for completion with four sessions left before the seasonal break (although one of them is earmarked for the Hockey Canada file).

By coincidence, this week the Australian government released its first annual report on the implementation of its own FaceGoogle legislation, the forerunner of Bill C-18. Its report is less transparent than a similar report the CRTC will be required to publish annually after Bill C-18 passes.

But the headline on the release of the report was that the Australian government will allow Facebook to keep its three-year exemption from mandatory bargaining with news organizations even though its series of voluntary deals with news organizations excluded two important Australian independent outlets.

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The vexing ‘original news’ problem of Rebel News and Bill C-18

November 30, 2022

When the Heritage Committee meets Friday it will begin debate on amendments to Bill C-18’s section 27(1)(b). That is the definition of an ‘eligible news business’ that qualifies a journalism outlet for bargaining rights with Google and Facebook. MediaPolicy posted about this on Monday.

A test case of such a news organization would be Rebel News (there might be others, including those on the Left).

Rebel News got punted earlier this year from the federal Qualified Canadian Journalism Organization (QCJO) program for journalist wage subsidies. The Independent Advisory Board on Eligibility for Journalism Tax Measures decided that Rebel News no longer met the Revenue Canada directive on “original news” reporting.

That Revenue Canada ruling gives us some insight into what might (or not) occur under an unamended section 27(1)(b).

To refresh your detailed recollection of section 27 (reproduced at the bottom of this post), there are two ways for a news organization to qualify for bargaining rights under Bill C-18. 

The door marked ‘section 27(1)(a)’ doesn’t specify any journalism criteria. Rather it rubber stamps the eligibility of any online news site (television is excluded) already granted “QCJO” status by Revenue Canada’s arm’s length Advisory Board. On Tuesday, Heritage MPs amended that section to include pre-qualification of CRTC licensed community TV stations.

The other door marked ‘section 27(1)(b)’ spells out the CRTC’s criteria for ‘eligible news business.’ It gives the CRTC interpretative guidance but is missing some of the harder rules of the QCJO program, namely a percentage of journalist time spent news gathering and a requirement for ‘original news content.’

When the aforementioned Advisory Board yanked Rebel News’ QCJO tags it focused on the lack of original news under section 248(1)(a)(v) of the Income Tax Act. Here is the relevant text in the denial letter:

[As required by section 248(1)(a)(v),] the Advisory Board found that Rebel News produces content which is of general interest, including coverage of democratic institutions and processes, and not primarily focussed on a particular topic. However, the Advisory Board’s assessment is that Rebel News does not provide original news content, on the basis that the content was found to be largely opinion-based and focused on the promotion of one particular perspective.

The term original news content is not specifically defined in the [Income Tax Act]. To assist with the interpretation of the term, and to ensure transparency, the Guidance on the income tax measures to support journalism (the Guidance) is published on Canada.ca. The Guidance explains:

2.27 The original news content of an organization generally refers to reports, features, investigations, profiles, interviews, analyses and commentaries that are:

(c) based on facts and multiple perspectives actively pursued, researched, analyzed and explained by a journalist for the organization;…

Further, section 2.36 of the Guidance provides:

2.36 Original news content should be based on journalistic processes and principles, which include:

(b) a consistent practice of providing rebuttal opportunity for those being criticized and presenting alternative perspectives, interpretations and analyses;…

The Advisory Board found numerous examples of curated content which is also not considered original news, and is contrary to sections 2.34 and 2.35 of the Guidance which state:

2.34. The rewriting, translation, reproduction or aggregation of news from external sources (including articles from news agencies, a current or previous issue of the same publication or any other publication) would not be considered original. Content produced in such a manner, by or for an organization, will factor into the determination of whether the organization is engaged in the production of original news content.

2.35. In addition, lightly edited reproductions of news content would not be considered original news content. For example, an article that repeats material from a news release with no evidence of further independent research and no additional facts, third party perspectives, or context, would not be considered original news content.

Our review of Rebel News’ application reached the same conclusions as that of the Advisory Board, namely, that Rebel News is not engaged int he production of original news content that meets the requirements of the Act.

Director General, Legislative Policy Directorate, Revenue Canada

For full appreciation of Revenue Canada’s Guidance document, the Director General’s letter might also have quoted section 2.33 which signals the primacy of news gathering over opinion giving:

2.33. The term original news content includes content for which research, writing, editing and formatting are conducted by and for the organization. Therefore, whether news content is original depends on the active involvement of a journalist in its creation. Original news content is produced through gathering facts and should show evidence of first-hand reporting, such as independent research, interviews, and fieldwork. For example, a news article or report about an event would be original if it is written or reported by a journalist and is based on first-hand knowledge that journalist gained by conducting independent research, attending or witnessing the event, or interviewing people who organized, attended, or witnessed the event.

In the end, the significance of Revenue Canada’s disqualification of Rebel News from the QCJO program is that its content lacked original news, especially:

  • Reporting based on facts and multiple perspectives actively pursued, researched, analyzed and explained. 
  • Original news gathering, as opposed to reporting on reporting by others.
  • Giving space to alternative or rebuttal views, presumably in opinion writing.

Putting aside the incendiary reputation of Rebel News, what is instructive to Heritage MPs considering section 27(1)(b) on Friday is the journalistic standard of ‘original news’ as expressed by Revenue Canada in its Guidance document. 

You won’t find the term ‘original news’ in section 27(1)(b), the portal for journalism companies to apply for official status as ‘eligible news businesses’ under Bill C-18.

