The CRTC says Radio Canada journalists can’t say the n-word and somehow there’s a connection to Bill C-11

July 2, 2022

Montréal artist Ricardo Lamour

Earlier this week the CRTC upheld a complaint from Montréal artist Ricardo Lamour and ruled the CBC must apologize after both the host and guest commentator of the CBF-FM radio afternoon show spoke aloud the full “n-word” while discussing the controversy embroiling a Concordia professor who did the same in a classroom reference to Pierre Vallières’ iconic sovereigntist text, “Les N**res blanc d’Amérique” (in English, “White N***ers of America.”)

The show’s segment title was “Certaines idées deviennent-elles taboues?”

Both white, the Radio Canada program hosts repeated the unabridged title of Vallières’ 1968 book four times in six minutes. The majority of CRTC Commissioners found this offside the CBC’s obligation to broadcast programs of “high standards,” the legislative term of art in section 3(1)(g) of the Broadcasting Act.

The Commission ruled the hosts should only have have used the abbreviated “n-word” in English or “mot d’n” in French.

In addition to a public apology, the Commission ordered the CBC to draw up new guidelines for its journalists on appropriate language as well as “mitigating” the online archive of the program (presumably bleeping the offending language). 

The ruling split the Commission panel hearing the case with Chair Ian Scott in a three person majority while two commissioners filed dissents.

The majority decision is only five pages long and it must be said is a little terse in its legal reasoning. The main hook in the majority opinion is the section 3(1)(g) “high standards” clause which for decades has provided the legal foundation for CRTC regulations governing “abusive comment” and “equitable portrayal” of identifiable groups.

In laypersons’ terms, the majority says that public tolerance of racist language has changed dramatically since 2020 when George Floyd was murdered by Minneapolis police and the Black Lives Matter movement against systemic racism surged in many countries including Canada. The majority clearly views the CBC hosts as having been too cavalier with their repeated use of the full n-word, regardless of the purpose of the program.

The first of two dissents written by Broadcasting Vice Chair Caroline Simard is thorough and appears to be written in anticipation that CBC might choose to appeal to Federal Court which only second guesses the Commission on errors of law, not fact. (The CBC has not commented on a possible appeal but the Editor-in-Chief of Le Devoir has called upon the CBC to file).

Simard’s first point is that the majority erred in law by not clearly applying the Charter of Rights’ protection of freedom of expression. That’s somewhat of a legal rabbit hole: the Supreme Court cases don’t go quite that far with respect to administrative tribunals and it may also be relevant that neither the complainant nor the CBC appear to have raised those constitutional arguments.

Simard offers her own analysis of that Charter right of expression in the circumstances brought forward by the complainant but then —in a puzzling move— drops the inquiry without applying the Charter’s section 1 analysis of the reasonable limitations to free expression that can be set by Commissioners empowered by statute to regulate communications. A reasonable limitation would undoubtedly include a statutory provision like the “high standards” of section 3(1)(g), applied judiciously.

Her second legal point might just trip up the Commission in the event of a CBC appeal. If the majority felt it could censure the radio hosts’ free speech based on the Broadcasting Act’s statutory goal of “high standards of programming,” Simard points out equally important statutory objectives which the majority ignored:

(2)(3) This Act shall be construed and applied in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings.

3(1) (c) English and French language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements;

The majority’s explicit reliance on one statutory goal to the exclusion of other relevant goals (even if they did implicitly or silently consider them) is just the kind of legality that gets the Court of Appeal’s attention.

Legalisms aside, Simard’s real challenge to the majority is that in her view its ruling is blind to differences between the English Canadian and Québec social contexts.

She suggests the evidence of public attitudes underpinning a restriction of free expression should zoom in on the prevalent opinion about “mot d’n” in the black francophone community, especially in greater Montréal, which she argues in an anecdotal way does not support censorship of the full epithet. At the very least, she says, a public consultation (or opinion poll?) would be better than just assuming the full n-word is always unacceptable in the relevant community of listeners.

It’s the other dissent by Commissioner Joanne Levy that really caught my attention because she views the situation through the eyes of the Radio Canada journalists investigating a difficult topic of public importance.

She argues the hosts conducted a professional show with a respectful tone and employed euphemisms for the n-word many more times than they did the full word itself. Listeners sometimes join a show in progress, she says, and they would need to know the name of the book at the centre of the controversy.

If journalists aren’t afforded leeway to be “reasonable” in making the judgment call about the n-word in these very specific circumstances, says Levy, think of the chilling effect on all Canadian TV and radio journalists and the programming they want to air.

As others have said, this is a “hard case.” It’s interesting that none of the Commissioners delved into the related CRTC ruling in 2009-548 where the Commission censured the CBC for airing the French language comedy show “Bye Bye 2008.” That show included a number of excesses including the use of the full n-word in a satirical skit about the racist reaction to the election of US President Barack Obama. The Commission censured CBC for the use of racist language.

