On the contrary, regulating our Internet is good public policy.

April 18, 2022

5 Minute Read

It’s a temptation in opinion writing to make caricatures of your opponents’ views while lionizing your own beliefs.

The Globe and Mail’s Andrew Coyne does so (Trudeau’s Tangled Web) in romanticizing the Internet while ridiculing the Liberal government’s impulse to regulate the Internet (sardonic italics in the original).

No one is asking Mr. Coyne or his many libertarian confederates to curb their appetites for a wide open Internet; just leave room for achieving policy goals like a strong cultural footprint for Canadian news, information, sports and entertainment.

Start with the Online Streaming Act C-11, the digital-era update to the Broadcasting Act. In 1999 the CRTC –-the unelected CRTC—  exempted the Internet from the plain wording of the statute covering all media platforms. Over the next twenty years the Commission refused to reconsider even as the Internet began its eclipse of conventional distribution platforms.

The chief goal of the Broadcasting Act has been to compel Canadian media companies to spend big on making Canadian news and entertainment programming, financed by profit-margins on retailing American-made shows.

The reason for this brazen nationalism legislated first by Trudeau Senior in 1968 and strengthened by Brian Mulroney in 1991 was to provide cultural oxygen to a small and bilingual country of less than 40 million people where authentic Canadian content vies for audience attention and advertiser dollars against American competitors who monetize on a global scale.

Justin Trudeau’s C-11 asks today’s global streaming and hosting platforms to play by the same rules: either make Canadian shows or chip in a fair share of production cash, all the while employing algorithms to recommend Canadian shows likely to appeal to individual viewer tastes. Allegations of the CRTC using C-11 to micromanage programming is misinformation and ignores the Commission’s half-century track record of not doing so.

Yet political lampooning often contains a grain of truth: if regulation exists to promote Canadian culture, why do the CRTC and Heritage Canada cling to an outdated definition of CanCon that relies on a headcount of Canadian-born producers, writers and actors while excluding any evaluation of “Canadianness” in movie plots? Our counterparts in the UK credit both home-grown talent and British-ness in film content. Bill C-11 doesn’t prevent that in Canada but updating the legislation is an opportunity for the government to adopt the British example and stamp a big maple leaf and fleur-de-lis on the Bill. 

The second piece of the Liberals’ Internet trifecta, the Online News Act C-18, deserves the support of all Canadians concerned by the economic strangulation of news journalism, even libertarians who can usually be counted upon to support competition principles.

That’s because the Bill’s provisions for arbitrating fair compensation for news content is designed to remedy the outsized market power that Internet colossi Facebook and Google have acquired in both digital advertising and the distribution of content. That leaves relatively puny Canadian news outlets starved of their main source of cash on one hand and on the other having too little bargaining power to negotiate better compensation from “FaceGoogle” who monetize their news content.

Big Tech market power is unlikely to be broken up by US Congress, certainly not by  Canada’s Competition Bureau, so C-11 provides a competition remedy to the externality created by FaceGoogle’s market power, namely the impoverishment of news journalism.

While Mr. Coyne joins Meta CEO Mark Zuckerberg in mocking the publishers’ views of the value exchange between news outlets and FaceGoogle, it is worth noting that FaceGoogle forked out $190 Million annually to Australian news organizations rather than face an arbitration ruling over how much that news content is worth to their digital advertising monopoly. Res ipsa loquitur, the thing speaks for itself.

There is a downside to aiding news journalism through competition remedies: it preserves FaceGoogle’s opportunity to pay more for national news, less for local news, and ignore news outlets deemed too narrow in audience appeal. C-18 gives the CRTC some authority to prevent that but also the discretion to give its blessing to the aggregate outcome of FaceGoogle’s deals on content compensation with “a significant portion of independent news businesses,” meaning some but not others. MPs considering C-18 need to talk about that.

A better C-18 policy tool might have been to impose a C-11 styled levy on FaceGoogle’s Canadian revenues and distribute the cash equitably to Canadian news outlets as do the federal government’s existing programs for Qualified Canadian Journalism Organizations and Aid to Publishers. This approach might have been possible under Parliament’s $900 million ‘audience tax’ on Big Tech legislated in 2021 but not proclaimed: the Digital Services Tax is expected to come off the books in 2024 in favour of an OECD agreement on minimum corporate tax rates.

Regardless of finding the perfect model for C-18, Parliament must fight for a healthy news industry. It’s delusional to imagine we can allow the flame of mainstream media to flicker out, counting upon a handful of advocacy websites to report on what is happening today and what the powerful are up to.

The final piece in puzzle is the Liberals’ promised legislation to regulate “Online Harms” (an exquisitely sanitized description of misinformation and hate infesting social media platforms).  We have yet to see a draft Bill but lately the federal government has signaled a more restrained approach in its mandate letter appointing an expert advisory committee. That body is invited to recommend binding standards of self-regulation by social media platforms and perhaps rely less on the State policing millions of daily posts on social media.

 Any kind of legislation curbing misinformation and hate will inevitably polarize Canadians of all opinions and political stripes. Fear of government overreach is healthy. Predictions of social media companies avoiding liability by self-censoring are well founded.

 But maybe it’s better to wait for the experts’ recommendations and a Bill before dismissing the government’s good intentions on this file.