You will find ‘original news’ under section 31 which is the opportunity for Facebook and Google to ask the CRTC to disqualify certain ‘news outlets’ operated by CRTC certified eligible news businesses —for example, a particular news title published by Torstar or Postmedia— if the news outlet’s content does not meet a number of tests, including original news reporting.

It’s an odd, backwards way to draft a statute. It contemplates the CRTC certifying a news business as eligible under section 27(1)(b), subject to Facebook or Google challenging a particular news outlet (which in the case of independent news organizations may be the same thing) as lacking original news content under section 31(2).

Something for MPs to chew on.

***

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Heritage MPs could make C-18 better, or much worse

NDP MP Peter Julian has been busy with C-18 amendments.

November 28, 2022

Tomorrow MPs on the Heritage Committee have an opportunity to make the Online News Act C-18 a better bill, or a much worse one.

C-18 boosts the bargaining power of Canadian news businesses to wring compensation out of Google and Facebook from advertising revenue they make on Search and Social Media using news content as an audience draw.

News organizations aren’t the only content creators who can make this claim, but they are the ones Parliament is helping to do so in the name of news journalism.

That’s why the challenge for MPs is to draw the line in C-18 between legitimate journalism on one hand, and “citizen journalism” or political activism on the other.

Last week MPs debated amendments to one way the Bill certifies professional news outlets: by defining the kind of news businesses with whom the Big Tech platforms must reach voluntary agreements to be exempted by the CRTC from formal bargaining and arbitration.

The exemption text in section 11 of the Act allows the government to outsource the unpleasant task of drawing the line between journalists and activists to Facebook and Google themselves. If a platform reaches voluntary agreements with “a significant portion” of organizations that are, in the platform’s opinion, legitimate news outlets, then the CRTC never has to draw the line between an “eligible news business” (ENB) and a blogger like MediaPolicy.

NDP amendments to remove the platforms as the arbiter of journalism organizations by requiring voluntary deals be negotiated with all “eligible news businesses” were voted down.

Tomorrow MPs will debate amendments to the other way to separate the journalism wheat from the chaff: by nailing down a definition of an ENB in section 27(1) that triggers the formal bargaining and arbitration scheme overseen by the CRTC.

There are two points of entry into section 27(1) and official designation as an ENB.

The first door, section 27(1)(a), is automatic qualification as an existing Qualified Canadian Journalism Organization (QCJO), currently restricted to daily newspapers certified by an arm’s length journalist committee for the purpose of federal tax credits.

The second door—- open to all other news media including television companies—- is where MPs can make either a better or much worse definition of an ENB.

Right now section 27(1)(b) establishes the following criteria for an eligible news business:

  • The news organization operates in Canada, including having content edited and designed in Canada.
  • It regularly employs two or more journalists in Canada.
  • It produces news content, defined as reporting on, investigating or explaining current issues or events of public interest.
  • Its content is primarily focussed on matters of general interest and reports of current events, including coverage of democratic institutions and processes.
  • Its content is not primarily focussed on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment.

This definition devised by Heritage officials is serviceable, if not perfect.

It supports news over opinion and communities over political tribes.

It supports the preservation and recovery of newsrooms with enough journalists to carry out proper news gathering.

And it draws a line, even though any line will be arbitrary, between freelance journalists and small publications.

Nevertheless the definition could be greatly improved with an explicit emphasis on professional journalism.

Professional journalism. Aye, there’s the rub.

Professionalism is a problematic descriptor in a craft marked by optional university credentials and non-binding press councils, where legitimate journalism is recognized as traditions and practices, not rules or certifications.

In earlier hearings, Bloc MP Martin Champoux noted the absence in the ENB definition of press council membership or adherence to editorial codes of conduct. Expect an amendment from him this week.

But while the definition of legitimate news organization is probably not perfectible, it could easily be made worse.

That could happen in at least a couple of different ways.

First, there is a move afoot among MPs to water down the threshold requirement of news outlets regularly employing at least two journalists.

Inserting that threshold into the Bill in the first place recognized the advantage of adequately resourced newsrooms over freelance journalists as news gatherers. It also signalled something less than an open invitation to all comers into a government-regulated compensation scheme supporting journalism.

But a practical concern about a “two journalist” rule was raised during hearings: very small rural newspapers could be disenfranchised because they “employ” only one journalist in addition to a proprietor-journalist. MediaPolicy wrote about that problem here and here.

Underdogs being the catnip of Parliamentarians, expect Opposition MPs and perhaps the government to lower the two-journalist threshold, but hopefully not so low that any self declared freelance journalist will be recognized as an eligible news business in their own right. That may not seem so bad to those who picture Chantal Hébert or Paul Wells qualifying as freelancers, but bear with me for a moment.

The second way this could get mucked up is to listen to critics who would repeal the Act’s requirements that an eligible news business must cover news “primarily focussed on matters of general interest and current events” and not be primarily focussed on “a particular topic,” meaning specialty or niche journalism.

Getting wrong either the “two journalist” threshold or the “general interest and current events” criterion is bad enough, getting them both wrong at the same time would be a disaster.

This would throw the door into C-18 wide open to freelance journalists, some of whom might be brilliant beat reporters but also to others who form an army of self-anointed citizen-journalists with an axe to grind on their favourite issue.

Like this page, for instance.

And that would give us a Bill we neither need nor asked for.

***

Here is an update on C-18 amendments that have been considered and those yet to be debated.