The Bye Bye 2008 case (very much pre-2020) is an interesting benchmark: there might well be a meaningful difference between trawling for laughs baited with racist language under the cover of comic satire versus analyzing the appropriateness of Vallières’ provocative choice of book title.

****

I might have expected that, if the phrases “CRTC” and “freedom of expression” were found in close proximity, Internet activist Michael Geist would link them to Bill C-11, the Online Streaming Act, now in the hands of the Canadian Senate.

Mr. Geist cites the CBF-FM ruling as a reason to suggest that the CRTC might run amok with censorship once handed the responsibility under C-11 to regulate broadcasting on Internet streaming and hosting platforms, in particular the administration of “discoverability” of Canadian content through algorithmic recommendations.

To rebut Mr. Geist’s argument, yet again:

  • The CRTC is not censorship happy by instinct if the last 50 years is any indication. The Commission long ago set regulatory standards of content supervision relating to abusive comment, discriminatory stereotyping, and so on relying upon section 3(1)(g) of the Act (“high standards of programming”) and then downloaded enforcement to industry self regulation. Ever since, the Commission has made rulings like CBF-FM when appellants bring issues to their doorstep.
  • Bill C-11 exempts hosting platforms (i.e. YouTube posts) from section 3(1)(g). That would oust CRTC jurisdiction to rule on the Radio Canada case if the CBF-FM program —or something even more offensive— was uploaded to YouTube. If there is ever going to be content supervision on social media posts it would have to come in an Online Harms Bill which the Liberals have yet to table.
  • Bill C-11 also exempts hosting platforms and YouTubers from any programming priorities (e.g. more drama, less news, etc).
  • Bill C-11 was amended (thanks to Peter Julian MP) to expressly subject regulation of YouTube videos to the freedom of expression guarantees in the Charter of Rights. 

If you thought C-11 was noisy, get ready for the Online Harms Bill.

June 29, 2022

Two weeks ago on June 15th Heritage Minister Pablo Rodriguez announced that the final summary of his Expert Panel on Online Safety will be published in the coming weeks. Presumably, that Report sets the table for a Bill or a further public consultation.

A Canadian Online Harms Bill would replicate measures being taken by Germany and the United Kingdom responding to harmful posts on social media. Any version of such a Bill in Canada, no matter how well crafted, will unleash genuine censorship issues in contrast to the risible “freedom of expression” messaging we endured from the critics of the Online Streaming Bill C-11. 

The heated debate that follows the tabling of such a Bill will conjure up images of Wile E. Coyote detonating the proverbial canister of TNT.

The Minister was understandably eager to “expert-fy” such a combustible issue. And so this Spring his panel of 12 experts met nine times (the minutes are online) grappling with the best way to tame the dangerous and uncivil excesses of social media and even less savoury online “services.”

For the most part, the panel leaned towards the UK model of a legally-binding “duty of care” imposed by government on social media platforms to improve their content moderation results overall while avoiding piece-by-piece content moderation as much as possible.

In their own words, the panel stated that “the objective is to reduce the amount of harmful content online and the risk it poses to Canadian users. Based on the responses to the 2021 public consultation, a harmful content regulatory model should not be organized around whether a regulated platform appropriately moderates a given piece of content. Instead, and similar to the proposal brought forward by the United Kingdom in its recent Online Safety Bill, a regulatory model focused on the systems, tools, and approaches that platforms have in place to address harmful content would be preferred.” (Emphasis added)

In practice that means social media platforms would be expected to exploit the proprietary knowledge of their own content moderation data and AI tools, and then develop codes of conducts (“Digital Safety Plans”) dealing with harmful posts that would trigger countermeasures, whether deleting posts, warning authors of offside content, labelling “awful but lawful” content as dangerous or untruthful, and so on. 

The government would also expect the platforms to share their data and AI decisions with a government-appointed Digital Enforcement Commissioner so that the public would be able to verify the platform’s efforts to reduce harmful content.

In this “systems” approach, the piece-by-piece moderation of posted content would play a peripheral role in the platform’s duty of care, deferring to the demonstrated improvement in overall results. Censorship (deleting posts or expelling unrepentant authors) would likely be restricted to posts advocating terrorism, criminal hate expression, threats of physical harm, sexual exploitation of minors, and possibly revenge porn. 

This systems approach is industry self-regulation by the social media platforms with the government looking over their shoulder and breathing down their necks. The government would be looking for results in the long term but letting platforms off the hook for the occasional screw up on a bad post.

The political payoff in such an approach is it reduces censorship, especially over-censorship by liability-averse platforms, and relieves government and the platforms of the burden of an elaborate administrative law regime with legal red-lines, justiciable complaints and appeals in a digital environment of millions of daily posts (which means that any Bill must not take away the right of Canadians to file tort actions in civil court).

