Senate #C11 Hearings: Canadian programming and the Gretzky factor

September 20, 2022

Brad Danks is the CEO of one of Canada’s niche broadcasters OutTV and he never claimed to be Wayne Gretzky.

But when talking to Senators about Bill C-11 today, he was not thinking about linear TV and where the puck has been. He was thinking about where the puck is going to be in a future where linear TV has been fully eclipsed by online distribution.

Apart from Bell, Rogers, and perhaps Videotron, the future of Canadian broadcasters is not their own destination streaming apps competing against global broadcasters Netflix or Disney Plus.

Their future is securing distribution deals from online channel aggregators Roku, AppleTV, or any number of foreign platforms around the world. Or perhaps free advertising-supported TV (FAST) like Pluto TV. That’s not just an export strategy aimed at expanding audiences, it’s a domestic strategy for reaching Canadian cord-nevers and cord-cutters.

That’s why Danks, joined by Monika Ille of the Aboriginal Peoples Television Network (APTN), implored Senators to pass C-11 amendments that would empower the CRTC to order both domestic and foreign online distributors to not only to accept Canadian channels but to provide a fair rate as the CRTC is authorized under current legislation applying to cable and satellite companies.

Under the current Act, the Commission has the power to backstop commercial negotiations between Canadian channels and cable and satellite companies if those distributors are tempted to be unreasonable about revenue splits that are more or less standard in the industry. The backstopping is the Commission’s power to fix reasonable terms through binding arbitration.

But the drafters of C-11 rejected a matching Commission authority over online undertakings, as seen in the reference to making an order “without terms and conditions” in section 9.1(1)(i):

(i) a requirement, without terms or conditions, for a person carrying on an online undertaking that provides the programming services of other broadcasting undertakings in a manner that is similar to a distribution undertaking to carry programming services, specified by the Commission, that are provided by a broadcasting undertaking;

It’s not clear why the drafters of C-11 didn’t just map over the CRTC’s full authority on these matters from linear broadcasting to the world of online distribution.

Minister Pablo Rodriguez made a cryptic comment to the Commons Heritage Committee that there might be international trade repercussions to giving the Commission such powers over foreign distributors operating in Canada. But we have heard nothing since.

Giving weight to Danks and Ille’s pitch to Senators is the fact these amendments were on the very short list of changes to C-11 endorsed by CRTC Chair Ian Scott.

It’s possible that the pressure point is how foreign distributors will react to the CRTC ordering them to carry the so-called “section 9(1)(h)” channels APTN, the Weather Channel, the French-language news consortium TV5, AMI-TV for disabled viewers, CPAC, the multi-ethnic channel OMNI, etc.

These channels have the CRTC to thank for their mandatory inclusion in the basic cable package, but also for above-market rates —-a deliberate cross-subsidy— that the Commission orders the Canadian cable companies to pay to these broadcasters based on so many cents per month for each cable customer (for APTN it is set at 35 cents, for AMI-TV at 20 cents, etc.).

As APTN’s Ille told Senators, it has taken 20 years to build up an indigenous broadcasting presence on Canadian cable TV thanks to its “section 9(1)(h)” status.

Are we going to leave its survival in the hands of American distribution companies?

This post was updated to clarify the interpretation of section 9.1(1)(i) of C-11.