Must it be war? A peace proposal for C-18

October 26, 2022

As of today’s date we don’t know if the House of Commons Heritage Committee will keep hearing witnesses on the Online News Act Bill C-18 —-the “FaceGoogle-must-pay” legislation— or when they will move on to debate amendments. (Update: the Committee has announced it will hold three more days of witness hearings followed by clause by clause debate beginning November 18th).

Regardless, the serendipitous timing of Facebook’s threat to blackout Canadian news and the release of Google’s gerrymandered opinion poll on the legislation suggest that sidebar discussions with Heritage Minister Pablo Rodriguez on changes to C-18 ended in stalemate.

The federal government appears unmoved. The Bloc and NDP are onside with the Liberals so far.  

It’s melodramatic to summarize FaceGoogle’s messaging as “it’s war.” But it sure isn’t peace.

At some point journalists may uncover the backstory on how it came to this. It’s a bad day for public policy given that the Liberals and Erin O’Toole’s Conservatives both promised in the 2021 election to pass legislation rebalancing the bargaining power between FaceGoogle and news organizations over news content.

To be fair, the Tories didn’t pre-approve C-18 but endorsed the “best practices” of French and Australian legislation. More on that below.

The backstory is probably this: Facebook and Google think they overpaid in Australia with $190M to broadcasters and publishers. They see C-18 as greasing the skids to a similar and a far more expensive deal in the United States. The American version of C-18 has bipartisan support in the Senate and debate ought to resume after the November 8th midterms are over.

Unlike the Australian scenario where a right-wing government stared down threats from both Facebook and Google, the web giants believe they have allies in the Conservative Party of Canada.

Google is irked by two points in C-18, which I will get to in a moment. Facebook’s messaging recycles its long standing talking points that failed to persuade in Australia, chiefly that it owes nothing to news organizations.

We may never know the parry and thrust of the lobby meetings Facebook and Google had with the Minister since C-18 was tabled April 5th. But it appears the government did not give an inch. That could be because there is no deal the Liberals could make with FaceGoogle that would stick with Pierre Poilievre: blowing up Bill C-18 (and Bill C-11) is too important to the Conservatives’ branding and fundraising.

Google has its list of criticisms of C-18. The two biggest are the so-called “link tax” and the “undue preference” provisions.

“Link tax” is the pejorative description of money changing hands between Google and the owners of intellectual property on the web, the property being “made available” by a hyperlink on Google Search accompanied by a headline or a snippet of text. In other words, the speculation over money changing hands is not a “tax” or fee paid to government.

Internet activist Michael Geist claims the “made available” legislative text supporting the so called link tax is an unwarranted Canadian embellishment on the Australian legislation and is “an approach not found anywhere else in the world.” Any compensation for intellectual property, he says, should be restricted to the display of full text articles on Search. In other words, never.

Geist is wrong about the Australian legislation. “Availability,” “link” and “index” are explicit in both its Newsmedia Bargaining Code and Canada’s Bill C-18. Here’s the Australian text followed by C-18:

52A  Definitions

core news content means content that reports, investigates or explains:

                     (a)  issues or events that are relevant in engaging Australians in public debate and in informing democratic decision‑making; or

                     (b)  current issues or events of public significance for Australians at a local, regional or national level.

covered news content meanscontent that is any of the following:

                     (a)  core news content;

                     (b)  content that reports, investigates or explains current issues or events of interest to Australians.

52B  Making content available

             (1)  For the purposes of this Part, a service makes content available if:

                     (a)  the content is reproduced on the service, or is otherwise placed on the service; or

(b) a link to the content is provided on the service; or

                     (c)  an extract of the content is provided on the service.

             (2)  Subsection (1) does not limit, for the purposes of this Part, the ways in which a service makes content available.

52C  Interacting with content

             (1)  For the purposes of this Part, a user of a service interacts with content made available by the service if:

                     (a)  the content is reproduced on the service, or is otherwise placed on the service, and the user interacts with the content; or

                     (b)  a link to the content is provided on the service and the user interacts with the link; or

                     (c)  an extract of the content is provided on the service and the user interacts with the extract.

             (2)  Subsection (1) does not limit, for the purposes of this Part, the ways in which a user of a service interacts with content made available by a service.

And here are the brief but parallel provisions in C-18:

Making available of news content

(2) For the purposes of this Act, news content is made available if

(a) the news content, or any portion of it, is reproduced; or

(b)access to the news content, or any portion of it, is facilitated by any means, including an index, aggregation or ranking of news content.

More to the point, Google settled voluntarily with Australian news organizations for upwards of $100M. If that wasn’t for hyperlinks on Google Search, what was it for?

Google’s link tax obfuscation is understandable: it wants to pay less, or not at all. 

On the other hand, Geist’s messaging about a link tax is advocacy for free-flowing information on the world wide web, a vision that requires a narrow interpretation of copyright and an expansive interpretation of “fair use” i.e. free access to the intellectual property of others.

In the same vein, Neiman Lab’s Joshua Benton asked rhetorically in a recent column opposing C-18, why should news organizations get special access to payment for Google links?

The short answer is: for the public good of sustainable news journalism, currently in crisis. 

That’s good enough for most of us and all federal political parties, given that FaceGoogle has acquired enormous market power in digital advertising, audience data, search and social media, thereby leaving news organizations no choice but to accept the price (if any) put on their content by Big Tech for distribution on their must-have platforms.

As the Australian Competition Bureau stated, simply unlinking their online journalism and walking away from the planet’s go-to search and social media platforms is a non-starter for any sustainable news business.

Aside from links, Google’s real priority is defeating the “undue preference” provisions of C-18 which contemplate news organizations (once certified as legitimate) filing complaints to the CRTC alleging the ranking of their news by Google’s algorithm is “unjust, undue, or unreasonable.”

Credit to Google, it rightfully concedes a role for Bill C-18 in banning retaliation by platforms against news businesses for exercising their bargaining rights under the legislation. The Australian legislation did just that and consequently is drafted far more tightly (see the end of this post for the full text).

As a matter of good public policy, C-18’s more expansive version of undue preference is defensible as supervision of privately curated distribution platforms, although free speech absolutists will disagree. But they are not critical to a Bill concerned about fair bargaining and are more suited to inclusion in the government’s forthcoming Online Safety Act.

Other criticisms of C-18 are in the realm of political gamesmanship. Geist’s post reporting that TV news organizations might be in line for as much as $250M in compensation from FaceGoogle seemed designed to provoke a populist outcry against the much-maligned CBC and pantomime villains Bell Media and Rogers City-TV. He also tweeted that Bell Media CTV’s firing of Lisa LaFlamme was relevant to the policy discussion:

It’s clever news cycle politics. But Geist (and Conservative MP Kevin Waugh who proclaimed that TV companies are “at the trough”) now need to state publicly which television news outlets they wish to disqualify from legislation designed to compensate for the abuse of market power by American Big Tech.  

It was after all the Conservative election platform that promised legislation where “a government won’t be able to pick and choose who has access to the royalty framework.”

It’s a notable point that US Republicans only co-sponsored their version of C-18 after excluding the liberal-leaning New York Times and Washington Post from its scope.

It’s no wonder that Google and Facebook need Canadians to make this argument for them.

***

As for the peace proposal, here are MediaPolicy.ca’s recommended and non-recommended amendments:

The CRTC:

This agency does not currently possess the journalism chops, time or staff resources to carry out a frictionless implementation of C-18. A special tribunal would have been better. But there is no changing course now and the CRTC will have to do.

The Minister has announced the extra financial resources for implementation. Let’s hope the government also takes the deficit of journalism experience into consideration when making appointments to the Commission. 

News Content:

Eligible news organizations must produce news content.

The definition of news content in section 2(1) contemplates “reporting, investigating or explaining”—emphasizing news over opinion— but imposes no quantitative requirement for fact-driven news reporting.

The Australian legislation gives its regulator that authority and C-18 should do so as well:

52N  Content test

             (1)  The requirement in this subsection is met in relation to a news business if the primary purpose of each news source covered by subsection (2) is to create content that is core news content.

             (2)  This subsection covers a news source if it comprises, whether by itself or together with other news sources, the news business.