  • Sponsored by NDP MP Peter Julian, the Bill has been unanimously amended to accord special status to Indigenous news organizations through definitions of “news outlet” (Indigenous-controlled and directed at Indigenous audiences) and “news content” (includes Indigenous storytelling as a legitimate method of journalism).
  • The CRTC’s criteria for awarding a regulatory exemption to Facebook or Google under section 11(1)(a) was amended to direct the platforms to give special attention to non-profit and Indigenous news outlets when making agreements with a diverse range of news outlets. A Conservative proposal to include “ideology and opinion” into “diversity” was rejected.
  • Still on exemptions, the NDP motion to require the platforms to reach voluntary agreements with “every eligible news business” failed. So did a comprehensive CPC amendment which mirrored the NDP amendment and added other detailed requirements including the completion of bargaining within a reasonable time frame; that compensation be comparable between different news businesses; that small businesses are able to negotiate with adequate information, and others. These additional exemption criteria were rejected by government MPs but couldstill end up in future cabinet regulations that are authorized under section 11(1)(b).
  • A heads up amendment was proposed by Peter Julian and adopted: it will provide that the cabinet order that confirms the voluntary agreements and the platform exemption must run for five years. This is likely a response to Facebook’s public messaging casting doubt on its willingness to renew some of the voluntary agreements it already has in the US and Australia. On the other hand the exemption order will shut out start-ups that miss out on negotiations for up to five years.
  • The CPC failed to get support for establishing a revenue threshold below which smaller platforms —-Twitter? Mastadon?—-which don’t exploit market power over news organizations would not be obliged to participate in the C-18 compensation scheme. Former CRTC Chair Konrad Von Finckenstein has made a good regulatory argument in favour of doing so. The cabinet still has the power to create such a revenue threshold under section 11(1)(b).
  • A series of mischief making amendments from the CPC were rejected. They sought to advance amendments affirming the supremacy of the copyright and intellectual property law that have been deliberately limited in C-18.

Still to come are amendments on key sections of the Act governing:

  • the recognition of eligible news businesses and news outlets, including whether CRTC-licensed community outlets “pre-qualify.”
  • (Update 29/11/22: the Heritage Committee unanimously adopted an NDP motion to pre-qualify CRTC-licensed community news outlets.
  • Update 2/12/22: the Committee amended the “two journalist” rule to include proprietor-journalists and family members.).
  • the timetable for bargaining, to guard against delay. (Update 29/11/22: the NDP motion was adopted)
  • a Conservative amendment to disqualify the CBC from compensation.
  • publishing the details of voluntarily negotiated or arbitrated deals on the CRTC website.
  • competing visions of the undue preference and ranking discrimination provisions from the government and the Conservatives.

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Also from MediaPolicy.ca Must it be war? A peace proposal for C-18 – October 26, 2022

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Catching Up on MediaPolicy.ca – C-11 and C-18 inch forward – Brad Danks dishes on Bell proposal- Jordan Bitove goes solo at the Toronto Star – a corporate soap opera at AT&T/TimeWarner

Torstar co-proprietors Jordan Bitove and Paul Rivett are splitsville.

November 26, 2022

The Conservative Party’s stance on the Online News Act C-18 continues to ping-pong between critical support and dogged opposition.

The Conservatives had teed off on C-18 with a disastrous day on October 28th when they appeared to ally themselves with Facebook at a meeting of the Commons Heritage Committee.

At the next meeting, MP Kevin Waugh made a point of stating that Conservatives “support C-18” while also making it clear they will try to exclude television companies from getting compensation from Facebook or Google because that would, they argued, leave more money for newspaper companies.

Having pitched for newspapers, the Conservatives’ first amendment at this Tuesday’s session sought to exclude bargaining over compensation for news content made available through hyperlinks or constituting fair use of copyright. That would restrict bargaining to news content posted (not linked) as full text articles:

news content means content — in any format, including an audio or audiovisual format — that [is protected by copyright and] reports on, investigates or explains current issues or events of public interest. [It does not include a hyperlink that provides access to online news content and is presented without images or extracts of alphanumeric text that are part of the online news content]

Liberal MP Chris Bittle pointed out the obvious: the Conservative amendment would eviscerate the Bill of any meaningful compensation for news outlets. The amendment was defeated.

Yesterday the important challenge to the government’s Bill came from NDP MP Peter Julian who unsuccessfully tabled an amendment to limit the CRTC’s discretion to exempt Facebook or Google from bargaining with every eligible news outlet provided they reach voluntary agreements with “a significant portion” of outlets. His amendment expressly required agreements with “all eligible news businesses”:

11(1)(a)(v) they ensure a significant portion of independent local news businesses [and all eligible news businesses] benefit from them, they contribute to the sustainability of those businesses and they encourage innovative business models in the Canadian news marketplace,

The Liberals, with Bloc support, rejected Julian’s all-in approach and argued a single “bad actor” news organization could sabotage the voluntary bargaining scheme offered under the Act by refusing to come to terms with Facebook or Google. Small news outlets, Liberal MP Chris Bittle reasoned, won’t be shut out if they join together in a bargaining coalition permitted under the Bill.

What MPs never discussed was how the “significant portion” language in section 11(1)(a)(v) empowers the Big Tech platforms to ignore a faux news outlet without putting the CRTC on the spot to deny it “eligible news business” status.

Rebel-washing, if you will.

That kind of news outlet might have been on the mind of Conservatives in tabling an amendment making the diversity of “ideology and opinion” of news outlets one of the CRTC’s considerations when giving its blessing to a set of voluntary agreements. The amendment failed.