The least difficult task will be separating the regulation of illegally bad posts from the awful-but-lawful.  

The sleeper issue is how far the list of regulated posts might extend into the awful-but-lawful territory, something that the general public may well be expecting

Said the panel’s minutes of April 21, 2022: “Some [panel] experts explained that additional types of harmful content would need to be included if the framework were to delineate specific objects of regulation. A range of harmful content was said to be important to scope in, including: fraud; cyberbullying; mass sharing of traumatic incidents; defamatory content; propaganda, false advertising, and misleading political communications; content or algorithms that contribute to unrealistic body image, or which creates a pressure to conform; and content or algorithms that contributes to isolation or diminished memory concentration and ability to focus.” [Emphasis added]

The most vexing of all is political or civic misinformation, whether spontaneous or coordinated by malign actors. In the end, the minutes reveal a panel of experts dreading the destructiveness of misinformation yet backing away from the precipitous ledge of censorship that beckons.

If the sophomoric flap over the Online Streaming Bill C-11 demonstrates anything, it is that reasoned policy solutions don’t get much of a hearing once the shouting starts. 

Regardless of how well thought out the details of an Online Harms Bill might be, any impact on freedom of expression will trigger political narratives of censorship versus safety and freedom versus harm. 

As the panel’s minutes repeatedly note, the constitutional and moral values at stake include both freedom of expression and equality. The latter is described clinically as everyone’s equal right to freely express themselves —-even provocatively—- online without being subject to racist or misogynist abuse. More fundamentally, you can take “equality” as code for the constitutional claim of the victims of hateful content to the protection of society. 

And that is what might get lost if free speech ultras —-an august but disproportionately white and male assembly—- don’t empathize with fellow Canadians who do the actual experiencing of hate online. 

When it comes to acting against Online Harms, no one should be morally bullied into acquiescing to the government’s approach, but everyone must keep an open mind and an open heart.

What we learned about #C11 at the Senate Committee

Internet Society VP and former CRTC Chair Konrad Von Finkenstein

June 24, 2022

The Senate Committee on Transportation and Communications held two days of hearings this week on the Online Streaming Act, teeing off with former CRTC Chair Konrad Von Finkenstein. Also appearing were Heritage Canada’s lead civil servant on C-11, Thomas Owen Ripley, current CRTC Chair Ian Scott, and Internet activist Michael Geist.

We learned some interesting things:

• Von Finkenstein offered his criticisms of the Bill with matching amendments. His number one issue is the lack of a threshold for annual corporate revenues below which all but the biggest online undertakings would be exempted from regulation (he proposes $100M, or alternatively a minimum of 100,000 subscribers).

He argued that, as a practical matter, without some kind of exemption threshold the CRTC will be swamped with exemption applications.

Another C-11 critic Peter Menzies has also argued that online companies need the business certainty of a bright line between obligations and exemption.

If C-11 isn’t amended as they suggest, the CRTC will certainly set a threshold, much for the reasons cited by these critics, although Heritage representative Ripley suggested there could be small public broadcasters that the CRTC might want to regulate regardless of revenues.

There are actually two possible revenue thresholds have been discussed during House proceedings and now the Senate: the first as cited by Von Finkenstein with respect to the online undertakings that will be regulated.

The second might be a revenue threshold for user programming channels on YouTube when, under section 4(2) of the Bill, the CRTC needs to calculate YouTube’s “five percent of revenue” contribution to Canadian production funds and so the Commission can total up YouTube’s programming revenues aggregated by its “commercial” user channels.

• On a different issue, CRTC chair Scott boldly requested Senators to amend C-11 in three different ways related more to administrative powers than policy issues. One in particular is the current Bill’s surprising omission of the CRTC’s authority to impose binding arbitration in commercial disputes between niche Canadian programmers (for example, APTN) and major online distribution platforms (for example Amazon Prime), the Internet equivalent of cable TV carriers.

Under the existing Broadcasting Act, the CRTC has the power to mediate and arbitrate disputes over the carriage of programming services on cable TV services on terms that are fair to the small programmers.

For some reason (the Minister was cryptic when questioned about this by Heritage MPs), binding arbitration is not carried over in C-11 to the modern version of cable distributors, the Internet content distributors. Scott says Senators should fix this before sending the Bill back to the Commons.

• The partisan opposition to discoverability of Canadian content on YouTube —-and the potential for its recommendation algorithm might be tweaked accordingly— continues unabated. We heard an unexpected intervention from Von Finkenstein —-a Vice President of the Internet Society—- who recommended that discoverability ought to be limited to supplementing YouTube’s recommendations in response to customized viewing preferences with additional links to similar Canadian content.

An eminently sensible solution (for video, if not music streaming).

Memo to Senators: C-11 is coming to a screen near you.