             (3)  For the purposes of subsection (1), in determining whether the primary purpose of a news source is to create content that is core news content, take into account the following matters:

                     (a)  the amount of core news content created by the news source;

                     (b)  the frequency with which the news source creates core news content;

                     (c)  the degree of prominence given to core news content created by the news source, compared with the degree of prominence given to other content created by the news source;

                     (d)  any other relevant matter.

Eligible News Organizations and Professional Standards:

The Bill does not require that eligible news organizations demonstrate their legitimacy and public accountability by belonging to any of Canada’s self-governing media press councils. 

It’s not clear why C-18 is missing this important safeguard. In Committee, Bloc MP Martin Champoux unsuccessfully pressed Heritage Minister Pablo Rodriguez on this point. 

Here’s the Australian text:

52P  Professional standards test

             (1)  The requirement in this subsection is met in relation to a news business if:

                     (a)  every news source covered by subsection (2):

                              (i)  is subject to the rules of the Australian Press Council Standards of Practice or the Independent Media Council Code of Conduct; or

                             (ii)  is subject to the rules of the Commercial Television Industry Code of Practice, the Commercial Radio Code of Practice or the Subscription Broadcast Television Codes of Practice; or

                            (iii)  is subject to the rules of a code of practice mentioned in paragraph 8(1)(e) of the Australian Broadcasting Corporation Act 1983 or paragraph 10(1)(j) of the Special Broadcasting Service Act 1991; or

                            (iv)  is subject to internal editorial standards that are analogous to the rules mentioned in subparagraph (i), (ii) or (iii) to the extent that they relate to the provision of quality journalism; or

                             (v)  is subject to rules specified in the regulations that replace those mentioned in subparagraph (i), (ii) or (iii); or

                            (vi)  is subject to other rules specified in the regulations; and

                     (b)  every news source covered by subsection (2) has editorial independence from the subjects of its news coverage.

Platform Exemption Criteria and no news organization left behind:

There are two ways for deals to be made between FaceGoogle and news organizations. One is through arbitration. The other is through a comprehensive series of voluntary agreements with news organizations, regardless of whether they have sought certification as Eligible News Organizations (ENOs).

There is wiggle room in C-18, as there was in Australia, for the platforms to exclude a handful of news organizations that might otherwise qualify as ENOs so long as the CRTC deems the voluntary agreements as being good enough and covering enough news organizations.

This was how Facebook got away with excluding two important news outlets in Australia: the investigative website The Conversation and the television outlet Special Broadcasting Service (similar to Canada’s OMNI-TV)

This wiggle room in C-18 ought to be removed by explicitly providing that, under the exemption criteria listed in section 11, deals must be made with all news organizations that demonstrate they can qualify under the Act as eligible news organizations.

Transparency of Bargaining Information: 

Once bargaining begins under the Bill, the two platforms Facebook and Google will of course know all of the details of their own deals with individual news organizations, or different groups of them. But news organizations won’t know each other’s outcomes and will be in the dark about what a fair settlement looks like.

This is grossly disadvantageous to news organizations, especially the smaller ones with less resources, in a Bill designed to rebalance bargaining power. This kind of information vacuum does not exist in comparable bargaining forums, for example labour negotiations. 

The Independent Online News Publishers have tabled the following amendment:

44.1 An eligible news business shall file a covered agreement with the Commission within 30 days of the conclusion of the agreement or from the date of an arbitration panel decision made under section 41 and the Commission shall make the agreement public in a database of covered agreements.

A similar clause was tabled by Friends.

If MPs want to support smaller news organizations, this amendment is the best way to do it.

Small Publishers and the Two Journalist Rule:

The publishers of small rural weeklies have become the poster children for the news outlets potentially left behind by C-18. 

The problem is the threshold requirement that an ENO must keep on staff at least two “regularly employed” journalists (and freelancers don’t count). The requirement stems from Income Tax regulations supporting the federal QCJO aid program for news journalism where it’s explicit that the two journalists can be part-time employees. 

The “part-time” interpretation of “regularly employed” likely solves the problem and it should be acknowledged that the drafters of C-18 are trying to prevent self-employed freelancers claiming status under the Act.

An amendment is not strictly necessary given that Heritage Canada has financial aid programs available for small weeklies without the two-journalist requirement. 

Also, publishers can always convert freelancers to part-time employees. Under C-18 they will have the financial means to do so.

Undue Preference:

The Bill’s fulsome “undue preference” provisions holding FaceGoogle to account for their algorithm rankings of news seemed aggressive until Facebook’s threat last week to de-platform Canadian news as a political tactic: talk about self-preferencing curation!

But in the spirit of turning the other cheek, perhaps an amendment to section 51 would be the government’s peace offering to Big Tech and the Conservatives if they are willing to accept it.

The undue preference provisions can be pared down to the protection of news organizations from algorithm manipulation by the platforms that is retaliatory or undermines a news organization’s bargaining rights. A similar concept exists in labour codes regulating collective bargaining between employers and unions. 

The verbose Australian text is here:

Division 5—Non‑differentiation

52ZC  Digital service to be supplied without differentiating in relation to registered news businesses

             (1)  This section applies if a responsible digital platform corporation for a designated digital platform service, either by itself or together with other corporations, operates or controls a digital service (whether or not the designated digital platform service).

             (2)  The responsible digital platform corporation must ensure that the supply of the digital service does not, in relation to crawling, indexing, making available and distributing news businesses’ covered news content:

                     (a)  differentiate between registered news businesses, because of any of the following matters:

                            (ia)  a corporation being registered under section 52G, or being endorsed under that section as the registered news business corporation for a news business;

                              (i)  a bargaining news business representative for a registered news business making a notification under 52ZE(1), or not making such a notification;

                             (ii)  a bargaining news business representative for a registered news business giving a notice under 52ZL(2), or not giving such a notice;

                            (iii)  a registered news business being paid, or not being paid, an amount of remuneration for the making available of the registered news business’ covered news content by a designated digital platform service (whether or not the remuneration is paid in accordance with a determination of a panel under section 52ZX));

                            (iv)  a registered news business being the subject of, or not being the subject of, an agreement of a kind described in section 52ZZK or 52ZZL;

                             (v)  a registered news business being the subject of, or not being the subject of, an agreement resulting from the acceptance of an offer of a kind described in section 52ZZM; or

                     (b)  differentiate between registered news businesses and news businesses that are not registered news businesses, because of any of the following matters:

                              (i)  a matter mentioned in subparagraph (a)(ia), (i), (ii), (iii), (iv) or (v);

                             (ii)  a news business covered by subsection (3) being paid, or not being paid, an amount of remuneration for the making available of the news business’ covered news content by a designated digital platform service;

                            (iii)  a news business covered by subsection (3) being the subject of, or not being the subject of, an agreement of a kind described in section 52ZZK or 52ZZL;

                            (iv)  a news business covered by subsection (3) being the subject of, or not being the subject of, an agreement resulting from the acceptance of an offer of a kind described in section 52ZZM; or

                     (c)  differentiate between news businesses that are not registered news businesses, because of any of the following matters:

                              (i)  a corporation being eligible to be registered under section 52G, or being eligible to be endorsed under that section as the registered news business corporation for a news business;

                             (ii)  a corporation applying under section 52F for registration of itself, or of a news business, or for endorsement of itself as the registered news business corporation for a news business.

             (3)  This subsection covers a news business if:

                     (a)  the news business is not a registered news businesses; and

                     (b)  none of the news sources that comprise the business form part of a registered news business.

             (4)  Subsection (2) does not apply in relation to differentiation if:

                     (a)  there is an agreement between:

                              (i)  the responsible digital platform corporation, or a related body corporate of the responsible digital platform corporation; and

                             (ii)  a corporation that is registered (or is eligible to be registered) under section 52G and, either by itself or together with other corporations, operates or controls a news business; and

                     (b)  the agreement provides that a corporation mentioned in subparagraph (a)(i) will ensure that remuneration is to be paid to the news business for the making available of the news business’ covered news content by the digital service; and

                     (c)  the differentiation arises solely from the amount of that remuneration.