After six hours (over three sessions) of clause-by-clause consideration, the Committee has moved through about a third of nearly 100 amendments.

***

Bill C-11 is making slow but forward progress through the Senate Transportation and Communications Committee.

To help Senators along, at the beginning of the week MediaPolicy published a hubris-infused list of demands, “Six C-11 Amendments the Senate Must Pass.”

Senators were so impressed they ignored three of the six when questioning Heritage Minister Pablo Rodriguez the following day in committee: local news funding, the union-busting amendment to the Status of the Artist legislation, and preserving the public right of appeal to cabinet.

As for MediaPolicy’s remaining three amendments, the Minister’s deputy Thomas Owen Ripley assured Senators that the controversial section 7(7) did not intend for cabinet to usurp the Commission’s daily powers (see our post on “The Next Internet Czar”). Moreover, the Minister himself gave the impression he wasn’t especially committed to 7(7). It seems that if the Senate repeals 7(7), the Minister might accept that or perhaps the deftly worded revision submitted by the CRTC.

The Minister then left the Committee mid-way through proceedings to attend a cabinet meeting. This allowed the policy conversant Ripley to field questions about other controversial elements.

In responding to questions about C-11 provisions giving special treatment to Hollywood studios making movies in Canada [section 3(1)(f))] and global web giants operating content platforms [section 9.1(1)(i)], Ripley defended the Bill but in the end acknowledged the government was ceding ground to American concerns.

This left a weighty question unasked: if the Liberals have already made compromises in the spirit of avoiding trade complaints or retaliation from the Biden administration, what if any reliable assurances were obtained that we won’t see them anyway? It’s worth recalling the line in the sand that Google drew on discoverability when it appeared before the Senate in September.

Senators then began clause by clause review of the Bill on Wednesday evening. In three hours they moved through fewer than ten of 100 amendments.

The most significant amendment debated, and defeated, was a Conservative proposal to narrow the scope of the CRTC’s “discoverability” powers to key word searches by consumers.

Senators then began debating a revenue threshold for social media platforms to be included or excluded from regulation when time expired. The committee will resume amendments next Tuesday and Wednesday.

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Speaking of C-11 amendments, MediaPolicy interviewed OutTV CEO Brad Danks on the Bell proposal to amend C-11 on the critical issue of distribution rights to American programming.

A good read for industry nerds and those who aspire to be.

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If you didn’t catch the news report, the co-owners of Torstar have completed their commercial divorce and Jordan Bitove will become the sole proprietor of the Toronto Star and its regional newspapers.

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If you like corporate soap operas, there’s a good one in the New York Times about the 2016 AT&T/TimeWarner merger that resulted in last February’s spin off of Warner Brothers, CNN and Discovery.

It’s got all of the elements of corporate intrigue, culture clash between telco and creative executives, billion dollar windfalls and share value vaporization, and the Trump administration fixing its baleful gaze upon CNN.

***

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Bell’s C-11 Proposal: a Q and A with Canadian TV exec Brad Danks.

OutTV CEO Brad Danks

November 23, 2022

Last week MediaPolicy.ca reviewed an intriguing proposal from Bell to amend Bill C-11 in a manner that puts Canadian media companies in a stronger position to retain the distribution rights to profitable American programming that are often linked to their ability to fulfill their licence obligations to make Canadian shows and local news.

Although last week’s post did not point this out, the Bell proposal is responsive to the call to bold action that industry analyst Peter Miller issued in concluding his recent study on programming rights for the CRTC.

The Bell amendments and full Senate submissions are reproduced at the bottom of this post.

The original post drew some caustic remarks on Twitter but also some thoughtful comments, including a reply from OutTV CEO Brad Danks who is a frequent participant in CRTC and Parliamentary hearings and a contributor to industry publications like Cartt.ca.

To better organize and expand upon those comments, MediaPolicy interviewed Mr. Danks:

Q – Brad, you’ve been a long time advocate for the interests of independent programming services in a regulatory regime dominated by the vertically integrated (VI) media companies Bell, Québecor, Rogers etc. Does Bill C-11 change that dynamic for you?

The big change is that we are moving from a two-tiered system in Canada with Vertically Integrated companies – those that own both media and distribution to a system — to one where we are all independents as our distributors will be Big Tech and Big Media platforms. This is the really important shift over the past decade but it has accelerated dramatically in the past three years as the Hollywood Studios have launched direct-to-consumer streaming platforms. This is really what C-11 is all about.

Q – Bell’s position (and my guess is ditto for Corus) is that the best way to deliver American content to Canadians, as well as Canadian news, sports and entertainment programming, is to have national broadcasting champions who make enough money by retailing American shows that they can finance authentic Canadian and local programming. Do you think Bell and the other VIs can salvage that strategy ?

No, I don’t think so. Certainly not entirely. It is all very complicated but useful to consider the ramifications if their amendments became part of the Act. The thing that has really struck me as odd about this proposal is how little discussion it has received. I know a lot of people who just dismissed it entirely when it was first proposed in June. Since then I haven’t seen a single formal response to it from anyone. Here you have the largest media company in the country basically saying they disagree with the fundamental premise of the proposed legislation and they require these significant amendments and no one is discussing it. It’s really unusual.

Q – What do you mean “fundamental premise”?

In my view, the legislation basically concedes that the streamers will bring their content into Canada and offer it exclusively direct-to-consumer. But in exchange for this the platform aggregators will be required to carry Canadian services on their distribution platforms like broadcasting distribution undertakings (BDUs) do now. And they will all contribute a share of revenues to a content fund – again, as BDUs do now. So basically the online platforms become regulated BDUs. I think that’s it in a nutshell.