June 21, 2022

The House of Commons will send the Online Streaming Act to the Senate where Conservative Senate Leader Leo Housakos’ tweet (above) heralds one last furious lap around the legislative oval for Bill C-11.

If I had the ear of Canadian Senators, here is what I would tell them.

First, if it was ever in question, maintain that Senatorial chill. It will be an improvement on the debate so far. 

This won’t be the first time Senators have been handed a controversial C-Bill filibustered by the Official Opposition to get public attention and then expedited by a Government using closure with majority support.

Bill C-11 was reviewed by Heritage Committee MPs for 20 hours over ten sittings with more than 50 witnesses. And that’s not counting all the Committee time spent on its forerunner C-10 in 2021.

At the end of those meetings, which included four sittings of undisguised filibustering, Conservative Committee vice-chair John Nater said (a) he wanted to schedule another 20 witnesses and (b) he would not agree to amend and return the Bill to House for Third Reading until after the Committee put aside C-11 to conduct an inquiry and complete a report on the incident concerning Hockey Canada. 

That put clause-by-clause amendments (of which Mr. Nater would submit more than 120) into the late Fall. On that timetable C-11 would pass —to recall Mr. Nater’s own word— “eventually.”

The Conservatives’ goal was and remains to force the Liberals to walk away from their Bill’s provisions relating to videos and music streaming on hosting platforms, while messaging to voters about freedom of expression and censorship. 

Throughout the Committee proceedings there was nary a hint of a side conversation to find a compromise which I suggested in a previous post is well within reach.

In the end the Conservatives gave the Liberals a binary choice: wait out an indefinite filibuster or capitulate to CPC demands. Instead the Liberals joined with the Bloc and NDP to end the filibuster and surrender nothing.

That meant a single day in Committee for amendments, a political farce by any measure. There were at least 150 amendments on the table. Nevertheless in a thirteen-hour sitting on June 14thforty-two amendments to the Bill were approved. Many were unanimous.

That much Senators already know. What about substance of the Bill?

The majority of the forty-two approved amendments were not contentious, inserted into the Act’s clause on the objectives of national broadcasting policy.

Many amendments tabled by groups supporting the Bill did not make the cut: for example, the local news amendment recommended by the CRTC and the government’s own expert panel was voted down by both Liberals and Conservatives.

The sticking points were the four signature amendments sought by the Conservatives.

They got their first, drawn from their 2021 election platform: the repeal of $120 million in annual Part II fees paid by broadcasters to the Consolidated Revenue Fund. 

Their second ought to have fallen like ripe fruit off the policy tree but did not: a minimum revenue threshold below which Internet broadcasters would be exempted from regulation. If Senators don’t fix that, the CRTC will.

Next came the hard part: amendments to delete sections 4.1, 4.2 and 9.1(1)(e). That meant ousting CRTC regulation of any uploads to YouTube, TikTok and Facebook; as well as prohibiting “discovery” orders to promote Canadian music or videos if that would require the platforms to tweak their recommendation algorithms. Those were key sections in the Bill and deleting them was a dealbreaker for the other parties.

In the theatre that the Committee proceedings became, the Conservatives accused Heritage Minister Pablo Rodriguez and outgoing CRTC Chair Ian Scott of contradicting each other and obscuring the meaning of section 4.1. The Minister told Canadians that “platforms are in, users are out” while Scott acknowledged that both the current Broadcasting Act and Bill C-11 would allow the CRTC to “regulate” user programming.  

In the interest of clearing that up, here are the facts.

The current legislation is technologically neutral and makes no distinction between conventional and Internet broadcasting platforms. Instead of tabling C-10 or C-11, the federal cabinet could have triggered their option to issue a policy directive to the CRTC reversing the Commission’s 20-year exemption of Internet broadcasting platforms and provide a regulatory road map similar to Bill C-11.  

That is what Scott meant when he said the current Act already gives the CRTC free rein over Internet hosting platforms and user programming. The new Bill makes that existing CRTC power explicit but also instructs the Commission in section 4.2 to draw a regulatory boundary between “commercial” and non-commercial programming, and also take into account “direct and indirect revenue.” 

YouTube has been the main focus of debate. The hosting platform’s channels are a mix of programming formats: an additional platform for long-form video from linear broadcasters; music streaming services; aggregated channel menus (we used to call that “cable TV”) but mostly niche video content posted by “YouTubers” competing for audiences via the platform’s proprietary recommendation algorithm. 

The Liberals (and anyone else in their right minds) have zero interest in micro-regulating 160,000 Canadian YouTubers and their thousands of short-form videos. That is why section 4.2 gives the CRTC the discretion to exempt non-commercial programming while YouTube has the right to appeal to the courts if they get it wrong.