             (5)  Subsection (2) does not apply in relation to differentiation if:

                     (a)  there is an agreement between:

                              (i)  the responsible digital platform corporation, or a related body corporate of the responsible digital platform corporation; and

                             (ii)  a corporation that is registered (or is eligible to be registered) under section 52G and, either by itself or together with other corporations, operates or controls a news business; and

                     (b)  the agreement provides that:

                              (i)  a corporation mentioned in subparagraph (a)(ii) will ensure the provision of a specified type of coverednews content to be made available by the digital service; and

                             (ii)  a corporation mentioned in subparagraph (a)(i) will ensure that the content is ranked preferentially when the digital service distributes the covered news content; and

                     (c)  the differentiation arises solely from that preferential ranking.

             (6)  For the purposes of this section:

                     (a)  treat the reference in the definition of news source in section 52A to “it produces” as instead being a reference to “it regularly produces”; and

                     (b)  treat the reference in that definition to “news content” as instead being a reference to “covered news content”.

Catching Up on MediaPolicy.ca – Facebook’s nuclear option -Google hits out at C18, Bloc MP hits back – the C11 truth serum – highly recommended podcast on C11

Facebook Canada’s Rachel Curran (formerly PM Stephen Harper’s chief communications officer) appeared at a Heritage Committee hearing in April 2022 where she did not rule out a Facebook blackout of news in Canada in retaliation against Bill C-18. Facebook has now issued the threat.

October 22, 2022

Late yesterday Facebook announced it is reaching for the ‘nuclear’ option by threatening to block Canadian news stories on its platform as a response to the “FaceGoogle” Bill C-18, a threat that it followed through in Australia in February 2021 for a weeklong blackout before backing down. 

In its statement, Facebook repeated its familiar arguments that the value of its platform runs heavily in favour of news organizations.

Bill C-18 and similar legislation already enacted in Australia and France is based on the findings by the Australian Competition Commissioner that the net value of the commercial exchange with news organizations is not properly recognized because of Google and Facebook’s outsized market power in data, digital advertising, Search and social media distribution.

The legislation allows the disagreement to be settled by arbitration: in Australia the platforms elected to settle for voluntary agreements worth about $190M rather than face an arbitrator.

Similar legislation is being considered in the UK and the all-important US Congress where the Journalism Competition and Preservation Act has bipartisan sponsorship and is expected to be debated in the Senate after the November 8th mid-term elections.

Google has also ramped up its publicity campaign against C-18. This included an Abacus opinion poll that Google commissioned to garner public support for its criticisms of the Bill a few days prior to appearing before the Commons Heritage Committee on Tuesday. I posted about how the argumentative and misleading poll questions rendered the survey results unusable.

At Tuesday’s Heritage committee hearing, Bloc MP Martin Champoux told Google representatives he considered the Abacus poll a “pseudo-poll” full of “misinformation.” My report on Google’s appearance before the committee including my comments on its critique of C-18 is posted here

The committee reconvened on Friday afternoon to hear from CRTC Chair Ian Scott and Heritage Minister Pablo Rodriguez on C-18. 

By then a story in the Globe and Mail had drawn attention to the Parliamentary Budget Officer’s report estimating that Canadian television companies and the CBC might be in line for $248M in compensation from FaceGoogle and newspapers were likely to receive $81M once negotiations were complete.

The overall estimate of $329M was based on an assumption that each Canadian news organization would be able to obtain settlements from FaceGoogle covering 30% of editorial expenditures (which is not in the Bill but rumoured to have been the consistent outcome in Australia where all deals were shielded by non-disclosure agreements).

Conservative MP Kevin Waugh picked up on the Globe report, suggesting “Bell, Rogers and the CBC” were “at the trough” gorging on FaceGoogle dollars earmarked for newspapers as if the overall estimate of $329M was a fixed sum to be divided up between news organizations.

Of course, there is no such “pie,” only a bargaining framework that will produce as yet unknown results. Each news organization, TV or newspaper, has an opportunity under C-18 to negotiate compensation for its own news content regardless of what other news organizations might obtain for their content. 

Perhaps the subtext to the Globe story and Waugh’s comments is an argument that the CBC and the major TV networks don’t need or deserve the money for local news, and neither do their audiences. If Mr. Waugh keeps at it, I am sure I will be posting on that very soon.

The Friday committee hearing itself was a disappointment. The Minister deflected most of the specific questions he didn’t want to debate.

Bloc MP Champoux was persistent in asking why C-18 does not include tougher criteria for news organizations to establish their journalistic legitimacy, but the Minister seemed cool to any amendments.

He also discouraged suggestions that the rule requiring news publishers employ at least two journalists should be changed, citing existing government programs that support those news minnows. In doing so, he erroneously stated that these small publishers would have to choose between C-18 funding and government programs.

The Senate hearings on C-11 continue as well. 

posted an account of the Senate’s customary twice weekly review of C-11 and queried what might spill out if everyone downed a shotglass of truth serum.

The Bill continues its march towards a self-imposed November 18th deadline to amend the legislation and return it to the House. There is speculation that Conservative senators may renege on that deadline which would mean a third filibuster on the same Bill.

If you want a crash course on C-11 (besides all my posts!), there’s a 40 minute Toronto Star podcast here.

The first half is packed full of some polarized views about the Bill, supplemented with analysis by Star reporter Raisa Patel.

The second half of the podcast is the most intelligent discussion about C-11 I’ve heard yet, hosted by the Star’s Althia Raj in conversation with two Senators and former journalists, Julie Miville-Dechêne and Paula Simons.

Last but not least, Conservative Leader Pierre Poilievre has declined to attend the Parliamentary Press Gallery gala, the annual event where party leaders put down Parliamentary cudgels to indulge in self-deprecating and other-deprecating humour.

And no, he’s not sending Jenny Byrne as a stand-in.

If we all knocked back a shot of truth serum and debated C-11.

YouTuber Stewart “Brittlestar” Reynolds of Stratford ON addressed the Senate on October 19th

October 20, 2022

I keep thinking I have written my last post on the Bill C-11 debate over regulation of User Generated Content and discoverability, but I am always wrong.

The issue continues to consume almost all the Parliamentary oxygen available. The Conservatives have made it a big part of their branding and fundraising. Now there is speculation that the Poilievre leadership is thinking about a third filibuster, this time in the Senate which had previously agreed to return the Bill to the House by November 18th.

C-11 has given us our own Canadian culture wars, divisive on the basis of ideology, fear-mongering, and opportunistic party politics.

If all concerned were administered a dose of truth serum, here is what we might discover.

First, the Liberals don’t need the controversial sections 4.1 and 4.2 of the Bill that set out how the CRTC would regulate uploaded video and music “programs.” 

No question, the legal text is a demanding read: but it does no more than give general instructions to the CRTC to scale the dollar amount on the cheques YouTube and TikTok will make out to the Canadian video and music industries to the amount of revenue the platforms earn from commercial broadcasters using those platforms to reach Canadian audiences. It also helps to identify which Canadian “programs” might be made more “discoverable” by the platforms.

Those limited purposes should be clear from a close reading of the text (which gives the Commission considerable room for interpretation) and also from the Minister’s repeated explanations to the Heritage Committee on June 6th.

In fact the Liberals could have accomplished the same goal, with fewer headaches, by omitting article 4 entirely and leaving it to the CRTC’s general powers over broadcasting, the same powers the Commission uses to levy similar financial commitments from conventional cable and broadcasting companies. Instead of tiptoeing past this political abyss, the Liberals transparently issued the CRTC specific instructions in the Bill. No good deed goes unpunished, they say.

Second, the video and music creators who have almost unanimously panned sections 4.1 and 4.2 would have to acknowledge that the content of their videos and music will not be regulated by the Commission: sections 2.1, 3(1)(g), 4.2(1) and 9.1(6) make that crystal clear. 

They would also have to admit that their fears of the Commission messing up recommendation algorithms under section 9.1(8) could only materialize if future CRTC Commissioners get reckless and adopt the opposite of current Chair Ian Scott’s minimalist philosophy of discoverability.

The added value the digital first creator lobby has brought to the table consists of two things. 

On the video side, its compelling message is that they trust YouTube’s algorithms, they want to keep the platform as an end-run past the gatekeeping of dominant media companies, and quite simply they don’t want Ottawa messing up a good gig. Yesterday YouTuber Stewart Reynolds (“Brittlestar”) told Senators the only help Canadian YouTubers need from Ottawa is a getting hosting platforms to share revenue with them (now there’s an amendment that should be put on the table!). 