What Bell is saying in their proposed amendment is that they don’t want to concede the first part. They want the streamers to have to make their programming available to Canadian programming services for a “reasonable” price and to encourage partnerships with Canadian programming services. It’s a huge ask.

Q – But wouldn’t that just mean extra revenue for the streamers from cable audiences, in addition to their own streaming platforms? What am I missing?

What you are missing is the details and so are the proposed amendments. For example, their amendment doesn’t require that the programming will be offered in a co-exclusive initial release. You would assume Bell would want to ensure this because the initial release has the most market value. Perhaps it would be in their interpretation of the word “reasonable” because their entire proposal really hinges on the interpretation of that word.

What they appear to want is for the streamers to offer all their programs – their best programs— to the Canadian programming services like they did fifteen years ago prior to Netflix and later Amazon’s arrival into Canada. In other words, rewind the clock.

Q- And you think the streamers would object?

One hundred per cent. This would be way worse for them than a five or ten per cent or even greater financial contribution to a fund. They would lose a lot of money this way.

Q – How so?

Consider the most likely outcome of this proposal. What if Netflix had to licence “The Crown” and “Stranger Things” to a Canadian programming service? And Disney had to licence the Marvel and Star Wars shows, Amazon had to licence “Lord of the Rings” and their best shows. Look at how Paramount+ is using “Yellowstone” now to sell subscriptions. They use these shows to drive subscription revenue through the exclusivity of that show. If they have to share it they lose that competitive advantage.

If their amendment was adopted in C-11, the most likely outcome is one Canadian service would get most, if not all, the best shows. Who would be that service? The obvious answer is Bell Crave although Corus might get some top shows for StackTV. I would assume they want the same thing for TSN and sports. The reason is simple, they have the biggest existing platforms and could outbid everyone. In fact, once locked in as the “go to” place for the best shows it would impossible to unseat them. They would soon have more subscribers than any other streaming service – as Canadians would know all the best shows will be there. In fact, this sort of thing happened about ten years ago when consumers would say they would just wait for everything to go to Netflix. That was back when the Studios were still licensing them most of their premium content. Then, of course, the Studios stopped doing that.

Q – But wouldn’t the streamers be compensated with the licence fee?

Again, the tricky part would be the definition of “reasonable” contractual terms, particularly price. Remember that the streamers have already made the financial calculation that it is better to hold on to their premium programs exclusively and not sell them to Canadian programming services. Therefore, from their perspective, a reasonable price would include compensating them for the loss of that exclusivity. However it is very doubtful that Bell would see it that way.

Bell would want a price that is reasonable to them to make a profit but was a dollar more than any other Canadian programming service could pay. Again, this was the market fifteen years ago before the streamers arrived. This is why acquisitions are much cheaper than making original programming. The prices are set based on the local markets’ ability to pay and are entirely unrelated to the cost of production. So who decides what are the licence fees when there is no competitive market operating?

Q – Wouldn’t the CRTC do that?

The proposal is silent on this but it would come under CRTC jurisdiction. I am sure they would run screaming from this as fast as they could. Remember that this wouldn’t just apply just to the top shows but technically apply to all content coming into Canada. Right now there are still hundreds of people in the industry in Canada who spend the majority of their working days screening content for acquisition, going to markets and negotiating deals. How do you replace that with a regulated system? It would be a nightmare to manage. Impossible really.

Q – What are your thoughts on the partnership portion of the amendment, that the CRTC “encourage” or “incent” the streamers to partner with Canadian distributors?

I think that’s just another attempt to roll-back the clock fifteen years. The Studios did exclusive deals for years because the Canadian programming services controlled the distribution to Canadian consumers. This gave the Canadian services leverage to negotiate these deals and the incentive for the Studios to do them. However the direct-to-consumer model doesn’t require a Canadian partner.

There are still opportunities for partnerships but putting it in the legislation as a requirement is extreme. It would be like legalizing shot-gun weddings. How is this going to implemented? It all feels like too much and too late.

Q – I am guessing an incentive for the streamers to go into Canadian partnership might look like relief from other regulatory obligations or contributions to go into a “Disney on Corus” or “Bell Netflix.” What do you think?

My initial thought was that this was designed to force one of the streamers to buy them. I really don’t see how you regulate a partnership.

Q – What do you think will happen if their amendments are not accepted by the Senate?

It’s a good question. It isn’t clear to me if this is a proposal or an ultimatum. Are they going to leave broadcasting and use this as the excuse? I guess we will find out if their proposal is not accepted by the Senate.

***

3.(1) (s.1) foreign broadcasting undertakings should 

(i) make their programming available to Canadian programming undertakings pursuant to contractual arrangements on reasonable terms; and 

(ii) be encouraged to partner with Canadian undertakings in the distribution of their programming throughout the Canadian broadcasting system. 

5.(2) The Canadian broadcasting system should be regulated and supervised in a flexible manner that 

(i.1) Ensures foreign broadcasting undertakings make their content available on reasonable terms to Canadian broadcasting undertakings; and 

(i.2) Foreign broadcasting undertakings are incented to partner with Canadian broadcasting undertakings in the distribution of foreign programming in Canada. 

Full Senate Submission:

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Six C-11 amendments the Senate must pass.

November 21, 2022

The Senate Transportation and Communications committee is set to debate amendments to Bill C-11 at Wednesday evening’s session.

Unelected Senators are expected to be the chamber of sober second thought but not the gallery of second guessers. 