While there is criticism that section 4.2 lacks specifics and leaves too much room for the Commission to define “commercial” and quantify “revenue,” not one of C-11’s opponents have offered a more fulsome version. There has been only one demand: exclude YouTube and all other hosting platforms from regulation forever. Pointe finale.

The policy case for Bill C-11’s regulation of commercial programming on hosting platforms is twofold.

Right now, YouTube’s music uploads and streaming services compete head-on with Canadian radio. This is a policy no-brainer: quite reasonably You Tube has publicly agreed to regulation of its music services.

As for video content, in the long term (if such a thing exists for the Internet) YouTube may evolve into a major distribution platform for commercial video falling into the priority genres of Canadian news, sports, and entertainment we currently see and hear on linear platforms. The policy question is why would an important broadcasting technology of the future be permanently excluded from the Act?

But to cut through the fog of war on section 4.2, it is helpful to turn the spotlight on the word “regulate.”

Up until now the word “regulate” has been used too loosely in the C-11 debate. 

In the current Broadcasting Act, “regulating” content includes at least these four major points:

  • Who makes or pays for Canadian content? The Act empowers the CRTC to determine which media companies writes cheques to production funds or make CanCon themselves. For Internet broadcasting, Bill C-11 imposes contributions on platforms and expressly excludes users. That is why section 4.2 refers to user programming on hosting platforms: so the Commission knows what programming revenue to count for the purpose of calculating CanCon contributions from the platforms
  • What kind of CanCon programming is supported by regulated funding or spending? The CRTC establishes priority categories of Canadian content, for example News and Drama. But as for YouTube being affected, section 9(6) of Bill C-11 expressly prohibits the CRTC from applying any such genre regulation to hosting platforms. This was pointed out to Heritage MPs by the CRTC’s General Counsel on June 1st but seems to have flown under the radar. There will be no CRTC programming goals or quotas for YouTube.  
  • Oversight of programming content: The CRTC has historically taken a light touch to oversight of programming containing abusive comment, misinformation, discriminatory stereotypes, or age-inappropriate content. Its authority to do so is rooted in the section 3(1)(g) requirement that programming be “of a high standard.” Crucially section 3(1)(g) cannot apply to hosting platforms because Bill C-11 amends it to require “control” of programming and then in section 2.2 deems YouTube not to possess that programming control. That is why claims of Bill C-11 “censorship” are categorically false.
  • The discovery and promotion of Canadian content: The CRTC has always required radio and TV companies to showcase home grown programming and Canadian artists. Bill C-11 applies this to all Internet broadcasting platforms including YouTube although section 9.1(1)(e) prohibits the Commission from ordering a specific change to recommendation algorithms. 

That means the fury over C-11 boils down to discoverability of Canadian video content and the role that hosting platforms’ recommendation algorithms play in that.

Which brings us to the “backfire” argument raised by Google and Canadian YouTubers.  

The concern is that Canadian YouTubers’ videos may be ignored or disliked if a CanCon recommendation algorithm pushes their niche content to millions of Canadians who have no interest in that niche. If the existing YouTube algorithm is indeed that badly designed, viewer disinterest could result in YouTubers’ videos being “buried.”

You would have to be empathy-depleted to ignore YouTubers’ fears given that a quarter of them are trying to make a living from their channel. My own view is that it would be surprising if YouTube’s algorithm engineers, who possess reams of data on individual viewing preferences, were unable to figure out a solution to such a massive misfiring of their recommendation tool. At the very least we ought to give the CRTC its opportunity to conduct the expected public consultation on discoverability and recommendation algorithms before any discoverability requirements are imposed or rejected.

But to reach the harbour where Senators might be allowed to coolly appraise C-11, it would be helpful if both the Liberals and Conservatives reconsidered their political messaging.

So far Conservatives are committed to the heat-seeking narrative of “freedom” and “censorship.” It is grist for a summer membership drive, so it’s unlikely to change. But maybe they will have second thoughts.

As for the Liberals, the Minister’s assurance that “platforms are in, users are out” isn’t getting much traction judging from the one-way traffic against C-11 on social media. 

Even though a public opinion poll in early May suggested solid support for the government’s approach, the Conservatives are trying to change that. The Liberals appear serenely disengaged on C-11, as if they can get out their message through ParlVu and CPAC. Most Canadians are not going to study the text of the Bill and 900-word news stories are unlikely to zero in on the legal nuances of “regulate.”

The Liberals raised expectations of YouTubers three months ago when they vowed in the House to issue a Ministerial policy directive that would “not include digital first creators” in regulatory contributions or discoverability. The Liberals never revisited that commitment in Committee and the Minister never released a draft CRTC Policy Directive that might have taken the air out of the Conservative ginned up accusations of censorship.

Here’s a proposal for a summer project for the Minister: publish a draft policy directive exempting YouTuber videos from discoverability regulation for the next five years. 

It might make the Senate’s work a little easier.