This kind of “supply-side” regulation of industry subsidies for video creators —while leaving “demand side” promotion strategies entirely in the hands of the platforms— is the same thing Andrew Cash requested on September 21st on behalf of the English Canadian independent music companies. Cash told the Senate Committee that radio airtime quotas for Canadian music no longer drive music sales and he believes they won’t work online either.

That’s the point the French language music industry does not accept. Its spokespersons are expressing an existential desperation to replicate the consumption outcomes of French language radio in the online environment. They are unapologetic about seeking discoverability regulations as the way to do that.

If the Commission took the C-11 truth serum they would have to admit they don’t really need to fiddle with algorithms to enforce consumption quotas, no matter how draconian or trivial those targets might be. They could simply set out a number of streams and then, if not met, fine the platform. Next to fines, algorithm tweaks might look benevolent by comparison and there’s plenty of room in the Act to tailor discoverability to different language markets.

You can see why there is no “cut the Gordian knot” solution for C-11 on these issues: simply removing sections 4.1, 4.2 and 9.1(8) doesn’t stop the Commission from regulating broadcasting over the Internet.

As Canada’s leading broadcasting expert Robert Armstrong reminded the Senate Committee yesterday, the CRTC has had that authority over Internet broadcasting since the Act was made technology-neutral in 1991 by the Mulroney government: in 1999 the CRTC declined to exercise that power until an elected government (with the support of two Opposition parties) decided in 2021 to revive it.

As Armstrong pointed out, the Commission’s common sense will prevail. He reminded Senators of section 9(4) in the existing Act where Parliament instructs the Commission as follows:

Exemptions

(4) The Commission shall, by order, on such terms and conditions as it deems appropriate, exempt persons who carry on broadcasting undertakings of any class specified in the order from any or all of the requirements of this Part or of a regulation made under this Part where the Commission is satisfied that compliance with those requirements will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1).

In other words, the Commission routinely acknowledges when the regulatory squeeze isn’t worth the juice by granting exemptions to small creators and media distributors. As commentators (including myself) have predicted, the Commission will do just that for YouTubers.

But in exempting YouTubers and finding a sensible solution on music distribution, the Commission will also keep in mind that big media companies —Hollywood studios, Canadian broadcasters, and global music labels—  will increasingly rely on YouTube and other hosting platforms to reach Canadian audiences. The media technologies and ecosystems of 2022 may look quite different in 2032, so C-11 must be built to last. 

After all, I don’t think any of us want to do this again soon.

Google takes the C-18 heat at Heritage Committee

Google Public Policy spokesperson Colin McKay appeared October 18th at CHPC

October 18, 2022

Google’s marquee appearance at the Heritage Committee’s study of the Online News Act Bill C-18 was not the political theatre that might have been expected given Google’s aggressive public campaign against the pay-for-news-content legislation. 

Google spokesperson Colin McKay wisely projected corporate humility and avoided the pugnacious stance taken by his YouTube colleague Jeanette Patell last month during Senate hearings on Bill C-11.

McKay’s talking points took aim mostly at C-18’s “undue preference” rule that would allow news organizations to challenge the Google Search algorithm’s ranking of their content if the outcomes are “unjust, undue or unreasonable.”

While acknowledging that Google’s management of the Search algorithm should not be used as a bargaining tactic against news organizations, McKay told Heritage MPs they should fear bad actors (who would first have to obtain official status as legitimate news organizations) gaming the Bill’s undue preference rule in order to spread misinformation to Canadians. (I posted about that yesterday).

That comment elicited a rebuke from Bloc MP Martin Champoux who told McKay that his recently released Abacus public opinion poll on C-18, filed as an exhibit with the Committee, was full of misinformation on C-18. 

After three days of “question-as-debate” Committee proceedings, it’s still not clear if the Conservatives will follow through on their election platform to support the Bill, but it isn’t looking like it so far. 

Recently elevated by Opposition Leader Pierre Poilievre to the post of Heritage Critic, MP Rachael Thomas ran with the Google argument that the value of news distribution provided for free by FaceGoogle far outweighs whatever is lacking in compensation to media organizations. Google and Facebook, she said, have become the digital equivalent of a street corner newspaper box, provided free of charge to the publishers.

That set up Big Tech critic Ben Scott for the best video clip of the morning:

Reset ED Ben Scott, video download below.

Apart from Google’s appearance, much of the Committee discussion focused on testimony from publishers of small weeklies. MP Kevin Waugh (CPC-SK) pressed Evan Jamison of the Alberta Weekly Newspapers Association to acknowledge that some of his publishers would benefit from C-18, but others would be competitively disadvantaged and excluded by the threshold requirement of employing two journalists in each publication. 

Instead of advocating for an amendment, Jamison supported the NewsMedia Canada position that Heritage Canada should support any scoped out weeklies through the Local Journalism Initiative and the Special Measures for Journalism program. 

At that point, Canadian Association of Broadcaster President Kevin Desjardins dragged the conversation in the direction of a solution: perhaps weeklies currently below the threshold could be allowed to participate in C-18 by submitting a business plan to CRTC demonstrating they could employ two journalists once they obtain C-18 funding. 

A further point that no one raised was that the two-journalist rule in C-18 does not specify “full-time,” only that they be “regularly” employed. This may provide the opportunity for existing freelancers and “stringers” to be put on payroll as part-time employees to qualify for C-18 funding. 

By the end of the two-hour session it appeared the majority of MPs are planning to move on to clause-by-clause debate shortly. 

***

Bill C-18 enjoys majority support and will eventually pass the Commons.

Nevertheless, opponents of the Bill as drafted continue to speak out against both the general wisdom of the legislation and its details. Last week McGill University visiting scholar Sue Gardner published what Michael Geist described on Twitter as a “take-down” of C-18.

Gardner is a visiting scholar at McGill’s Max Bell School of Public Policy where the internal debate over C-18 reportedly turned ugly earlier this year.

She makes some familiar arguments in principle against Bill C-18 but some of her criticisms, if valid and addressed, could lead to amendments. 

Before I get to that, here’s a general observation about the legislation: it has a dual personality.

C-18 is primarily an anti-competition remedy, intended to mitigate FaceGoogle’s overbearing market power in its commercial exchange with news organizations over the distribution of news content.  

It’s well known the Canadian Bill is rooted in the Australian Competition Commission’s findings that FaceGoogle’s “market power” in news distribution guarantees it greater monetized value from news content than it is paying for, even after deducting the value of free distribution it provides to news organizations. 

Also, while FaceGoogle’s other oligopoly on digital advertising is not at stake in C-18, there is no denying that it’s linked to the Bill both in terms of the political will to legislate but also the desperation of cash-strapped news organizations to take any deal they can get from the platforms.

Yet in spite of its origins as an anti-competition remedy, the Bill is widely viewed as public policy to save news journalism, supplementing direct government subsidies including the CBC parliamentary grant, the QCJO program for daily newspapers, Canadian Heritage programs for weeklies and magazines, and the CRTC-mandated cross-subsidies for local TV news.

Public policy designed to save news journalism immediately mobilizes concerns around the transparency of Big Tech funding news outlets, news as a public good, and the access of small news organizations to funding. 

The latter point segues to Gardner’s claim that C-18 is bad because its prototype in Australia allowed 90% of the FaceGoogle money to end up in the hands of mainstream media. 

Gardner cites no authority for the “90%” figure but it can be traced back to an article in The Crikey published in February 2021 where it’s clear the figure is a guesstimate.

The precise number isn’t important: presumably Gardner’s point is that larger news organizations should not be rewarded for being able to provide FaceGoogle with a larger volume of news coverage than small news outlets are capable of. 

This is a talking point adopted by independent Canadian publishers although they have yet to propose a metric of compensation for journalism, for example the number of stories published per dollar of journalist salary.

Whatever the answer to that question, Gardner joins the ranks of many other advocates for distributing FaceGoogle money in a manner more closely aligned to good public policy (journalism as intrinsically valuable, not just popular) than the market solution the Bill offers by rebalancing the commercial bargaining power between the market powerful and the market powerless. 

This tension in Bill C-18 between rebalanced bargaining for compensation on one hand, and “equal outcomes” on the other, is left unresolved in the Act for voluntary agreements that are vetted by the CRTC under section 11(1)(a): both factors are included in an unranked list of public policy considerations.