After all, the Online Streaming Act was studied by the Commons Heritage Committee for twelve days before being approved in a blur of amendments on June 14th. The Bill was a reboot of the previous Parliament’s thoroughly debated Bill C-10 and subsequently placed before Canadian voters in the federal Liberals’ 2021 election platform.

But grâce à the Conservatives’ avowal to indefinitely filibuster C-11 in the Heritage Committee, the other parties representing a majority of MPs and voters set a June 14th deadline. That resulted in 42 amendments rushed through the Heritage Committee in a mere twelve hours; some for better, some for worse and some left on the table.

That ugly Parliamentary episode is why it’s legitimate for Senators to aggressively amend the Bill and offer the Minister and the House an opportunity to pass a better one.

Without knowing whether a back channelled discussion of amendments between Senators and Heritage Minister Pablo Rodriguez has occurred, MediaPolicy.ca hereby tenders some gratuitous advice on a better C-11:

Parliamentarians, Do No Harm.

There are provisions in C-11 that are a step backwards for Canada’s broadcasting policy and fixing them deserves non-partisan support.

1. Repeal section 7(7). This dangerous power grab on behalf of federal cabinet to micromanage almost anything under the Act that is normally the responsibility of the arm’s length CRTC has got to go. There is no acceptable version of it. MediaPolicy.ca explained why, here, as did broadcasting experts Robert Armstrong and Monica Auer.

2. Update the public’s right under section 28(1) to appeal to federal cabinet any Commission “orders” to the newly created class of (mostly foreign) online undertakings that play the same role as licence conditions for (mostly Canadian) conventional broadcasting. Appeals to federal cabinet are an important safety valve in the event of egregious policy errors by the Commission. Some might advocate for either a broader or narrower right of appeal to cabinet but including “orders” under section 28(1) simply maintains the status quo in the Internet era.

3. Defend Canada’s cultural sovereignty. The CRTC routinely enforces fair treatment of Canadian programming services by cable companies. That includes a short list of “section 9(1)(h)” public interest channels the Commission deems “must carry” at a fixed compensation rate. The House Bill fails to make these Commission powers binding on foreign online undertakings like Roku, Pluto TV or any number of content aggregators, apparently reflecting Heritage Canada’s fear of an American trade complaint. Do it anyway.

4. In the same vein, repudiate the two-tier favourtism shown to Hollywood studios to use less Canadian talent and production workers than expected of Canadian filmmakers and domestic media companies. Heritage Canada never explained why foreign companies deserve special treatment under a revised section 3(1)(f) but the House Bill certainly gives a new twist to the phrase “most favoured nation status.” And it’s not Canada.

5. Repeal the anti-worker, Hollywood-appeasing section 31.1 which exempts Canadian actors, writers and directors working for online undertakings from the federal Status of the Artist Act and invites American studios to make movies in Canada, draw from our hefty film production tax credits, and operate non-union. It’s hard to understand how federal Liberals would want to be within a thousand miles of this odious provision (it was introduced last minute by the Liberals in the chaos of June 14th as a sop to foreign streamers ).

6. Save local news. This ought to be an easy one. The Unifor amendment strengthens the Commission’s authority to order better financing for local newsgathering, flowing from broadcasting distribution undertakings (e.g. cable companies) to broadcasters. After all, the House Bill removed $120 million in annual “Part II fees” that big Canadian media companies have been paying into the federal treasury, so they can afford it. The Unifor amendment also modernizes the Commission’s authority by including “online undertakings” as the source of news funding when inevitably it will be necessary.

Send a message.

One can’t discuss amendments to C-11 without acknowledging the campaign by Google, Digital First Canada and the Conservative Party to remove provisions in C-11 regulating uploaded videos and music on social media platforms.

In fact their campaign demands a roll back of the Commission’s broadcasting jurisdiction by permanently removing American hosting platforms from Canadian regulation.

The campaign has a libertarian inspiration that clashes with the policy objectives of the Act, but it has been fueled by YouTubers’ visceral fears of regulatory overreach once the Bill has passed. It doesn’t help that the Minister elected not to publish a draft policy directive that might have given the CRTC clear instructions to exempt programs made by small scale content creators and ensure that “discoverability” measures don’t backfire.

But the Liberals, Bloc and NDP don’t share those fears of overreach so the most the Senate can do, if so inclined, is to send a message to the Minister for the Policy Directive he says he will publish after Royal Assent.

That message might be expressed as regulatory exemptions tied to revenue thresholds applied to either the platforms’ and/or creators’ businesses. Another message might express regulation of recommendation algorithms as an exceptional measure.

Don’t hold your breath.

The House Bill includes an elevated process of public consultation over broadcasting policy affecting Official Minority Language Communities in a manner that seems more geared to an expression of respect for those communities than practical necessity.

However an amendment will likely go nowhere. 

And so.

Perhaps an unnecessary last word to Senators: debate but don’t delay this Bill.

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Catching Up on MediaPolicy.ca – Senate moving towards C-11 amendments – Conservatives begin filibuster of C-18 – “Viral News” doc on Toronto Star covid coverage

Toronto Star photographer Steve Russell fends off a resident preventing him from shooting the aftermath of an apartment fire. From Kevin McMahon’s documentary “Viral News.

November 19, 2022

MediaPolicy.ca posted a summary of Wednesday’s Senate Committee hearing on Bill C-11 in which Senators tried to pin down CRTC Chair Ian Scott on how a future CRTC might apply the Bill to video and music uploads on YouTube, Spotify and other platforms.  The post called on the Committee to move on to amendments. 