Catching Up: C-11 reaches Third reading with amendments, but not for local TV news.

June 18, 2022

Bill C-11 the Online Streaming Act is likely to pass Third Reading in the House of Commons early next week after the Liberals teamed up with the Bloc and the NDP to impose closure on the Conservative filibuster.

The Heritage Committee passed 42 of about 150 amendments submitted by MPs (approximately 120 submitted by the Conservatives) and I offer a brief inventory here.

One amendment that didn’t make the cut was the NDP-submitted proposal for local TV news recommended by both the CRTC and the government’s expert panel, voted down by the Liberals themselves. I wrote about the urgency of that amendment here.

The Online News Act C-18 (the “FaceGoogle pay-for-news” legislation) will return in the fall Parliamentary session. It has passed Second Reading and now moves on to the Heritage Committee. There has been industry muttering about whether Facebook is planning to aggressively shed news content from its Feed and what that means for legislation like C-18. US commentator Joshua Benton is a long time opponent of FaceGoogle legislation and has an interesting take on it all.

Benton’s view might be tempered by the latest industry metrics on news viewership over social networks published by Oxford Reuters. The same study has data about news audience disengagement that left me slightly queasy.

The Competition Bureau has filed its pre-hearing rebuttal to Rogers and Shaw on the Bureau’s application asking the Competition Tribunal to block the $26 Billion merger. The Globe coverage is here.

Bureau Chief Matthew Boswell’s litigation blood is up it seems, as he offered this zinger: “[The deal] will result in a transfer of wealth from low- and moderate-income groups in society to the respondents, whose shareholders include ultra-rich members of the family ownership groups of these companies.”

And here is something that just popped into my Inbox: the CRTC has announced it will release its ruling on the long expired CBC license this coming week.

Updated and Breaking: The Globe is reporting that Rogers has negotiated the sale of the Shaw wireless division Freedom Mobile to Québecor for $2.85 billion, likely removing the last regulatory obstacle to its $26 billion merger.

C-11 Amendments that made the cut, and some that didn’t.

June 16, 2022

Heritage Committee MPs pulled a near all-nighter on June 14th voting on more than one hundred amendments to Bill C-11 after the Liberals, Bloc and NDP passed a House motion ending the Conservative filibuster.

The Committee’s report back to the House for Third Reading includes 42 approved amendments.

Here are some significant amendments:

  • The Canadian ownership clause was redrafted to affirm overall Canadian control of the private broadcasting system: the government’s proposed language was porous and appeared to allow foreign-controlled media to outgrow the Canadian-owned system.
  • Canadian broadcasters were relieved of their collective burden of $120 million in annual “Part II fees” paid to the consolidated revenue fund, a major demand of the broadcasting companies and a plank in the Conservative election platform. A big win for the Canadian Association of Broadcasters.
  • Amendments were made to the broad objectives of the Act (the “Broadcasting Policy for Canada”) strengthening the role of independently-owned Canadian film production companies who supply 75% of the CanCon aired by broadcasters, no doubt in anticipation of large American streamers making CanCon here in the future.
  • Specific amendments were approved directed at the CRTC’s regulatory power to define Canadian content by specifying the importance of Canadian producers retaining copyright and long term exploitation of program rights. The Heritage Minister has promised to give the CRTC directions to review the rules for Canadian content which means the Commission will be looking at whether foreign programmers (e.g. Netflix) are going to control the copyright over their own contributions to CanCon programming.
  • A series of amendments were passed emphasizing the general importance of community programming; programming for official minority language groups; and also programming, viewing access, and production opportunities for Black, racialized, disabled and other marginalized communities.

Few of the other major amendments touted by the different industry groups and commentators were accepted. Not all were put forward by Heritage MPs of course, but of those that were, here are some notable misses:

  • No amendment to eliminate or curb the CRTC’s regulatory oversight of user-generated programming on hosting platforms was accepted. The only relevant amendment that went through was NDP MP Peter Julian’s proposal to subject the CRTC’s discretion to regulate or exempt such programming to a freedom of expression standard (which is currently in the general objectives of the Broadcasting Act).
  • No amendment was accepted to set a revenue-threshold on the size of online broadcasters that will be regulated (although it is likely the CRTC will develop one, relying on its past history of imposing revenue-based regulatory exemptions).
  • No amendment was adopted on “discoverability” —which raises the issue of recommendation algorithms— of Canadian programming.
  • The NDP amendment to strengthen funding of local news was defeated by the Liberals and Conservatives.
  • The Independent Broadcasters Group —-the industry association representing Specialty channels seeking carriage on cable TV— did not get the amendment it sought extending the Commission’s dispute resolution powers from cable to online undertakings. The IBG did obtain an amendment appearing to confirm the CRTC’s regulatory powers to “order” online undertakings to carry specialty channels on their service in a manner “similar” to the existing Commission rules for Canadian cable companies.