On the other hand, the arbitration criteria in section 38 of the Act for involuntary agreements appears to be a number-crunching exercise in the commercial “value” and “benefits” of news content and its distribution. It’s hard to find policy objectives of “the right kind” of journalism or equal treatment of all news organizations in the language of section 38.  

Gardner also criticizes C-18 for requiring news organizations to produce “general interest news” instead of “specialized news” which she argues has been scoped out in section 31(2).  She argues that by privileging general interest news the Bill incentivizes click bait and bad journalism.

In these early days it’s difficult to prove or disprove such an ambitious claim (which is also central to Google’s arguments against C-18).

However it’s not clear “specialized news” is scoped out. The legal text excludes news outlets whose content “is… focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment.” (Emphasis added)

There’s a great deal of beat or “specialized” news coverage —for example environmental reporting or business coverage—that would likely elude “industry-specific” and remain in scope.

One final point from Gardner: the Bill’s lack of transparency over compensation outcomes is intolerable to public policy and threatens to undermine any fair bargaining process if small news outlets are kept in the dark about the voluntary deals that large outlets obtain from FaceGoogle . 

On that, Gardner has plenty of allies pitching amendments at the Heritage Committee. 

The error-riddled Abacus C-18 poll commissioned by Google tells us nothing.

October 17, 2022

It’s a time honoured tradition in Canadian politics to bootstrap one’s cause with public opinion polls.

Last Friday Abacus released a poll commissioned by Google that surveyed 2,207 Canadians on the Online News Act Bill C-18. The announcement came just days before Google Canada’s Colin McKay appears before the Commons Heritage Committee tomorrow at 11 a.m. 

The pollster Abacus said its findings demonstrate public support for Google’s C-18 amendments:

The results clearly indicate that while few Canadians are paying close attention to what is happening with the Online News Act, the issues with Bill C-18 raised by Google resonate with Canadians and cause them to want legislators to amend the bill to address concerns they have with it – including Liberal supporters and those most familiar with the legislation.

Most Canadians use Google Search daily. It is an essential part of their life. They depend on Google to solve their problems, find information, and access news. But there is little appetite to pay to access that content – whether personally or by the platforms.

If Bill C-18 fundamentally changes the user experience, if it helps to spread misinformation or supports organizations that don’t follow core journalistic standards, Canadians will be dissatisfied and support for the legislation will quickly fall….

After being informed of Google’s concerns with Bill C-18, Canadians were asked whether the federal government and Parliament should work to amend the legislation to address these concerns or whether Google’s concerns are not that serious, and the legislation should pass as is.

59% felt the bill should be amended while only 15% felt it should be passed as it is. Another 27% were unsure.

It’s perhaps a small shortcoming of the amazing confluence of Google’s desire and the public mind that nobody including the survey respondents knows what Google’s amendments are. 

If only that was the sole problem with the poll.

Alas the survey questions are loaded with argumentative premises and false claims about the Bill.

Initially, the poll establishes some base line information that should not surprise:

The public is hooked on free information and doesn’t want that to change.

The majority of the respondents believe (or say they believe) that news media is financially stable, despite all evidence to the contrary.

Overall, Abacus’ questions and analysis of the results could be summarized: “your government is tiptoeing legislation through Parliament that will result in search fees, gerrymandered search results, more click bait, and foreign propaganda. We can’t show them to you right now but Google’s amendments would fix all those things. Do you agree?”

Is that unfair to Google and Abacus? Here are the poll questions.

Q1. How familiar, if at all, are you with Bill C-18, the Online News Act, legislation that the federal government introduced to regulate the internet and support news organizations in Canada. It is currently being reviewed and debated in the House of Commons?

The answer was only 8% said they were very familiar with the Bill (25% were somewhat familiar). It was a useful question and the answer helps build Google’s narrative: few Canadians know what’s in Bill C-18.

Q2. After specifying the different things C-18 might accomplish, respondents are asked which goals are most important?

Again, a useful question. Here are the results:

Q3. Thinking specifically about [the financial health of] Canadian news and journalism, do you feel the news industry in Canada is…

The result: an astonishing 55% think the Canadian news industry is financially sustainable despite all of the reporting and documentation on the collapse of the advertising-reliant business model for news.

It’s sad to say, but the significant degree of counterfactual opinion probably does not enhance the authority of those respondents’ answers to the remaining questions.

***

Next are two questions in a row suggesting Bill C-18 will result in Google’s news compensation costs being passed along to consumers as search fees:

Q4. “Imagine you read an article on a Canadian news website and shared it on social media because you wanted others in your network to read it. Do you think the social media platform you shared it on should have to pay the news organization a fee for that?

“Q5. If you were searching for something on Google and a link to a news article appeared in your search. Would you pay a small amount to be able to click through and get to the page through Google?”

The results were negative of course. Who wants to pay for what’s free?

The Abacus summary of these replies states:

69% are worried when they find out Online News Act would require companies like Google to pay news businesses simply so that they can help you find what you’re looking for. This is what’s known as a “link tax” and it fundamentally breaks the way search (and the internet) have always worked. Requiring payment for links risks limiting Canadians’ access to the information they depend on.” (Emphasis added)

Requiring payment?

Although not pointed out by Abacus to poll respondents, the Bill does not charge fees to news consumers

At Google’s direction, Abacus seems to be threatening poll respondents and Canadian MPs that if C-18 is approved Google will pass along its costs of paying for news to consumers: even though Google didn’t do that in Australia after legislation similar to C-18 was passed in 2021.

The two questions are argumentative and misleading.

***

(Q6) Abacus also asks a question about the CRTC’s governance of the bargaining scheme under C-18. The specific question and results are not posted by Abacus but the pollster provides this summary:

“70% are worried when they find out that ‘the bill gives the Canadian Radio-Television and Telecommunications Commission (CRTC) unprecedented, sweeping new powers to regulate every aspect of the Canadian news industry even though these decisions are far outside of its expertise as a broadcast regulator.‘”(Emphasis added)

You could include me in that 70% of worriers if any of it were true. I mean, “unprecedented sweeping” powers sounds very bad: even though 92% of poll respondents probably have no idea what it’s describing.

The claim that the Commission will “regulate every aspect of the Canadian news industry” is preposterous and false. 

As to whether the CRTC would be “far outside of its expertise as a broadcaster regulator,” the prose is embellished but identifies an important issue.

In its favour, the CRTC has extensive expertise in mediation and arbitration involving media companies.

As for journalism issues, the Commission has mostly left them to self regulation by those companies and lacks experience.

It’s an issue that should be addressed either by Parliamentarians or Heritage Minister Pablo Rodriguez.

***

(Q7) The next question (again, only the Abacus summary of results is available) raises Google’s concern that faux news organizations will use the C-18 bargaining process to get money from Facebook and Google by gaming the definition of “an eligible news organization”:

69% are worried when they find out “the proposed law uses an extremely broad definition for “eligible news businesses” and doesn’t require eligible news organizations to follow basic journalistic standards.” (Emphasis added)

The certification of an eligible news organization (ENO) in C-18 can take either of two paths.

The first accepts the existing certifications of Canadian daily newspapers as “Qualified Canadian Journalism Organizations” (QCJO) under section 248 Income Tax Act as implemented in 2019. That certification process has been considered a success. 

As a benchmark of what kind of news organizations might be disqualified because of (the lack of) journalistic standards, it’s worth noting that the arm’s length independent journalist panel that administers the QCJO program decertified Rebel News in 2021 after initially granting it QCJO status.

Unless already certified as a QCJO, media companies seeking ENO status apply to the CRTC under section 27(1)(b) that requires them to “produce news content.”

News content is defined in section 2 as “content — in any format, including an audio or audiovisual format — that reports on, investigates or explains current issues or events of public interest.‍” (Emphasis added)

In addition, section 31 allows Facebook or Google to ask the CRTC to carve out any of an ENO’s various “news outlets” (e.g. a publication, website, or news show) that don’t match a more detailed description of news journalism. Here’s the text:

(2) A news outlet is to be a subject of the bargaining process if the Commission is of the opinion that the outlet is operated exclusively for the purpose of producing news content — including local, regional and national news content — consisting primarily of original news content that is

  • (a) produced primarily for the Canadian news marketplace;
  • (b) focused on matters of general interest and reports of current events, including coverage of democratic institutions and processes;
  • (c) not focused on a particular topic such as industry-specific news, sports, recreation, arts, lifestyle or entertainment; and
  • (d) not intended to promote the interests, or report on the activities, of an organization, an association or its members.