Yesterday the Senate announced a final day of hearing witnesses (Minister Rodriguez and his staff) next Tuesday, followed by debate over amendments beginning Wednesday.

Earlier in the week I posted about C-11 amendments proposed by Bell that have flown under the radar. The amendments are aimed at recapturing Canadian broadcasters’ opportunity to buy American programming for retail to Canadians, in line with the long-time strategy of subsidizing local news and Canadian content with profits earned from hit US shows. 

The first day of amendments to the “FaceGoogle” Bill C-18 began yesterday at the House of Commons Heritage Committee. The Conservatives are filibustering the Bill as they did C-11 last spring. Only two Conservative amendments and one NDP motion were voted on.

We might be headed for another C-11 debacle where a Conservative filibuster forces the other parties to set a deadline, resulting in inadequate debate over important amendments.

The Committee will continue clause by clause consideration of C-18 on Tuesday.

Toronto documentary maker Kevin McMahon (Borealis, Stolen Spirits of Haida Gwaii) started filming soon-to-be-commercially-divorced Torstar owners Jordan Bitove and Paul Rivett just as they took over the Star a few months into the pandemic. 

The Viral News project turned into a compelling record of Star journalists covering the pandemic, replete with busting bad health data and enduring anti-vaxxer harassment. You won’t be bored. In Ontario you can watch it Sunday night on TVO or any time on YouTube.

Hoping for a spin off starring Queen’s Park reporter Rob Benzie (watch, you’ll get it).

The long awaited federal public consultation on potential amendments to the Competition Act has been opened by the Competition Bureau. That includes publication of the Bureau’s consultation paper.

If you are looking for a context piece, a MediaPolicy.ca post from last February should help.

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Senators, it’s time to put up or shut up on C-11.

November 17, 2022

If the Senate Committee’s Wednesday night hearing on the Online Streaming Bill C-11 revealed anything, it’s time for Senators to stop talking and start legislating.

By now the Senators know the Bill inside out. They know what could conceivably go wrong with the Bill, plausibly or not. 

Yet the committee had CRTC Chair Ian Scott in front of them for a second time as Senators sought to pin him down on his interpretation of the most controversial elements in C-11.

Most of the questioning was about how the Commission would use its powers under section 9.1(8) which explicitly authorizes the CRTC to order YouTube or Spotify to tweak their recommendation algorithms in the name of showcasing Canadian video and music content. The clause only limits the Commission’s power to dictate the precise kind of tweak.

Scott’s answer picked up from where he left off in his previous appearance in June. He minimized the likelihood that algorithms would be entangled in regulation and emphasized all of the other discoverability measures the platforms could implement, including more financial support for artists.

Senators weren’t having Scott’s deflection, demanding a hard answer to a hard question.

What became clear is that the likelihood of tweaking recommendation algorithms hinges on whether the Commission sets consumption targets for Canadian content (particularly in the French language music market) known in CRTC vocabulary as exhibition quotas. 

Scott’s comments about consumption targets confirmed his track record as a Commission chair with little affection for the few exhibition requirements remaining on linear platforms. In fact, his controversial elimination of exhibition minimums for local news and prime time CanCon on CBC television was repudiated by federal cabinet.

Senators were also hoping Scott would cast shade on the Bill’s broad regulatory scope over uploaded videos and music, in particular whether programs generate commercial revenue “directly or indirectly.”

Both Scott and CRTC General Counsel Rachelle Frenette replied —indirectly it might be added— that the Commission might exercise its well-known power under section 9(4) to narrow the regulatory scope through exemptions. 

It’s now clear that more Senate questioning of witnesses is not going to provide a eureka moment and that political theatre around the Bill has become tedious. It’s time for Senators to move on to clause-by-clause consideration of amendments and, with all due respect to Parliamentarians, to put up or shut up.

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C-11 amendments: Bell seeks partnerships with American streamers to recapture programming rights

November 15, 2022

Senate committee chair Leo Housakos says Bill C-11 hearings will be “wrapping up soon” and it looks like representatives of Bell Canada will not appear before the Senate as they did June 1st before the House of Commons Heritage Committee.

But Bell submitted some intriguing amendments to the Senate which deserve consideration.

The common reaction to anything Bell has to say is that anything good for Bell is bad for everyone else, and vice versa.

So Bell’s C-11 amendments probably won’t get a warm reception.

That’s too bad. As our biggest domestic cable provider and broadcaster at $4.3 billion annually in television revenues, Bell is trying to figure out a way to keep profit margins healthy enough to keep spending about $870 million of that on Canadian content and TV news that doesn’t make money.

As any historian or analyst of Canadian broadcasting will tell you, the algebra of the industry’s finances has been domestic broadcasters retailing American shows and spending the profit on Canadian shows.

“To be clear,” says Bell in its Senate brief, “everything we are able to achieve is directly related to the profits we make by accessing foreign content, and through a regulatory regime that enabled this,” although others believe it’s a timid and unimaginative strategy.

Bell wants to keep that business model alive, hence its proposal for four key amendments to C-11 and its renovated regulatory scheme.

The first amendment (reproduced at the bottom of this post) is to empower the CRTC to encourage, reward, prod or force the Hollywood studios and streamers into content distribution co-ventures with Canadian TV companies.

“The Act must ensure the regulatory regime continues to incent foreign content owners to partner with Canadian broadcasters which our regulatory system historically supported,” says the brief.