There is a helpful article in the Globe and Mail, here.

The revised C-11 is here:

Local News must be Heritage MPs’ priority C-11 amendment

Profit/Loss line for Canadian local TV news from CRTC data

June 13, 2022

CRTC commissioners have asked for a mandate to save local radio and TV news. Parliament must give it to them in C-11.

The stack of amendments waiting for Heritage MPs tomorrow no doubt includes the proposal Unifor submitted on local news [Disclosure: as Unifor’s Media Director from 2013-2021 I submitted a similar amendment to the Committee on Bill C-10].

The Unifor amendment mandates the CRTC to boost funding for local news by realigning existing industry cross payments flowing from broadcasting distributors (BDUs) to broadcasters.

Bill C-11 adds the option of tithing matching cross subsidies from foreign streaming platforms as part of their new obligations to support Canadian news, sports and entertainment, keeping in mind that Heritage Minister Pablo Rodriguez expects a $1 billion injection of cash value into the Canadian broadcasting system as a result of C-11.

Everyone —especially the Canadian public– agrees local news is at the core of our Broadcasting Act. While not indisputably the legislation’s first priority, it ranks at the top with Canadian drama and programming in the languages of our founding and Indigenous nations.

The authors of the 2020 “pre-C11” report of the Broadcasting and Telecommunications Legislative Review (BTLR) were emphatic about local news. Writing two years ago, before the pandemic, they said the financial plight of local news required action:

With the decline in BDU revenues averaging 1.5 per cent per year since 2014, the funding mechanisms currently in place are likely to be less effective over time. Conventional television stations — typically the bedrock of audiovisual spending on news and an important source of local news — have not been profitable since 2012 [see chart above]; they have lost over $600 million in revenues between 2013 and 2018. Revenues for radio have also been declining….

There is little doubt that the current model for supporting news is not sustainable. The traditional news industry in Canada, as in many countries around the world, is facing a crisis, which has serious implications for Canada’s democratic system and social values.

And so BTLR Recommendation #71 says:

We recommend that the CRTC consider that some or all of the levies on media aggregation and media sharing undertakings contribute to the production of news content. These contributions would be directed to an independent, arm’s length CRTC-approved fund for the production of news, including local news on all platforms. We further recommend that the CRTC consider redirecting a greater portion of the levy currently paid by broadcasting distribution undertakings to this same fund for the production of news.

The Report reflected a consensus about the importance of local news. It is the community hall where we see, hear and learn about each other. It’s where professional journalists hold power to account and provide fact-based reporting.

Despite the overwhelming case for saving local news, it’s often the case that significant regulatory change doesn’t attract unanimous support within the industry because some players fear losing funding in a zero sum game while some of the large media companies don’t operate enough local stations to make the BDU-to-broadcaster cross-subsidy worth their while.

Among Canadian media companies, only Bell is prepared to champion the Unifor amendment (CTV is the country’s biggest local TV provider with 36 out of 90 local stations).

Sadly, we almost had the local news funding problem sorted out ten years ago.

In the early ‘00s the cracks in the business model for local news began to show: broadcaster profit margins were dropping. The smaller the market, the more likely its local station was losing money.

The CRTC devised a solution. In 2008 it created the Local Programming Improvement Fund (LPIF) ——a $60 million news fund aiding “non-metropolitan” local stations —transferring cable profits to small and mid sized local TV stations. The fund was underwritten by a new levy of 1% of annual BDU revenues.

The 1% levy was on top of the 5% cable operators were already paying to support Canadian drama and community cable stations. Like those other obligations, LPIF was an industry cross subsidy moving from the more profitable BDUs to the less profitable broadcasters. 

Around the same time, the cash-squeezed broadcasters sought to put an end to the cable companies’ free lunch, earning subscriber dollars from station signals taken from local TV towers without compensating the broadcasters, especially in large metropolitan areas left untouched by the LPIF.

After saying no to the broadcasters twice, in 2009 the CRTC agreed to force the BDUs to the table to negotiate “fee for carriage” (FFC) payments to the broadcasters.

But before implementing its FFC order, the CRTC asked the courts to confirm it had the jurisdiction to order compensation in the first place. In December 2012 the Supreme Court of Canada said no and struck down FFC in a 5-4 split decision because of conflicts between the Broadcasting and Copyright statutes. Ironically the broadcasters found themselves cross subsidizing the wealthier BDUs with their free content.

But at least the broadcasters still had LPIF money to sustain their small and mid sized stations?

No such luck. By 2012 the industry had consolidated: the big cable and telco companies had splashed out millions to buy specialty channels and local stations. Bell and CTV. Rogers and City. Shaw and Global. Québecor and TVA. They became “vertically integrated” (VI) media companies with presumably a limitless ability to cross subsidize local news and Canadian drama from their cable and specialty profits.