While relying upon Google and Facebook to be the first identifier of faux news outlets, C-18 requires ENOs to do original news reporting. Moreover, section 31(2)(d) excludes many faux news organizations that might claim to being journalists. 

The Bill could be tightened up in two respects.

It could establish a high bar for the amount of news in any outlets’ overall content and in general the CRTC could adopt the exhaustive and detailed QCJO regulation from the Income Tax Act.

The Bill could also require news outlets belong to a recognized self governing News Council.

Having said that, it was inflammatory and argumentative for Abacus to tell survey respondents that the C-18 contains “an extremely broad definition for ‘eligible news businesses’ and doesn’t require eligible news organizations to follow basic journalistic standards.”

***

The next question Q8:

65% are worried when they find out “the Online News Act would effectively subsidize any outlet that “explains current issues or events of public interest”. This means that any opinion or commentary blog with two or more people could be eligible to receive funds.” (Emphasis added).

The definition of news content in section 2 does not only say “explain,” it also says “reports on and investigates” which Abacus appears to have omitted. That’s means news reporting, not just “opinion” or “commentary blog” (like the one you are reading).

Maybe Abacus doesn’t recognize the difference but most do. It’s a misleading question and the conclusion that “any opinion or commentary blog could be eligible” is false.

***

The next question Q9:

“60% are worried when they find out “foreign, state-owned outlets could be eligible, even if they are known sources of misinformation and propaganda, under the Act.” (Emphasis added).

What is the plausibility of “could?” 

If the CRTC acts incompetently and recklessly? In the recent case of banning Russia Today the CRTC got the right result (but I would say in a hasty manner).

Better, look to the language of the Bill.

Misinformation and propaganda are not “news content” as defined in the Act, they are at best “opinion” and “blog commentary” which by themselves are not “news content” unless accompanied by reporting and investigating.  

If Parliamentarians want to make the definition of “news content” more precise and demanding —fear-mongering has a way of motivating greater clarity— they might do so.

***

The last question Q10 is undoubtedly Google’s biggest concern:

“65% are worried when they find out “a section of the bill prohibits companies like Google from using ranking, or showing you the content most relevant to your search, first. It also could allow blogs, foreign state-owned media, or any other “eligible news business” to inflate their ranking in your search results, preventing Google from presenting you with the most reliable and useful content, making Search (and the internet) less useful and less safe.” (Emphasis added)

This is the scare-your-pants-off question, so let’s break it down.

First, the Bill’s “undue preference” provision in section 51 does not “prohibit” Google from “using ranking, or showing you the content most relevant to your search, first.” That is a false statement by quite a margin. Section 51 allows an ENO to lodge a complaint to the CRTC that Google’s algorithm is punitive to that ENO and the Commission should intervene.

Second, “blogs” and “foreign state media” would have to qualify as ENOs before being allowed to lodge a complaint. The likelihood of an opinion blog becoming an ENO is nearly zero and the only “foreign state media” likely to become an ENO are legitimate public broadcasters like the BBC (assuming it provides Canadian news in Canada).

What section 51 actually says is that legitimate ENOs can complain to the CRTC that Google’s ranking algorithm is “unjust, undue, or unreasonable” in favouring another source over the complainant’s content.

“Undue preference” is a known legal term with a history. So it’s difficult to see how a complaint would succeed unless (a) Google was favouring the rankings of its own journalism or undisclosed paying customers or (b) was punishing an ENO as a bargaining tactic.

If Heritage MPs are prepared to have a civilized conversation about the Bill (unlike the filibustered C-11), the undue preference clause will be an important issue to study carefully.

The clause is probably not integral to the central purpose of the Act —-rebalancing commercial bargaining power between Platforms and news organization—- except to ban reprisals against ENOs by Google and Facebook. But that doesn’t make it a bad idea.

The real issue is that Big Tech companies are prepared to go to the wall over allowing regulators to peer into the black box of their commercial algorithms. Expect a big fight.

***

If the Abacus poll proves anything it’s the difficulty of gleaning informed answers from an uninformed public. 

Feeding respondents questions that are argumentative, misleading or based upon false premises does not help.

Previous polls on C-18 from Nanos (for the Globe and Mail) and Pollara (for NewsMedia Canada which supports C-18) kept the questions general enough that the polls were effective in testing general attitudes and public mood, rather than the fine points of legislation.

Perhaps Abacus might approach the subject differently next time. It might have to find a different sponsor.

Catching Up on MediaPolicy.ca – Does C-18 fight news deserts? – Google takes off the gloves (again) – Robert Armstrong weighs in on C-11 – Netflix bites into the advertising apple.

October 15, 2022

Last week the Chicago-based Medill School of Journalism released its annual report on the state of local news.

Its focus this year is on expanding news deserts in suburban and rural areas. I posted about concerns expressed by Canadian publishers that the Online News Act Bill C-18 as drafted excludes smaller weeklies.

Google opposed the Australian version of C-18 last year and will appear before our Heritage Committee on Tuesday.

Google paid for a poll released yesterday by Abacus to explicitly support Google’s C-18 amendments that it has yet to make public. The proposed amendments were not included in the poll questions.

The poll was criticized on Twitter (not just by me) for its argumentative questions.

The Star published an article describing the Abacus survey with the government’s response.

As I posted previously, Google is funding Canadian lobby groups in opposition to the Online Streaming Act Bill C-11 and is also inviting Canadians to sign its online petition against the legislation now in the Senate.

***

The leading academic expert on Canadian broadcasting regulation Robert Armstrong published an opinion column in which he called for article 7(7) of Bill C-11 to be dropped: that section allows the federal government to substitute itself at will for the CRTC in devising regulations and orders.

I previously posted about this issue here after it was highlighted by the Forum for Research and Policy in Communications.

An announcement that may have caught your eye that massively impacts the broadcasting industry: Netflix’s anticipated move into advertising-supported streaming video will begin on November 1st when it introduces its $6.99/month service.

A similar move by Disney+ is expected soon.

Will Bill C-18 help rural publishers and push back news deserts?

Grasslands News (SK) Publisher/Editor Chris Ashfield appeared before the Heritage Committee on September 27

October 12, 2022

During Heritage Committee hearings on Bill C-18 on September 27th a skeptical Kevin Waugh (CPC- Saskatoon-Grasswood) questioned whether the FaceGoogle-Pay-For-News legislation would do anything for rural publishers

Testimony from Chris Ashfield, the publisher/editor of Saskatchewan’s Grasslands News group of five local weeklies, tapped into a deep concern previously documented by TMU’s News Poverty Project about the troubling spread of news deserts in rural and suburban communities.

Ashfield told Heritage MPs how the publications in his local chain and other Saskatchewan weeklies are shrinking in advertising revenue, news coverage, and the number of employed journalists.

The latter could be a barrier to rural publishers seeking access to the compensation expected to flow from C-18. Currently the eligibility criteria in s.27(1)(b)(i) requires a publication employ at least two journalists, excluding the publisher, other staff and freelancers.

Asked about that rule, Ashfield told MPs:

 In Saskatchewan, the outcome [of the two-journalist rule] would be fairly detrimental to a lot of the smaller publications. The newspaper industry has changed. Most of the work is now being done by the publishers, who are multi-tasking.

In my own operation, I run five newspapers, but each newspaper has anywhere from a part-time reporter to one full-time reporter. Under the current situation, we would not qualify for that…

Communities are on the verge of losing their newspapers and with them the coverage of their municipal councils, school boards, sports and cultural events and all the independent local news coverage residents have relied on for decades.

The growth of news deserts and the parched news coverage that results is without a doubt an alarming development for the Canadian news ecosystem and the democracy it sustains.

In its annual report released last week on the dire state of local news in the United States, the Northwestern University Medill Journalism School observed that communities in news deserts, or reduced to only one publication, skew towards a poorer, older and less educated demographic. They are also far less likely to be patronized by philanthropic donors or journalism programs, or by digital news start-ups, all of whom gravitate towards urban centres and state capitals. 

