What we learned about #C11 at the Senate Committee

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 Finckenstein. 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 Finckenstein 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 Finckenstein 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 Finckenstein —-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).