Those co-ventures already exist on a small scale: Canadian media ownership laws in the Broadcasting Act and regulations restrict foreign equity stakes in Canadian programming services to a minority investment: examples are TSN/ESPN, Discovery Canada, or the branded licensing agreement Bell has with HBO.

Bell wants to scale up these programming co-ventures so they can continue to buy American hit shows whose prices are spiralling upwards or not even for sale because they are increasingly released as exclusives on American streaming apps.

The Bell amendment would force Hollywood to keep making licensing deals with Canadian TV companies or else create co-venture apps with Canadians, perhaps a Netflix Maple, jointly owned with Bell or Corus.

That’s on the distribution end. 

On the production side, Bell lines up with other Canadian broadcasting stakeholders in favour of equal responsibility on both domestic and foreign media companies to make use of Canadian talent and labour when making Canadian programming (the House of Commons version of C-11 holds foreign companies to a less onerous standard).

Unfortunately in doing so, Bell and the Canadian Association of Broadcasters break ranks with the rest of the Canadian industry by proposing to water down the obligations in section 3(1)(f) to “employ and make maximum use, and in no case less than predominant use, of Canadian creative and other human resources in the creation, production and presentation of programming.”

Here’s the legal text beginning with the existing Broadcasting Act, then the C-11 text, and finally the CAB/Bell proposal:

Current Broadcasting Act, s.3(1)(f)

each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources;

From C-11

(f)each Canadian broadcasting undertaking shall employ and make maximum use, and in no case less than predominant use, of Canadian creative and other human resources in the creation, production and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources;

(f.‍1)each foreign online undertaking shall make the greatest practicable use of Canadian creative and other human resources, and shall contribute in an equitable manner to strongly support the creation, production and presentation of Canadian programming, taking into account the linguistic duality of the market they serve;

Bell/CAB:

each broadcasting undertaking, shall make a significant contribution to the creation, production and presentation of Canadian programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that contribution impracticable, in which case the undertaking shall make an appropriate contribution;

delete 3(1)(f.1)

Bell’s third amendment already has broad support (including a rare endorsement by the CRTC): legislate that foreign online undertakings carrying on business as Internet cable companies (e.g. Roku, Pluto TV) must obey Canadian rules on mandatory carriage of public service channels, some of which come with compensation at a subsidized rate set by the Commission. MediaPolicy.ca previously wrote about that here.

The fourth amendment is to produce a larger stream of industry dollars flowing from both foreign and domestic media companies to a fund supporting money-losing local TV news.

Similar to the Unifor amendment on local news, the Bell proposal permits the CRTC to tithe both profitable domestic cable companies and online undertakings and then distribute the funds to all Canadian news networks (including CTV’s 30 stations) or independent stations. 

The broad drafting of the Bell amendment gives the CRTC the option to assign asymmetric responsibilities for the creation of Canadian dramas, documentaries and news programming: perhaps more “Programs of National Interest” from the foreign streamers (who are good at making drama) and less for Canadian companies who can divert resources into the news production at which they excel.

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Bell partnership amendment:

3.(1) (s.1) foreign broadcasting undertakings should 

(i) make their programming available to Canadian programming undertakings pursuant to contractual arrangements on reasonable terms; and 

(ii) be encouraged to partner with Canadian undertakings in the distribution of their programming throughout the Canadian broadcasting system. 

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Catching Up on MediaPolicy.ca – the most important fix for C-11 – Nanos poll shows strong support for C-18

The sliding public trust in news from the 2022 Reuters poll

November 12, 2022

The Senate committee studying the Online Streaming Act Bill C-11 took a rare week off. It’s unclear how many more days of hearings (currently at 20 days and 125 witnesses) it will convene, although it has scheduled two more days and ten more witnesses next week. The unofficial agreement to have the Bill voted upon by the full Senate and returned to the House by November 18th obviously will not be met. 

Other than the unusual length of the Committee proceedings, there is no overt sign of a filibuster. However the Québec-based Coalition for Diversity in Cultural Expression (CDCE) has drawn attention to the fact that spirited opposition to the Bill from the Chair of the Committee, Conservative Senator Leo Housakos, has spilled over into making partisan videos (in English and French) inviting the audience to sign the CPC’s anti C-11 petition . In the video, Housakos identifies himself as chair of the committee. He also says that the Committee hearings “will be wrapping up soon.” 

In case the Committee moves on to amendments soon, I posted (“The Next Internet Czar”) on the biggest flaw in C-11 that the Senate should fix (and it’s not about YouTube videos). 

The House debate on the Online News Act C-18 will begin clause-by-clause (amendments) consideration on November 18th. Earlier this week a Nanos poll sponsored by the Canadian Association of Broadcasters revealed strong public support for the legislation. I posted a brief evaluation of the questions and the results and then segued into comments on this year’s Reuters poll on “trust in news” which provides important context to public policy and regulation of the news industry. 

McGill University’s Taylor Owen published his views on C-18 here. Owen is the school’s Chair in Media, Ethics and Communication and recently lead Heritage Canada’s study of online harms and safety.

The Globe’s Phillip Crawley posted a rare Publisher’s comment with a luke warm endorsement of C-18. Crawley indicates some discomfort with the CRTC’s stewardship of the new regime and a lot of discomfort with the Commission’s authority to compel disclosure of advertising rates charged by news organizations to their commercial clients.

The Rogers-Shaw merger hearings continued all week at the Competition Tribunal and the proceeding is really just getting started. So much hearing time was spent reviewing confidential documents in camera that the Globe had little to report and instead focussed on the lack of public transparency.

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