Even were we to ignore these news deserts as someone else’s problem, say the authors of the report, there is a knock-on effect on the entire polity:

In a healthy news ecosystem, the journalists at local print and digital news organizations not only cover the ebb and flow of everyday life in their communities, but also alert reporters at national and state newspapers, regional television stations and larger digital operations to developing trends and major occurrences that deserve broader attention. Journalists at these larger organizations, in turn, produce the majority of the investigative and beat reporting that prompts legislation and policies to correct problems. As cracks form in the base and local print and digital news outlets struggle to gain traction or disappear, the journalism of the national and state news organizations is also compromised. 

The Medill Report continues its year-by-year documentation of the decline in news publishing. The metrics of that decline in the US are supported by more granular data than are available in Canada due to the size of the market. The key and most reliable metric is the decline in journalism employment: down 60% nationally among dailies and weeklies since 2005.

Neither are digital publishing start-ups a saviour: the Report says their growth is incremental, dwarfed by the size of decline in conventional media, and in any event not taking root in news deserts.

The size of the US market provides more opportunities for experimentation: the Report cites encouraging examples of collaborative news coverage and shared overhead among publishers.

Financial aid to journalism also looks different in the US than Canada: the US is more advanced in private philanthropy and non-profit activity while remaining far behind Canada in terms of government aid. In addition, it’s not clear as yet if the American counterpart to Canada’s Bill C-18 will get through Congress.

In Canada, the flow of C-18’s anticipated journalism funding to small weeklies will be influenced by a number of legislative design factors including the two-journalist requirement.

The paid weeklies are already eligible for discretionary funding from Heritage Canada through the little-known but decades-old Canadian Periodical Fund/Aid to Publishers program. The free weeklies are eligible for similar funding under the Special Measures for Journalism program which began as Pandemic funding and has been extended for three years by the 2022 budget. In either program there is no requirement for a minimum number of employed journalists (only that the publication “regularly present written editorial content from more than 1 person.”)

There is however a public appetite for rigorous accountability in the funding of journalism as we saw in the hair-on-fire politics ignited by the federal government’s introduction of aid to Qualified Canadian Journalism Organizations in 2019. As it turned out, the government’s delivery of that program through an arm’s length committee worked out rather well.

It was the QCJO program that introduced the two-journalist threshold. As one eligibility criterion in a long list, the two-journalist rule was probably intended as a barrier to political action groups and basement bloggers accessing the QCJO program. This may be why the newsroom employment threshold found its way into C-18.

However the safety-features of the QCJO eligibility rules were designed with the reassurance that small weeklies like those published by Grassland News’ Chris Ashfield were already drawing government assistance under Canadian Periodical Fund/Aid to Publishers (and they could not draw from both federal programs for the same publication).

There may be amendments tabled by Heritage MPs on the two-journalist rule in C-18’s section 27 which would bring it in line with the Aid to Journalism and Special Measures criteria. On the other hand, the legislation establishes the power of the governing CRTC to devise eligibility regulations that could address the issue.

For its part, the advocate for small publishers, News Media Canada, is pushing for more resources through the government’s internship program the Local Journalism Initiative.

Catching Up on MediaPolicy.ca: “Vile” tweets from Heritage’s Anti-Racism Consultant – Google campaigns against C11 – Algorithms and Public Policy

Anti-Racism Consultant Laith Marouf

October 8, 2022

Federal media policy continues to swirl in the tempest of Parliamentary politics. 

Yesterday Heritage Committee MPs summoned Diversity and Inclusion Minister Ahmed Hussen to explain the government’s role in hiring anti-racism consultant Laith Marouf, the author of a series of Tweets variously described as vile, outrageous, racist and anti-semitic.

I posted a short account of the Committee hearing here, including a selection of Marouf’s most offensive Tweets (be forewarned).

***

Earlier the Senate held further hearings on Bill C-11, the Online Streaming Act. This week Senators focussed on a vital policy issue: the unprecedented role that American studio/streamers will play in making Canadian content. 

I posted on that here. You can round out your understanding of the fine points with two excellent explainers published in Cartt.ca by Douglas Barrett and Leonard  St. Aubin. Also here‘s commentary from Globe film critic Barry Hertz.

This week’s C-11 political drama was Google’s e-mail to 160,000 Canadian YouTubers asking them to sign an online petition against C-11, hosted by Canadian lobby group Open Media (Google is a Platinum donor to Open Media).

Heritage Minister Pablo Rodriguez responded he didn’t much like Big Tech wading into Canadians politics. 

Google’s campaign also put a new perspective on Liberal MP Chris Bittle’s provocative decision to file a complaint with the federal Lobby Commissioner against Digital First Canada for failing to make a timely disclosure of its financial backing from Google.

A final highlight on the C-11 hearings for now: Brock University’s Blayne Haggart and two other academics challenged Senators to think about whether the big platforms’ content algorithms are as neutral and untouchable as many are claiming. 

Algorithms are curated by the platforms and, in that sense, are privately regulated. As TMU researcher Irene Berkowicz noted in her Google-funded study on YouTube, YouTubers themselves have mixed feelings about the platform’s algorithmic manipulation. 

Haggart tweeted the short version of his argument here.

***

As for the Online News Act Bill C-18, Cartt.ca published a twopart post by Internet Society VP Konrad Von Finckenstein with his fix-it list for the pay-for-news-content legislation that awaits further hearing dates at the Heritage Committee.

report published by the Parliamentary Budget Officer stated that C-18 will result in compensation for news organizations at the rate of 30% of editorial costs. 

That estimate does not rely on any new data but cites the round-figure previously stated by Australian Competition Commissioner Rod Sims.

Liberals’ accountability in Marouf scandal stymied by Conservative filibuster

Anti-racist consultant Laith Marouf

October 7, 2022

The federal government was called on the carpet today to take responsibility for the scandal of Heritage Canada hiring Laith Marouf as an anti-racism consultant despite his history of anti-semitic and racist tweets (examples below).

Diversity and Inclusion Minister Ahmed Hussen answered questions from Opposition MPs on the Parliamentary Heritage Committee probing why Marouf was hired and why it took the Minister a month after being notified of the tweets on July 19th to comment publicly and terminate Heritage’s relationship with Marouf.

Hussen reiterated his condemnation of anti-semitism and racism and promised better vetting of consultancy applications and more training for Heritage officials. His explanation for his delayed public response was essentially that is the speed at which the federal civil service moves when lawyers and contract liability are involved.

MPs also asked how Heritage’s vetting of an anti-racist consultant did not include an Internet search that would have discovered the tweets.

Pressing the Minister, Conservative MP John Nater asked if he could confirm a press report quoting Marouf bragging that Heritage Canada was so desperate to appear responsive to racism suffered by media workers that officials pro-actively solicited an application from him to provide anti-racism training.

The Minister said he would check with officials on the report. But with the responsible Assistant Deputy Minister waiting in the witness queue to answer questions, Conservative MP Rachael Thomas began a filibuster of the remaining hour of the Committee session. The official was never questioned and so no answer was provided.

There has been detailed reporting on Marouf’s tweets, his work for Heritage and the government’s accountability in the matter. The pot will continue to boil because despite Heritage Canada banning Marouf from future consultancy contracts, the CRTC has said it may continue funding him under the Broadcasting Participation Fund to take part in certain Commission hearings.

Marouf’s defence —repeated by some— is he doesn’t mean all Jews.

You cannot read Marouf’s incendiary tweets without acknowledging, only to yourself if necessary, that they indiscriminately incite violent feelings and violent actions against Jews, not just Zionists (again, see below).

Everyone knows who Zionists are. They are Jews. There are millions of Jewish Zionists around the world, even if not all Jews are the “white supremacist” Zionists that Marouf insists he is accusing. But if you flood my house with gasoline and walk away, you are still culpable for the deadly spark and explosion that follows. Would we tolerate incitement of hate against Black Lives Matters because not all Blacks belong to BLM?

Yes, the situation in Israel and Palestine makes moral choices hard. Whatever you think injustice or justice means there, the fact remains there is a 75-year war that has never stopped and never will until those who insist on vanquishing their enemies turn to pragmatism and peace. 

Laith Marouf’s racist and anti-semitic tweets tells us he stands with the vanquishers. More’s the pity.

Senate witnesses refocus the C-11 debate on what matters

Netflix’s Stephane Cardin appeared before the Senate Committee reviewing Bill C-11. He didn’t mince words.