Somewhere in this time frame the consumer-crusading Harper cabinet turned against the four-year old LPIF levy that cable companies had made a line item on Canadians’ monthly bills.

In July 2012 the Commission killed the LPIF news fund, ruling that vertically integrated media companies would just have to absorb the losses in local news, “innovate” (a signal for job cuts that soon followed) and keep ladling money from one side of the business to the other as a condition of keeping their licenses for overall TV operations. 

Asked to reconsider in the Commission’s 2015 “Let’s Talk TV” proceedings, Harper’s new CRTC Chair Jean-Pierre Blais was unmoved so far as the VI local stations were concerned.

Instead Blais made two tweaks to the regulation of local news. He allowed the VIs to defund their community stations and reallocate the money to their local stations; and he abolished the CRTC’s Small Market Local Programming Fund and recreated it as an independents-only news fund available to about 20 stations not owned by VIs.

But as for a dedicated stream of funding or cross subsidy for the vast majority of local news stations —-70 out of 90 are owned by the VIs—- not a penny.

That’s how things stand in 2022: an inexplicable regulatory asymmetry in which there is little relief for money-losing news journalism but a 4% revenue tithe supporting Canadian drama.

More to the point, our broadcasting economics have only gotten worse for conventional TV, meaning local news, as these 2020 CRTC statistics on PBIT/EBITDA margins demonstrate:

When asked by the Liberal government for advice on a new Broadcasting Act in 2018, the CRTC recommended “supporting television news production through increased access to subscription revenues,” advice that would be repeated by the BTLR Report eighteen months later.

It would be wishful thinking that the CRTC will venture forward on something so bold without an affirmative response to their recommendation.

It’s up to MPs from all parties to say yes.

Catching Up on MediaPolicy.ca: Filibuster and Closure of C-11

The Conundrum of Canadian Broadcasting Economics in a graph. Source: CRTC Report “Harnessing Change.” (2020)

June 11, 2022

The Conservative filibuster of the Heritage Committee hearings on C-11 continued throughout the week. CPC committee vice-chair John Nater MP served notice the filibuster would continue into the Fall. I wrote about that here.

Heritage Minister Pablo Rodriguez spoke to the Committee (he was denied the previous week by the filibuster) and revealed some new information about the $1 Billion injection of foreign streamer cash his Department projects.

The Liberal, Bloc and NDP MPs remained tellingly serene throughout the week and on Friday morning the Liberals responded with a closure motion introduced into the House of Commons providing for one nine-hour day of Committee debate (June 14th) on amendments —-Committee meetings normally last two hours—- before C-11 is returned to the Commons for Third Reading. 

With C-11 as a springboard, the Conservatives kicked off a summer membership recruitment campaign with a rhapsodic video starring Andrew Scheer MP entitled “I’m not sure how long the government will let this video stay up.”

The tragedy of the filibuster after 10 days of Committee hearings is that the amendments, some of which I profiled in Monday’s post, will receive inadequate debate and be available only to Canadians who tune in to ParlVu. 

I also had a volley and response debate with C-11 critic Leonard St. Aubin that began with my proposal to split the difference on regulating user generated programming but ended up being a discussion of the conundrum of Canadian broadcasting economics. Mr. St-Aubin’s first and second replies are here and here.  

Enough of C-11 for today and on to the FaceGoogle Bill C-18: you can read a typically incisive article from former CRTC Chair (former Competition Bureau Commissioner, former federal judge, etc.) Konrad Von Finkenstein itemizing all the things he think might go wrong with the Bill.

For Rogers-Shaw followers, there is an excellent business feature published this morning in the Globe and Mail covering Québecor CEO Pierre-Karl Péledeau’s bid to buy Freedom Wireless and emerge as a fourth national wireless carrier.

Day Seven at the Heritage Committee: #C11 Filibuster Continues

NDP MP Peter Julien

June 9, 2022

Yesterday’s meeting of Heritage Committee MPs charged with reviewing the Online Streaming Act C-11 was again filibustered by the Conservative party.

Liberal MP Chris Bittle kicked off the two-hour session with a motion to commence clause by clause consideration of amendments on June 13th and, upon finishing C-11, move on to the Conservative motion to investigate whether Hockey Canada used public funds in settling a sexual assault lawsuit.

Conservative MP John Nater —-the Tories’ Committee Vice Chair— opposed the motion and, as a signal of the CPC’s intentions of indefinite filibuster, announced that he had another “twenty witnesses” he wants to call on C-11 in addition to the approximately 30 that have been questioned over the last three weeks.

NDP MP Peter Julien proposed a compromise of assigning the next two Committee days to Hockey Canada and then resuming C-11 and Hockey Canada “simultaneously.”

The Conservatives rejected that and filibustered the remainder of the afternoon without any clear path for the Committee over the remaining two weeks of the Parliamentary session.