October 4, 2022

Despite the Senate’s singular focus on Bill C-11’s regulation of user generated content, today’s witnesses shed some light on other issues both important and neglected.

The biggest issue that has been mostly avoided in both the House and the Senate is what the post C-11 broadcasting world will look like when the US streamer/studios are placed under new obligations to make and/or finance CanCon, known in CRTC lingo as “Canadian Programming Expenditures (CPE).”

Debate over that issue immediately invokes a hot button issue: what counts as a certified “Canadian” program?

And debate over what is a Canadian program immediately poses a further question: should the current rule requiring Canadian ownership of the production’s intellectual property remain a sine qua non requirement? In film and TV production, “IP” refers to second seasons and spin-offs but also the exploitation of a production’s global distribution.

Netflix, Disney Plus, Paramount Plus and Amazon Prime are not Canadian, of course. So the C-11 question is how US studio/streamers will make Canadian programs in fulfillment of a CPE target handed to them by the CRTC? It’s hardly a secret they will prefer making their own “Canadian” productions rather than writing cheques to a Canadian film fund to finance someone else’s movies.

When a Senator asked Netflix spokesperson Stéphane Cardin today what his priority amendment was, he answered bluntly “copyright,” meaning Netflix should retain full intellectual property rights and be able to certify any movie it makes that otherwise qualifies as Canadian content.

Appearing for the US streamer/studios in Canada (including Netflix, Amazon and Disney Plus), Wendy Noss proposed an amendment stating that “no one factor is determinative” in defining a Canadian program, a swipe at current rules around employment of Canadians in key talent positions but mostly at the inviolable rule on copyright ownership.

The Noss amendment responds to Heritage Minister Pablo Rodriguez’s statement in May that he contemplates a post C-11 government directive to the CRTC to review the long standing CanCon certification rules, although it’s far from certain he had copyright in mind.

The intention of the streamer/studios’ amendment is best understood in the context of existing “CAVCO” rules governing a producer’s claim to “CanCon” production tax credits under the Income Tax Act that are in turn linked to the CRTC’s parallel set of rules governing certification of broadcasted Canadian programs (CPE).

Both the CAVCO and CRTC rules determine Canadian content by a point system that tallies the employment of Canadians in key creative roles. In addition the CAVCO tax rules require the producer to be a Canadian who retains copyright. The CRTC broadcasting rules are not quite as specific about Canadian copyright ownership and up until now that was unimportant because only Canadian-owned broadcasters are regulated by the CRTC, not American streamer/studios.

Here’s the realpolitik that few are saying out loud: if the US streamer/studios are regulated in Canada without the opportunity to retain global distribution rights to their movies, we are going to see a CUSMA trade complaint regardless of its merits.

The Canadian film and TV production industry is equally adamant about copyright 180 degrees in the other direction.

It is not just Canadian movie makers jealously guarding the Canada Media Fund’s $366 million kitty for certified Canadian films (although that matters of course).

It is not just questioning why big American streamer/studios should be permitted to access CanCon tax credits financed by Canadian taxpayers.

It’s instead the concern that unless independent Canadian producers retain full rights to exploit and profit from their best creations (including distribution to global audiences), they will become CanCon sub-contractors in their own land as US streamer/studios insist that Canadian independents surrender copyright and global profits in exchange for distribution on their global platforms.

As both of today’s “Canadian” witnesses (Blue Ant Media and the Canadian Association of Film Distributors and Exporters) stated, without copyright Canadian producers will become the “hewers of wood and drawers of water” of old.

There’s merit to both sides of the argument in an asymmetric way, meaning a win-win compromise is not out of the question. The streamer/studios’ amendment is probably a non-starter for the Liberals, Bloc and the NDP. But perhaps the CRTC —with a gentle nudge from the Minister in a policy directive— will look at it this way:

The US streamer/studios regulated by C-11 are likely to make big budget CanCon movies (with global audience appeal being the key) that just don’t get financed in Canada.

The CRTC could establish a high threshold for production budgets above which it could certify a film for Canadian content if the streamer/studio shares the copyright and exploitation rights 50/50 with a Canadian producer or broadcaster.

Any production below that threshold —-essentially the production budgets of current Canadian movies— would still require 100% Canadian ownership and retention of intellectual property.

Now that might seem like apostasy to some (and no less irksome to Netflix and Disney Plus) but would the Canadian industry and Canadians be better or worse off?

***

This is a post about C-11 hearings so there is no escaping the discoverability issue.

Today the Senate heard from its umpteenth YouTuber witness. But in a refreshing development, Bastien Forrest wanted to talk about how C-11 fails to address how we could nurture Canadian digital first creators by earmarking a portion of YouTube’s CanCon contribution for Canadian creators.

Similar to the pitch made by Andrew Cash on behalf of Canadian independent music companies on September 21st, Forrest argued that the shortest distance between creation and consumption of online Canadian content is subsidizing supply.

Forrest spent four and a half minutes of his five minute Senate presentation making his point, adding at the last moment his agreement with other YouTubers about the perils of interfering with YouTube’s distribution algorithm.

Unfortunately during questioning Senators ignored Forrest’s main point and obsessed about the latter.

This is consistent with the long shot political strategy devised by Digital First Canada who, in an alliance with the Conservatives, insist upon a total exclusion of regulating user generated programs. Meanwhile a consensus Senate amendment to limit its regulatory scope, or directly help digital first creators, might find favour with a majority of MPs in the House of Commons.

***

A C-11 issue concerning labour rights surfaced on September 14th when ACTRA appeared before the Senate and it doesn’t reflect well on a Liberal government that has no desire to appear to be anti-union.

Back on June 14th the Liberal, NDP and Bloc MPs on the Commons Heritage Committee broke through the Conservative filibuster and passed 42 amendments in one all-nighter session. Most of the amendments had been publicly tabled and debated by MPs during previous hearings but many had not and were pushed through unceremoniously following ex-camera negotiations among MPs.

One of these secret amendments sought by the US streamers was tabled by MP Michael Coteau on behalf of the government and supported by the Conservatives (though not the Bloc or the NDP).

It said:

31.1 Section 6 of the Status of the Artist Act is amended by adding the following after subsection (2)

Non-application

(3) This Part does not apply in respect of an online undertaking, as defined in subsection 2(1) of the Broadcasting Act.

There is a long explanation for why that defeats labour rights.

It goes like this:

  • Creator Guilds like ACTRA, the Writers’ Guild and the Director’s Guild represent movie talent whom are technically self-employed and not eligible to be unionized through conventional labour laws.
  • Instead, union recognition and collective bargaining are enabled by the Status of the Artist federal legislation.
  • Broadcasters are federally regulated. When they make in-house productions with Guild labour, the federal Status of the Artist Act applies.
  • Guilds like ACTRA have collective agreements with broadcasters CBC, CTV and the National Film Board. But since broadcasters mostly buy their TV dramas from independent film producers who are not broadcasters and not federally regulated, the Guilds instead have collective agreements with the independent producers under the banner of the Canadian Media Producers Association (CMPA) and the AQPM in Québec. These collective agreements are under provincial jurisdiction with mirrored versions of the federal Status of the Artist legislation.
  • When Netflix, Disney Plus and the other American streamer/studios become “online undertakings” under Bill C-11, their activities will fall in federal jurisdiction under the Broadcasting Act.
  • But the Coteau amendment says that these federal regulated streamer/studios are exempted from the federal Status of the Artist Act, meaning that when they make movies in-house (instead of buying from independent producers) their labour obligations do not include recognizing Guilds representing self employed talent.
  • Bottom line: federally regulated streamers making in-house productions will be able to operate non-union.

Let’s follow the money. As today’s testimony from US studio/streamer spokesperson Wendy Noss appeared to confirm, the amendment came from them.

At the moment, it’s mostly Disney Plus that prefers to make movies in-studio while Netflix tends to make movies in partnership with or through purchase from provincially regulated independents. So Disney Plus is the immediate beneficiary of the Coteau amendment.

But now that the federal Liberals have handed US streamer/studios a path to making movies in Canada non-union, Netflix will have an opportunity to make their movies in-house at cheaper labour rates than they would by continuing to work with the independents bound by the CMPA master agreement with the Guilds.